April 5, 2006 RESOURCE COMMITTEE

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

CHAIR (Harding): Good evening, everyone.

I would like to welcome everyone as we debate the Estimates of the Department

of Innovation, Trade and Rural Development. Welcome everyone, the Committee

members, the minister and her staff, as well as the Table Officer and Page.

First of all, I would like to have the Committee members identify themselves

and their districts.

MR. REID: Gerry Reid, MHA for the District of Twillingate & Fogo.

MS FOOTE: Judy Foote, MHA for the District of Grand Bank.

MR. HUNTER: Ray Hunter, MHA for the District of Windsor-Springdale.

MS JOHNSON: Charlene Johnson, MHA for the District of Trinity-Bay de

Verde.

MR. O'BRIEN: Kevin O'Brien, MHA for the District of Gander.

CHAIR: I am Harry Harding, Chair of the Committee and MHA for the

District of Bonavista North.

I would ask Minister Dunderdale now if she would introduce the officials that

she has here this evening.

MS DUNDERDALE: Thank you very much, Mr. Chair.

It is my pleasure to appear before the Committee this evening. I have with me

Bill MacKenzie, Acting Deputy Minister. Behind me, I have Phil McCarthy,

Assistant Deputy Minister of Strategic Industries and Business Development. At

the far end, I have Rita Malone, Assistant Deputy Minister of Regional

Development. A rose between two thorns, Dennis Hogan, Assistance Deputy Minister

of Innovation, Research and Advanced Technologies, and Lynn Evans, my Director

of Communications.

CHAIR: Thank you very much.

This is being recorded by Hansard. I think they have had some problems

previously with people, the minister's staff, not identifying themselves prior

to speaking. Whenever you are asked to speak, if you would identify yourself

first. That will take care of that problem.

Normal procedures, what we have been trying to follow, is that the minister

would have up to fifteen minutes, if she wanted to, to give an overview of her

estimates. The vice-chair, or the critic, would have up to fifteen minutes as

well. Then we would have alternating ten minute periods each, if the other

members wanted to ask questions of the minister and her officials.

I ask the Clerk now to call the first subhead.

CLERK: Subhead 1.1.01.

CHAIR: Subhead 1.1.01.

Minister Dunderdale.

MS DUNDERDALE: Again, thank you, Mr. Chair.

The Department of Innovation, Trade and Rural Development is being allocated

more than $45 million in 2006-2007 to allow it to implement its plans for

economic growth and job creation throughout the Province. I would like to

highlight a few of our initiatives for this year.

The department recently launched a provincial Innovation Strategy to make

Newfoundland and Labrador more competitive internationally. We have allocated

$20 million over the next four years for the Innovation Strategy. Of the

four-year $20 million investment, approximately $3 million has been allocated

this year for a commercialization program designed to bridge the gap companies

face in moving from new technologies to true commercial activity.

This year we have also allocated approximately $2 million for an Innovation

Enhancement Program to assist not-for-profit organizations that support

innovation by enhancing research and development capacity.

Last year we announced a Comprehensive Regional Diversification Strategy for

the Province. The plan builds upon the strengths of our regions and is

complemented by government programs that will help develop those strengths so

that they result in long-term sustainable employment for the people of this

Province. Two of those programs are the Small and Medium Size Enterprise Fund

and the Regional/Sectoral Diversification Fund.

Last year government placed $10 million into the SME Revolving Fund to

provide business financing to small and medium sized businesses. The financing

will allow eligible businesses the opportunity to start up and expand, thereby

helping them create and retain long-term sustainable jobs. We made an additional

injection of $8 million in this year's budget.

This year government allocated $5 million to Regional Sectoral/Diversification

Fund to provide non-repayable contributions for economic development initiatives

that address regional and sectoral development, diversification and innovation.

The $5 million is in addition to carryover funding of $1.8 million. The RSDF

provides funding to economic development organizations for work that complements

and enhances the growth of SMEs. This fund is critical to ensuring that

necessary infrastructure is in place to support the growth and development of

businesses in all regions of the Province. Government is continuing its $1

million business and market development program to assist entrepreneurs in

pursuit of new business ideas and markets.

We have allocated an additional $200,000 to the Island Business Partnerships,

increasing its annual budget to $500,000. The increase will allow the IBP to

develop and foster a strong trade initiative with Ireland to work on joint

projects in the ocean and marine technology sector and to collaborate on the

emerging oil and gas sector in Ireland.

The department will continue to contribute to the core operational funding of

the Province's twenty Regional Economic Development Boards in the amount of

$1.2 million to carry out their economic development mandate.

INTRD is currently working on revising the five-year Marine Technology

Development Strategy originally launched in November 2004. This work includes

the compilation of an updated industry profile and an increased focus on ocean

technology partnerships with both Ireland and the New England States.

Ten local ocean technology companies and R&D institutions participated in

a trade and technology mission to New England in January 2006 at which time

Newfoundland and Labrador and Rhode Island representatives signed three MOUs

between industry, institutional and government stakeholders. As a key component

of the revised strategy, government will coordinate efforts to develop a large

scale ocean observing system project in the Northwest Atlantic. The project will

support efforts to improve Maritime defense and security, marine forecasting and

weather warnings, environmental conservation and pollution control.

The development of a strategy for the Centre of Environmental Excellence is

underway with the hiring of external consultants. This will lead to the

completion of a comprehensive business plan to position the West Coast as the

centre for environmental applied research and commercialization. The $500,000

allocated for this year builds upon last year's investment to establish the

centre. Funds will be used to complete the business plan as well as leverage

research and commercialization opportunities.

The Strategic Partnership Initiative has been very active during the past

year. Through the work of the Secretariat, in co-operation with the Newfoundland

and Labrador Statistics Agency, it has produced a major report on the

competitiveness of the provincial economy compared to other Canadian provinces

and some select American states and European countries. Based on issues

identified as competitive challenges through the research, the Strategic

Partnership Committee has established four sub-committees to research, analyze

and reach consensus on recommendations respecting labour market development,

investment capital, taxation and industrial relations.

To support and promote the work of the Rural Secretariat, government is

allocating an additional $150,000 to the Secretariat for a total budget of $1.85

million. The additional funding will support the ongoing work of the regional

councils, allow for addition public discussions, and enhance the ability of the

Rural Secretariat to undertake needed research on issues of importance to rural

Newfoundland and Labrador.

Mr. Chair, that is a brief overview of some of the activities and programs

that we will be working on over the coming year.

Thank you for your time, and I will certainly be happy to answer any

questions.

CHAIR: Thank you, Minister.

Who is going to speak now?

MS FOOTE: I will go first.

CHAIR: Ms Foote.

MS FOOTE: I just want to go through the different headings, to get some

answers to some of the variances in the numbers there.

In the Minister's Office, 1.1.01., the salary increase there, we saw a

budget for $197,000. That was revised to $180,000, and now you are projecting it

to be $198,700. Is that a new position in the Minister's Office? What accounts

for that?

MS DUNDERDALE: No, the savings in 2005-2006 were due to a vacant

political secretary position for a portion of the year.

MS FOOTE: Are you filling that position?

MS DUNDERDALE: Yes.

MS FOOTE: What is the position?

MS DUNDERDALE: It is filled. Doreen McCrate, she is my personal

assistant, my CA.

MS FOOTE: Is that the same as your executive assistant?

MS DUNDERDALE: No, Kimberley Mullins is my executive assistant. My

district assistant is - and that was vacant for a substantial part of last year.

MS FOOTE: The executive assistant is paid by the House of Assembly,

right?

MR. REID: No, your constituency assistant is paid by the House of

Assembly isn't it?

MR MACKENZIE: No, I don't believe so. That was the budgeted position

here that was vacant for a period of time last year.

MS FOOTE: So that is your personal political assistant?

MS DUNDERDALE: Yes.

MR. REID: Maybe you do not know the answer there, Deputy, but I thought

the House of Assembly paid for all constituency assistants.

MR MACKENZIE: No, it is in our salary plan.

MR. REID: Okay.

MS FOOTE: Transportation and Communications, budgeted $60,000, revised to

$29,000 and back up to $60,000. Is there some reason? Are you anticipating you

are going to need that? What accounted for the fact that you did not spend that

much?

MS DUNDERDALE: We did not spend that much this year due to my own

personal circumstances. I have not been able to travel as much as I would

normally do.

MS FOOTE: Okay, and I appreciate that.

In 1.2.01., Executive Support, just looking at Salaries component again, I am

wondering what accounted for the drop there in terms of the expenditures. It was

$868,600 down to $806,500 and you are budgeting $816,100. So, approximately

$60,000 less was used under Salaries. Was that someone laid off, or a position

not filled, or...?

MS DUNDERDALE: That was a reassignment to Policy and Planning Division,

and that person will come back to us.

MS FOOTE: So that one turns up over in another

section of your

department?

MS DUNDERDALE: It shows up on the next page, on Policy and Planning.

MS FOOTE: Okay.

Administrative Support, you budgeted $50,000 in Salaries there and revised

$73,100. Were there additional people hired there?

MS DUNDERDALE: Yes, it was a clerical position assigned to assist in the

department's registry, and that position will continue in 2006-2007.

MS FOOTE: Is that a permanent position or is it a contract?

MS DUNDERDALE: It is a temporary position.

MS FOOTE: So, the registry had no secretarial support up to that point?

MS DUNDERDALE: There was a position. This is an assistant to that

position. There was one position there and we have a second one now. It is a

temporary position for -

MS FOOTE: So, it is two support positions to the registry, is that...?

MS DUNDERDALE: Yes.

MS FOOTE: What do they do?

MR. MACKENZIE: They handle the filing in the central filing system for

the department. They handle the mail and various administrative matters that are

cross-departmental or across the branches.

MS FOOTE: Okay.

Professional Services, I am looking at budgeted last year $55,000, revised at

$30,000, and now you are looking at $70,000. Do you want to explain that?

MS DUNDERDALE: That is block funding provided to engage consultants as

required, and expenditures are dependent on identified initiatives. We budgeted

$55,000, we spent $30,000, and we have budgeted $70,000 because we are expecting

there will be increased activity in 2006-2007.

MS FOOTE: Such as?

MR. MACKENZIE: This, again, like the registry itself, would serve all

branches; so, if there is some initiative department-wide, this is where we

would take the money from. We have a number of initiatives underway this year

under Information Management, in trying to electronically organize our filing

system and so on. So, if we need a consultant for that, it would come out of

this vote.

MS FOOTE: Are you thinking primarily technical services that would be

required across the department? Is that...?

MR. MACKENZIE: Yes, that sort of thing.

MS FOOTE: IT type support?

MR. MACKENZIE: Well, I do not know if it would be IT type tech support

but it would be the sort of records management expertise which we do not have.

OCIO has some in-house within government, but I do not think they have the

numbers to help each individual department do the actual work - that sort of

thing - but we haven't got anything planned or proposals developed so it is a

place, if we needed to do that sort of stuff, you know, we would have the money

there.

MS FOOTE: Is it the kind of thing that you would tender for?

MR. MACKENZIE: Yes, tender or an RFP.

MS FOOTE: Let's go back to Purchased Services under Administrative

Support. You budgeted $31,700 and you spent $55,900. What accounted for that?

MS DUNDERDALE: The major expenditure under Purchased Services is that we

had a staff conference last year. We also had higher than average postage costs.

We partially offset the increase by reduced requirements to replace furniture,

equipment and office supplies.

MS FOOTE: Staff conference, where did that take place?

MS DUNDERDALE: In St. John's.

MS FOOTE: Where?

MS DUNDERDALE: At the Battery, I think it was.

MS FOOTE: Okay.

Policy and Strategic Planning, we have a significant salary increase. Well,

you budgeted $513,000 last year and spent $493,000, now you are going up to

$609,400. Do you want to elaborate what is behind that?

MS DUNDERDALE: The special projects coordinator that we referred to under

the Executive Support shows up here in this area - has been reassigned to this

area. As well, we have an additional policy analyst position which will be

funded. We also had savings in salaries -

MS FOOTE: Did you say that person is hired?

MS DUNDERDALE: Yes.

MS FOOTE: Who is that?

MR. MACKENZIE: I guess there is no problem sayings names, Mr. Chair, is

it? Leanne Combden is her name.

MS FOOTE: Leanne?

MR. MACKENZIE: Leanne Combden.

MS FOOTE: We call it Combden down in Grand Bank.

MS DUNDERDALE: Leanne has been with the department for some time.

MS FOOTE: Yes, the name rings a bell.

MS DUNDERDALE: Plus, in 2005-2006 we had savings because of the vacant

position.

MS FOOTE: Did you say Leanne has been with the department for some time?

MR. MACKENZIE: I guess halfway through last year. I do not know

precisely. Some time halfway through last year.

MS FOOTE: Okay.

Strategic Initiatives; I was looking at Transportation and Communications,

approximately a $70,000 increase there. Budgeted $28,000, spent $21,200, now you

are looking at $92,800.

MS DUNDERDALE: Yes. The extra funding is provided to cover travel costs

for the Ireland Business Partnerships Advisory Board and to cover travel by the

executive director and support staff. As you know, we brought the IBP into

government now. So the expenses associated with the IBP Advisory Board and the

travel of the executive director and so on all fall under that heading.

MS FOOTE: What was the rationale behind doing that?

MS DUNDERDALE: We felt, and it has been confirmed, that it would be a

more effective process to do what we had laid out to do in terms of our

relationship with Ireland. We wanted very much to beef up that relationship, to

strengthen that relationship.

In the discussions we had with the advisory board at the time, that was

outside government, they felt, as we did, that the whole structure could be

strengthened if we took the executive director inside of government where she

has now access to all of the support within the department in terms of trade and

investment, advanced technologies and so on, and can also go through government

for additional support, for example, from tourism and so on, in terms of

complementing the work of the Ireland Business Partnerships. The advisory board

has been struck and the budget has been significantly beefed up. We have six,

eight months under our belt at this time. I must say, it was a really good move.

It has been well received on both sides of the Atlantic.

MS FOOTE: Who is the Chair of the advisory board now?

MS DUNDERDALE: I Chair the advisory board as Minister of ITRD. Shawn

Skinner, the MHA for St. John's Centre, is the VP.

MS FOOTE: Who is on there from the private sector?

MS DUNDERDALE: The private sector; we have the Mayor of St. John's on

there. Dr. John Ashton is on there. Adele Poynter is on there. Maureen - I

cannot quite catch her last name - from Tilting is on there. I can get you a

list of all of the board members. Dr. Pat Parfrey is on there. I can get you -

MS FOOTE: Is that the one that Cathy Duke is - Cathy is the Executive

Director.

MS DUNDERDALE: Cathy Duke is the Executive Director of the IBP. I will

get you a list of the members of the advisory board.

MS FOOTE: In Grants and Subsidies here, $388,000. What do you expect to

be spending that on? Grants and Subsidies, for what and to whom?

MS DUNDERDALE: Again, that is the Ireland Business Partnerships and it is

for the initiatives and business and labour partners involved with the SPI also.

MS FOOTE: So, is that to travel to Ireland?

MS DUNDERDALE: Some of it is for the Ireland Business Partnerships and

some of it is also with the Strategic Partnership Initiatives, the labour

government business partnership. We use a part of that funding to - if I am not

mistaken - subsidize the salaries of the two staff with our SPI partners. So, we

have one person who works with the Federation of Labour and one person who works

with the Business Caucus of the Board of Trade. We pay a portion or...?

MR. MACKENZIE: We pay all of their salaries, plus (inaudible).

MS DUNDERDALE: We pay all of their salaries; the two salaries of those

two people out of that fund.

MS FOOTE: The individual works with the Board of Trade, did you say?

MS DUNDERDALE: The Business Caucus. They are one of the partners in the

SPI. The Federation of Labour is the second partner and then government is the

third partner. So, the other two partners have a salaried position that we pay

for out of this heading that helps them with research and do their piece of work

around their contributions to the SPI.

MS FOOTE: Let's look at Administrative Support. Property, Furnishings

and Equipment. There is only an increase of $3,500; nothing substantial there.

What was that for, just equipment of some sort?

MS DUNDERDALE: Which line is it?

MS FOOTE: Sorry. 1.2.05, Property, Furnishings and Equipment, $23,500.

You spent an extra $3,500 there. Was that -

MS DUNDERDALE: Okay. That was a vehicle we purchased.

MS FOOTE: A what? A vehicle?

MS DUNDERDALE: A vehicle.

MS FOOTE: For $3,500. Is it still going?

MS DUNDERDALE: The $23,500 was a vehicle.

MS FOOTE: Oh, okay. Well, if you can get one for $3,500, I (inaudible)

you are still on the road.

MR. REID: Yes, Loyola would want that for licence plates on it.

MS FOOTE: You certainly would not be able to get it checked and

inspected, right?

Export and Investment Promotion, under Trade and Investment, 2.1.01. Salaries

again, do you want to elaborate on the increase there?

MS DUNDERDALE: Extra funding is provided in support of trade policy,

trade development and the provincial nominee program. We are starting to really

punch up our activity around the provincial nominee program in terms of

promotion.

MS FOOTE: My colleague is asking: What is that? You can fill him in. I

know what it is.

MS DUNDERDALE: The provincial nominee program is a federal government

program where they allow provinces x number of units where we can attract

immigrants into the Province for either investment purposes to invest in an

existing business or to create a new business. The second prong of that is we

can bring in new immigrants to fill trade skilled shortages that we have. What

it actually does is provide investment money for the Province and bumps the

immigrants to the front of the visa line. Right now we have about 400 units, I

think. It has been ongoing for some time. Significant investment in the Humber

resort came from PNP.

MS FOOTE: Are they still availing of this program?

MR. MACKENZIE: Not Humber resort.

MS FOOTE: No?

MS DUNDERDALE: No.

MR. REID: How much do you get per immigrant under that fund, or how much

does the immigrant pay to come in?

MR. MACKENZIE: There is a minimum that they have to invest in a business

venture. Government does not receive any. So, it is going into a business

venture; $200,000 is the minimum.

MR. REID: How many did you have last year?

MR. MACKENZIE: I would have to check the numbers. We probably had about

thirty, but two-thirds to three quarters are skilled workers. There is only a

small number who are actually starting a business or investing in a business.

The majority are skilled workers. Rural physicians and so on come in under that

program.

MS FOOTE: What was that?

MR. MACKENZIE: Rural physicians and so on often use this program, under

the skilled shortages.

MR. REID: So, you have not had a large increase like they had when the

Humber Valley -

MR. MACKENZIE: No.

MS DUNDERDALE: We are not allowed the same kinds of investment that -

Humber Valley was a passive investment and we are not allowed to do passive

investments under the provincial nominee program. Immigration will not let us

circumvent their rules through the use of this program.

MS FOOTE: How did we fair after, in terms of the numbers that we were

able to go after versus other provinces? I remember there was an issue there at

one point in terms of, we wanted to increase the numbers. Did that ever get

itself sorted out?

MR. MACKENZIE: We finished up the first 300 in the first agreement. Many

of those were Humber Valley Resort and the aquaculture project down the South

Coast. Three hundred are used up. We have an additional 400 units now from the

federal government.

MS FOOTE: Okay. How many of those 400 -

MR. MACKENZIE: That is the thirty or forty that we have worked through so

far. There are still many of them left.

MS FOOTE: Okay. How many of those did you say were actually investors, of

the thirty or forty?

MR. MACKENZIE: The total number, generally, will run in 75 per cent

skilled workers, 25 per cent either investors in an existing business or

entrepreneurs who start a new business.

MS FOOTE: Are there any entrepreneurs?

MR. MACKENZIE: Yes, there are six or eight, I think, from the

entrepreneur category.

MS FOOTE: Okay.

MS DUNDERDALE: (Inaudible) you have to come to the Province now and you

have to take an active role in the management of the business.

MS FOOTE: Okay. The Transportation and Communications Budget, a

significant increase there too. Did you want to elaborate on that?

MS DUNDERDALE: It is basically the same thing. Extra funding provided in

support trade policy, trade development in the Provincial Nominee Program.

MS FOOTE: Supportive in what way? What does it cover?

MS DUNDERDALE: We are going to hire two new people in the Provincial

Nominee Program whose main task will be to promote the program and encourage

applications. Right now we are dependent on agents who either work for

themselves or work for some other companies and so on. There is a significant

piece of promotional work that needs to happen around this, so we are going to

hire two people to do that piece of work.

MS FOOTE: What type of individuals would you be looking for these

positions? What did you have in mind?

MR. MACKENZIE: We have not advertised or decided yet where to go. There

is a school of thought that it would be good to have people with experience in

immigration, people with international experience and so on and so forth, but we

have not even posted the jobs yet.

MS FOOTE: When do you anticipate posting them?

MR. MACKENZIE: Well, as soon as we can. We had to wait of course until

the Budget was approved, or at least Interim Supply. I guess we will try to get

at it in the next few weeks.

MS FOOTE: Okay. Grants and Subsidies there, under that same heading you

had a budget of $608,200. You did not spend that but now you are going to

$475,000. What does that cover?

MS DUNDERDALE: Network Newfoundland and Labrador has ceased to exist as a

separate entity, so the savings have been reallocated to salaries and operating

within this activity for 2006-2007.

MS FOOTE: Okay. Let's move on to Business Development. I am trying to

get a handle on some of the variances in the Budget. We have a lot of other

questions. I will try and move through these a little more quickly.

Business Development, 3.1.01. Grants and Subsidies is down for this year.

That is, in fact, down significantly. Why is that?

MS DUNDERDALE: Yes, the expenditures for payroll rebates for call centres.

They vary from year to year, depending on the number of employees and the gross

payroll.

MS FOOTE: That has all to do with call centre rebates?

MS DUNDERDALE: That piece does, yes, because our five-year agreements

with two of our call centres will expire in 2006-2007.

MS FOOTE: Investment Portfolio Management, budgeted last year $150,900,

spent $30,000, and you are looking at $50,900; details on that one as well.

MS DUNDERDALE: Yes, that is the fisheries interest subsidy program. The

expenditures were down in 2005-2006 due to continuing low interest rates.

MS FOOTE: What was that?

MS DUNDERDALE: It is the fisheries interest subsidy program.

MS FOOTE: What is that?

MR. REID: On boats? The loan board?

MR. MACKENZIE: Yes, the loan guarantee interest subsidy. At a time back

in the mid-1990s there was a subsidization of interest rates above a certain

threshold. That terminated around 1995. There is a declining number of fishers

still involved in that program, so interest rates remained low. As loans get

paid out, there is less need for that subsidy.

MS DUNDERDALE: When interest rates were really volatile is when this

program was introduced. That is my understanding. When interest rates went

really up high, then this program kicked in to try and provide some relief.

MS FOOTE: How many fishers would still be on the hook here? Do you have

any idea?

MR. MCCARTHY: There are thirty-one accounts left active.

MS FOOTE: Sorry, what was that?

MR. MCCARTHY: Thirty-one.

MS FOOTE: Thirty-one.

In the Salaries component there, your revised was $415,500 and now you are

anticipating $458,100. Is that a position?

MS DUNDERDALE: No, those salary savings in 2005-2006 were from vacant

positions, varying vacant positions throughout the year.

MS FOOTE: How many vacant positions were there in the department from the

last budget to this budget?

MS DUNDERDALE: We would have to get that information for you.

MS FOOTE: Can you get it for me, make it available to me?

MS DUNDERDALE: Yes.

MS FOOTE: I guess, in addition to that, how many of those are filled or

will be filled?

MS DUNDERDALE: It is our intention to fill all of our positions.

MS FOOTE: If you could be specific, Bill, in terms of what the positions

are as well? How soon could you get that for me?

MR MACKENZIE: Early next week.

MS FOOTE: Sure. If I could have it by early next week, that would be

fine.

Grants and Subsidies, under the same heading, Investment Portfolio

Management, $150,900 down to $30,000. What was that all about?

MS DUNDERDALE: That is the one we just spoke to.

MS FOOTE: Oh, the fisheries.

MS DUNDERDALE: Yes, the fisheries interest subsidy program.

MS FOOTE: All right.

Business Development continued, under heading 3.1.03., this particular

initiative, do you want to just elaborate on what is happening with that one? Is

that something that is - I know it is the Canada/Newfoundland and Labrador

Business Service Network. I notice that it is pretty stagnant in terms of the

allocations to that. Do you just want to elaborate on what is going on there?

MR. MCCARTHY: That is the joint partnership with us and the federal

government. ACOA puts in more money than we do.

MS FOOTE: I cannot hear you, Phil. I do not know if it is my age or if it

is your voice.

MR. MCCARTHY: That is the joint partnership with us and ACOA that run

that. The Canada/Newfoundland and Labrador Business Service Centre is duplicated

right across the country, and ACOA actually puts more money into it than we do.

I mean, that has been there for a number of years now providing service. They

have their book loan program. They have their library. They are doing stuff with

the Internet and voice mail and stuff like that.

MS FOOTE: So, what is the life of the agreement?

MR. MCCARTHY: There is no signed agreement. It just operates from year to

year and the federal system, they go in and they look for funding for two or

three year periods for all their centres right across Canada.

MS FOOTE: Okay.

Strategic Communications and Promotions, a Salaries increase again. Do you

want to tell me now what that is?

MS DUNDERDALE: Yes, there was a position there that we initially thought

that we could probably do without. We rethought that position and maintained it.

MS FOOTE: What was the position?

MS DUNDERDALE: A director's position.

MS FOOTE: Who is that?

OFFICIAL: It was Ruth Parsons, when we looked at this a year or a

year-and-a-half ago and developed the 2005-2006 budget. We thought we might have

to cut it, but we found other ways of keeping it so we have actually never

spoken to her about this.

MR. REID: Why not?

OFFICIAL: It didn't happen. Why would you cause concern?

MR. REID: Yes, but the salary budgeted last year was $605,000. You said

you fought for and kept the position. It was only $635,000 last year. It is

$681,000 this year. Is that the one we are talking about?

OFFICIAL: Yes.

I am unclear on your question.

MR. REID: You said you fought for and maintained -

OFFICIAL: No, not fought for; we found other funds so that we did not

have to go through with eliminating the position.

MS DUNDERDALE: Also, under that category, a position has been

reclassified and it is at a higher step than was budgeted. That accounts for -

MR. REID: For $45,000 more?

MS DUNDERDALE: Not all of it, no.

MR. REID: That was the point I was making.

MS DUNDERDALE: Okay.

MR. REID: You said you maintained the position, or managed to find money

for the position. What was budgeted was $605,900, you spent $635,800, and this

year you are spending $681,300. Was the person in the position last year?

Obviously she was.

MR. MACKENZIE: In that there would be six or eight positions so there

could have been other vacancies and so on for various parts of the year to end

up with the $635,800 figure.

MS FOOTE: The person who was in the position is staying in the position,

but the position was reclassified?

MS DUNDERDALE: A position has been reclassified in this area, because

this is for a group of people.

MS FOOTE: Not necessarily hers.

MS DUNDERDALE: No. There is a group of people in here, and some of those

positions might have been vacant for part of the year and so on.

MR. REID: I think what the confusing thing here was, when my colleague

asked why it went from $605,900 budgeted to $681,300 this year, you only talked

about one position.

OFFICIAL: Yes.

MS DUNDERDALE: Yes, because that accounts for a significant part of the

budgeted increase.

MS FOOTE: An increase by about $50,000 there for Transportation and

Communications?

MS DUNDERDALE: Yes, because in our projected budget for 2005-2006 we did

not expect to retain that position so we did not put in a salary for that

position. We decided to maintain that position, thus the difference in the

revised. It does not account for all of it because we had a number of vacancies

and so on, plus the higher step, but in terms of our projected budget, including

that position, the higher step and all the jobs being filled for the next fiscal

year, that is our budgeted amount of $681,300.

MS FOOTE: That makes more sense than the argument that we did not expect

to keep the position, because you had budgeted for the position. Anyway, we will

not go there. Your further elaboration makes more sense than you initial answer.

That is okay.

MS DUNDERDALE: She would not have been in that position all of last year

either. That is the other piece.

MS FOOTE: That is okay.

Professional Services, you are looking at $79,200, up from $34,500 that was

spent last year. What do you anticipate needing there?

MS DUNDERDALE: The $79,200?

MS FOOTE: Yes.

MS DUNDERDALE: We want to enhance the GMO program, Getting the Message

Out.

MS FOOTE: How do you propose to do that? Is that hiring more students?

MS DUNDERDALE: Yes.

It is my view that it is a very good program, but we are not able to deliver

it in enough regions of the Province. We are not getting into enough schools and

we are not sustaining our presence in the schools for a long enough time to make

a real impact, so we are really going to try and enhance that this year.

MS FOOTE: What about Purchased Services there? Because again there is a

significant increase there from what was actually spent to what you are

budgeting.

MS DUNDERDALE: There were savings in 2005-2006 because activities were

delayed around the government's branding initiative. In 2006-2007, again,

additional funding is provided to the GMO.

MS FOOTE: What is the status of the branding initiative?

MS DUNDERDALE: The branding initiative now has been transferred to the

Department of Business, and there has been substantial progress made.

MS FOOTE: What do you mean by substantial? You can tell me now or I guess

you can tell me tomorrow night, unless your boss is going to turn up and

surprise us all.

MS DUNDERDALE: I will be here tomorrow night.

Consultants have been engaged and are reporting.

MS FOOTE: What was that? Sorry.

MS DUNDERDALE: Consultants have been engaged and they have been doing

their piece of work around and are now back with a series of recommendations on

initiatives around the branding.

MS FOOTE: Consultants being the company that was hired?

MS DUNDERDALE: Yes, Target.

MS FOOTE: Target.

What was allocated for the particular initiative? What was the budget for

that?

MS DUNDERDALE: I will have to get that figure for you.

MS FOOTE: Okay.

I know it is a different department, Bill, but initially it was under your

department so I would assume that, before it was transferred - or did all the

branding aspect of it take place before it was transferred to the Department of

Business, or would you not have been involved prior to it being transferred?

MR. MACKENZIE: If it was in our department it would have been two budget

years ago, not in 2005-2006. In 2005-2006, it would have been in the Department

of Business. It was not in ours last year.

MS FOOTE: What was the Purchased Services spent on last year, then,

2005-2006, the $332,000?

MR. MACKENZIE: This is still under Strategic Communications and

Promotions?

MS FOOTE: Yes.

MS DUNDERDALE: Which line?

MS FOOTE: Purchased Services.

MR. MACKENZIE: Essentially, that is the department's advertising budget

so that is all promotional materials, newspaper ads, pamphlets, brochures, all

of that; it all comes out of this one Purchased Services.

MS FOOTE: Who is the Agency of Record now?

MR. MACKENZIE: Total is still the Agency of Record.

MS FOOTE: Okay. All right, let's move along.

Strategic Enterprise Development Fund, your estimates are down. You budgeted

and you spent essentially what you had budgeted last year and now you are

looking at $16,000. Why would that be? I would have thought, among the things

that would have increased, that would have been one of them.

MS DUNDERDALE: The total business development budget, $16 million?

MS FOOTE: Yes, it is down from $20 million.

MR. MACKENZIE: If you look at the total business development budget,

there is a $3 million drop, then, in the Strategic Enterprise Development Fund

and the other significant drop was in the call centre payroll rebate back in

3.1.01.

MS FOOTE: Yes, I saw that.

MR. MACKENZIE: That is the sort of total of roughly $3 million and

change.

MS FOOTE: That accounts for that.

Okay, heading 3.2.01., Strategic Industries Development, Salaries, were these

positions that were left vacant again?

MS DUNDERDALE: No, these resulted from vacant positions for varying

durations, and these vacancies will not continue in this fiscal year.

MS FOOTE: I am sorry, they will not continue?

MS DUNDERDALE: No, a number of these have been filled and we plan to fill

all of them.

MS FOOTE: Okay, so that will all be included in the information that you

are going to compile for me, Bill? These will as well?

MR. MACKENZIE: (Inaudible).

MS FOOTE: Okay.

Is that what will account for the increase as well in Transportation and

Communications?

MS DUNDERDALE: Yes, it is all associated.

MS FOOTE: Okay.

Under 4.1.01., Regional Economic Development Services, again your Salaries

budget is going up considerably there. Are these new positions?

MS DUNDERDALE: Well, there is a position that was formerly funded under

the LMDA in prior years that is now being funded by the department. As well,

there has been a reassignment of staff to administer the RSDF fund, which is a

new program.

MS FOOTE: The Labour Market Development Agreement, is that ongoing?

MS DUNDERDALE: Yes.

MS FOOTE: Okay.

Again, Transportation and Communications, you are up from your revised amount

of last year; you are up to $87,200. Again, is that with the positions or is

that...?

MS DUNDERDALE: That is to cover off travel costs in responding to

regional issues. There is more travelling by our regional office staff,

associated with some of the difficulties we have in Harbour Breton and

Stephenville, for example, as well as the administration of the RSDF fund.

MS FOOTE: Where is the funding for the REDBs? Where is that? Under which

heading is that?

MS DUNDERDALE: Grants and Subsidies, line 10 under 4.1.01.

MS FOOTE: Okay.

Why didn't you spend all of the money that was allocated last year? You are

back up to it this year, but I notice that you were -

MS DUNDERDALE: Some of the capacity building initiatives and some of the

actual operations of the REDBs were less than projected.

MS FOOTE: Do you want to elaborate?

MR. MACKENZIE: Rita, can you elaborate?

MS MALONE: Some of the year-ends for the REDBs do not fall with our

fiscal year-end, so in actual fact what looks like a savings will catch itself

up when their year-ends come. Some of them are renewed at a different time frame

than our year-end but we budget for one point two and then we budget another

$100,000 for the umbrella organization. So, it is a matter of their year end

differs than our fiscal year end.

MS FOOTE: Okay.

Business and Economic Development Services, 4.2.01. Again, in most of your

salary headings you have spent less than was actually budgeted and you are

looking at an increase from what was actually spent. New positions? Vacant

positions?

MS DUNDERDALE: Vacant positions that, again, we expect to be fully

filled.

MS FOOTE: Professional Services; now, a significant jump. Why is that?

MS DUNDERDALE: It paid for one time expenditures in 2005-2006 related to

a feasability study and financial review of the Stephenville Airport

Corporation.

MS FOOTE: What was the cost of that, minister? Just for that alone?

MS DUNDERDALE: Rita.

MS MALONE: The feasability study in terms of developing a business plan

was $35,000, and then there was further work with the Stephenville Airport on a

restructuring and bankruptcy protection. That was about another $150,000.

MS FOOTE: About another $50,000, so that is $85,000.

MS MALONE: Excuse me. It would be $35,000 for the business plan and then

about another $150,000 for -

MS FOOTE: One hundred and fifty?

MS MALONE: Yes, $150,000 for the bankruptcy protection procedures.

MS FOOTE: Who did the work for the $35,000?

MS MALONE: It was a consulting firm. The name escapes me now but -

MS DUNDERDALE: Erickson.

MS MALONE: Erickson. Thank you, minister.

MS FOOTE: Sorry, Kathy?

MS DUNDERDALE: Erickson. It was a company out of Calgary, and Ernst &

Young did the bankruptcy protection work.

MS FOOTE: What is happening with the airport now?

MS DUNDERDALE: It has a new board and new management. We have just been

in receipt of their business plan and it will probably be slow but they are on a

very solid footing to recovery.

MS FOOTE: Who is chairing the board?

MS DUNDERDALE: Rita.

MS MALONE: Bob Abbott, who is with Abbott and Haliburton, which is a

company of wholesale and retail products on the Port au Port Peninsula. So, it

is a businessperson.

MS FOOTE: You say you have their new business plan?

MS MALONE: Yes.

MS FOOTE: What direction are they going in, in terms of attracting new

traffic?

MS MALONE: Three directions; number one, in terms of improving the

revenues, they have managed to secure a contract financing around fuel with

Shell Canada which will alleviate their working capital profits to have fuel at

all times, which was an issue.

The second is, they have managed to secure some additional carriers to

replace some of the lost carriers that they have had and they are pursuing an

aggressive agenda on additional domestic carriers.

On the expense side, they have brought their salaries and other operating

expenses well in line with industry averages. So, their challenges improve the

domestic carrier and make the most - the expenses are very well in control.

MS FOOTE: Okay. The Comprehensive Economic Development plan there. In the

Grants and Subsidies, the revised is down almost half of what was actually

budgeted for but you are back up now higher than what was budgeted in 2005-2006.

What accounts for that?

MS DUNDERDALE: Well, that is all associated with the RSDF and that was a

new program in 2005-2006. Time was required to establish the funding criteria in

policies and procedures. There was a delay in the full implementation of the

fund in 2005-2006.

As well, changes to the funding criteria for some federal programs resulted

in delays in approving projects cost-shared with ACOA. So, they resulted in the

savings for 2005-2006. Also, some of the projects in 2005-2006 could not be

completed and require a carryover of funds to complete them. There is $1.8

million being carried forward for RSDF.

MS FOOTE: Innovation, Research and Advanced Technologies, the last

heading here, 5.1.01. Again, Salaries, were these vacant positions or new

positions?

MS DUNDERDALE: No, just delays in filling vacant positions.

MS FOOTE: The budget was $508,000 and you spent $418,000 and you are

looking at $625,000. If they were vacant positions, would you not have had them

in your budget and just not have spent the money? So, it looks like it is a new

position here somewhere.

MR. HOGAN: There were delays in filling two vacant positions in the

department in the last budget year. They started, perhaps, midway through the

year, our director's position and also life sciences development officer

position.

In the upcoming budget, we are going to fill a vacant position that has been

vacant for several years and also extend a temporary industrial development

officer position. Those two positions will assist in implementation of the

Innovation Strategy and work we are doing to revise the Marine Technology

Development Strategy.

MS FOOTE: Professional Services, can you tell me why it is up $507,500?

MS DUNDERDALE: Those extra funds were provided to implement the

Innovation Strategy.

MS FOOTE: How so? How will it be used to implement the Innovation

Strategy?

MR. HOGAN: We have just recently completed and launched the Innovation

Strategy and we are about to start implementation. There is a division in terms

of the allocations here for moving forward with implementation and there are a

number of programming elements related to commercialization and innovation

enhancement in which those funds will be allocated toward.

MS FOOTE: Purchased Services, again, is that because the Innovation

Strategy is just getting off the ground?

MR. HOGAN: Yes, that is right.

MS FOOTE: What do you anticipate having to purchase?

MR. HOGAN: Well, it could be a range of different items in relation to,

possibly, consultancy work or other program development work that we will be

doing. Again, primarily focused on commercialization activities and innovation

enhancement for industry groups or public sector institutions.

MS FOOTE: Grants and Subsidies, I guess it is all in keeping with just

getting this off the ground. Is that what it is? Is that the increase there as

well?

MS DUNDERDALE: There are two elements in that one.

In 2005-2006 there were cash flow savings related to the funding provided by

xwave support, to support IT sector development, and again the delays in

finalizing the Province's innovation strategy. So, in 2006-2007 extra funds

have been provided for the innovation strategy and to cover cash flows related

to the xwave special payment, which will support IT capacity building.

MS FOOTE: Will any of this money be available to small business?

MS DUNDERDALE: Yes, the $3 million commercialization fund is available to

small businesses. The $2 million enhancement is available to industry

associations, and there are also awards. There are a number of things we are

using -

MS FOOTE: Will this be advertising and they will apply? How will this

money roll out? How will they be able to access it?

MR. HOGAN: We are currently developing the program design criteria and we

expect it to be released later in the spring. There will be an application

process in which companies will undertake to apply to the commercialization

program. The applications will then be reviewed and decisions will be made upon

either acceptance or rejection of the proposals that come forward.

MS FOOTE: Will these be reviewed internally or will you have a separate

board? Who will be doing that kind of assessing of the applications in

determining whether or not they are eligible?

MR. HOGAN: We are currently making the decisions on those design

criteria. We will be conferring with other agencies that are involved in similar

work, such as the National Research Council and the Atlantic Canada

Opportunities Agency. There will be crosscutting (inaudible) within Innovation,

Trade and Rural Development itself to help undertake the reviews.

MS FOOTE: You will be rolling that out in the spring, is that what you

said?

MR. HOGAN: Yes, that is correct.

MS FOOTE: The last heading there - my colleague is getting a bit antsy, I

think; he has lots of questions there - 5.1.02., Special Initiatives-Offshore

Fund, are these all federal dollars or all provincial dollars? Anything there -

what is the situation with that?

MR. HOGAN: The allocation of $650,000 was the final payment under the

Offshore Development Fund for Bridges, the Marine Technology Building and

Marketing Alliance Initiative, and this initiative was established approximately

three years ago to support enhanced marketing efforts of the ocean-related

Centres of Excellence that were established originally under the Offshore

Development Fund. So, the final payment has recently been made and the work that

Bridges is currently doing will conclude at the end of the calendar year.

MS FOOTE: Is there anything going to replace it? Have we made application

to the federal government for a similar type of program?

MR. HOGAN: Currently there is no application before the federal

government. We have had some discussions - the board of Bridges, that is, have

had discussions - about perhaps what we would seek to do based on the feedback

and evaluations of the current allocation that has been spent. There will be a

full review and evaluation conducted on the successful Bridges project to see if

it warrants further investigation.

MS FOOTE: Okay, over to you?

MR. REID: Are you sure you're finished?

MS FOOTE: No, I have more but I will let you go now.

MR. REID: Can we go back to the Fisheries Loan Board?

You talked earlier about interest subsidy, how it is going down in price

soon. Are we still guaranteeing the loans for over $50,000 for new vessels or

used vessels or vessel equipment for fishers in the Province?

MS DUNDERDALE: Phil?

MR. MCCARTHY: There still is the Fisheries Loan Guarantee Program. That

is still on the go, yes.

MR. REID: Is for $50,000 or over, or is it more or less?

MR. MCCARTHY: The maximum guarantee can be up to $1.3 million.

MR. REID: No, but there is a minimum that you have to borrow before your

loan is guaranteed. Is it $50,000?

MR. MCCARTHY: I haven't seen one that small. I do not know what the

minimum is. I haven't seen one that small. Most of the ones we see are for

equipment or for major renovations for new vessels, and I would say the average

we are looking at is probably somewhere around $400,000 to $500,000.

MR. REID: Yes, I know, but I think at one point we were not guaranteeing

any loans under $50,000. What is the minimum amount you can avail of a loan

guarantee for? Do you understand where I am coming from?

MR. MCCARTHY: Yes, and I think you are talking about a program that was

on the go a number of years ago in terms of the fisheries loan program as

opposed to the Fisheries Loan Guarantee Program.

MR. REID: No.

MR. MCCARTHY: Okay.

MR. REID: Well, there is obviously - all right, let me rephrase it. If

there is a Fisheries Loan Guarantee Program, is that the one you have now?

MR. MCCARTHY: Yes.

MR. REID: Is there a minimum you have to borrow before you can avail or

before it is guaranteed by government?

MR. MCCARTHY: I would have to check. I am not aware of any minimum, but

this is for new vessel construction. It is not for just a small piece of

equipment. It is for new motors and stuff like that.

MR. REID: No, but if you wanted to go out and purchase a twenty-foot

fibreglass fishing vessel for $35,000 - new construction - would that be under

the loan guarantee program?

MR. MCCARTHY: I doubt it very much.

MR. REID: All right, so what I am saying is, there is no program for

fishermen - can you find out what the minimum amount is that they have to borrow

in order to be guaranteed by government?

MR. MCCARTHY: I can find that out. I am just looking at the ones we did

last year and they are all in the $200,000 or $300,00 or $400,000 or $500,000

range.

MR. REID: Yes, but there is a problem in the fishery, as you realize,

that some fisherman will go to a bank and say I need anywhere from $30,000 to -

I think there was at least one vessel in my district the year before last that

cost $1.6 million, and that is probably guaranteed by government. There are

others who might want to go for $30,000, to borrow from a bank, and the bank

will say, probably, no; because, as you know, the banks do not have a lot of

faith in the fishery in this Province.

What I want to know is, what is the minimum that government will go in and

guarantee the loan with the bank for?

The other is, can you find out - I think that it used to be, like, if the

bank had $50 million out in loans to fishermen, the loan board only guaranteed a

portion of the total.

MR. MCCARTHY: That is correct.

MR. REID: How much is out there now, and how much are we on the hook for?

MR. MCCARTHY: How much are we on the hook for, collectively?

MR. REID: In terms of a loan guarantee?

MCCARTHY: Twenty-nine million.

MR. REID: Twenty-nine million. That must have come down considerable in

the last few years, did it?

MR. MCCARTHY: It has probably gone up a little bit.

MR. REID: All right, but in the last five or ten years?

MR. MCCARTHY: I would have to look. The figures I have seen for the last

several years have always been around $27 million, $28 million and $29 million.

The last figure I saw was somewhere between $29 million and $30 million.

MR. REID: Rita, you are shaking your head yes and he is saying no.

MS MALONE: (Inaudible) listening to what you are saying.

MR. REID: Okay.

Anyway, Phil, if you could get those figures.

Minister, can I ask you some general questions?

MS DUNDERDALE: Sure.

MR. REID: You are the lead on a number of ministerial committees that

were established. In the House the other day, you made reference across the

floor to me about $1.4 million to the Fogo Island Co-op. What was that about?

MS DUNDERDALE: We have a loan guarantee out to the Fogo Island Co-op and

there was a trust fund of $1.45 million set up to offer some protection to the

Province should the company go down. The company found itself in some difficulty

last year and felt that, if they did not get some support, they would not be

able to operate, so we released the trust fund and increased our exposure by the

same amount.

MR. REID: I am not so sure that you increased your exposure. I think, at

least when I was Minister of Fisheries, the loan guarantee for the Fogo Island

Co-op was $2 million.

MR. MCCARTHY: That is correct.

MR. REID: How did you increase your exposure?

MS DUNDERDALE: We had $1.45 million in the trust fund covering that

amount of the $2 million. There was a pool set up that we took part of their

earnings every year and put in the trust fund.

MR. REID: This pool that you are talking about, the trust fund, that came

about - and when you say we, that loan guarantee for the Fogo Island Co-op was

probably there when Tom Rideout was minister in the 1980s. Now, it was

increased. We did not put it all there. We increased it at one point, but the

loan guarantee has been in place for the Fogo Island Co-op for probably twenty

years, Phil, if I am not mistaken, being financed.

MR. MCCARTHY: Yes, this is financed. The trust fund - the Co-op had to

take a percentage of their profit and put into the trust fund.

MR. REID: Exactly, so the trust fund was basically the Fogo Island Co-op's

money?

MS DUNDERDALE: They are (inaudible) off the government's exposure.

MR. REID: Yes.

MS DUNDERDALE: Yes, so we released that money. Now we were fully exposed

for the full amount of the loan guarantee.

MR. REID: For how much, $1.4 million?

MS DUNDERDALE: Yes, $1.4 million, the total amount of the (inaudible). We

were exposed right back up to the $2 million.

loan guarantee is, any amount of profit over a certain dollar they had to put

into a trust fund -

MS DUNDERDALE: - to cover off the government's exposure on the loan

guarantee.

MR. REID: Exactly, so I do not understand the comment you made the other

day when you said that we gave them $1.4 million.

MS DUNDERDALE: Well, we stepped out. We released the pool that was there

to cover. It was like, in a troubled company, taking on a higher risk of almost

$1.5 million. It was the right thing to do, and we have absolutely no regrets

about it, but we stepped up.

MR. REID: Yes, and every government before you for the last twenty years

stepped up. All I am saying is that at one point they had a $2 million loan

guarantee and they have a $2 million loan guarantee today.

MS DUNDERDALE: In very difficult circumstances today.

MR. REID: Yes.

I would assume, though, Minister, no disrespect, but they must have been in a

very difficult circumstance or they would have never gotten the loan guarantee

in the beginning.

MS DUNDERDALE: Yes, but an even more difficult circumstance when the loan

guarantee was set up and the way the loan guarantee has been maintained. It was

always considered prudent, I suspect - otherwise somebody would have changed it

- it was considered to be prudent to keep that trust fund, to keep that pool of

money, to reduce government's exposure should the company get into financial

trouble.

They found themselves in a difficult circumstance and, despite that, and

despite all the reasons why that trust fund or pool would have been set up in

the first place - it would have been to protect government against such a

circumstance as the company going down - despite all of that, this government

decided to release the pool and increase its exposure.

MR. REID: Well, the pool was money that Fogo Island Co-op.... You might

argue - and it is not your fault - you might argue that the reason they were in

financial trouble, you are saying, is because they were sitting on $1.4 million

up in the Department of Finance so that the Department of Finance would have

limited its risk on the loan guarantee.

MS DUNDERDALE: Well, I do not accept the argument but I think the point

for us was, Fogo Island Co-op found itself in difficulty. There was a

circumstance in which we were able to step up and help that company operate last

year and we did it, even though there is considerable risk that we may end up

having to pay the full $2 million loan guarantee.

Now, I do not know how significant that risk has been in previous years but

it certainly is this year, and was last year, by the company's own accounting,

to be a very significant risk.

MR. REID: Are you aware of any other loan guarantees to businesses in

this Province?

MS DUNDERDALE: There are several guarantees, yes.

MR. REID: How many of those are paying into that trust fund, profits from

their business?

MS DUNDERDALE: I am not aware.

MR. REID: I am not aware there is one, and that is the point I am making.

Fogo Island Co-op had a loan guarantee, and everyone likes to tell them that

they could not survive without a loan guarantee, but in actual fact they had a

loan guarantee for $2 million from the Department of Finance and $1.4 million

was sitting in an account in the Department of Finance, which was money that the

Fogo Island Co-op had sitting there.

MS DUNDERDALE: Mr. Reid, you know, I do not know who set up the loan

guarantee or the pool. I know, whoever set it up put the trust fund in place. I

know that your Administration maintained the trust, as probably did a former

Administration. People obviously felt that was an important thing to do.

Government felt that was an important thing to do. My only point is that Fogo

Island Co-op found itself in difficulty and, despite whatever previous

Administrations may have felt, we put ourselves in a position where we released

the pool and took full exposure, and that is the only point.

MR. REID: Just on that again, there haven't been too many loan

guarantees in the history of this Province that the Province has not paid out

on. This is one that has been around for, I suppose, twenty years or more and it

hasn't cost the government a cent. We have never paid it out. In fact, there

is also a fee that Fogo Island Co-op pays each year to government that is not

refundable or it does not go into the trust fund for the simple fact that they

have a loan guarantee. I do not know, what is it, 1 per cent or 2 per cent or

something? Are you aware of that?

MR. MCCARTHY: There is a fee on guarantees. I do not know if it applies

in Fogo's case. You might know. The fee is generally 1 per cent.

MR. REID: Yes, so, I mean, the exposure has been there and it has never

been called. Like, I would say it is probably - unless it is Torngat Fisheries,

they are probably two of the only loan guarantees in the fishery in the history

of the Province that the government has never had to pay out on. The fact that

they have had $1.4 million sitting in a bank, while other fishing companies are

out there saying that they have a $2 million loan guarantee, does not go down

well for the people who operate that Co-op, and it certainly does not go down

well for me when, in actual fact, for the past few years, the maximum the

government could be exposed was $600,000, according to your own statement. It is

just a matter of, I guess, perception out there in that we are still no more

exposed on the $2 million than we were when we originally gave it to them, which

was - well, the first million probably came around 1985 or before.

The other thing, minister, is you are also the lead minister in Harbour

Breton. I find it difficult to get a handle on what is actually going on down

there because things keep changing. If you remember the FPI debate back in June

of last year, in the Premier's speech late on a Friday afternoon, when he got

up and went through all the money that would go into Harbour Breton as a result

of the Income Trust, federal government money and provincial government money. I

think at one point in the afternoon it was somewhere in the area of $13 million

to $16 million. How much of that has actually gone into Harbour Breton?

MS DUNDERDALE: Well, some of the money that the Premier spoke about was

dependent on the Income Trust. Right now, there is approximately $4 million.

There is $2 million of ACOA money. It is more than that, actually. There is $2

million of ACOA money that has been committed to Harbour Breton. There is $1.25

million of provincial money committed to Harbour Breton. There is $1.5 million

from Fishery Products gone into Harbour Breton.

MR. REID: Has FPI forwarded that money in?

MS DUNDERDALE: Yes, they have.

MR. REID: And the $1.25 million from the Province?

MS DUNDERDALE: Yes.

MR. REID: And the $2 million has gone -

MS DUNDERDALE: From ACOA, about $1.5 million of that has been paid out in

projects. All of that money has been directed to the fish plant workers in

Harbour Breton.

MR. REID: So that would have gone in for employment?

MS DUNDERDALE: Employment, all of it.

MR. REID: So, somewhere in the area of $5 million?

MS DUNDERDALE: Over $4 million. The initial funding was ACOA. They have

used up $1.5 million and workers were employed at a rate of, I think, $8.50 to

$8.75 an hour.

MR. REID: How much?

MS DUNDERDALE: Eight dollars and fifty cents to $8.75. After the $1.5

million, there is some delay in approving. Because of the federal election, some

things slowed down in terms of getting the ACOA money, the remaining $500,000 in

development down there. So, we started to use our $1.25 million to fund projects

down there. After some discussion with FPI they deposited with the Government of

Newfoundland and Labrador the $1.5 million just before Christmas. We have

negotiated with the FFAW a wage enhancement package that that $1.5 million will

be used for. On Friday of last week, the first sixty-two disbursements were

made; $5,000 cash lump sums to -

MR. REID: That is just for the severance?

MS DUNDERDALE: It is not severance.

MR. REID: No, but is that the money that FPI -

MS DUNDERDALE: FPI never agreed to pay severance.

MR. REID: Okay. So, they gave the town $1.5 million.

MS DUNDERDALE: They agreed to give the town $1.5 million -

MR. REID: In lieu of.

MS DUNDERDALE: No, never in lieu of.

MR. REID: Okay, they will not mention severance so they just gave them a

gift of $1.5 million.

MS DUNDERDALE: No, the provincial government negotiated $1.5 million in

cash for economic development in Harbour Breton. The FFAW, with the local

membership in Harbour Breton, came to us with a proposal on how to use that

money because it was certainly left within the purview of the provincial

government how that money could be used. We could have used it for any kind of

economic development or purchase of quota or whatever. They came to us with a

proposal. We worked with them diligently and refined that proposal. It is that,

that is being delivered.

MR. REID: Is it going to be a wage subsidy, or cash?

MS DUNDERDALE: It will be either a wage subsidy or a lump sum payment.

Workers have an option. What we have tried to do is ensure that all of the 300

workers all capture the same amount of benefit from that $1.5 million.

MS FOOTE: You said there were sixty-two disbursements?

MS DUNDERDALE: Yes, of lump sum and there is another seventy plus in the

process.

MS FOOTE: How is that determined in terms of who is going to get a lump

sum?

MS DUNDERDALE: Everybody who worked at the plant had the opportunity to

have one rotation of work through ACOA, or ourselves or a joint project of all

of us. So, we gave them all one year. Some people had moved on or wanted to move

on and did not want to take the fourteen weeks work, so they opted for a lump

sum payment. Others, once we got the ruling, because the proposal allowed us to

build on the $8.75 that they were now earning, either with us or with ACOA, and

pump that up to $14.50 an hour, which allowed a greater return on their

earnings. It also gave them enhanced EI and was close to what they would have

received had the plant been - their annual income would have been very close to

what they would have received had the plant been in operation.

So, we have been very thorough in terms of - because some of the people -

initially, we wanted to implement this in October. We were delayed because of

waiting for the CRA ruling. Because some people had to be put through the

project, we developed with the FFAW - we did whole calculations based on what

you would have received had you worked for $8.75 an hour and plus received EI on

that basis, as opposed to what you would have received had you worked at $15 and

got your EI. We did out the income tax forms and everything, so we knew exactly

what your net would have been at the end of the year. It is on that basis that

we paid people -

MR. REID: I am not so sure we should be talking about that here,

minister. Revenue Canada might be listening.

MS DUNDERDALE: Well, we have a ruling from Revenue Canada which said that

the earnings could be used - that this money could be used as a supplement to

wages and will be considered EI insurable and that the lump sum payments will be

tax exempt.

MR. REID: So, there are projects going on as we speak?

MS DUNDERDALE: Yes, there are people working in Harbour Breton as we

speak. As they roll off EI we take them up. We find that people in Harbour

Breton had lots of time to think about - and we have sent people down to talk

with them and to make sure they understood clearly what the implications were in

terms of whatever package they decided to go for. We find that a number of

people - like a couple with two people working at the plant, they are taking one

of each. We have also made an arrangement with people who are doing the

fourteen-week enhanced wage program, that we will give them a cash advance on

their salary. So, on their first day of work they can get a cheque for $3,500

and then it is taken out incrementally over there. So, in terms, we have tried

to use that money to bridge them from the closing of the plant until at least we

get something on the go, and have that income reflect back and mirror their

earnings that they would have gotten had the plant been open, and also ensure

that there is some capacity, that they can get their hands on some lump sum

payments to take care of extraordinary bills.

MR. REID: Minister, how much longer do you think they will be working on

these projects? How much of the $5 million or $4.5 million has been spent, and

how much is left? In other words, how many more weeks can these people expect to

work, or will those who are currently on unemployment, when they come off in,

say, six or eight months from now, is there enough money left now to put them

back on the project?

MS DUNDERDALE: We have enough money to put everybody through the program

once. How many people, I would have to get an updated number for you on how many

people have been through. A significant number went on the program in the fall -

October, November, December - so a lot of them have just filed for EI now, but

exactly the breakout of the numbers I did not bring with me.

MR. REID: No, that is all right.

MS DUNDERDALE: We have $500,000 yet to come from ACOA, and we have about

$873,000 left in our pot. I am not sure how much will be left in the pot in

terms of the $1.5 million, but there is $5,000 in that $1.5 million for all of

the permanent workers on FPI.

MR. REID: So, anyone who has been on the project and has since gone on EI

anywhere from November until now, when their EI runs out some time between now

and next November, that is it for them unless something else comes along?

MS DUNDERDALE: Well, I mean, we will see where we are then.

MR. REID: You cannot remember how much FPI was going to give to the town

if they were successful in selling the income trust, do you?

MS DUNDERDALE: There was an additional $1.5 million.

MR. REID: Why did they feel compelled to give them an additional $1.5

million?

MS DUNDERDALE: Because we strongly argued, as a government, that if they

were successful in setting up the income trust and realized profits from the

income trust, that Harbour Breton had a right, also, to participate in the

profits from it, so there was another $1.5 million negotiated for them on the

completion.

I will have to get the term sheet again, but it seems to me, too, that there

was another - I will have to get it and check it - it seems to me there was

another investment in terms of the plant.

The other piece that the Premier talked about in the $14 million was that we

were prepared, if quota became available, such as it did in Arnold's Cove, to

do a similar quota buy under the same kind of conditions and so on that we had

done in Arnold's Cove, and that is still on the table.

MR. REID: But you have not had any takers or cannot find any fish.

MS DUNDERDALE: No, we have not been able to identify any quota at this

point.

MR. REID: Bill Barry has not moved into the plant yet.

MS DUNDERDALE: Because -

MR. REID: An environmental thing.

MS DUNDERDALE: Yes, that should be signed off within days, I am told by

the mayor.

MR. REID: What is he proposing to do down there right now if he were to

move in now?

MS DUNDERDALE: Right now, his plan is to put some of his own resources in

from his aquaculture operations to at least get the plant up and running. Time

is of the essence in it, so they are very anxious to get going.

MR. REID: The plant up at the Head of Bay d'Espoir is where,

traditionally, the aquaculture fish were processed.

MS DUNDERDALE: Yes. No impact on that plant. There are 152 fifty-week

positions there.

MR. REID: There are 100 fifty-week positions.

He thinks he is going to have enough excess fish to -

MS DUNDERDALE: Not to hire 300 people; I mean, we have been very clear on

that. The operation will begin slowly.

MS FOOTE: How many?

MS DUNDERDALE: He thinks maybe seventy in terms of his first hire for

this year.

MS FOOTE: How many worked in Harbour Breton?

MS DUNDERDALE: Three hundred.

MR. REID: The 100 in Bay d'Espoir, they have been there for years.

MS DUNDERDALE: Yes, it is a very solid operation and it will not be

impacted.

MR. REID: The plant stays open, if you can call that solid. The

aquaculture industry has not been very solid down there in the last twenty

years, if you take out the loan guarantees.

MS DUNDERDALE: There are all kinds of reasons for that.

MR. REID: No doubt about it, and I know a lot of them.

MS DUNDERDALE: In terms of where we are, and were we happen to find

ourselves today, these are the only aquaculture sites left in Eastern Canada,

and it appears that once you use the right business model and you have the right

supports in place that this is a very - Chile has put itself first in the world

in terms of fisheries, because of its aquaculture, so there is huge potential

here.

MR. REID: Yes, but Chili is one of the reasons why we are not succeeding.

MS DUNDERDALE: Unless we get innovative and competitive, we will not.

MR. REID: Our biggest problem is food, fish feed (inaudible).

MS DUNDERDALE: That is one of the most interesting things about Mr. Barry's

proposal, because the feed was running about $1,600 or $1,700 a ton and, as you

know, the surcharge that was on the feed made it almost impossible for any kind

of a company to succeed in that area. He has already reduced the cost of feed

down to about $1,200 a ton, and with the use of some underutilized species as

well as his seal oil and so on, which is what is now reducing his feed costs

because he has negotiated a deal with Shur-Gain where he uses his own seal oil

and stuff and manufactured grain, he hopes to reduce his feed costs for himself

and others to well under $1,000 a ton, and that is the model they use in Chile.

You have to be in control of your feed production if you are going to be

successful in aquaculture.

MR. REID: Any expansion in that, is it contingent upon quotas from the

federal government, additional quotas other than what he has now?

MS DUNDERDALE: Yes, his main area that he is interested in now is herring

on the South Coast. There hasn't been a study done on herring there in over

twenty-five years. Anecdotal reports say that there is a lot of herring right

along the whole South Coast and he, along with some assistance from DFO and some

assistance from DFA, is doing the science there now to substantiate whether or

not that anecdotal information is correct. Once that is substantiated and the

initial surveys look very good, then an application will be made for quota.

MR. REID: So, the herring will do it for him in terms of feed?

MS DUNDERDALE: Pardon?

MR. REID: Will herring quotas do it for him in terms of feed?

MS DUNDERDALE: Herring will certainly be a substantive part of it, yes.

He has some markets in the U.S. and in Europe for the herring fillet, and the

remainder can be used in the meal plant for feed.

MR. REID: On the loan guarantee that Mr. Barry has in Bay d'Espoir, do

the same rules and regulations apply to him that apply to the Fogo Island Co-op,

that any profit that he shows over and above a certain amount would go towards

putting this contingency fund in the pockets of the Department of Finance?

MR. MCCARTHY: No.

MR. REID: I did not think so.

MR. MCCARTHY: That loan guarantee under the program has to be out in

seven years.

MR. REID: Is he permitted to use the loan guarantee for renovations,

repairs or what not, in Harbour Breton?

MR. MCCARTHY: When you say Harbour Breton, in terms of what?

MR. REID: The plant.

MR. MCCARTHY: Pardon?

MR. REID: The plant. The operation of the plant in Harbour Breton. Will

he be requiring financial assistance from the Province for the plant?

MS DUNDERDALE: He has not made any requests, that I am aware of.

MS FOOTE: You know what my question is going to be, don't you?

MS DUNDERDALE: Tell me.

MS FOOTE: Fortune.

MS DUNDERDALE: Yes, Fortune?

MS FOOTE: You had a meeting with the Concerned Citizens' Committee.

MS DUNDERDALE: Yes, I did.

MS FOOTE: A lot of concern has been expressed there because obviously,

with respect to FPI, there is no indication that they have any plan at all for

Fortune.

Have you given any thought to the path you are going to have to go down for

Fortune in terms of the similarities with Harbour Breton that Fortune finds

itself in?

MS DUNDERDALE: Fortune is a little bit more difficult in terms of a way

forward than Harbour Breton. FPI left Harbour Breton, they were out, they were

gone and there was nowhere else for the fish plant workers in Harbour Breton to

go. It was done and it was over. So, we had to find a way forward, and we have

come some way in doing that. They have left FPI in Fortune. They have been very

clear and adamant, in every discussion that I am aware of, that they are not

going back to Fortune and being fairly dug in, in terms of that position.

However, it is not as straightforward as it is in Harbour Breton. There are a

number of things that will affect - what happens on the rest of the Peninsula

will have an impact on Fortune. For example, the early retirement program will

have an affect in Fortune. The number of positions that get opened up in Burin

or in Marystown, as a result of early retirement, will have an impact in

Fortune.

MS FOOTE: In terms of the number of people being impacted and the number

who will be eligible for early retirement, that is going to -

MS DUNDERDALE: I understand. There are approximately 300 to 400 people on

the Burin Peninsula who will be eligible for early retirement and, obviously,

they are not all going to come from Fortune. I think maybe there might be

forty-five or fifty, maybe fifty-five plus, in Fortune who will be affected.

Then you have positions opening up in Burin because of early retirement and I

would expect that anybody from Fortune who was interested in those jobs would

have rights to go into those positions.

MS FOOTE: My understanding from FPI is that those positions would also be

open to people from Harbour Breton.

MS DUNDERDALE: And that very well might be the case. It is certainly

likely that would have more - people from Harbour Breton might be interested,

but I think there would be a very particular interest in Fortune in terms of

what happens in Burin and Marystown and any positions that might be opened up

there.

MS FOOTE: I think anyway you look at it though, the numbers are such that

115 positions at a plant in Marystown that are going to probably take care of

about 300 people for fifteen weeks. Well, that means about 300 gone out of

Marystown. You have 300-and-some-odd gone out of Fortune. So, anyway you look at

it, you are going to find that there are going to be people in a similar

situation in Fortune as there are people in Harbour Breton.

MS DUNDERDALE: Well, there are a number of elements to it. There are new

positions that will open up in Burin. I do not want to go throwing numbers

around at this point in time, but if they bring in the second line there could

be a possibility of anywhere from fifty to ninety-two positions opening up in

Burin. Fishery Products' projections on their workforce in Marystown are now

based on processing only of the large yellowtail, and they will be processing

more than the large yellowtail. That will impact on the weeks of work and it may

impact on the number of employees. So, all of that is still in the mix. I am

just saying that in terms of it makes it all a little bit more difficult.

Cooke is very interested in coming into Fortune. The Concerned Citizens'

Committee are very excited about the fact that Cooke will be coming, or

interested in coming in, because they have an operator in the town who wants to

be there instead of looking for an excuse to get out, I suspect, is a plus right

off.

MS FOOTE: I guess the issue for them, and you are right, I mean they are

excited and I am excited about Cooke going in there, but two things. One, of

course, is the timing, and that is serious. I mean, how long do we expect people

to hang around? EI is running out, and these are the people of the age. If you

look at the age, the average age of the people who worked at the plant in

Fortune, you know, you are talking people who are in their fifties and too old

now to be applying to go elsewhere for work. Then if you look at Cooke, the

numbers are going to be such - I would expect there is no way it is going to

accommodate the numbers who worked at the plant in Fortune.

MS DUNDERDALE: No. I mean, if Cooke were to come in there tomorrow there

is no way that they would be hiring 200 or 250 people. They are looking for some

resource to process in Fortune, to keep the plant working and to keep some of

the skilled workforce in the area for them so that when their own production

starts in two years from now, that they will have the skilled workforce that

they need. But they are not going to be able to engage that amount of people. We

have to be practical and sensible about what is available.

We were there when the plant closed down last year in terms of FPI. To their

credit, they have come with some money for them. So, at least we were able to

pay more than $6.50 an hour. The Concerned Citizens' Committee now are

concerned because there are large numbers to come off EI -

MS FOOTE: I hear from them daily.

MS DUNDERDALE: Yes - in June and July, and we are looking at our response

to that now.

MS FOOTE: For June and -

MS DUNDERDALE: To start to pick up the people who are now coming off EI.

MS FOOTE: The quota that Cooke is looking for, is that something they

will be looking to the Province to purchase?

MS DUNDERDALE: Cooke's?

MS FOOTE: Yes. Cooke is saying they want a quota, something to hold the -

MS DUNDERDALE: Yes.

MS FOOTE: Is that something they would be looking to the Province to

purchase, a quota?

MS DUNDERDALE: No.

Well, the Minister of Fisheries met with Cooke yesterday and the evening

before and toured their facilities in New Brunswick and so on. I understand a

proposal was put to them by Cooke around the whole aquaculture piece and the

whole large piece. I do not have the details of that proposal. I have no idea

what that is, but they certainly have not asked us, in any discussion that I

have been engaged in with Cooke, to purchase quota, for the government to

purchase quota on their behalf.

MR. REID: Just after you spoke about Cooke Aquaculture coming into

Fortune, I listened to a spokesperson for that company, on CBC, say that they

would need a quota in order to go into Fortune.

MS DUNDERDALE: Yes.

MR. REID: Does that mean that they are looking at purchasing a quota

themselves, or looking for a quota from the federal government?

MS DUNDERDALE: I am not clear. I know there was some discussion with FPI.

I do not know the total picture of who - Cooke has not shared with me who they

have spoken with, with regard to quota. I know there was some initial discussion

with FPI with regard to quota, and FPI offered up, at least in one meeting, some

quota that might be available to Cooke. They have since backed off from that

position.

MR. REID: When you say they have offered it - for sale or as a gift?

MS DUNDERDALE: Oh, no, for sale.

MR. REID: To go back to Fortune, FPI gave Harbour Breton, for the lack of

a better word - you say it wasn't severance - a gift of $1.5 million. Did the

people in Fortune get a severance package when they closed their plant?

MS DUNDERDALE: Again, I will have to check my figures on this but FPI

provided, I think, X number of dollars. I am hesitant to give you the number

because -

MR. REID: Does X equal $1.5 million like in Harbour Breton?

MS DUNDERDALE: No, it was not $1.5 million, but it was enough to bring

the wage offer to the FPI workers in Fortune from $6.50 an hour up to $10 an

hour, and they have paid that money.

MS FOOTE: Was the $1.5 million for Harbour Breton based on the number of

employees at Harbour Breton?

MS DUNDERDALE: Pardon?

MS FOOTE: The number, the $1.5 million, was that done in calculations in

terms of the number of people? Would that be why it was less for Fortune?

MS DUNDERDALE: No.

MR. REID: I am not making a statement to you, but I will make it to my

colleague: It is my understanding that, at least by some, it was considered that

FPI owed the people of Harbour Breton a sum of money, and I have heard anywhere

from $1.5 million to $3 million, in severance, and that, because it was not

taken to the Labour Relations Broads or taken to court, then FPI forked out the

$1.5 million in Harbour Breton.

I do not expect you to respond to that. I am just wondering if there is a

similar situation in Fortune and, if so, how come they have not put the $1.5

million out down there?

MS DUNDERDALE: It was never -

MR. REID: I know that FPI never agreed that they owed them severance.

MS DUNDERDALE: Never agreed to pay them severance.

There are reasons, we all understand, that it was not taken to the Labour

Relations Board. I cannot imagine anybody who felt and had a sure case that they

were entitled to $3 million, that they would forgo the $3 million and take a

chance on $1.5 million.

MR. REID: Unless they were not certain that they were going to get any.

The other thing, too, is that, last June, by your own admission there, FPI was

going to, from June up until the income trust went down the tubes - which was

when, in September? - when Martin made the statement, there was supposed to be

an additional $1.5 million go into Harbour Breton, so it would have been $3

million.

MS DUNDERDALE: If the income trust was complete, there would be a

subsequent $1.5 million go into Harbour Breton.

Again, I have to refresh my memory with the term sheet but it seems to me

there was another $1 million there somewhere for plant refurbishment, or

something like that, but I will have to check the term sheet.

MR. REID: When you talk about early retirement, have you gotten any more

of a response to that proposal or to the idea of early retirement, more than

Stephen Harper wrote us back and told us we were going to get in his letter

during the election?

MS DUNDERDALE: Well, the Premier and I met with Minister MacKay and

Minister Hearn just over two weeks ago and we made the case very strongly. There

was no reiteration of former position or present position at that meeting in

terms of the federal government. We put our position forward very strongly and

then we followed up with a detailed proposal that went, just about a week ago

now, I think, to the minister.

MR. REID: In the detailed proposal, is it for FPI employees only?

MS DUNDERDALE: I will have to go back and revisit the proposal, because

the proposal came out of fisheries.

MR. REID: Could you, Minister, also find out the numbers it involved, the

age group, or how you intend to - one of the problems the last government, to

get an early retirement package, had from the federal government was back in the

mid-1990s, and one of the problems that was discovered after the program was -

and it took quite some period of time to put the proposal together. That is why

I do not understand, you waited two years, even though you say you had too many

people in the fishery. One of the problems we experienced, or I should not say I

- I was an employee; I was not an MHA at the time - was that at the end of the

day we settled on the age fifty-five. We had some workers who were fifty-four,

who had spent thirty-five years in a fish plant, while others who were

fifty-five had spent fifteen months in a fish plant. They qualified because they

were fifty-five, and the others did not.

Could you tell me what age group you are looking for and what people in the

Province you are asking for, and if there is also, in an early retirement

package, the possibility, or did you ask for a licence buyout for some

harvesters? Because both your Ministers of Fisheries have said in the past

two-and-a-half years that we have too many people in the industry, in the plants

and on the waters. If you could give us those details?

MS DUNDERDALE: I will give you what detail I am able to give you. I can

say to you that the concerns that you have raised, and the experience of the

former program, were all considered and taken into account in the drafting of

the criteria for this early retirement program.

MR. REID: Yes, and I would have assumed that you would know all of the

numbers because the FFAW would have had them, that you are proposing, and the

amount that the government of the Province is willing to pay. What percentage -

MS DUNDERDALE: Thirty million.

MR. REID: So, you are talking a $100 million program.

MS DUNDERDALE: That has been on the table for some time.

MR. REID: Well, I do not know if it has been on the table for some time.

MS DUNDERDALE: We made that proposal some time ago and spoke about it

publicly some time ago.

MR. REID: Are you talking about in the new year?

MS DUNDERDALE: Yes, certainly. At least two or three months ago.

MR. REID: Yes, because for some time - I mean, my colleague asked the

previous Minister of Fisheries the same question upstairs this time last year.

At that time there was no proposal gone to the federal government. I think

either she or I asked one of your two colleagues, Mr. Taylor or Mr. Rideout, in

November, or I guess it was December when the House opened. No proposal had gone

then.

MS DUNDERDALE: A proposal has gone now and the $30 million number has

been publicly talked about for some weeks.

MR. REID: Your minister said it the other day and I did not know if he

meant $30 million or 30 per cent.

MS DUNDERDALE: No, up to $30 million from our government and we expect

$70 million from the federal government.

MR. REID: That would be over the life of the program? Not for a year.

MS DUNDERDALE: I will have to get clarification on just the extent, the

life of that.

MR. REID: Yes, because if you pick the age of fifty-five then, obviously,

there are going to be some of them on that program for ten years.

MS FOOTE: Is it fifty-five?

MS DUNDERDALE: It is a combination of age and time in the fishery.

MS FOOTE: I want to go back to Fortune and just ask again: You said that

government was pretty insistent with FPI in terms of the one-point-five?

MS DUNDERDALE: Yes.

MS FOOTE: Have you had any discussion with FPI in terms of - other than

what the top up that they had put in - coming to the table and responding in

kind for the people who work at the plant in Fortune?

MS DUNDERDALE: Yes, it is all part of the discussion that is happening

now with FPI with regard to what is happening on the Burin Peninsula.

MS FOOTE: When? Do you have any idea -

MS DUNDERDALE: We have not accepted any of the proposals that FPI have

put on the table to date.

MR. REID: Minister, Derrick Rowe, when he was CEO last year, said, when

asked a question on the Fisheries Broadcast: Where is the future for FPI? He

said: FPI in Newfoundland will be a shellfish operation. I know you have not

accepted any of their proposals. Maybe they are content with you not accepting

them. Maybe they will not open these plants on the Burin Peninsula.

MS DUNDERDALE: That is not acceptable either, Mr. Reid.

MR. REID: I know it is not acceptable. It is not acceptable to the people

or us.

MS DUNDERDALE: And it will not happen.

MR. REID: The other thing, when Mr. Rideout said the other day that he

was considering bringing in legislation to force FPI to cross-subsidize their

ailing groundfish operations, you have said here tonight that in all discussions

you had with FPI, FPI is adamant that nothing is going to happen in Fortune. If

you are going to cross-subsidize those operations that are losing money, would

Fortune be included in that?

MS DUNDERDALE: Yes. I mean, we are going to look at all of the Burin

Peninsula operations. Everything is on the table at this point. FPI have said a

number of things that are not acceptable and -

MS FOOTE: So, I take it from that, you do not accept their position with

respect to Fortune?

MS DUNDERDALE: It is all in the discussion in the same way that the three

sixteen-week shifts - you know, processing only the large yellowtail. All of

those things are - that is what they have put on the table. This government has

not accepted any of them.

MS FOOTE: I guess the overriding question for the people who are being

impacted is the time frame. Do you, as a minister and the government, have a

point in time where you are saying enough is enough?

MS DUNDERDALE: Oh, absolutely. I mean, we understand that time is of the

essence here. We are progressing this as quickly as we can and, at the same

time, exploring other opportunities that may or may not be taken up, such as

Cooke.

MS FOOTE: I appreciate what you are saying but it is just that it is

really difficult -

MS DUNDERDALE: I understand that.

MS FOOTE: - on the people who are impacted.

MS DUNDERDALE: I, absolutely, understand that.

MS FOOTE: I mean, they hear all these - and that is, hence, the protest

that took place here. It is just that it has been going on for way too long.

MS DUNDERDALE: Yes, I understand that. That area of the Province is my

home. I lived for over forty years there. I spent a year on a protest line in

Burin trying to secure our plant in Burin. I have been asked to participate, by

the people of the Peninsula, in all of the meetings that have taken place around

this issue. So, I understand all of that. What we have to do is move this along

in a way that works best for the people of the Peninsula and works best in the

long term. These whole issues around cross-subsidization and so on are extremely

important.

At the end of the day, people also have to have some kind of comfort that we

are not going to be going through this year after year after year where people

have no stability. There are big issues around sixteen-week work, or

eighteen-week work, or even twenty-four week work, which is what Marystown was

doing previous to this. They had four shifts, two eighteen weeks, two

twenty-four weeks. As grateful as people are for that employment, that still

poses great difficulties for the region and for the long-term future of the

fishery.

MS FOOTE: They may be grateful but it is not what they want.

MS DUNDERDALE: It is not what they want and it is not what they are used

to, that is the other piece. I grew up in Burin where we had a fifty-two week

operation. In Harbour Breton, the issue ten years ago, was workers being able to

have Saturdays off. Some of these factors are beyond our control. There are some

that we can have some influence on, but there is a big piece of work before us

here.

MS FOOTE: I just hope that by the time you get to a point with FPI where

there is a resolution that there are people left to benefit from it.

MS DUNDERDALE: I agree.

MR. REID: Minister, has FPI ever indicated to government that they might

be willing to give up their quotas and let somebody else run those plants?

MS DUNDERDALE: I have never been in a discussion with FPI where that

proposal has been made.

MR. REID: Because you spoke earlier to Judy that there might be more

employment in Marystown because the three shifts of 100 people for fourteen

weeks is just going to be on large -

MS DUNDERDALE: That is their proposal.

MR. REID: Yes, that is on large yellowtail.

MS DUNDERDALE: Yes.

MR. REID: Well, yellowtail makes up 50 per cent of FPI's entire quotas.

MS DUNDERDALE: Yes, and the minister has stated quite clearly that it is

totally unacceptable and it will not happen, that they are going to ship out 60

per cent to 70 per cent of their quota out of the Province. It is just not going

to happen.

MR. REID: Well, minister, I cannot get an answer and maybe it is my

confrontational attitude or something, but I cannot get an answer out of your

colleague as to - FPI is still fishing and they have no plants open in the

Province. There is fish being landed somewhere. It traditionally was landed in

Newfoundland. I am not using Labrador because it was landed here in

Newfoundland, at one of their plants here. It is being landed. I do not know if

it is being landed in this Province or if it is being landed somewhere else, but

FPI does not have a fish plant open in this Province as we speak today. Where is

the fish going? I cannot get that answer.

I know we yell and scream at each other every day in the House of Assembly,

but it is my understanding that the Newfoundland Lynx was supposed to

land somewhere between April 3 and April 5 - I think April 5 is today - with

somewhere between 1.4 million and 1.8 million pounds of fish. Where is it going?

CHAIR: I would like to interject now.

We are discussing the Estimates of the Department of Innovation, Trade and

Rural Development. For the past twenty to twenty-five minutes it has been off

that topic. I would like to see if you have any more questions on what we are

here for. There is an opportunity for hon. members to ask questions like we are

asking now when the House of Assembly is open, but we are here tonight debating

the Estimates of the Department of Innovation, Trade and Rural Development. For

the past twenty or twenty-five minutes, the questions being asked are not really

relevant to the Estimates in that department.

MR. REID: No disrespect, Mr. Chair, but you are starting to sound like

Stephen Harper.

I would like to thank the minister, actually, because I have gained more from

this discussion here tonight then I have gained in the House of Assembly for the

last two-and-a-half weeks.

CHAIR: The House of Assembly is the time to do that, but we are

discussing the Estimates tonight.

MR. REID: She could have interrupted any time at all and said this is not

on the budget of my department.

CHAIR: We all know that it is not. You have the opportunity in the House

to ask these questions.

MS FOOTE: She was courteous enough to (inaudible)

MR. REID: She had courtesy enough to (inaudible).

CHAIR: I want to know if there are any further questions on the Estimates

of the department.

MS FOOTE: Well, let me tell you that my questions to the minister about

Fortune had everything to do with her department, and whether or not monies have

been allocated. I am thankful to you, Minister, for being so gracious tonight

and giving us your time in answering those questions, because they are really

pertinent to people in Newfoundland and Labrador who need to know whether or not

you have budgeted in your department, whether or not the federal government will

come to the table for the early retirement package. All of that - contrary to

your statements tonight, Sir - are relevant.

CHAIR: But they are not in the Estimates as presented by the department.

MR. REID: We will just say, where are they in the Estimates? - if you

want to be technical about it.

CHAIR: We went right through, pretty well, all of the subheads.

MS FOOTE: We can go back to the subheads again, if you would like to do

that. I can take it right back to the subheads again, if you are going to be

difficult about this, and I can go through every subhead and ask the questions

again about where I would find - if you want to put the minister through that. I

do not want to do that to her at this time in the evening, but I can certainly

do that. I can go back starting at the very beginning and go through all the

subheads and ask her again where I would find the money for Fortune. Do you want

to do that? Do you want to go back to the subheads?

CHAIR: If the minister is prepared to answer the questions, that is up to

her.

MS DUNDERDALE: You will not find money for Fortune under the subheads in

my department.

MS FOOTE: Where would I find that, Minister? Has there been money

allocated at this point?

MS DUNDERDALE: Not at this point. We are assessing now. We had our first

discussion with the Concerned Citizens Committee last week, in terms of numbers,

assessing the numbers, and seeing where we are and what will be required.

MS FOOTE: Okay.

Well, let's go back through the subheads because I am not sure - where

would I find, in the subheads, the allocation for Dr. House's position within

your department?

MS DUNDERDALE: He is in Executive Council now.

MS FOOTE: So he is no longer employed with the department, okay. What is

he doing in Executive Council?

MS DUNDERDALE: He is co-ordinating the provincial economic plan, ensuring

that all of the economic development initiatives that have been undertaken by

each department are all compatible with one another and working in synergy with

one another.

MS FOOTE: So, looking at all of the departments that have an economic

component or focus and -

MS DUNDERDALE: Tourism, INTRD, Environment, Natural Resources.

MS FOOTE: So, his salary unit will now appear in Executive Council?

MS DUNDERDALE: Yes.

MR. REID: Can I ask one question on it?

MS FOOTE: Yes.

You had better make sure it is on the Estimates.

MR. REID: It is on the Estimates.

Dr. House has gone out of your budget; Mr. MacKenzie took his position. Did

you hire another ADM, and who is it?

MS DUNDERDALE: No, we haven't hired another ADM.

MS FOOTE: So, there is a vacant ADM position in your department.

MS DUNDERDALE: In Trade and Investment.

MR. REID: Is the money in the budget for that person for this year?

MS DUNDERDALE: Yes.

MS FOOTE: Will you be filling that position?

MS DUNDERDALE: We may fill that position. We are reorganizing now because

we have just take on the Innovation Strategy. We are in that implementation. We

took on the RSDF fund last year, and the SME fund last year, all that program,

without any new personnel, so we are just looking at our staffing requirements

now and filling our vacant positions. Then we will see where we are and whether

or not we need that new position.

MR. REID: Did you have one secretarial position to accompany the ADM

position?

MS DUNDERDALE: We have a position that is shared between the ADM and IBP

Executive Director. Not between - between the ADM and the former ADM and the

Irish Business Partnership Executive Director.

MS FOOTE: I have to go back and refer to the Estimates. Where would I

find the budgeting for the REDBs and the Rural Secretariat?

MS DUNDERDALE: The Rural Secretariat comes under Executive Council.

MS FOOTE: When did that happen?

MS DUNDERDALE: That has always been so.

MS FOOTE: I thought it was budgeted, and I thought you were the Minister

Responsible for the Rural Secretariat.

MS DUNDERDALE: I am the minister responsible, but it all falls under

Executive Council.

MS FOOTE: What is the rationale there?

MS DUNDERDALE: That is the way the Strategic Social Plan was set up, and

we have just followed the same format.

MS FOOTE: Okay.

MR. REID: How much money do you put into each of those RED Boards?

MS DUNDERDALE: One point one million annually.

MR. REID: Each?

MS DUNDERDALE: No, for all of them.

MR. REID: There is one situated in Gander. How many employees, and how

much does it cost to run that office?

MS DUNDERDALE: Rita?

MS MALONE: Their employees vary, but in terms of the core funding between

ourselves and ACOA we have three core staff in all of the RED Boards in the

Province, but some RED Boards have more than that because they avail of other

programs and services, primarily LMDA, to do specialized hiring, so it varies,

but the core funding is three resource people.

MS FOOTE: With each board?

MS MALONE: Each board.

MS FOOTE: When you say the number of employees vary because they are

sectoral, is that -

MS MALONE: No, because of their abilities and their strategies they are

able to secure contract employees or other employees, primarily through LMDA,

for specific projects.

MR. REID: How many Regional Development Associations do you have in the

Province now?

MS MALONE: There are probably about seventeen that still would be

considered constituted and viable.

MR. REID: Do you give any direct core funding to any of those?

MS MALONE: No.

MS FOOTE: How are they being funded now?

MS MALONE: They are funded a lot by project administration fees

associated with project initiatives that they carry out.

MR. REID: Could you explain, maybe in an hour or so, about the role of

the RED Boards, especially the one in Gander?

MS MALONE: RED Boards are to excite and energize economic development to

try to encourage - it won't take me an hour - they will try to encourage

economic activity as it relates to their region, and encourage partnerships to

develop projects and sectors for their region.

MR. REID: If the development association in my district were looking for

funding from provincial and federal sources, would they normally go through the

RED Board? Or, in order to secure funding from the provincial government, would

they need approval from the RED Board or a recommendation from the RED Board?

MS MALONE: No, that is not an absolute requirement to secure funding.

AN HON. MEMBER: (Inaudible).

MS FOOTE: Mr. Chairman, we need some protection here from the peanut

gallery. They have no questions of their own.

MR. REID: Boys you can home, or at least one of you. We are not going to

cut the minister's salary tonight to $1 or anything.

MS FOOTE: So, the Rural Secretariat, you are the minister responsible.

The funding is Executive Council. What is the relationship between the Rural

Secretariat, can I ask that? The relationship between the Rural Secretariat and

the REDBs? Are they -

MS DUNDERDALE: The Rural Secretariat's relationship with the REDBs is

no different than their relationship with the school board or their relationship

with the Chamber of Commerce or with the health board or with the

municipalities.

MS FOOTE: Does the Rural Secretariat meet with - I know they have

representation, but how often would the Rural Secretariat meet? Would it meet

because of the makeup of the REDB and the rationale for their existence? Do they

meet regularly with them?

MS DUNDERDALE: No.

MS FOOTE: No?

MS DUNDERDALE: No. The rationale for the Rural Secretariat is completely

different from the rationale for the REDB. The REDB - as Rita has just explained

- is a facilitator of economic development. The ministerial committee really

focused - the four partners agreed to really try and focus that activity in

economic development by the REDBs.

What the Rural Secretariat is, is a way to have direct citizen engagement

with government on a regular basis. It is really a think-tank in each of the

regions, a researcher both from personal experience and from dedicated research

that they do to foster social and economic development by its engagement with

government; like best practices, best advice in terms of the design and

development, the design and policy, like policy development, and program design

and implementation. All REDBs, municipalities, school boards and so on, have a

role to play in the REDB process because it is about developing a vision for

regions of the Province. It is understanding where we are at the moment and

understanding if everything remains the same where we will be in 2016, for

example, and where we would like to be in 2016, and creating that vision from

citizens and from stakeholders who live in a region, then understanding what

elements are required to get us to that place and engaging with government

directly in terms of policy development and program design to help that happen,

to make that happen.

MS FOOTE: What is the budget for the Rural Secretariat?

MS DUNDERDALE: Just $1.85 million.

MS FOOTE: And it is one- point what for the REDBs?

MS DUNDERDALE: It is $1.1 million, but the difference is the Rural

Secretariat is totally funded by the provincial government. We only provide 25

per cent of the funding; 75 per cent of the funding for REDBs is provided by

ACOA.

MS FOOTE: Is that still being reviewed annually in terms of the existence

of the REDBs, whether or not they will continue? Is that something the feds are

- I know they used to look at it.

MS DUNDERDALE: They are doing two and three-year contracts now with a

number of the REDBs. REDBs also - I know the intention when they were set up,

that they would be facilitators and not implementors but a number of REDBs have

now become engaged in implementation, especially in things like Broadband, a

brand new project coming out of the federal government and so on. We have

partnered with them in that, so they are also realizing earnings from that.

Another difference for REDBs is that now we have the Rural Secretariat

Diversification Fund, that $5 million fund that did not exist before, that they

can now avail of for projects.

MS FOOTE: Okay.

MS DUNDERDALE: That $5 million is dedicated almost completely to

community in terms of organizations and so on.

MS FOOTE: Can the Rural Development Association access that as well?

MS DUNDERDALE: Yes.

MR. REID: In your total budget, how much total money is available for

loans to businesses, whether they be small or large?

MS DUNDERDALE: Now we have $18 million circulating in our SME fund. That

is a revolving fund that we set up last year. We put $10 million in it last

year. We have a further $8 million investment in that fund now. That is set up

as a revolving fund. So, $8 million goes in with this new budget. We have $1

million in our Business Market and Development fund, and we now have a $3

million commercialization fund under the innovation strategy.

MR. REID: On the revolving fund, can you explain what you mean by that?

MS DUNDERDALE: It is money we lend out to businesses, and when the

payments are returned they return to the fund. That fund will become, within

five years we hope, self-sustaining.

MR. REID: Did you lend the whole $10 million last year?

MS DUNDERDALE: Yes.

MR. REID: How much of that is back?

MS DUNDERDALE: No, we did not lend out all $10 million last year. We put

$10 million to set up the fund last year and we put a further $8 million in the

fund this year. In terms of the SME, we were late in the year before we actually

started to lend the money out. It is just over $4 million lent out of that fund

last year.

MR. REID: Did any of it come back in?

MS DUNDERDALE: No, it is pacing itself.

MR. REID: Someone paid back a buck somewhere, did they?

So there is -

MS DUNDERDALE: There is $18 million -

MR. REID: Yes, but you lent out some. That is not back yet.

MS DUNDERDALE: In our SME, yes, and some is coming back. A further $8

million into that now. There is $1 million in the Business Market and

Development Program and there is now $3 million in our commercialization fund of

our innovation strategy.

MR. REID: In terms of grants, do you have any outright grants for

businesses?

MS DUNDERDALE: The Business Market and Development Program is a granted

program.

MR. REID: Yes. What does that do?

MS DUNDERDALE: It helps business get ready to export, to explore markets.

MR. REID: So it is an export thing, is it, outside of the Province?

MS DUNDERDALE: Partially, I mean it is more than that.

MR. MACKENZIE: It is marketing assistance, new product development and so

on, on a dollar for dollar basis with SMEs.

MR. REID: You mentioned broadband, minister, how much has government

spent on that in the last few years?

MS DUNDERDALE: We spent somewhere around $1 million in terms of the

brand, which levered out -

MR. REID: How much did you say, minister?

MS DUNDERDALE: One million dollars in terms of the branding, BRAND

program, the federal government program, which levered out another $16 million

in broadband development in the Province.

MS FOOTE: Who is the partner now? Is it Persona?

MS DUNDERDALE: It could be Aliant or Persona.

MS FOOTE: I am sorry, then I misunderstood. I thought that the

partnership had been defined at this point, that it was Persona, the government

and the federal government. No?

OFFICIAL: You may be thinking of the CDLI, the Centre for Distance

Learning and Innovation. That is a specific -

MS DUNDERDALE: Under the Department of Education. That is another $5

million that was invested in broadband under that program.

MS FOOTE: Oh, that is Persona, yes.

MR. REID: That was when I was the Minister of Education, I believe. I

think we put in $5 million, the federal government put in $5 million and Aliant

was going to match $5 million. Am I right?

MS DUNDERDALE: Yes.

MR. REID: Has that been done?

MS DUNDERDALE: Yes.

MS FOOTE: But it is not Aliant now, it is Persona.

MS DUNDERDALE: Yes.

MR. MACKENZIE: The BRAND initiative was a different matter. That is

Broadband for Rural And Northern Development. There are a number of individual

projects throughout the Province on that one.

MS DUNDERDALE: Also, a number of the REDBs were involved in that. Of

course, they were one of the partners but did not have access to the -

MR. REID: Under that program, who decides where it goes? The company that

applies?

MS DUNDERDALE: No, the federal government decided which ones they

approved. So, any number of -

MR. REID: So, if there is no broadband on New World Island in Notre Dame

Bay, they should go to the federal government -

MS DUNDERDALE: Well, there were two rounds, actually, of the BRAND

initiative. I think that was introduced by your former colleague, Mr. Tobin.

Proposals went in from all over the Province, and the proponent - and they

brought a partner with them, which could have been Aliant or Persona or whoever.

The federal government decided which of those projects were approved. So, they

came to us, a number of them. Some of them managed it on their own. A number of

them could not and we provided the funding to leverage out the federal

government funding.

MR. REID: So, is it still ongoing or are they complete?

MS DUNDERDALE: The BRAND initiative is complete. What we have now

undertaken is broadband in government - a strategy is one we have undertaken now

where government is reviewing all of its broadband needs right throughout the

Province; in Health, in Education, in INTRD, wherever we have government

offices, wherever we need communication services. This is all being done through

the Office of the OCIO. We are determining what is the most effective, efficient

way to get those services for government. In doing that, we can extend those

services to the communities in which we are receiving them so that we can

maximize what it is that we need our dollars, in terms of government, in terms

of providing those services but also how we can make those services available to

as many communities in the Province as we can through our own initiatives in

terms of meeting our own needs.

MR. REID: Did you put any money in the budget for it for this year?

MS DUNDERDALE: It does not fall under my department. So I do not have -

MR. REID: Whose department would that fall under?

MS DUNDERDALE: Executive Council.

MR. REID: So, if we never had broadband in Twillingate but you thought it

necessary to put the hospital in Twillingate on broadband, you could service New

World Island and Twillingate island.

MS DUNDERDALE: Well, we would look to see what synergies were there, that

whatever services we were using that we could make available to the community.

We also do that with CDLI. When you bring services into a school in a small

community usually it is in CDLI, and the people in that community are also able

to avail of the services then because the service provider is there.

MS FOOTE: Your Regional Diversification Strategy -

MS DUNDERDALE: Yes.

MR. REID: Tell me what that is, will you?

MS FOOTE: He wants to know what it is.

MS DUNDERDALE: In all areas and all regions of this Province there are

opportunities for diversification. There are wonderful things happening in

aquaculture, in agriculture, in agrifoods, in mining and fur breeding, in

manufacturing, in marine technology. I mean, the list can go on and on. We have

identified a number of those opportunities in all regions of the Province and we

are making funding available to support those industries, through the SME Fund,

through their rural diversification strategy, in terms of the innovation

strategy, the marine technology strategy, in terms of what we are doing in the

White paper in education in strengthening the college system to respond to the

industrial needs in each of the regions.

Too many of our communities have a single economy and they have a single

economy in the fishery that is under extreme pressure, and has been for some

time. There is significant work and investment required, not only in trying to

support the fishery and ensure that it is relevant in the world in which we

live, but also to diversify the economy so that when we hit these lows, in

whatever industry it is, that there is some capacity in the region to absorb it.

In far too many of our communities, especially our rural communities and our

coastal communities, we do not have that capacity. So, we have to make a

significant investment, and we are doing that in terms of infrastructure, in

terms of communications, in terms of our business development plan, our business

initiatives coming out of INTRD through investments in natural resources, in

fisheries, in environment, to really maximize opportunities that are there.

MS FOOTE: Under the Estimates Committee, when you talk of this particular

initiative are you really focusing on the success of them based on looking at

hubs, so that on the Burin Peninsula you would look at Marystown as being a

centre of activity? When you are talking about diversification, obviously, you

cannot look at a community like Lamaline or Lawn and -

MS DUNDERDALE: Well, just let me share this story with you. Last week I

had a meeting with an older gentleman out of Hermitage. He had developed a mould

for ship building that is probably one of the most innovative projects that has

ever been done in this Province and the prototype of this was built in

Hermitage. So, in terms of opportunities, they can happen anywhere in the

Province. This man has had help from us. He has had help from the federal

government. He certainly has the distinct possibility of being helped again now

under our innovation fund. A sale of one mould will bring him home $2 million

and a great opportunity for shipbuilding, which he certainly intends to do in a

rural part of the Province. In terms of where opportunities are, that could

happen in Lamaline and would be supported in Lamaline just the same way as we

are trying to support this gentleman in Hermitage.

MS FOOTE: I said that because I know when Dr. House was in the position

of deputy minister, one of the things that he referenced in all of his material

was the importance of hubs. I was just a little concerned, and I am glad to hear

that is not your focus at this point in time; that focus is gone to Executive

Council, I hope, with Dr. House, where you are now looking at doing things in

places like Hermitage or Lamaline. That is encouraging, to hear that.

MS DUNDERDALE: We have always looked at that. All of our research and all

of our experience shows us that, where regions are healthy and thriving, and

where small communities have the greatest chance of survival, is when they have

an urban core. That is not hard to test, when you can look at different areas of

the Province and see some of them that are in serious difficulty, and you will

see that a lot of them do not have a strong urban core. So, large centres are

extremely important to smaller centres all around them, but the smaller

communities are just as important to the urban core. All of those terms are

relative, like urban core, of course, in the Province. Over 52 per cent of small

businesses in this Province are outside the Avalon.

MS FOOTE: Absolutely.

MS DUNDERDALE: So, wherever an opportunity exists and has the possibility

of success and creating employment and diversifying the economy, we are more

than prepared to look at it and support it, encourage it, and do whatever we

can.

MS FOOTE: Well, that is it for me.

MR. REID: With regard to Stephenville, Madam Minister, is there any money

in your budget for the committee that you struck, or helped strike, over in

Stephenville?

MS DUNDERDALE: There is funding in our budget for the Stephenville

committee, for the task force.

MR. REID: How much?

MS MALONE: (Inaudible) and fifty thousand for the work of the community