April 19, 2005 RESOURCE COMMITTEE

The Committee met at 9:15 a.m. in Room 5083.

CHAIR (Harding): Good morning, everyone.

I would like to welcome you all to the Resource Estimates Committee meeting.

This morning we are debating the Estimates for the Department of Innovation,

Trade and Rural Development.

We will begin with our usual introductions, I guess. I just want to remind

you that, when you speak, you just press your microphone on and, when you are

finished speaking, you have to turn it off; because, I think, with too many

microphones on at one time it might cause some problems for the media people.

Anyway, my name is Harry Harding, Chair of the Committee and Member for

Bonavista North; Judy Foote, the Member for Grand Bank; Ray Hunter, the Member

for Windsor-Springdale; Charlene Johnson, the Member for Trinity-Bay de Verde;

and Kevin O'Brien, the Member for Gander. Two other members, I think, will be

joining us a little later -

OFFICIAL: They are on the way.

CHAIR: They are on the way? Okay.

- the Vice-Chair, Gerry Reid, the Member for Twillingate & Fogo; and

Eddie Joyce, the Member for Bay of Islands.

Now, Madam Minister, if you would like to do your introductions.

MS DUNDERDALE: Thank you, Mr. Chair.

Good morning. It is a pleasure to be here this morning.

The officials accompanying me this morning are: Dr. Doug House, my Deputy

Minister; Rita Malone, Assistant Deputy Minister for Regional Development; Phil

McCarthy, Assistant Deputy Minister for Strategic Industries and Business

Development; Bill Mackenzie, Assistant Deputy Minister for Trade and Investment;

Cathy Duke, Executive Director, Ireland Business Partnerships; Ken Curtis,

Financial Operations, Central Administration Division; Dennis Hogan, Assistant

Deputy Minister, Innovation, Research and Advanced Technologies; and, at the

table on the side, Lynn Evans, our Director of Communications.

CHAIR: Thank you.

Mr. Reid just joined us. I think you all know him.

I guess we are about ready. We have some kind of standard procedure that we

try to follow, but it does not always work that way. We give the minister the

opportunity (inaudible). Following that, then, we try to alternate ten minutes

each but it doesn't really work that way. Anyway, we will see how it goes.

Madam Minister you may begin.

First, I will ask the Clerk to call the subhead.

CLERK: Subhead 1.1.01.

CHAIR: Subhead 1.1.01.

I ask the minister now to begin.

MS DUNDERDALE: Thank you, Mr. Chair.

I will not take all of my fifteen minutes.

The Department of Innovation, Trade and Rural Development has a pivotal role

to play in shaping and improving the economy of this Province. We will identify

new opportunities for economic growth, strengthen our rural communities, and

develop strong regions.

The department is being allocated $43.6 million in 2005-2006 to allow it to

implement its plans for economic growth and job creation for the Province.

The department has established an Innovation, Research and Advanced

Technologies Branch to focus on high-growth opportunities, information

technology, marine technologies, biotechnology, environmental technologies,

defense and aerospace.

We are currently developing a provincial innovation strategy. As a

government, we are very excited about implementing the strategy so that we can

utilize the many advantages of research, technology and ingenuity in all regions

and all economic sectors of the Province. One million dollars has been allocated

in Budget 2005 to implement the innovation strategy.

Last month, we announced the details of the 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.

To further support the growth of the regions, government has established two

funds which will address two significant economic development needs: business

financing and community development. Government will establish a $10 million

revolving fund to provide business financing to small and medium size

businesses. The financing will allow eligible businesses the opportunity to

start up and expand, thereby helping them create and retain long-term

sustainable jobs.

The fund will target strategic growth sectors such as manufacturing,

value-added production, IT and tourism. In particular, the fund will target

businesses which have export potential and need assistance to enter or expand in

external markets. The fund will be administered through the Business Investment

Corporation, an arm's-length agency that reports to me, as Minister of

Innovation, Trade and Rural Development. Revenue collected from the fund will be

retained by the Business Investment Corporation for reinvestment.

This reinvestment in regions will further support business growth and

expansion, especially in rural economies. To establish the revolving fund,

government has added $7.9 million to the $2.1 million previously allocated for

the Seed Capital Equity Program.

Government has also established a $5 million Regional-Sectorial

Diversification Fund. Through this fund, government will provide non-repayable

contributions for economical development initiatives that address regional and

sectoral development, diversification and innovation.

Funding will be allocated based on criteria such as the project's ability

to lever funding from other sources, and whether the project has tangible

economic development benefits. The aim is to contribute to long-term sustainable

employment and growth of small and medium size enterprises in each region.

Details on program criteria for both of these funds will be released in the

coming weeks.

Government has also increased the budget for our department's Business and

Market Development Program from $500,000 to $1 million. The increase provides

more assistance to new entrepreneurs and expanding small businesses to pursue

new business ideas and new markets, including product development, implementing

market strategies, and advancing new technologies.

Government has recently announced the structure of the Rural Secretariat that

will work with local and regional partners to build strong and dynamic

communities. It will comprise nine regional councils and one provincial council

which will act as an advisory body to government, providing guidance on rural

and regional issues in all parts of the Province.

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. The work of the ministerial review committee, which has

representation from my department, ACOA, the Federation of Municipalities, and

the Newfoundland and Labrador Regional Economic Development Association, is

continuing. The review is being conducted so that boards will have a sharper

focus on the economic development agenda.

In November, the provincial government announced a five-year $1.5 million

strategy to establish Newfoundland and Labrador as the centre of excellence in

marine and ocean technology. We intend to capitalize on those strengths by

making our marine technology sector the most innovative and the fastest growing

in Canada. Budget 2005 allocated $338,000 for the marine technology strategy.

In January, a labour-sponsored venture capital fund was established in the

Province. Through this initiative, local capital will be collected and invested

in local businesses, which is good news for entrepreneurs with small and medium

size enterprises.

In November, the provincial government announced it would increase funding

for the Ireland Business Partnerships by $200,000 to $300,000 to increase

efforts to identify, foster and promote trade and partnership opportunities with

Ireland in the areas of business, education and culture. Budget 2005 continues

that funding commitment.

In December, we officially launched Nearshore Atlantic to establish the

Province as a recognized centre for information and communications technology

development for COBOL and marine simulation. Nearshore Atlantic will pursue

opportunities to attract business to the Province from markets around the world.

Two hundred and fifty thousand dollars has been budgeted for this year.

In partnership with the Government Purchasing Agency, we are implementing a

Supplier Development Initiative to assist businesses in bidding on government's

goods and services. The overall goal of the initiative is to strengthen the

relationship and understanding between public sector purchasing agents and

private sector groups to facilitate the development of a local supplier

development community. The Supplier Development Initiative will allow private

sector firms to meet with public sector purchasing agents to learn about

government purchasing requirements, and purchasing agents to gain an

understanding of supplier capabilities within Newfoundland and Labrador.

Together with the Labour Relations Agency and the Department of Finance, the

Newfoundland and Labrador Federation of Labour and the Newfoundland and Labrador

Business Caucus, ITRD is moving forward with the Strategic Partnership

Initiative, an initiative to build a consensus, an opportunity for collaboration

with business and labour stakeholders around strategic issues facing the

provincial economy. The initiative is facilitating work to assess and address

factors affecting the competitiveness of the economy in global markets,

including labour market development, investment capital, tax policy and labour

relations.

We are moving ahead with the Red Tape Reduction Task Force. A committee of

government, business and labour representatives will seek input from businesses

and related organizations to identify inefficient regulatory and administrative

red tape and recommend measures to remove barriers to business growth and job

recreation.

In conclusion, Mr. Chair, I want to say that the programs we are implementing

and continuing are based on sustainability and deriving long-term economic and

employment benefits for people in all regions of the Province.

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

CHAIR: Thank you, Minister Dunderdale.

Mr. Reid.

MR. REID: Thank you.

Under 1.2.03., Policy and Strategic Planning, an extra $200,000 is allocated.

I don't see what positions. They don't seem to be in the Salary Details on

that page. Are you hiring some new people there?

MS DUNDERDALE: I just have to find out where you are now. What line

again? Salaries, is it? Just give me the line again.

MR. REID: Yes, there is an extra $200,000 put in there, but there do not

seem to be any Salary Details on that page.

MS DUNDERDALE: That is for temporary staff for the Red Tape Reduction

Committee.

MR. REID: The what? The Red Tape Reduction Committee?

MS DUNDERDALE: To facilitate the work that is being done there. Also,

there is funding in that line to fill a director's position.

MR. REID: Okay.

How many staff members do you have on that committee?

MS DUNDERDALE: My understanding is, there were three positions identified

for the red tape reduction.

MR. REID: I like the name. The director is going to be - what director's

position is that? Is there a Director of Red Tape Committee?

OFFICIAL: What we are talking about there is hiring a director for the

policy shop. What was happening up until this past year, was that we had one

individual, Terry Johnstone, who was basically playing two roles. As an

Executive Director, he was both acting as the Director for our Policy Division

and he was also acting as Director of our Advanced Technologies

section at the

time. What we are doing now, we have elevated the Advanced Technologies and

Innovation into a branch with an Assistant Deputy Minister, Dennis Hogan, who is

sitting over here. That means we have an opening gap that needs to be filled for

the Director of Policy.

MR. REID: Thank you.

On the same 1.2.03. again. In the Estimates last year you had under Grants

and Subsidies $186,000. That seems to have gone. That is grants for businesses.

Is that eliminated?

MS DUNDERDALE: No.

MR. REID: They were eliminated from last year's revised.

MS DUNDERDALE: They were reallocated to Salaries and Operating because of

the projected costs associated with the red tape reduction. The red tape

reduction did not actually get off the ground. There was an allocation for red

tape reduction in last year's budget and it was reallocated because we did not

get the red tape reduction task force off the ground until earlier this year.

MR. REID: Subhead 1.2.04. There appears to be an extra $150,000 for

Salaries, an extra $20,000 for Transportation and Communications, and $60,000

for Professional Services under Strategic Initiatives.

MS DUNDERDALE: Yes.

MR. REID: Where is all that going?

MS DUNDERDALE: Under 01., Salaries, that reflects the additional funding

for the Ireland Business Partnerships and the reallocation of funds within the

department to cover secretarial support for the Strategic Partnership

Initiative.

Transportation and Communications, it is the provision of additional funding

for the Ireland Business Partnerships. Just about all of those items,

twenty-five, also reflects additional funding for the Ireland Business

Partnerships. So the increase we made to the Ireland Business Partnerships are

reflected in all of those line items.

MR. REID: Under 2.1.01., the Export and Investment Promotion. There is a

$130,000 cut to Salaries, yet Purchased Services has been increased by $700,000.

MS DUNDERDALE: Yes, the savings were due to the strike and also some

unanticipated vacancies.

MR. REID: How much are you saying you saved from the strike?

MS DUNDERDALE: Ken, can you give us the exact number there?

MR. CURTIS: In the 2004-2005 Revised there was about $55,000 in savings

because of the strike.

MR. REID: Fifty-five thousand?

MR. CURTIS: There was also some unanticipated vacancies in 2004-2005, and

in 2005-2006 some of those vacancies are going to be maintained there. So, the

2005-2006 is down as well.

MR. REID: All right, but let's go back to the question I asked now.

Under Export and Investment Promotion there is $130,000 cut to Salaries,

right?

MR. CURTIS: Right. That is because some positions that went vacant in

2004-2005 are going to continue to be vacant in 2005-2006.

MR. REID: Okay.

MS FOOTE: Why is that, and what are the positions?

MS DUNDERDALE: You can speak to that Doug.

DR. HOUSE: Well, basically speaking, what is happening there is that we

are in a little bit of a transition period because we think some of the

investment attraction activity that has been done in our department up until

recently, is probably going to be going to the Department of Business. So, we

are not filling vacancies that we would otherwise fill until that gets settled.

MS FOOTE: What departments? Sorry.

DR. HOUSE: We will talk about that tomorrow.

MS FOOTE: I could not resist.

MR. REID: You are saying the positions that were eliminated will probably

end up in the Department of Business?

DR. HOUSE: They are not positions that were eliminated. They are

positions that are being kept vacant until we see the lay of the land,

basically.

MS FOOTE: What are they?

MR. CURTIS: I do not know, Bill, if you could talk to that.

MR. MACKENZIE: They are the Industrial Development Officers, the GS-40

positions. There are a couple of those that have been vacant. So we will

maintain the vacancies until the Department of Business is established.

MR. REID: But isn't the $130,000 in salary cuts removed from the

heading now, Bill, or is it still in there?

MR. MACKENZIE: No, it is removed from 2005-2006. So, yes, we will have to

revisit that, I guess, to see what we can afford.

MR. REID: When you say that they are not gone - if the money has been

eliminated, you cannot say that they are still there if there is no money for

them. Why, under that same heading, under Professional and Purchased Services,

have you increased the amount there by $700,000?

MS DUNDERDALE: I will let Ken speak to it, but that is cash flow

requirements out of our relationship with ACOA and our Canada/Atlantic Provinces

Agreement on International Business Development.

Ken, you can speak to that more fully and explain it in more detail, but that

is a cash flow issue.

MR. CURTIS: Just back to the Salaries for a second. That money is removed

from this subhead in 05. and 06., but it is basically reallocated to elsewhere

in the department. So it is not gone from the department's budget. They will

use the fund in other priorities in 05. and 06.

In 06. and 07., this will get a part of the budget (inaudible) every year;

the salary allotment or which positions that are going to be filled gets

reviewed. Next year, it may be decided to fill some positions in this division

and hold some other positions vacant, so to balance off the overall salary

budget. So, the money is not gone from the department's budget.

MR. REID: You have me a bit confused because the deputy just said -

MS FOOTE: Three different answers.

MR. REID: There are three different answers to the same question, because

the deputy said that the money was not really gone. The minister said something

about these positions being transferred to the Department of Business. The

deputy said something different.

MS DUNDERDALE: No, the minister did not say that. The deputy said that.

MR. REID: The deputy, I am sorry.

MS DUNDERDALE: The three of us have said that the money is still within

the department. It has been reallocated. The money came from positions that are

being held vacant until we see whether the role is going to be filled in INTRD

or it is going to be in the Department of Business. We are in that transition;

that decision has not been made. So, the money is reallocated elsewhere in the

budget and we are expected to hold those vacancies through the coming months. We

are not anticipating that we - but the money is still there in our budget.

MS FOOTE: It sounds like you are no clearer with respect to the

Department of Business than we are. Is there a Department of Business? Have

there been people hired? What relationship exists there?

MS DUNDERDALE: There is a Department of Business, and I understand the

department will be appearing before a committee tomorrow. Is the department up

and fully staffed and fully functional? No, not at this point. They are in a

transition period. Gary Norris is the Acting Deputy Minister. The Minister of

the Department of Business, the Premier, works very closely with INTRD. We

expect in short order, in the next coming weeks, that department will be up and

fully functional.

MS FOOTE: What will the relationship be with ITRD and...?

MS DUNDERDALE: Well, INTRD will still be the lead business department of

government. We will do all of the research and the functions and maintain the

bulk of the programing that we now have. Strategic Investment Regional

Development, all of those functions, will all stay within INTRD.

MS FOOTE: How many employees are in the part of Business now, do you

know?

MS DUNDERDALE: No, I cannot speak to that right now.

MS FOOTE: All right, I am sorry, go ahead. I apologize for jumping in -

MS DUNDERDALE: That's okay. I do not know if you want to address the

issue of Purchased Services.

MR. REID: Yes, the $700,000. But before that, on the employees, did you

say that you did not want to discuss that now in the Department of Business or

you did not know how many were there?

MS DUNDERDALE: No, I understand the committee is going to appear before

you tomorrow and that will be addressed then.

MR. REID: All right.

MS DUNDERDALE: Now, the cash flow requirements that show up under

Purchased Services, Bill Mackenzie will speak to that.

MR. MACKENZIE: This is 100 per cent recoverable money from ACOA. If you

look back at 2004-2005, the budget $259,000, there was no Federal Revenue down

below. So we had to cash flow that through savings throughout the department.

What we have done this year is added $500,000 to the Purchased Services but

looking down at the Federal Revenue, that is all cost recoverable from ACOA. So

it is just a means to simplify cash flow. Previously, we were searching for

savings throughout the department to find means of paying the bills, which

would, ultimately, be reconciled at the end of March. So, it is an in and out,

just to assist us in cash flow.

MS FOOTE: But where did you find the additional money to put there to

carry you over until...?

MR. MACKENZIE: That was an increase to the department's budget from

Treasury Board. They permitted that since it was just an in and out.

MS FOOTE: (Inaudible).

MR. MACKENZIE: Yes.

MR. REID: 3.1.01. Under the heading Business Analysis, a $103,000 cut, is

that right?

MS DUNDERDALE: Under Business Analysis, which line again?

MR. REID: I think it is under employees in (inaudible).

MS DUNDERDALE: Under Salaries?

MR. REID: Yes.

MS DUNDERDALE: That is because several budgeted positions were not filled

and most of these positions will be filled this year in 2005-2006.

OFFICIAL: (Inaudible).

MS DUNDERDALE: No, will not be filled.

MR. REID: Not be filled, yes, that is what I was going to say. Can we, at

some point in the next couple of weeks, have a list of the number of employees

who have been cut?

MS DUNDERDALE: Sure.

MR. REID: And the positions they occupied, as well as any new ones, if

you have already decided on that, positions that will be created?

MS DUNDERDALE: Yes.

MS FOOTE: And any vacant positions as well?

MS DUNDERDALE: Yes, that is no problem.

MR. REID: The same thing, I think, under 3.1.02. Under Investment

Portfolio Management, there seems to be some positions cut there as well.

MS DUNDERDALE: Well, there are a number of vacant positions and we are

still holding them vacant. As well, there were savings due to the public sector

strike.

MS FOOTE: Would you be holding those vacant again in keeping with what

you are doing for the Business Department? Is that the same approach there?

MS DUNDERDALE: No.

MR. REID: All right. So you will give us a list of all those.

OFFICIAL: No, they are not related to the Department of Business at all.

That is the portfolio management down in Marystown.

MS FOOTE: Okay.

MS DUNDERDALE: The number of accounts are coming down, so we do not

require these positions to be filled at this time. However, we are not prepared

at this time to say that we will not need them in the long-term, so we are just

holding them vacant for the moment.

MS FOOTE: How many positions?

MS MALONE: Two positions.

MR. REID: The same question, I guess, under 3.1.04. Strategic

Communications and Promotions, there seems to be $63,000 gone out of the

positions there as well.

MS DUNDERDALE: In Salaries, under 3.1.04?

MR. REID: Yes, Strategic Communications and Promotions.

MS DUNDERDALE: We have been looking for operating efficiencies there and

that is reflected in the budget. Doug will also speak to that.

DR. HOUSE: Just to add to that, what happened last year, after our budget

had been allocated we were able to negotiate with the HRSD for some extension of

some funding under the Labour Market Development Agreement. So we ended up not

having to use the full allocation there on Salaries. We were able to save a

significant amount of money there, almost $300,000, but that only lasted for

half the year and we do not have that this year. This is why the figure has

increased again for 2005-2006.

MR. REID: All right, that is pretty well it for me, but I want to ask you

a general question because I am sort of lost as to what you are doing with the

department. It seems to be, like you said, still in a state of flux.

I had a question from a local development association in my district. I had a

meeting with him recently and I asked, basically, where they fit into the whole

scheme of things now because it used to be the development association and then

the RED Board in Gander, I guess, was the one that they were tied into. Where do

they fit now in the whole scheme of things because you have this strategic

economic committee?

Are you going to keep the RED Boards as well, and development associations,

and anyone who would like to deal with government, or to go and look for funding

from a development association such as the one I have in my district - it is

probably one of the best in the Province. They have operated for quite a long

period of time and, as far as I know, they have been self-sufficient for a

number of years. Where do they fit into the whole scheme of things now?

MS DUNDERDALE: It is no different from your time in government. Those

organizations have been around - rural development associations - for a long

time. Under Premier Clyde Wells, he and his government felt that there was a

better way of doing regional economic development, first of all, in consultation

and in co-operation with the Newfoundland and Labrador Federation of

Municipalities as well as the provincial organization for rural development. I

think Dr. House actually had something to do with the task force that was put

together, and out of that task force came the twenty regional economic

development committees that were supposed to consume, as I understood it, the

rural development associations. I knew something about it because I was

President of the Newfoundland and Labrador Federation of Municipalities when the

initiative began.

The REDBs got up and got underway. Funding was taken away from, as I

understand it, rural development associations, but they continued to exist in

some form or another and they play a role in communities. Some of them are very

effective. Others are, much like the REDBs, not as effective. They do not

receive any core funding or operational funding from government. Regional

Economic Development Boards do, as you know, $1.2 million. We continue to fund

Regional Economic Development Boards.

In terms of community-based regional economic development, our support is

continuing. This government believes that we have to have regional economic

development and we still support our Regional Economic Development Boards, REDBs.

There is a ministerial committee in place now, in partnership with NLREDA and

the NLFM, ACOA and ourselves, to see if we can bring a sharper focus to REDBs

and to review after seven years. They feel, as we do, that it is time for a

review. They know there are some challenges around the way that they are doing

the work, their mandate and their structure, and in partnership with the two

levels of government and the Newfoundland and Labrador Federation of

Municipalities - the largest number of their stakeholders around the Province

come from that organization - they are working in partnership to have a look at,

to review the structure and mandate of the REDBs and make them more effective

organizations for community-based economic development.

Development associations have applied for funding for projects that they have

applied to us to leverage money out of either ACOA or Industry Canada. There was

no funding available for quite some time, other than under the Community

Economic Development Program that we talked about last year. There were serious

problems with that program. It was not advertised, the criteria were unclear,

and there was only $460,000 in it. There were over 3,000 applications on file,

when I came to the office, that had not been notified whether or not they

qualified for funding under CEDP. I certainly did not advocate for that program.

That was not a program that I was prepared to support or look for further

funding for; however, we did go and make a submission to government and to

Cabinet for funding for regional economic diversification and leverage funding

for organizations like REDBs and like rural development associations, and from

that we have the $5 million Regional Diversification Fund. Rural development

associations are just as able to apply for support from that fund to leverage

out projects as any other organization in the Province.

MR. REID: You are saying there is going to be a review of the REDBs.

MS DUNDERDALE: The REDBs are engaged in a review. It is a partnership.

REDBs do not answer to government, other than around their core funding. That is

used for what we contracted for that money to be. REDBs answer to their

stakeholders and community. They do not answer to government. Anything that we

do with REDBs, we have to do in co-operation and in partnership with them.

Through the last year and a half we have developed a very good relationship with

NLREDA, and I have met with all of the REDBs, I have met with all of the Chairs,

and this ministerial committee has arisen in a co-operative way. The committee

itself sets the parameters of what it is that they are going to do.

MR. REID: All right.

MS DUNDERDALE: The whole idea is just to bring a sharper focus to

economic development.

MS FOOTE: How long is the review supposed to take?

MS DUNDERDALE: The review should be complete in the fall.

MR. REID: Under the Rural Secretariat - I just want to figure it out,

because it was never very clear to me - if there is a group like the Development

Association on New World Island, and they want to get some money from whatever

level of government, normally they would go to the RED Board to look for support

for that, am I right?

MS DUNDERDALE: Sometimes they would. Sometimes they would come directly

to government.

MR. REID: That area there - I forget the name of the larger one - never

worked very well, from my perspective anyway. Now you have how many of those,

nineteen RED Boards?

MS DUNDERDALE: Twenty.

MR. REID: Twenty.

This Rural Secretariat now -

MS DUNDERDALE: Does not have anything to do -

MR. REID: How many of those are going to be out there?

MS DUNDERDALE: Nine, but they do not have anything to do with leveraging

money out of government. They are two completely separate things.

MR. REID: What is going to be their role, then?

MS DUNDERDALE: What we are doing is building on the work of the Strategic

Social Plan, in which you had six committees operating around the Province, in

six regions of the Province, in terms of the social economy in the main, but

eventually, as the SSP evolved, as I understand it, and keeping a fairly close

eye on it because I worked in community most of my life and I was very intrigued

in the whole SSP process, and I though it was a very good plan, it is evolving,

that plan, to create a process where people who are involved in economic and

social development in different regions of the Province have a process where

they can come together, first of all, to develop a regional vision. They bring

all of their own expertise togther.

For example, on the Burin Peninsula, they would come together and they would

talk about what they need to do to live a healthy life on the Burin Peninsula.

What do they need in education? What do they need in health care? What do they

need for economic development? How could 30,000 people live good, healthy lives

on the Burin Peninsula? What would be that vision? And to create a process,

then, through the Provincial Council of the Rural Secretariat, to ensure that

information comes directly up to government, and that grassroots experience and

grassroots knowledge and grassroots people have regular access to government so

that they can influence policy and program development at the very beginning.

That is what the Rural Secretariat is. We are not interested in a Premiers'

Council that the Premier may or may not attend. You know, three times in the

last two years, of seven or eight meetings, the Premier attended the Premiers'

Council. We want to have a mechanism where regional differences - because we

talk about it all the time, how one size does not fit all - the different

flavours, the different experiences, the different realities of different parts

of the regions of this Province, we have created a process where that knowledge

and that experience can be brought right to the Cabinet table twice a year, that

people from all of those regions have influence regularly - not every four

years, but on a regular timely basis - they have the opportunity to be proactive

in influencing government policy in program development.

Nobody goes to them for funding any more. They will have project funding, the

same as the SSP did. They will have a planner. The nine regions will have a

planner, the same as the SSP did, the committees did, and that is because, if

they want to know what is happening around education - because most of this work

is based on evidence-based research - they will have the same allocation of

funding and the same expertise available to them to gather in the knowledge or

study particular aspects of the economy, the social economy, or whatever it is

they need to look at, that they have the opportunity to do that so they can do

their work in a really comprehensive and well-informed way.

MS FOOTE: Is there a focus with this group to look at the economy as well

as social...?

MS DUNDERDALE: Yes.

MS FOOTE: Did you give any thought at all to looking at REDBs and these

nine regions, and somehow bringing them all together rather than having -

MS DUNDERDALE: No. I do not know if the ministerial committee will go

there. They have set out the parameters of their work. As I say, that is being

done in partnership, and the committee has set the parameters of its work.

Whether they will go there at the end of the day, that is what we will have to

wait and see.

In terms of what directed our work, and how we came up with the nine regions,

it was an in-depth piece of work that has gone on for months and months within

the department. All of us know that there are natural regions of this Province.

I have lived in rural Newfoundland all of my life, just about, other than the

last nine years. All of it was spent in rural Newfoundland. So you know, in

terms of yourself, when we talk about the Burin Peninsula and what is it we are

referring to, and what is a natural fit for us, we know, intrinsically, from our

own history and our own culture and so on, what that means.

MS FOOTE: That Clarenville is not the centre.

MS DUNDERDALE: That is right.

While it might appear to somebody that the Bonavista Peninsula and the Burin

Peninsula may have a lot in common, for people who live on both those

Peninsulas, that might not be true for a number of reasons.

What we did was, we did some in-depth research. The first thing we did was,

we went back and we went to hospital and clinic records to say: Where do people

get their health care services? We started with that basic principle, and then

we started to draw a map. The people who live in this area, where do they work?

Where do they get other services? Where do their children go to school? Almost

naturally, the nine regions fell out. We were looking for percentiles like 90

per cent of the people who work in this area live in this area. Once we had that

piece of work done, it looked pretty good to us, but then we knew we had to test

it against the people who lived in the regions, and that is what we did. We took

it back to people all over this Province and said: Does this make sense to you?

MS FOOTE: What are you doing to educate members of the REDBs about your

plan, about the process? Because I am getting a lot of representation from

members of REDBs saying, we do not know where we fit into this. You know, there

is confusion out there. There is doubt out there. There is concern out there.

MS DUNDERDALE: Well, I have done more talking about the Rural Secretariat

to REDBs, I expect, than I have done to any other group. They have been

consulted more widely than any other group in the Province. I have had an

opportunity to speak with all of the Chairs. We attended their AGM in Rocky

Harbour earlier this year, and spoke at length.

They fit in this plan the same way they fit in the SSP committees. What we

have done is evolved the SSP. The SSP, right there on their own - there wasn't

any great carryover, from my understanding, from the SSP to the Premiers'

Council. The SSP were working, and they reported to the secretariat within

government, but they had no access to government, to caucus. They had to get in

a lineup, the same as anybody else, to bring their knowledge and any information

forward.

What we are trying to do is evolve that now so that, when you ask these

people to be engaged and to share their experience and their knowledge and their

best ideas with us, we provide a process and that gets to where it needs to go.

MS FOOTE: Let me just move on to another area. I think one of the

problems that I see with the government, and probably it is something that you

are grappling with as well, but a lot of the decisions that are being made do

not seem to take into account the impact that they are going to have on rural

Newfoundland and Labrador, the negative impact, and I alluded to that yesterday.

I am just wondering, I know when we were a government, part of the

decision-making process was we always factored in what impact a decision by any

department would have on rural Newfoundland and Labrador. I am just wondering if

that is something that you have tried to insert into the process from your

perspective, being the minister responsible for rural development, because we

have seen some things happen that if you look across the board - and rural

communities are really having a difficult time. Apart from economic development,

there are things that are happening in those communities that are really - you

are going to see so much out-migration as a result of those decisions.

MS DUNDERDALE: There is no doubt that rural communities are under

distress. That is not only true for Newfoundland and Labrador, that is true for

Canada and that is true for Ireland and that is true for Iceland.

MS FOOTE: Yes, but we have to deal with Newfoundland and Labrador.

MS DUNDERDALE: Absolutely, and that is what we are doing. Yes, we do take

into account all the time, not only myself as minister responsible for rural

development, but other caucus members and other cabinet ministers around the

table. It is a very serious issue when there is any loss anywhere, but

particularly in rural parts of the Province. However, given the fiscal situation

that we have had to deal with last year, that there was a rationalization and a

consolidation that was required -

MS FOOTE: But this is a new year, Minister, and we are not in that same

fiscal situation.

MS DUNDERDALE: No, that is right, and that is why we have increased

economic development monies from $2.6 million to almost $16 million. Now there

has been an erosion of money in economic development over the last ten years by

the former government, from $26 million on an annual basis down to $2.6 million,

and that has had an impact. That has had an enormous impact on economic

development all over this Province.

MS FOOTE: You are losing sight of my question.

MS DUNDERDALE: No, I am not.

MS FOOTE: I am not talking about economic development.

MS DUNDERDALE: I am not. What I am saying is -

MS FOOTE: I am talking about other decisions that impact negatively. What

I am asking you is that if the government has a policy whereby they are looking

at whether or not they are going to reduce services that are so vital in rural

Newfoundland and Labrador -

MS DUNDERDALE: It is not a matter of reducing services, with all due

respect.

MS FOOTE: But they are being reduced. Face the reality, they are being

reduced.

MS DUNDERDALE: Services are being consolidated and they are being

rationalized. Sometimes you -

MS FOOTE: That is a good word for reducing.

MS DUNDERDALE: But we are not going to be able to have a school in every

community, a hospital in every community, a government office in every

community.

MS FOOTE: You have a highway depot though, especially going down the

Burin Peninsula.

MS DUNDERDALE: We are 500,000 people spread out over a vast geographical

distance. We are in severe fiscal -

MS FOOTE: Now you are not sounding like the Minister of Rural

Development. Now you are sounding like the minister of economic development.

MS DUNDERDALE: No. What I am -

MS FOOTE: I am just suggesting to you, there is a different focus.

MS DUNDERDALE: What I am is a minister who is responsible for rural

development and has to do her very best to work with government to ensure that

we have a sustainable economy, a real economy. Our vision is, for every job that

is lost, to ensure that there are two jobs put back there to replace the job

loss. So, you are always sensitive to any erosion of employment in rural

communities, but we are identifying the strengths of communities, the

opportunities for economic diversification and economic growth in communities.

We are providing government funding, the mechanisms. We are working with our

private partners to ensure that funding is available. It is not government that

drives the economy of rural Newfoundland, not to date. Small business -

MS FOOTE: But it is decisions of government that impact negatively on

rural Newfoundland and Labrador.

MS DUNDERDALE: Small and medium-sized businesses ought to be driving the

economy, and do drive the economy of this Province. We have to find ways that we

can help Newfoundlanders and Labradorians grow small and medium-sized businesses

and have a sustainable economy built on the strengths of their regions. That is

the focus of this government, to maintain government jobs where we can.

MS FOOTE: Explain to me what the Member for Gander means when he talks

about hub. What is a hub for a region?

MS DUNDERDALE: Well, in terms of what we speak, I talk about clusters.

All our research, research done at home as well as research that we have done

around the world, shows us that rural communities, smaller communities survive

when they have a strong urban core. I use all of these terms, like urban and so

on, relatively given that we are in Newfoundland and Labrador. I mean, we came

back off a trade mission last week, four Atlantic provinces, and we had between

us all less population than the city we were in. So I am speaking very

relatively, but perhaps my colleague, Paul Shelley, put it best: When Baie Verte

is doing well, the other twenty-two communities on the Baie Verte Peninsula are

doing well.

We are not going to be able to put a government job, or there may not be a

full array of services in every community. You may live in community A, you may

work in community B, the industrial piece -

MS FOOTE: It sounds like a speech I gave.

MS DUNDERDALE: Well, the thing is, we are going to make it a reality. You

are going to get a number of services in the region but you are going to have

access to services. I mean, it is back to that whole concept again around the

Rural Secretariat. What is it that we need to live healthy lives? How can we

have reasonable access to services? It does not mean the services are going to

be in your community but it has to be within a reasonable time and distance from

your community and so on.

MS FOOTE: Listen, I am not disagreeing with (inaudible).

MS DUNDERDALE: That is where our focus has to be, and around sustainable

economies. When we look at where the opportunities are - because we have been

doing the drill down for the last sixteen months. We have been working with the

Economic Initiatives Committee of Cabinet that the Premier established. So we

are combing through departments all the time. We are doing the homework to

ensure that opportunities which are identified are real opportunities, and we

are working with stakeholders in the region to exploit those opportunities and

to maximize the benefits to the people in the region. That is where our focus

has to be.

MS FOOTE: Nobody expects - I do not even think people in rural

Newfoundland and Labrador expect that they will have all the services in all of

the communities. Clearly, they acknowledge that, just as we did some

decentralization of government services and put the investment portfolio down in

Marystown. The choice was Marystown, and not in Grand Bank or Fortune or

wherever, and I was instrumental in doing that.

MS DUNDERDALE: Sure. Certainly.

I remember the customs office coming out of Burin and going to Grand Bank and

going to Fortune and the great hullabaloo when we put it. Yes, it is painful

when it happens, but it has been happening for a very long time.

MS FOOTE: That is right, yes, and nobody, I think, expects that there

will be a school in every community. It is just not possible to do that and we

do not have the student population to it.

Having said that, I go back again - and the reason I continue to harp on

government is because you are the Minister Responsible for Rural Development and

to me that is crucial in Newfoundland and Labrador. I look at Lamaline, for

instance, where we have six families now leaving because they worked at the fish

plant in Fortune and because that fish plant now, it is very likely it is going

to close. Unfortunately, government has not held FPI accountable and they could

have. I look at those rural communities, and when we talk about opportunities, I

do not know what else they are going to do. Well, they are not going to find any

job in Lamaline. The job would have been in Fortune. Now, that is gone.

MS DUNDERDALE: They may not. And there was a time when they found a job

in Lamaline and they did not have to go to Fortune, but I understand that.

MS FOOTE: Well, in the fishery, right?

MS DUNDERDALE: Yes, absolutely in the fishery. I mean the same thing

happened in my hometown of Burin. When we went from primary processing they were

going to close our plant. The same thing happened in Trepassey. I mean in lots

of ways we are subject to what is happening in the world and world markets and

all of those kinds of things, and all of that influences.

MS FOOTE: Now that is Derrick Rowe's speech. That is the apologist for

FPI.

MS DUNDERDALE: But it is important. You cannot live in a bubble. We are

in a real world. There are things that are happening that, unfortunately, we do

not have a great deal of influence over, but to say that we don't understand -

MS FOOTE: But we could have, with respect to FPI, but that is a debate we

can have another time. Clearly, I would have thought that, being the minister

responsible for rural development, that would have been one of the things that -

because it is not just going to be Harbour Breton and Fortune. It is going to be

Marystown. It is going to be Bonavista. They are on record already as saying

that they are going to reduce the number of processing plants in the Province.

MS DUNDERDALE: Absolutely, and we realize that.

MS FOOTE: And, for me, it is not fair. FPI was created for the very

reason to ensure that there was a social conscience there in rural Newfoundland

and Labrador with a fishery (inaudible) should be able to survive.

MS DUNDERDALE: But it also has to be a viable company. The same thing

that we went through back in 1984 and 1985 when there was that whole

rationalization of fisheries and consolidation. Primary processing was taken out

of Burin, and workers had to move to Marystown. We went from a workforce of 600

to - workers had to move. Fish plants were closed in Trepassey. I mean, all of

those things have been happening for a very long time.

MS FOOTE: The only difference is, is that it is

an act of Legislature

with respect to FPI.

MS DUNDERDALE: Yes, absolutely. I agree.

MS FOOTE: That is the difference here, and the fact that FPI was created

by taxpayers' dollars and there was a reason for that. I guess what I am

saying is that the government needs to, and you need to, be looking at this and

looking at what some of the corporations are doing. It is a different business.

FPI is a different business. And, yes, I know businesses need to make profit.

There is nothing wrong with profit, but, at the end of the day, how much wealth

is too much wealth, or how much wealth is enough for the shareholders? I am

thinking about those Newfoundlanders and Labradorians who live in rural

Newfoundland and Labrador and really do not know. Even in your own document that

you put out with respect to out-migration, you see it continuing.

MS DUNDERDALE: Out-migration - I mean, I wish that the numbers that you

have been touting around were correct.

MS FOOTE: So do I.

MS DUNDERDALE: Everybody in the Province would be happy if out-migration

would stop and, in fact, we had an in-migration of 300 people.

MS FOOTE: But one of the ways to ensure that it does not happen is to

deal with companies like FPI.

MS DUNDERDALE: We have never stopped out-migration. You could not stop

it.

MS FOOTE: But we have to try.

MS DUNDERDALE: We are trying.

MS FOOTE: That is the objective.

MS DUNDERDALE: That is exactly it, and that is why we have gone from a

$2.6 million investment in economic development in this Province to a $16

million investment in economic development. That is why we had things like our

diversification plan, where we know where the real opportunities exist. That is

why we have a labour-sponsored venture capital fund. That is why we are working

with the Federation of Co-operatives to ensure that we can get our micro-lending

program.

MS FOOTE: I couldn't agree more with your labour-sponsored investment

fund.

MS DUNDERDALE: All of these things are important, to have a whole

spectrum of funding mechanisms so that small and medium size business - because

that is where the heart of our economy is. That is where the driver of our

economy is, and that is where we have to focus a great deal of our attention.

MS FOOTE: Do you want to elaborate on the sponsor - the labour market

development?

MS DUNDERDALE: GrowthWorks.

MS FOOTE: Yes.

MS DUNDERDALE: It was registered in the company, so Phil can speak to it.

Phil was very much involved.

It will be another year, I expect, before they will start to make investments

in the Province, but 75 per cent of the money raised in the Province will have

to be invested in the Province. They will have a local advisory group who will

direct investments in the Province. They have not released the amount of money

they have raised since the fund was registered, other than to say that they are

very, very pleased with the way - so GrowthWorks is delighted with everything

that has happened to date.

I don't know, Phil, if there is anything else you want to -

MR. McCARTHY: Not really. We meet with GrowthWorks regularly. They were

down a couple of weeks ago and they are very pleased. They are putting together

their marketing plan for this year now. They plan to be very aggressive. ACOA

has also provided some funding to the Federation of Labour so they can hire a

person so they can work with GrowthWorks to market it that way. They are really

looking forward to a good year.

MS FOOTE: What is the focus, Phil? Is it looking at your strategic

industries, the ones that you have identified?

MR. McCARTHY: If you look at the legislation, they have to look at

strategic growth sectors. A lot of things they cannot do, ordinary retail and

wholesale and stuff like that. They have to invest in strategic growth sectors

of the Province.

MS FOOTE: Another initiative, I guess, of the department that I am

interested in pursuing is with the whole area around immigration, and where we

are with that.

MS DUNDERDALE: The Provincial Nominee Program?

MS FOOTE: Yes.

MS DUNDERDALE: We have 400 units that have been allocated under - and we

spoke about that last year in the Estimates.

MS FOOTE: We have 400 units?

MS DUNDERDALE: We had 400 additional units last year.

MS FOOTE: How does that compare with the other provinces? I am just

trying to remember now.

MS DUNDERDALE: Bill?

MR. MACKENZIE: I am not sure. I will check. Generally, it is

proportionate throughout the country but I do not know precisely what the other

provinces have.

MS FOOTE: Because it was an issue, remember, with respect to getting more

units? Was it P.E.I. or some others that had close to 1,000 units? We were

hoping to get more, I know. I am just wondering.

MR. MACKENZIE: The 400 are new units. It could be other provinces have

more, but we would not be restricted. We probably only asked for something like

that. If we wanted more, I am sure -

MS FOOTE: You can ask for more.

MR. MACKENZIE: Yes.

MS DUNDERDALE: We have not used up those units yet.

MS FOOTE: What is the criteria?

MS DUNDERDALE: Very strict.

MR. MACKENZIE: Well, there are three categories. You can come in as a

skilled occupation. That could be trades, medicine, what have you. You can come

in as a -

MS FOOTE: Is it broken down, a percentage for...?

MR. MACKENZIE: No, you can use the 400 for any. There are skilled trades.

You can be in an investor category, where you invest in an existing business, or

an entrepreneur category where you are actually starting a brand new business.

The difference now from formerly is clearly the investor categories have to

take a direct management or a direct role in companies. The passive investment

of the past is no longer permitted by the federal government.

Those are the three categories. The predominant activity -

MS FOOTE: Would they have to actually move and live here?

MR. MACKENZIE: Yes, they have to live here now.

MS FOOTE: They cannot just buy a piece of real estate on the West Coast.

MS DUNDERDALE: No, they cannot, and they not only live here but they have

to have an active management role in the company.

MR. JOYCE: I have a few questions.

First of all, do you know how much money FPI made last year?

MS DUNDERDALE: No, I do not know.

MR. JOYCE: I don't want to be argumentative.

MS DUNDERDALE: I am not responsible for FPI.

MR. JOYCE: No, no, but I am just saying here you are giving us a speech.

I travelled with the FPI committee, and every place we went into, the minister,

(inaudible) the minister now, said no plant should be closed down. Here you are,

as Minister of Innovation, Trade and Rural Development, giving us a lecture, in

my opinion, about how a company has to be profitable, and you do not even know

how much money they made last year. They made millions upon millions upon

millions. So, here you are, carrying a line for FPI against rural Newfoundland.

MS DUNDERDALE: I am not carrying a line for FPI against Newfoundland. I

am speaking to my responsibilities as the Minister Responsible for ITRD and what

it is we are doing for rural development in Newfoundland. I do not have the

responsibility for FPI, or to direct FPI in any kind of a way.

MR. JOYCE: Your government does, though, Minister.

MS DUNDERDALE: My government does, yes, and when I have the opportunity

to speak to it then I do.

MR. JOYCE: So, you have no idea.? So, the speech that you gave -

MS DUNDERDALE: I cannot give you the dollar amount of profitability of

FPI at the table here this morning.

MR. JOYCE: Okay.

So, when you were just speaking to the Member for Grand Bank and you were

saying that a company has to be profitable -

MS DUNDERDALE: I am talking in general terms.

MR. JOYCE: Can I ask a question?

MS DUNDERDALE: Sure.

MR. JOYCE: - and you were telling the minister the company has to be

profitable, you have no idea if the company is profitable?

MS DUNDERDALE: Yes, I have an idea that the company is profitable. That

is not the question you asked me.

MR. JOYCE: So, they are profitable.

MS DUNDERDALE: You asked me how much profit did they make, and I told you

I could not give you the exact amount.

MR. JOYCE: The production crab quota - and you just mentioned that one of

your programs that you have is the social economic development of rural

Newfoundland and Labrador, the health issues. Your department - I am sure you

did - did you do a social or an economic study on the results of the production

crab quota sharing for rural Newfoundland?

MS DUNDERDALE: No. Nor did I say that my department was doing a social

and economic analysis connected with the rural development associations.

MR. JOYCE: Strategic plan, was it?

MS DUNDERDALE: Our rural diversification plan identifies strengths around

the Province. In terms of impact analysis and so on, on specific plant

operations or policy with regard to fisheries, will be done in the Department of

Fisheries and Aquaculture.

MR. JOYCE: So, you guys did not do any social plan or economic plan of

rural Newfoundland, the devastation of rural Newfoundland if this goes ahead?

There was none done. That is all I am asking.

MS DUNDERDALE: No, there was no analysis done in my department on crab.

MR. JOYCE: Okay.

The Department of Business, as you just mentioned, is not set up yet?

MS DUNDERDALE: It is functional. It has a deputy minister. The CIO was

operating within the Department of Business and has now been transferred out to

Executive Council.

MS FOOTE: Who is that?

MS DUNDERDALE: Peter Shea, the Chief Information Officer.

MS FOOTE: So, he is no longer with the department; he is with Executive

Council?

MS DUNDERDALE: He has moved into Executive Council.

MR. JOYCE: Are there any funds in your department that are going to be

transferred to the Department of Business, or does it stand alone now?

MS DUNDERDALE: It stands alone.

MR. JOYCE: It stands alone right now, okay.

MS FOOTE: I am sorry, Eddie.

What is Peter doing in Executive Council? Do you know?

MS DUNDERDALE: He is the Chief Information Officer for government.

MS FOOTE: For government.

MS DUNDERDALE: He looks at the technological needs of government,

communication needs of government.

MS FOOTE: Okay.

MR. JOYCE: In the Strategic Enterprise Development Fund, there is an

increase there of almost $10 million or $11 million. Are there any applications

for that? Because there are businesses that have been phoning me and the only

information I can get from the department is, phone someone at the department.

Are there any applications? Can I get some applications?

MS MALONE: This is rolling down to the next days and weeks.

MS FOOTE: Days or weeks?

MS MALONE: Within the next day, the next couple of weeks, we are

concluding our policy and have all our literature ready to roll out. In the

meantime, we are taking applications for funding. We are able to take business

plans, provide counselling, and work on files.

MR. JOYCE: Can I get a copy or number of the proposals, applications,

when they are sent, so we can have them for our office?

MS MALONE: Certainly. They will be posted on Intranet and the Internet.

They will certainly be available.

MR. JOYCE: My last question is: Last year, I asked for a copy of the

people who were being hired in Corner Brook, and the people being laid off, and

I never did receive it.

MS DUNDERDALE: Okay, I will see that you get it.

MR. JOYCE: For this year also?

MS DUNDERDALE: Yes.

MR. JOYCE: There was information last year that I requested that was

never, ever received. If I could get the same information this year: the people

who were laid off, any new positions hired, and what the positions are?

MS DUNDERDALE: Yes.

MR. JOYCE: Thank you.

MS FOOTE: I am just looking again down through the salary component in

the department under the Minister's Office. I see a Director of

Communications. Do you have a public relations specialist?

MS DUNDERDALE: I have my Director of Communications, Lynn Evans.

MS FOOTE: I know Lynn.

Do you have a public relations specialist?

MS DUNDERDALE: Yes.

MS FOOTE: Where is that in the Salary Details?

MS DUNDERDALE: Ken?

MR. CURTIS : As I understand it - I will check the Salary Details - I

think that is a temporary position so it does not show up in the Salary Details,

but in the salary budget it shows up under the Strategic Communications and

Promotions activity subhead.

MS FOOTE: It is a temporary position?

MR. CURTIS: I think so, but I will double-check. I have the Salary

Details. I will have a quick glance.

MS DUNDERDALE: Doug can speak to that, Ken.

DR. HOUSE: At the moment it is a temporary position, but there is process

going on now whereby we are making it into a permanent position. We are in the

process of hiring now for that position.

MS FOOTE: So, it does not show up in the Salary Details?

DR. HOUSE: It does not show up now because it is a temporary position.

MS FOOTE: Okay.

When will that be made permanent, Doug?

DR. HOUSE: As soon as we get through this hiring process.

MS FOOTE: I guess you are in the middle of interviewing now.

DR. HOUSE: We have not started interviewing, but we are getting

applications.

MS FOOTE: Okay.

I am just looking at Purchased Services. I notice in some areas we have seen

an increase - a big increase in some. I am just wondering, for your Purchased

Services, do you tender those or are the majority of them people you know who

are working in some distinct area that you think would be appropriate to hire?

DR. HOUSE: What we do in Purchased Services in all cases is to adhere to

government guidelines - not guidelines, I guess, regulations. Beyond a certain

amount, which I am not sure off the top of my head, we always tender.

MS FOOTE: Is it $50,000 or $5,000?

DR. HOUSE: It is more like $50,000.

OFFICIAL: It varies, depending on whether it is something that you are

doing under the Public Tender Act or whether you are doing it for hiring a

consultant, and there are guidelines for that so there are different rates,

different limits.

MS FOOTE: I think Susan Sherk has been -

OFFICIAL: That was tendered, and there were a number of applications for

that.

MS FOOTE: Adelle Poynter as well.

OFFICIAL: The same thing, yes.

There was a process. There were interdepartmental committees that reviewed

all of the applications.

Just for the record, I had nothing to do with either of those decisions.

MS FOOTE: I am not saying they were bad.

OFFICIAL: I know. I am just explaining.

MS FOOTE: They are good people. I am not saying they were bad. They were

just a couple that came to mind.

How many contracts have been awarded by the department under the heading of

Professional Services? Do you have any number on those?

OFFICIAL: Not off the top of my head.

Ken, do you have any -

MR. CURTIS: No, I do not know right off, but (inaudible).

OFFICIAL: We could find that out for you.

MS FOOTE: Can I get a list of all the contracts and who has gotten them?

MS DUNDERDALE: Sure.

MS FOOTE: If you could table that for me, I would appreciate it.

MS DUNDERDALE: That is not a problem.

MR. CURTIS: Over what time period are you looking at there for that? Just

in the last year or so.

MS FOOTE: In the last couple of years.

I would also like to know how many employees were in the department when you

became the minister, compared to the number of employees there now.

MS DUNDERDALE: Sure.

MS FOOTE: If we could get that number tabled as well?

MS DUNDERDALE: Yes.

It would be about the same, I expect, or more.

MS FOOTE: Is there any discussion with the federal government, or

anything happening around the Comprehensive Economic Development Agreement? Is

that dead in the water, you are getting nowhere with it, or...?

MS DUNDERDALE: Well, it is dead in the water in terms of the response we

are getting, but I continue to make it an issue with every federal minister and

representative that I meet. It does not matter if it is directly a part of their

portfolio or not. I raised the issue just last month in Boston with Joe McGuire,

the Minister Responsible for ACOA. The Atlantic Premiers have made it an issue,

but there really hasn't been any kind of response. There doesn't seem to be

any desire at the moment.

MS FOOTE: Or appetite to go down that road.

MS DUNDERDALE: Or any appetite at all. It is just difficult for it.

MS FOOTE: Just back to the whole issue around - you mentioned how you are

trying to look at community development in the Province. How do you see that

being rolled out in terms of how communities in rural Newfoundland in particular

- and I keep harping about rural Newfoundland because I think that is -

MS DUNDERDALE: Very important to all of us.

MS FOOTE: That is Newfoundland and Labrador. We talk about tourism, and

tourists coming here, but I wager a bet that when people come to Newfoundland

and Labrador they come to see rural Newfoundland and Labrador, as great as St.

John's is or Corner Brook is.

What is the approach? How are communities supposed to get involved and get on

the radar screen and be able to move ahead, I guess, or access funding, or find

something happening within their communities to enable them to survive?

MS DUNDERDALE: Well, they have their Regional Economic Development

Boards. They have their Chambers of Commerce. They have people who are engaged

in business.

MS FOOTE: There aren't many rural communities that have Chambers of

Commerce.

MS DUNDERDALE: Well, you know, in terms of a region, they certainly have

their councils, their joint councils, and we are working very closely with all

of them. There is intelligence on the ground that is better than any

intelligence that might be found in terms of St. John's. There are a number of

agencies and organizations involved in economic development, and our whole

Regional Diversification Fund speaks to that. I mean, that is $5 million that is

available for that kind of expansion and diversification that those

organizations, when they are applying for money from Industry Canada or ACOA,

that is where the dollars are. If we do not have federal-provincial agreements

then we have to find another way to be able to access that federal money, and

the diversification plan does that. I mean, we have seen it with broadband. We

see it with all kinds of infrastructure that is happening in communities. We

hope we will, and we will, see it in our marine strategy as we implement that

strategy in terms of the innovation strategy, but also in terms of the Economic

Initiatives Committee of Cabinet where there is a constant combing through of

natural resources, fisheries, tourism, our own department and others, and

combing out real opportunities that exist all around the Province. In agrifoods,

for example, there are enormous opportunities, particularly on the West Coast

and in Labrador and in the central part of the Province, enormous opportunities

in agrifoods. What we are doing in aquaculture, like our loan guarantee program

for working capital for aquaculture, it is certainly not all of the answer for

Harbour Breton -

MS FOOTE: Speaking of aquaculture -

MS DUNDERDALE: It is a program that is mirrored very closely on the

program that is in New Brunswick, and it has been very, very successful there.

One of the huge impediments to aquaculture development in this Province has been

access to working capital, so we have introduced this program which addresses

that.

It is certainly not all of the answer for the Connaigre Peninsula but it is

certainly going to be an important part of it.

MS FOOTE: Are they not on their last legs now? I understood that they

were selling off -

MS DUNDERDALE: But there are new players who are interested and in

discussions with government. Companies that have had very good success elsewhere

in the country and internationally are very interested in our Province, so talks

are ongoing with them, especially now that we have the working capital guarantee

program in place.

There are big issues in aquaculture. The way that it was set up in terms of

access to food, feed for the fish, it was destined to failure because of the

exorbitant prices being charged by companies for feed. It was almost impossible

for the companies that currently exist down there to survive without any kind of

a funding program to assist them or help them in way. It would have been an

incredible story, in fact, if any of them had succeeded. We are trying to

address all of that and lay the foundation here that a company - and we hope

local companies - can come back in there and invest and grow.

MS FOOTE: I am not sure if I am recalling it correctly, but, the Minister

of Fisheries and Aquaculture, was the fund in his department or in ITRD?

MS DUNDERDALE: No, the fund is in our department but we work very closely

with the Department of Fisheries and Aquaculture to develop -

MS FOOTE: I remember him standing in the House and talking about how they

had helped to save aquaculture on the Connaigre Peninsula.

MS DUNDERDALE: The criteria developed were developed for existing

companies as well as any new enterprises that might begin, and they were

eligible to apply for funding under that program.

MS FOOTE: Apparently they did not qualify.

MS DUNDERDALE: They did not meet the criteria.

MS FOOTE: Why was that?

MS DUNDERDALE: Because it has be a viable company. It has to be able to

show sustainability in the long term; because, in this program, you have to

bring a bank with you. It is somewhat similar to the Fisheries Loan Guarantee

Program. You have to have equity in the company, you have to have a long-term

business plan and a sustainability plan before anybody is going to invest, any

bank is going to invest or anyone is going to invest in you. Unfortunately,

because of some of the circumstances that those companies had gotten into,

particularly around feed with Shur-Gain, they were just too far gone.

MS FOOTE: That is it for me.

Thank you, Mr. Chairman.

CHAIR: Okay.

Are there any further questions from Committee members?

There being no further questions, I ask the Clerk now to call the subheads.

CLERK: Subheads 1.1.01. to 5.1.02. inclusive.

CHAIR: Shall subheads 1.1.01. to 5.1.02. carry?

All those in favour, aye'.

OFFICIALS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, subheads 1.1.01. through 5.1.02. carried.

CHAIR: Shall the total carry?

All those in favour, aye'.

OFFICIALS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, total carried.

CHAIR: Shall the Estimates for 2005-2006 for the Department of

Innovation, Trade and Rural Development carry without amendment?

All those in favour, aye'.

OFFICIALS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, Department of Innovation, Trade and Rural Development, total

heads, carried without amendment.

CHAIR: We have the minutes of our previous meeting, and I will deal with

that a little bit later.

First of all, I would like to thank Minister Dunderdale and her officials

from her department for providing us with so much information here this morning.

I would also like to thank the members of the Committee as well as our Table

officer, our Page and media person.

I remind the members that our next meeting is tomorrow morning at 9:00 o'clock,

here in the Committee room, and we will be dealing with the Department of

Business, and tomorrow evening, as well, in this room, Fisheries and

Aquaculture.

MS FOOTE: Mr. Chair, I ask: Do you know if the Minister Responsible for

Business is going to be here?

MR. JOYCE: Can you ensure that he is going to be here, so we can have

a...?

CHAIR: I am just following the schedule, the printout that we had, but I

will check on that and let you know.

MS FOOTE: I would like to know, please.

CHAIR: Okay.

MR. JOYCE: It is no good to have the meeting if (inaudible) .

CHAIR: Okay, I will check on that.

We have the minutes of the meeting that we held last night. I would like to

ask for a motion to adopt these minutes.

Moved by Mr. O'Brien, seconded by Mr. Hunter, that the minutes of last

night's meeting be adopted as circulated.

All those in favour, aye'.

OFFICIALS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, minutes adopted as circulated.

CHAIR: I guess that is about it.

Again, I would like to thank everyone.

A motion for adjournment? Moved by Ms Johnson.

This meeting now stands adjourned.

On motion, the Committee adjourned.