April 20,

RESOURCE COMMITTEE

Pursuant to Standing Order 68, John Dinn, MHA for Kilbride, replaces Paul

Davis, MHA for Topsail, and Vaughn Granter, MHA for Humber West, replaces Jim

Baker, MHA for Labrador West.

The Committee met at 5:30 p.m. in the Assembly Chamber.

MR. VERGE: Okay, can I have your attention, ladies and gentlemen. I want

to welcome you to this meeting where we will be reviewing the Estimates for the

Department of Natural Resources. The first order of the day is we need to elect

a chairperson for this Committee.

MR. BRAZIL: I nominate Wade Verge.

MR. VERGE: I will call on the Clerk to conduct that nomination.

Thank you, though, for your eagerness.

MR. BRAZIL: Overzealous.

CLERK (Ms Murphy): Are there any nominations for Chair?

MR. BRAZIL: Wade Verge.

CLERK: Mr. Brazil.

Seconded by?

MR. HUNTER: Seconded.

CLERK: Mr. Hunter.

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CLERK: Contra-minded?

Carried.

CHAIR (Verge): Okay, thank you.

Now we need to elect the Vice-Chair of the Committee. Are there any

nominations for the position of Vice-Chair?

MS JONES: Kelvin Parsons.

CHAIR: Kelvin Parsons has been nominated.

Seconded by?

MR. GRANTER: Seconded.

CHAIR: Vaughn Granter.

Thank you.

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Carried.

CLERK: 1.1.01.

CHAIR: I call subhead 1.1.01.

I recognize the Minister of Natural Resources.

MR. SKINNER: Thank you very much.

Just by way of procedure, we did submit a layout of all the people sitting. I

am assuming whoever is in TV land is able to look after all of that. Okay, thank

you.

I have a few opening remarks. It was going to be my intention, by way of

introduction, to have a few opening remarks before we get into the details, if

that is okay?

CHAIR: I was thinking, Minister, you have fifteen minutes, technically,

for opening remarks and to introduce your staff and whatever else you want to

say, but you do not have to use the fifteen minutes. The first speaker over here

has fifteen minutes as well, but if it is in agreement with people we will guide

the time and try to be fair and go back and forth as needed, if that is in

agreement with everybody.

OFFICIAL: (Inaudible).

MR. SKINNER: Fair enough. Thank you, and the same to you.

I think I should, just by way of introduction, even though we have sort of

done it, I think I will do it for everybody in the room. I will ask everybody

here on my side if they would just introduce themselves by name and by position

so that members opposite will be able to understand who is here sitting with me

and what their function is within the department. As we get into the Estimates,

I will be calling upon some of these people for specific responses that I may

need.

My name is Shawn Skinner, Minister of Natural Resources, and I will start

here on my left.

MR. MOORES: Len Moores, the CEO for the Forestry and Agrifoods Agency.

MS MACDONALD: Cindy MacDonald, I am Director of Agriculture Business

Development.

MR. LIVERMAN: Dave Liverman, Assistant Deputy Minister of Mines.

MR. BOWN: Charles Bown, Associate Deputy Minister, Energy.

MR. WARDLE: Richard Wardle, Acting Deputy Minister of Mines and Energy.

MR. IVIMEY: Philip Ivimey, Departmental Comptroller.

MS MACLEAN: Heather MacLean, Director of Communications.

MS HUMPHRIES: Denise Humphries, Executive Assistant to Minister Skinner.

MR. SKINNER: Okay, thank you very much.

What I would like to do is just a general overview of the main budget items

for the four branches of the department which are the Forestry, Agrifoods, Mines

and Energy branches.

CHAIR: Mr. Skinner, can I interrupt you for one second?

MR. SKINNER: You can, Sir.

CHAIR: I was in error. I really should have asked the rest of the

Committee members to introduce themselves as well, if that is okay?

MR. SKINNER: Absolutely.

MR. BRAZIL: David Brazil, MHA, Conception Bay East & Bell Island.

MR. MALLAM: Hi, my name is Andrew Mallam. I am a researcher with the

Opposition Office.

MR. GRANTER: Vaughn Granter, MHA, Humber West.

MR. HUNTER: Ray Hunter, MHA, Grand Falls-Windsor-Green Bay South.

MR. DINN: John Dinn, MHA, Kilbride.

MS JONES: Yvonne Jones, MHA, Cartwright-L'Anse au Clair.

MR. WESTCOTT: Craig Westcott, Director of Communications, Opposition

Office.

MR. MILES: Peter Miles, researcher of the Opposition Office.

MS MICHAEL: Lorraine Michael, MHA, Signal Hill-Quidi Vidi.

MR. MORGAN: Ivan Morgan, researcher, NDP Office.

MR. SKINNER: Thank you very much.

As I indicated, I will sort of just have a couple of brief remarks on the

four divisions within the department and then after that whatever questions

there are we would be more than happy to try and answer them to the best of our

ability.

I will start off with Forestry. The forest industry in this Province has been

significantly affected by the changes in the global economy. In particular, the

pulp and paper and the lumber industries have been negatively impacted over the

past several years. Our response to this downturn has been to work with our

forestry entrepreneurs to improve their facilities and to build upon the

strengths of the sawmilling and value-added industry.

Through our Forestry Industry Diversification Fund, $4.2 million will be

invested into two of our larger integrated sawmills which will help with product

quality, product capacity and product efficiency. In today's marketplace, it is

also pivotal to invest in research to explore new, innovative opportunities for

this sector. An investment of $1.1 million will support a new forest research

and innovation fund to strengthen the research capacity in the Province to open

new avenues for future advancement of the forest industry in Newfoundland and

Labrador.

In the Agriculture division, food security is an important issue for the

people of our Province. Newfoundland and Labrador is vulnerable to world events

given that we import approximately 90 per cent of the food that we consume.

Strengthening our local food production is paramount. In consultation with the

agrifoods industry, we have developed a five-year action plan for the

agriculture and agrifoods industry to build upon our current capacity. We will

be investing $250,000 in 2011-2012 to begin implementing this action plan.

Investments this year will be focused on new entrants; $150,000 will be used to

develop programs to attract new entrants into the industry and $100,000 will be

invested to implement a legal survey assistance program for new entrants.

We believe that food safety is crucial for the agriculture and agrifoods

industry; $500,000 will support the purchase of new equipment for the Province's

Animal Health Laboratory. This will provide greater food safety and milk quality

testing capabilities. These investments into the agriculture and agrifoods

industry will support increased industry food production and safety, resulting

in improved food security for the people of Newfoundland and Labrador.

The provincial mining industry is a significant contributor to the economy

with valuable employment opportunities for the people of our Province. The

mining industry is growing in the Province with mineral shipments predicted to

hit an all-time high and two new mines expected to open in 2011-2012, the

Labrador Iron Mines and Rambler Mines and Metals. Funding of $1.2 million will

support geoscience mapping and maintenance of the collection of geoscience data

that will benefit the Province's mineral exploration sector, particularly in

Labrador and rural areas.

Budget 2010 identified funds to implement dam repairs at the former Buchans

mine. Budget 2011 confirms this work by providing funds for the inspection and

repair of four dam sites to ensure their long-term stability and safety. These

include Whalesback dam near Springdale, Rambler near Baie Verte, Gull Bridge

near South Brook, and Daniel's Harbour. Five hundred and ten thousand dollars is

allocated to address issues at these sites, as well as to continue inspection

and maintenance at all such dams. The work required will ensure these dams

remain in good condition and support containing mines tailings in the future.

Geoscience mapping and an up-to-date geoscience database are important

components to provide a competitive environment for mineral exploration. The

Geological Survey Division is considered one of the top providers of public

geoscience in North America with a long and successful history of supporting

mineral exploration. Budget 2008 identified $1 million a year for a three-year

period for additional geoscience mapping. This program was very successful in

achieving its outcomes, particularly in Labrador, and in stimulating mineral

exploration. A permanent addition of $1.2 million is now identified to sustain

this geoscience activity, especially in Labrador and rural areas.

The provincial Energy Plan was released in 2007 and identified an initial $35

million for specific initiatives, such as geoscience data acquisition, energy

efficiency and conservation, and energy innovation. All of the 107 commitments

are either underway or completed. Some of the significant initiatives include:

the Energy Innovation Roadmap, initiatives under the Offshore Geoscience Data

Program, initiatives under the Petroleum Exploration Enhancement Program and the

major projects capacity study. The department has been provided $13.5 million in

funding to continue these programs which includes $3.1 million for the EnerGuide

program.

Budget 2011 will provide $348 million to Nalcor Energy for investments to

facilitate participation in oil and gas and other energy projects including the

Lower Churchill. Climate change is having and will continue to have a major

impact on our coasts and which affect communities and infrastructure in coastal

areas vulnerable to flooding and coastal erosion. Through Budget 2011, $100,000

has been allocated for a project to map vulnerable coastal areas, identifying

areas at risk and developing a better understanding of erosion rates. The

project will identify areas where development could be restricted or mitigation

required before development occurs, thereby reducing the cost incurred by the

Province of expensive mitigation and rehab in the future.

We remain committed to enacting the best standards possible in regard to

offshore helicopter safety and support of all the recommendations of

Commissioner Robert Wells of the Offshore Helicopter Safety Enquiry. Safety in

our oil and gas industry is paramount, and the recommendation of Commission

Wells provide for enhanced measures to protect the workers who travel offshore.

We look forward to the co-operation of those involved in the industry, including

both levels of government, the regulator and operators, and most importantly the

workers as steps are taken to implement these recommendations. We have provided

additional funding to the C-NLOPB of $1.4 million to increase its existing

operating capacity and to specifically fund the implementation of

recommendations from the Phase I report.

In late 2009, CF(L)Co requested that Hydro-Quebec renegotiate the 1969 power

contract to establish a fair and equitable return for both CF(L)Co and

Hydro-Quebec When Hydro-Quebec did not respond to this request CF(L)Co launched

a legal proceeding against Hydro-Quebec. The legal proceeding was launched on

the basis that the pricing terms of the 1969 contract are inconsistent with the

obligation imposed by the law of Quebec - which is the Quebec Civil Code - to

act in good faith in all legal relationships, including the ongoing performance

of contracts.

This court challenge is entirely different than previous court challenges

that have ruled against the Province of Newfoundland and Labrador. A number of

steps have occurred since legal proceedings began in early 2010 and Hydro-Quebec

is scheduled to file its defence by the end of April, 2011. According to the

agreed timetable, the case should be ready for trial by the fall of 2013. As per

our agreement with CF(L)Co to fund the legal cost of this challenge, $653,000 is

provided for the CF(L)Co trust which has been established to oversee the

distribution of funds.

These are just some of the items included in Budget 2010 for the Department

of Natural Resources and I look forward to addressing any questions that

members' opposite my have.

Thank you, Mr. Chair.

CHAIR: Ms Jones, would you like to go first?

MS JONES: Thank you, Mr. Chairman.

I certainly want to thank the minister for his brief overview and to thank

your officials for being here this evening to address our questions as well.

I am going to start right at the Estimates,

section 1.2.01.01 under Executive

Support for the department. The salary budget from last year was overspent by

$800,000. Can you provide for me an explanation of what that money was used for

and why it was necessary to overspend?

MR. SKINNER: Yes, Ms Jones, the amount, specifically the $777,900 - is

that the amount you are referring to?

MS JONES:

Section 1.2.01.01., you had budgeted a little over $2 million

and you spent $2.8 million.

MR. SKINNER: Yes, okay. Thank you.

There were payouts to employees during the year; there were overtime payouts

to some former employees who left; there was some severance, some vacation pay.

Those would be the broad categories. If you require more specific information, I

will look to officials to see if they may be able to help right now and, if not,

we will certainly endeavour to provide you with more specific amounts, but I can

tell you in terms of a general - the headings that I just gave you in terms of

severance, vacation, people leaving and so on, is what was the cause of that.

MS JONES: Okay. There were no additional staffing measures here?

MR. SKINNER: No, and I will just look for clarification.

Philip?

MR. IVIMEY: No.

MR. SKINNER: Just to be sure. No, there was not.

MS JONES: Okay.

How many employees would have left the department last year?

MR. SKINNER: I will have to ask Phil, if I could, Mr. Ivimey, to answer

that. I do not have that particular specific number.

MR. IVIMEY: In the Executive Support area there would have been

approximately four employees who would have retired or left the department

during the year.

MS JONES: Okay. Those positions, have they been replaced to date?

MR. IVIMEY: Yes, one of those positions has been replaced. Actually, the

majority of those positions, I think, with the exception of one, have been

replaced.

MS JONES: Okay. Are you working on replacing that position, and can you

tell me what it is?

MR. BOWN: That position is a Commercial Advisor, and that remains vacant.

It is a Solicitor IV position.

CHAIR: Can I please, just as a reminder to everybody too, this is being

recorded in Hansard and when anybody speaks from the Minister's officials just

watch the little light on the front, and when it comes on that means your mike

is on and it is being picked up.

MS JONES: I am just wondering what a commercial advisor is in you

department? What is it they do, and how many positions are there like that?

MR. SKINNER: Again, I will ask Mr. Bown to give you that detail.

MR. BOWN: That position was used during the period of time that we were

concluding commercial negotiations with respect to Hebron and White Rose, the

expansion, and Hibernia South. That was our position, was responsible for

leading the provincial negotiating team on helping Nalcor with its equity

interests, and also negotiating benefits and royalties.

MS JONES: Okay. Is there a need to fill the position now that those

particular deals have been resolved? I am just wondering on a go-forward basis

what the intention is?

MR. BOWN: For the moment, we have not indicated a specific need, but the

position is there for us to fill should we acquire it.

MS JONES: Are there other commercial advisors within the department?

MR. BOWN: The department has a lot of expertise in economics, financial

and technical, in engineering and geoscience as well, that would fill out the

body of a negotiating team. So, no, we would not require anybody else.

MS JONES: Okay.

Also under the estimates in that section, 03 Transportation and

Communications, again, you overspent about $100,000 than what you budgeted;

however, you went back to the original estimates this year. Can you tell me what

the extra cost was associated with there? Is there a specific campaign that you

did within this category of the department or something?

MR. SKINNER: No, those extra costs basically were a number of FPT

meetings that were scheduled throughout the year that we ended up having to

attend as staff. Also, as you are aware, we have our Forestry and Agrifoods

executive staff based in Corner Brook. They would have been into St. John's at

various times throughout the year. There was excess travel costs associated with

the staff coming in from Corner Brook.

MS JONES: Okay. I notice you did not budget for that incremental cost

this year in your budget. Is there any reason? You do not expect them to come in

this year, or they are not allowed in? What is the story?

MR. SKINNER: No, it is just that I have a Monday morning meeting that I

schedule with the executive, teleconference. They do come in from time to time,

but I am a believer in using the telephone and teleconferencing where possible.

We have been trying that and we will see how it goes.

MS JONES: Okay. Thank you.

Under

section 2.1.01 Administration and Program Planning, we have seen a huge

rise in Employee Benefits in that section. In fact, you had budgeted $61,800,

you actually spent $239,000. Can you give me an explanation for that?

MR. SKINNER: I will give you a general overview, and again I will look to

my staff if they can fill in maybe a little bit more detail to help with the

explanation. It is my understanding that full amount of variance is because of

increased Workplace Health and Safety payments that were higher than were

anticipated when the budget was originally done. That is the understanding I

have of the increased amount.

I do not know if Mr. Ivimey might be able to help us with why that was higher

than anticipated.

MR. IVIMEY: Yes, that is correct, Minister.

The variance was primarily due to higher than anticipated Workplace Health

and Safety compensation payments through the year which tend to vary from year

to year, depending on the services of the employees who are often availing of

the Workplace Health, Safety and Compensation program. That can vary year to

year and it just so happened this year that the variance was higher than

anticipated, but it is anticipated for the following year to be at the budgeted

level of approximately $60,000.

MS JONES: These are people who are off work for some reason? Is that what

you are talking about?

MR. IVIMEY: Yes, correct. That would be people who are off on long-term

disability and who are availing of Workplace Health and Safety compensation.

MS JONES: A lot of them were temporary according to this. You are not

budgeting for it this year.

MR. IVIMEY: Like I say, it all depends on the length of time. It varies

per employee, depending on what form of long-term disability or what program

they may be availing of underneath the Workplace Health, Safety and Compensation

program. They may not have the same medical claims; they may not have the same

benefits that would be paid out to them next year as they are currently being

paid out this year.

MS JONES: Okay. That number is subject to change in most budgets, I guess

is it?

MR. IVIMEY: Yes, that is correct.

MS JONES: Okay. Under 06, the same heading, Purchased Services;

obviously, you budgeted about $8.7 million and you end up spending over $13

million. Can you tell me what that was for?

MR. SKINNER: It is related to Corner Brook Pulp and Paper and the buy

back of timber rights. Originally, there was a payment to Corner Brook Pulp and

Paper that was budgeted for the Budget year 2011-2012 but actually got paid out

in the Budget year 2010-2011. That would be the bulk of that.

MS JONES: Okay. When you say the bulk, how much are we talking about? How

much did you spend to buy back the timber rights?

MR. SKINNER: The total amount for timber rights was $12 million and, as I

said, $6 million was advanced into an earlier year then was originally

anticipated. It would have been paid next year and we just paid it in this year;

I guess is what I am trying to say.

MS JONES: Okay. What did we get for that?

MR. SKINNER: We got a lot of rights to the land back, with a lot of trees

on it.

I will ask Mr. Moores to give you a little bit more detail than that.

MS JONES: Yes.

MR. MOORES: It involved around 400,000, maybe 440,000 hectares of land

that was returned; I guess their ownership right was returned to the Crown, the

Corner Brook Pulp and Paper licence to (inaudible) Crown ownership. Associated

with that is the volume of wood that was on that land base as well.

MS JONES: There was 440,000 hectares of land that returned to the Crown

for this $12 million in price. Why was it necessary to buy that back?

MR. MOORES: I think in terms of trying to restructure our own industry,

and trying to have more control and access to the resource as we try and

restructure an industry was important, especially where we took a significant

portion of that land base over in Central Newfoundland for our sawmill sector,

which we are hoping will continue to have a demand for the resources on the East

Coast.

MS JONES: Okay. You felt it was necessary in order to restructure the

forest industry appropriately so that the government could have more ownership

over timber rights?

MR. MOORES: Well, we thought that would be one piece of that support to

the sector in terms of having additional fibre availability for the Crown to

allocate to the sawmill sector.

MS JONES: Yes, it is a lot of money. How did you determine what the

market value on that was? Who determined that?

MR. MOORES: The way we determined it, there was an evaluation done in

1994-1995 when a similar exercise was completed with Corner Brook Pulp and Paper

on some different land base. The value of the land base at that time was

pro-rated up to current dollars. That is how the value was determined.

MS JONES: Okay. Is the land being used now? What is the intended use for

the timber that is there? I know you talked about the Central Newfoundland mill,

but it is my understanding they are not accessing any of that wood yet. What is

it being used for today? Is it being used at all?

MR. MOORES: Oh, yes. A lot of that land base, most of it is being

allocated out now to current operators in the East Coast of the Province. The

only portion I am aware that is not allocated out at this time would be that

timber resource on the Northern Peninsula that we purchased back as well, behind

Hawke's Bay.

MS JONES: Okay. Commercial operators on the East Coast, you are saying?

MR. MOORES: Yes.

MS JONES: Okay.

Corner Brook Pulp and Paper no longer has this property. Do they have any

property that was formerly owned by Abitibi? Did they obtain any of those

properties?

MR. MOORES: No, not that I am aware of.

MS JONES: Okay.

Still under that particular section, the Transportation and Communications

cost, I overlooked it. You budgeted $828,000, obviously you spent much more than

that. I am just wondering again what the contributing factor was there?

MR. SKINNER: Again, the department undertook some forced inventory

surveys and some forced mapping exercises. Those exercises involved the use of

helicopter time. That would be more money because of the fact we needed more

helicopter time, would be the main reason.

Again, I will look to Mr. Moores to see if he has any further detail he can

provide on that. Basically, it is us doing the forced mapping and forced

inventory exercise and using the helicopter time.

MS JONES: Okay.

Still on that section, again, Professional Services increased from $330,000

to $520,000. Can you tell me what professional services you would have been

purchasing there?

MR. SKINNER: Those costs would have been related to work done with

National Forest Week and there was a forest fair and a model forest that would

have been a part of that expenditure. There was also some work done with the

marketing of the Forest Industry Diversification program. There were originally

some grants under the Forest Industry Diversification program but, ultimately,

those grants were paid out under this particular category Professional Services,

not under grants.

MS JONES: Okay.

Still under that section, because all of the estimates here have gone up of

course; Property, Furnishings and Equipment, again, you budgeted $57,200 and you

spent $441,200. Can you tell me what was purchased there?

MR. SKINNER: The majority of that would have been for purchasing

equipment, basically to be used by our field staff. Equipment like snowmobiles,

ATVs, trailers to take those pieces of equipment around, boats and motors, in

terms of some of the enforcement work that would have been done. That would be

where that money would have been spent.

MS JONES: Were there tenders called for all of that?

MR. SKINNER: I will have to refer to Mr. Moores for specifics on that. I

will ask him to answer.

MR. MOORES: For all those vehicle purchases of boats or trucks or

whatever, ATVs, all that would go under a tender process.

MS JONES: Okay. That was like a one-time purchase for the Department of

Forestry was it?

MR. MOORES: Yes.

MS JONES: Okay.

Maybe you can tell me how the forestry department and the inland waters piece

are tying together here. Government has talked about the inland waters piece and

having enforcement officers and so on. How does that gel with the forest

enforcement piece of it with forestry officers?

MR. SKINNER: Our officers are out doing enforcement work, as you have

indicated, in terms of forestry enforcement and the inland waters enforcement

part of it. It became a part of the duties they picked up as a part of extra

duties that they were given. It has gone well. There has been success in terms

of the work they have done. From a public perspective, we have received positive

feedback in terms of recognizing that we value the inland waters and that we are

trying to ensure they are protected. From that perspective, it works well.

MS JONES: Yes. How many new positions were added for inland waters?

MR. SKINNER: I will refer to Mr. Moores, if I could, for specifics. For

clarification I guess, when you are asking how many new, do you mean when the

program initially started?

MS JONES: Yes.

MR. SKINNER: Okay, so when the program initially started.

MR. MOORES: In 2004.

MS JONES: Yes.

MR. MOORES: In 2004, the first year, there were no new positions; it was

all done within the department. Then there were seasonal positions created to do

the program because the program transferred to the Department of Justice. I

would think they are up because that was with the Department of Justice.

Somewhere between twenty-eight and thirty-three, thirty-four seasonal positions

were established to deliver that seasonal program.

MS JONES: Right now, where is that program? Is it in the department of

forestry and wildlife or is it in the Department of Justice?

MR. SKINNER: The program is currently with the Department of Justice.

MS JONES: It is currently with the Department of Justice, okay. Some of

the people who worked in forestry were rolled over into those jobs were they,

those enforcement jobs, or were they not?

MR. SKINNER: Some of them would have been, yes.

MS JONES: Okay. Because I was told a while ago that and maybe you can

explain this to me some of these forest officers were going to lose some

designation because of the inland waters program and they were going to be

reclassified or re-categorized or something of that nature. Are you guys aware

of well you would be aware of it, it would be your department.

MR. MOORES: No, I am not aware of it.

MR. SKINNER: No, I am not aware of it, unless you have some specific

knowledge of something I am not aware of, but no. My response to that is no.

There is no change, certainly nothing we have initiated in terms of any

re-designation or loss of designation. I do not know if you mean job designation

or professional designation but nothing like that, that I am aware of, no.

MS JONES: Okay.

No, I think what they were referring to is responsibilities of enforcement

officers or some of the responsibilities that enforcement officers had would be

removed as a result of this program with regard to inland waters. They would be

basically, strictly doing forestry work as opposed to doing wildlife duties as

well.

MR. SKINNER: The answer to that would be yes. In terms of the actual

duties, the forestry personnel will now be doing strictly forestry enforcement

duties, yes. The wildlife officers who are now in Justice will be doing the

inland fish enforcement and whatever other duties Justice would apply to them,

but our forestry officers would only be doing now forestry enforcement, yes.

MS JONES: When is that full designation going to take place, or what is

the plan for that?

MR. SKINNER: The transition that is occurring is actually happening as we

speak. We have been working on that for some time. Since I have become minister

it certainly has been something that I have been involved with. That transition

is occurring as we speak. It is in process, basically.

MS JONES: How many forestry employees will be displaced or rolled over

into the wildlife aspect of it?

MR. SKINNER: There is no displacement of people in terms of anyone losing

a job, if you mean displacement in that regard. If you mean in terms of people

moving from one division within government to another, thirty-seven I think is

the number; thirty-seven people.

MS JONES: Okay.

CHAIR: Ms Jones, maybe I could get some direction from some other

Committee members. You have been asking questions for a little over twenty

minutes. I do not know if we want to have some other members asking questions

and come back to you again in a while.

MS JONES: It does not matter to me; whatever you want to do is fine.

CHAIR: Ms Michael.

MS MICHAEL: Thank you.

I would like to ask a further question to the discussion you were just

having. What are the implications of what has happened, the restructuring that

has happened with the movement of thirty-seven to Justice and the loss of

conservation officers per se?

MR. SKINNER: The staff who are remaining in forestry will now do the

forestry duties, which is what we were doing before. The staff complement is

basically the same complement who were doing that work before. The thirty-seven

positions that are being transferred over to Justice basically are the number of

people who were absorbed into forestry when the initial division was created in

1996. It is felt that the duties these people will now be performing are more

appropriately represented by them being a part of Justice and doing that

enforcement piece than to be a part of forestry. That is why the split was made.

They will join other people in Justice who are doing enforcement work.

MS MICHAEL: You do not see anything with regard to wildlife work, jobs

around wildlife that is being lost because of those thirty-seven moving? You are

saying the work for them is not changing. The work is the same; they are just

doing it out of a different department.

MR. SKINNER: Yes, we do not see any loss of function or loss of scope of

work in that regard. As a part of the transitioning exercise, we looked at

things like that and we feel we are adequately staffed. The duties that are now

being assigned to the forestry individuals are adequate to do what they need to

do, and the people who have moved to Justice will now be able to do the work

that is required there.

MS MICHAEL: I have been told there is just one person now, the whole way

across Southern Labrador from Cartwright all the way to Quebec, covering that

area with regard to wildlife conservation, and you consider that adequate. My

understanding is that has not always been the situation.

MR. SKINNER: I cannot speak specifically to that particular zone from

personal knowledge, so I will ask Mr. Moores maybe if he can help us with some

of that. Again, I do not know the specific layout of every zone and how many

people are in each zone, so I will defer that to Mr. Moores.

MR. MOORES: Just to be clear, you are saying there is only one person in

Southern Labrador for the wildlife enforcement piece?

MS MICHAEL: Yes, right.

MR. MOORES: That is not the way I understand it for Southern Labrador. I

know they had a group of officers assigned to Cartwright that would cover - I am

only assuming in the Justice structure that they will be covering the scope of

Southern Labrador based out of their Cartwright office.

MS MICHAEL: Right. The information I have received - and maybe I have

received the same information that Yvonne has, but the information I have

received is from somebody working inside. That is what I am being told, and that

there were forty seasonal officers who relied on seasonal work who are now gone.

MR. MOORES: How many seasonal?

MS MICHAEL: Forty.

MR. MOORES: No, that is not to my understanding from speaking to the

Department of Justice.

MS MICHAEL: Could we have some clarification on that?

MR. MOORES: Yes, that would be Justice.

MS MICHAEL: Okay. I do not mean right now, but if you could get that for

us so that we can get the rights of this.

MR. SKINNER: I will inquire to the Minister of Justice because it is now

a Justice function. I do not want to leave you with the impression we are doing

that, but I will inquire with the Minister of Justice about that and we will

make sure we provide that information to you.

I will say for the record, that it is certainly not our understanding.

MS MICHAEL: Okay. Thank you.

I am going to do some line items also. I would like to come back to 1.2.03.

Administrative Support under Capital: "Appropriations provide for the purchase

and construction/alteration of tangible capital assets." The budget line last

year was $2,610,000 and it actually went up to $33 million was the revised. What

was that about?

MR. SKINNER: That increase, Ms Michael, was specifically related to the

negotiation and compensation arrangement with Enel related to Star Lake and

Abitibi.

MS MICHAEL: Okay.

MR. SKINNER: That was $32.8 million, I believe.

MS MICHAEL: Thank you.

We are still seeing fallout from Abitibi.

All right then; let's come to 2.1.03 Silviculture Development, under

subheading 03 Transportation and Communications, there is a big variance there.

Can we have an explanation for that variance, please?

MR. SKINNER: Some of the silviculture projects that were anticipated to

start did not commence, and some of them that we did commence actually came in

under budget. That is the general answer. We tendered some of these and the

tenders were less than we expected them to be.

MS MICHAEL: No, I was looking at 03 Transportation and Communications.

Would that be the reason? You went down further, I think.

MR. SKINNER: I am sorry, yes.

MS MICHAEL: You went down to Purchased Services. I think you did.

MR. SKINNER: I did, yes.

MS MICHAEL: Well, you can continue with the Purchased Services and then

go back up to 03.

MR. SKINNER: I did go to the wrong heading but I will ask Mr. Moores to

just

MR. MOORES: The additional cost was for additional contract helicopter

time and fixed-wing aircraft time for verification of areas that were treated,

in helping out with the mapping of those areas to confirm the areas were

actually treated.

MS MICHAEL: Great. Thank you.

Then 06; I interrupted you then, because you were explaining that.

MR. SKINNER: Again, my apologies for the wrong heading I looked at there.

MS MICHAEL: That is okay.

MR. SKINNER: Some of it was, as I indicated, work that we did not get

commenced. Some of it that we did commence, the tenders came in less than we

expected they would be, so that is why the variance was there.

MS MICHAEL: Okay.

Then, under 07, there is a major variance there, because only $1,500 was

budgeted, but it was $1,072,500 spent under 07, Property, Furnishings and

Equipment.

MR. SKINNER: Some of it was equipment purchase, but I will ask Mr. Moores

to give you more detail on that. I do know there was some equipment purchased

there.

MR. MOORES: There were some vehicles purchased for the nursery, but the

majority of that funding was for maintenance, getting roads up to standard so we

can access the areas, because silviculture treated areas are usually treated

maybe ten, fifteen years after an area is sometimes actually accessed. So we had

to purchase culverts and grading material and bridges to re-access the areas.

MS MICHAEL: Was this a surprise to you? Because obviously it was not

planned for, but that would seem, to me, to be something that you would be doing

long-term planning about.

MR. MOORES: I can check, but I would think it is variable, and the areas

they went into this particular year seemed to have a higher cost than other

years.

MS MICHAEL: Okay.

How are things going with the whole program? Are you adding to the amount of

land that has to be re-seeded, or does it depend on things beyond your control,

the industries that are using the land?

MR. MOORES: Well, obviously, for our planting and thinning programs, they

are usually areas that had been harvested

MS MICHAEL: Yes.

MR. MOORES: initially by the forest industry, and we are averaging

around 5,500 hectares a year to be planted, which translates to about 13

million, or 13.5 million seedlings a year, about 1,000 or 1,100 hectares every

year being thinned. So that is the basis for the silviculture program.

Since we started we have 113,000 hectares planted and 150,000 hectares

thinned in the Province, in our management program.

MS MICHAEL: Okay; and you are satisfied with it?

MR. MOORES: Oh, yes. In this program - you do not see the details - there

is a lot of survey work that goes on every year with staff and students, to all

the areas that are harvested, to make sure they meet our regeneration standards.

Then we do an evaluation of what treatments we would put on, and deal with those

areas then.

MS MICHAEL: Okay, thank you.

Down to 2.1.04.03 Transportation and Communications, only $5,000 budgeted but

$30,000 the revised figure.

MR. SKINNER: That particular increase has to do with: there was some road

inspection work that we had to do. There were some emergency bridge repairs that

were done in there under transportation. As well, there was a little bit of

employee travel that brought us over the budgeted amount.

MS MICHAEL: Okay.

Obviously you can see the $5,000 the norm, so some of the stuff that happened

was not the norm.

The next one would be Supplies, only budgeted $5,000 but $150,000 is the

revised.

MR. SKINNER: Again, the vast majority of that, Ms Michael, was related to

bridges, roads and culverts, and mostly related to Hurricane Igor. The specifics

I do not know, and maybe Mr. Moores might be able to help you a bit more with

it, but generally that is what the damage was; it was one-time unexpected.

MS MICHAEL: I forgot about Igor. Yes, that would have affected your

budgets as well.

Under Property, Furnishing and Equipment, subhead 07, $1,000 budgeted but

$201,000, so $200,000 extra spent.

MR. SKINNER: Again, given the damage to the roads, we went out and bought

a road grader, a piece of heavy equipment, basically, so that we could do the

work ourselves. It was cheaper to do it that way, so we purchased a grader. I

guess it is called a road grader; I think that is the name of it.

MS MICHAEL: Okay, thank you.

That was smart, actually. You are right; it is cheaper to do that than to

subcontract that out.

That is enough for me, for the moment; you can go back.

CHAIR: Do any other members of the Committee have any questions?

Okay, we will go back to you, Ms Jones. I am just estimating about twenty

minutes to go back and forth, but if you are finishing up a category or

something and you want a bit of extra time just let me know.

MS JONES: Whatever you think, Mr. Chair, that is fine with me.

CHAIR: Okay.

MS JONES: I am very co-operative this evening.

Just on the resource roads again: where was it that you bought the grader

for? What area of the Province? I am sorry; I just walked in, on the end of it,

and raised a question.

MR. SKINNER: I do not specifically know that it was bought for any

particular area, so much as it was bought to repair a bunch of damaged roads

related to Hurricane Igor.

MS JONES: Okay.

MR. SKINNER: I will ask the officials if they can answer that for you.

MR. MOORES: I think most of it would be on - when I say east, it is

probably Badger East, because that is where the largest part of our Crown

operations are. So I assume that would be where they would have designated it,

and put the grader.

MS JONES: Okay.

I am just going to go back and finish the

section I was on, 2.1.01, Grants

and Subsides. Under that particular

section you had budgeted $1.7 million and

you spent $10.7 million, or a little more, actually. Can you tell me what all of

that grant and subsidy was for?

MR. SKINNER: Yes, there was a payment made to Corner Brook Pulp and Paper

again. There was a payment of $10 million made to Corner Brook Pulp and Paper as

a grant, and that was part of a two-year financial commitment that government

had committed to Corner Brook Pulp and Paper.

MS JONES: Okay.

So, in addition to the $12 million to buy back the timber rights, you also

made a grant to them of $10 million. Was that consecutively for two years, three

years the grant?

MR. SKINNER: The total was $10 million.

MS JONES: Okay.

MR. SKINNER: So that would have been incremental to the $12 million that

we referred to earlier.

MS JONES: Okay. So, you paid it all out in this year's budget?

MR. SKINNER: Yes, that is correct.

MS JONES: Okay.

Incidentally, what would the other grants and subsidies be under that

category in that department?

MR. SKINNER: I will ask Mr. Moores, if he would, just to give you an

overview of some of those.

MS JONES: Sure.

MR. MOORES: A series of grants for some work at the national level of the

Canadian Council of Forestry Ministers, we pay a grant; we are a corporate

member of the Canadian Institute of Forestry, so we pay a grant; Junior Forest

Wardens; the Lumber Producers Association is a major grant; Foreign Tech, which

is a national research organization that we are part of, we pay a grant for

that; to Atlantic Wood, which is an Atlantic organization that does, I guess, a

think tank on marketing of forest products, and we pay a grant there as well.

MS JONES: Okay, thank you. That will conclude that section.

I also want to go back to

section 1.2.03. The Leader of the NDP asked a

question about it in terms of the $33 million that was paid out for Star Lake's

assets, and the other settlements that were announced there last week. Can you

tell us where the negotiations are with Fortis? Obviously, there is no money

budgeted here for that piece of it, so if you can give us an update on where you

think it is, or where it is going.

MR. SKINNER: We are currently in negotiations with Fortis, obviously. The

negotiations, from reports to me, are friendly, and appear to be moving along;

there does not appear to be any particularly dispute. Enel was particularly

interested in concluding their arrangement as quickly as they could. When I

became minister, they very quickly contacted me and said: Look, we want to bring

this to a head. It has been on the go for a couple of years, and we would like

to get this settled.

So, we concentrated our efforts on them. Fortis understood that we were going

to concentrate our efforts on them, because they wanted to get concluded, and

when we did we would turn our attention back to Fortis. That is what we have

done, and we are moving along.

I am reluctant to give you any particular timeline, simply because I am not

in control of it, I guess; we are not in control of it. It has to be something

we agree to, but the principles that were applied to the Enel settlement are

being applied as we move forward with Fortis, but they are progressing well,

from my perspective.

MS JONES: Okay.

I am just wondering, how long will it take before we actually recover the

expropriation cost of Enel, and what was the other group?

MR. SKINNER: Fortis?

MS JONES: Sun Life.

MR. SKINNER: Oh, Sun Life, okay. Sorry, yes.

I do not have that information in terms of being able to give you you mean

a period of time in terms of months, years or whatever? I assume that is what

you are asking, when you ask how long. I do not have that information; I am not

able to give you that information.

MS JONES: Obviously the recovery would be based on power sales, right? Is

there any estimation? I am just trying to get a handle around, we paid out all

this money, when do we get a return on it?

MR. SKINNER: Well, we paid out the money for the assets, and we paid out

the money based upon contracts that they had in terms of power purchase

agreements. There was money paid out based upon money that they, themselves, had

paid out as interest payments and so on since the expropriation occurred. There

was money related to they operated the asset for a period of time, so there

were various categories that were used, or items that were used, in determining

the value of that payment that we made, that $32.8 million, so it came from a

number of areas; but in terms of when we will see the return of that, as I have

said, I have not projected that timeline or time frame.

MS JONES: How much of it was actually for the asset as opposed to all of

the other things you just categorized?

MR. SKINNER: I am just hesitating because I do not have the information

off the top of my head, but there would have been the things that I just

outlined for you in terms of some of the power agreements, some of the interest

they had paid, the operational costs, they would have come off if I were to

try and give you a number now the $32.8 million, but I am not sure how much

all of that would be. I can endeavour to find that out for you, but I am

reluctant to give you a guess. I do not want to guess.

MS JONES: I would like to get a breakdown, just so I know what the asset

is costing as opposed to all of the other pieces that go along with it.

MR. SKINNER: Yes, okay.

MS JONES: Who would have done the legal work on that for the government?

MR. SKINNER: Again, I will look for direction but there was legal

expertise within Nalcor. They would have had a staff solicitor. There was legal

expertise within the department, within government, and - nobody else? That was

it?

OFFICIAL: (Inaudible).

MS JONES: Okay.

Section 2.1.02, still under Administration and Program Planning, Operations

and Implementation, I am just wondering what the increased cost, the small

amount of money in Employee Benefits, was for last year.

MR. SKINNER: I am not 100 per cent sure, Ms Jones. I am going to have to

look for some assistance on that one.

MS JONES: Okay.

MR. MOORES: Are you referring to the $3,900, the revised?

MS JONES: Yes.

MR. MOORES: That is additional costs for fees, seminars and conferences

that staff would have participated in over the year.

MS JONES: Okay.

Also in that same section, Supplies increased by $300,000. What was that for?

MR. SKINNER: Ms Jones, the majority of that would have been for the fuel

associated with vehicles that are used by staff during field work, as well as

some field equipment that was required for operations by the staff.

MS JONES: Okay.

Also under that

section 06 Purchased Services, there was over a $350,000 more

spent than was budgeted. Can you explain to me what that was for?

MR. SKINNER: Again, the majority of that, the bulk of that, would have

been for vehicle repairs and maintenance, including snow machines, winter

vehicles, as well as regular vehicles. There was also some money for rental of

storage facilities as well.

MS JONES: Okay, thank you.

Under the Forest Industry Diversification Program - you spoke to that in your

opening remarks - you were talking about investments that you are making into

integrated sawmills in the Province. Can you tell me what those two mills are,

and what kind of investments these are?

MR. SKINNER: The two of them are Burton's Cove Logging, and there was an

investment there of $2 million; and there was an investment in Cottles Island

Lumber of $2 million as well.

MR. MOORES: $2.2 million.

MR. SKINNER: $2.2 million.

MS JONES: Can you tell me what they are going to be using that money for,

in their businesses?

MR. SKINNER: In the general sense it is being used for allowing them to

diversify some of the product that they offer, and to increase their capacity,

but in terms of specific line items, I will ask Mr. Moores maybe if he could

just give you a little overview of what they will be doing.

MS JONES: This is grant money, right, or is it loans?

MR. SKINNER: This is loan money in this particular case.

MS JONES: Okay. Both of them are loans?

MR. SKINNER: Yes.

MS JONES: Okay.

MR. MOORES: Burton's Cove Logging are adding a new HewSaw which gives

them more efficiency in their sawing, better recovery. Again, what they call a

log sorting system so they can sort their logs by size to get a better recovery

when they are sawing. It is important for them as new they do not have a kiln

but a kiln for drying their lumber because kiln-dried lumber obviously opens up

many more markets for Burton's Cove Logging than they have today with just

selling green lumber.

For Cottles Island Lumber, they are improving as well. Their drying capacity

with a kiln line that is a new kiln which is on wheels, so they can roll their

product in and out and get more efficiency and have the kiln closed longer

instead of open and it saves on heat costs. They are adding a new value-added

line based on log siding. Right now they are going to add a line where they can

actually stain the log siding. They feel they can increase their market share

with a stained product for log siding as opposed to just the bare wood siding.

MS JONES: Okay.

Last year you spent $4,800 as well. Can you tell me where that was spent, for

the loan itself? You budgeted $6,500 but you spent $4,800.

MR. SKINNER: Are you referring to line item 2.1.05.08?

MS JONES: Yes.

MR. SKINNER: Okay. The difference in the budget amount and the revised

amount, which is what I understand you are asking me about, the $6.5 million to

$4.8 million?

MS JONES: No, I am asking where it was spent, the $4.8 million.

MR. SKINNER: Oh, in terms of where it was spent?

MS JONES: Yes.

MR. SKINNER: Okay.

MS JONES: Million, sorry. Craig just reminded me it is millions, not

thousands.

MR. SKINNER: Yes. No, that is why I was a bit but I understood you.

MS JONES: $4.8 million, sorry. That is what happens after twelve hours.

MR. MOORES: The majority of that funding was with Holson Forest Products.

MS JONES: Okay.

MR. MOORES: That is the one in Roddickton for the start of redevelopment

of their sawmill and their pellet plant, and their kiln as well. Some of that

money was also for part of the Burton's Cove Logging project. We have just

described some of it; it is crossing over two fiscal years.

MS JONES: Okay. Again, that was all loans last year?

MR. MOORES: It was all loans, yes.

MS JONES: Yes. What is the interest rate on the repayment of those loans?

MR. MOORES: Zero.

MR. SKINNER: Zero.

MS JONES: Okay, there is no interest. So it is different than the small

business loans program which is, I think, prime plus 3 per cent right now in the

department of industry, for example.

MR. SKINNER: I am not sure what the interest rate is but in this

particular case there is no interest.

MS JONES: No interest.

MR. SKINNER: No.

MS JONES: Okay. I am in the wrong the business, obviously.

Insect Control, again, just looking at this section, Transportation and

Communalisations is up. It is something that we are noticing, actually, in most

of the headings throughout the department. Again, I will ask you what it is

contributing to.

MR. SKINNER: That particular line item, we had to expand the control

program in the Goose Bay area due to an infestation of budworm. I would assume

that involved flights, airplane time and all that kind of thing. I do not know

if it would be classified as an outbreak or just a greater infestation but more

budworm than was anticipated and so more insect control.

MS JONES: Can you also explain to me why you spent $500,000 more in

materials, as well, or Supplies in that department?

MR. SKINNER: That would be the product in terms of the insect control

product, the deterrent that we are using, and again, aircraft time that would be

used there.

MS JONES: I was just looking at the bottom line figures in the Forest

Management budget. If you look at what you budgeted last year and what you

actually spent, I think you are looking at a difference of about $8.5 million

more last year than was budgeted. I am just wondering about that, because that

is something like 25 per cent over what you would normally budget in the

department. I am looking at this and I am saying: okay, you are budgeting at a

lower rate again this year. What are the prospects that you are going to live

within that budget and within that means this year as opposed to going over by

another $8 million or 25 per cent of the budget?

MR. SKINNER: The answer on that, Ms Jones, would be the overage that we

saw last year would have been basically one-time costs. Those costs, for the

most part, would have been related to the Kruger payments that were made, the

Corner Brook Pulp and Paper payments.

MS JONES: Yes.

MR. SKINNER: That is why we would have been over there and why we would

not be budgeting again this year for that amount of money.

MS JONES: Okay, so there are no payments left to be made on those

particular aspects. The only outstanding piece under that

section would be if

there is a settlement with Fortis, which is not budgeted for, right?

MR. SKINNER: Correct.

MS JONES: Yes, okay.

Under the Fire Suppression and Communications section, under Employee

Benefits there was $40,000 budgeted but you did not spend any. You did not give

your employees any benefits last year, or what was the case?

MR. SKINNER: There were a number of seminars and conferences and training

sessions for fire staff that were budgeted for, and I am not sure why there was

none spent. I would have to ask officials to help me with that. Maybe it is

MR. MOORES: I think a big reason for that is last year we joined the

Northeast Pact, which is a fire group for Eastern Canada and the Northeastern

States. By joining that particular organization, the benefit to us was a lot of

the training that they were providing would be consistent right across the

Eastern Seaboard then. By joining the organization, all the training that they

provided is free of charge. Some of those fees that we used to have are not

there. You saw in some of the other budgets when we did our conferencing and

membership fees, we drew down in other parts of the budget for the remainder.

MS JONES: Okay.

Under that

section Grants and Subsidies, what kind of grants and subsidies

are they?

MR. SKINNER: Basically, it consists of two grants. One is to the Canadian

Interagency Forest Fire Centre, which is a co-ordination agency for forest fire

support amongst its member agencies. The other one is the one that Mr. Moores

already mentioned in terms of the Northeast Compact or the Northeastern Forest

Fire Protection Commission, the new one that we joined this year. They would be

the two groups.

MS JONES: How much are the fees to join those groups?

MR. SKINNER: The first one, the Canadian Interagency Forest Fire Centre,

is $24,900 and the Northeastern Forest Fire Protection Commission is $5,500.

MS JONES: What do you get for being a member at $25,000 a year? What kind

of services do they provide to your department or to the Province?

MR. SKINNER: Again, I will ask Mr. Moores to give you more detail, but

basically it is, in some ways, I guess, almost like an insurance that you buy in

the sense that, should you have forest fires where you require the services of

outside agencies, this group would be the group that would allow you to

co-ordinate to bring other resources in that you needed, and they would have the

contact and the connection to be able to pull these resources in quickly and

help you co-ordinate a provincial response to a disaster that is happening here

vis--vis a forest fire, and bring in outside resources if we felt we could not

control it ourselves. That is what it does.

MS JONES: Good. Thank you for the explanation.

CHAIR: Ms Jones, if you are finished with that particular section, it

might be a good place to pause for a while and turn it over to Ms Michael.

MS JONES: Sure. I have more forestry questions, but I will wait and you

can come back to me.

Thank you.

CHAIR: Okay, you can go ahead and finish off your questions on forestry.

MS JONES: Okay, thank you.

I have some questions around Abitibi, of course, and one of them is the type

of environmental cleanup or containment that might have been done there so far.

Can you give me some explanation around that?

MR. SKINNER: We have not done anything in terms of Abitibi at this point.

(Inaudible) but there has been nothing done by us.

OFFICIAL: No.

MR. SKINNER: I just wanted to be sure -

MS JONES: I am referring to Abitibi Grand Falls, just to be clear.

MR. SKINNER: Yes.

OFFICIAL: (Inaudible).

MR. SKINNER: What is that?

OFFICIAL: (Inaudible).

MR. SKINNER: Yes, fair enough. I was just conversing to make sure I

understood.

The site itself is being managed now by the Department of Transportation and

Works. To my knowledge, there has been no site cleanup done, or any

environmental cleanup done. We have obviously, as a Province, laid claim against

Abitibi for those environmental liabilities that we believe are remaining. I am

not aware that any cleanup has occurred, but I will defer to the Department of

Transportation and Works, as to whether or not they may have done anything, but

not to my knowledge.

MS JONES: Okay.

In terms of the security and stuff that is in place at the mill there right

now, does that fall under Works, Services and Transportation as well?

MR. SKINNER: Yes, it does.

MS JONES: Okay. So you would not be able to tell me how much money has

been spent in security costs so far, would you?

MR. SKINNER: I do not know, no.

MS JONES: Okay.

Back some time ago the Premier, in her former capacity as minister, announced

that they were investigating potential operators for this mill. Of course, one

of the potential operators that were named, obviously, did not pan out at the

time. What is the status of this now? What has been happening?

MR. SKINNER: The current status is that we had, as you are aware,

Expressions of Interest done. I will go back a little bit, and I am going from

memory here, so if I am off on my numbers jump in. In the initial expression, I

believe, there were nine that came in nine Expressions of Interest. None of

those, based upon the information that was received, were deemed to be suitable.

There was a second call for expressions done, of which there were three that

came in. Three of those were evaluated. Just to make a long story shorter, one

of those three sort of made it through the process and we are in discussions

with them. They asked for some extra time to prepare some more information to

submit to government, and that time that they asked for was March 31 of this

year March 31 just past. That information has been received; it is being

reviewed by staff, and I am in the process of scheduling a Ministerial Task

Force meeting to basically update the Ministerial Task Force Committee on that.

MS JONES: Do you want to give us any details of what kind of an operation

this could look like? What it is they are proposing?

MR. SKINNER: I am not prepared to, at this point, until I have an

opportunity to discuss it with the task force, no. I would be more than happy to

share it with you after that.

MS JONES: Yes. What is the time frame around that? Now that you have

received everything, what is the time frame for government to make a decision on

whether they will accept this proponent or not?

MR. SKINNER: There is no formal time frame that we have put on the

process, nor am I aware that the proponent has put any particular time frame on

us, but we have made a commitment that we would meet as a task force and, as I

have indicated, I am trying to

schedule that for the next couple of weeks. I

have not gotten a confirmation yet, but I am trying to do it in a timely manner.

We will then present to the Ministerial Task Force and take direction then, from

them, as to what we should do next.

MS JONES: Okay.

After Abitibi shut down, obviously they used to provide grants to the local

communities like Grand Falls-Windsor, Botwood, Bishop Falls, Buchans, I think,

and some of the others, and I know that government picked up those grants for a

period of time. Now, I understand, this is the last year for that grant program.

Where is that in the Estimates, or where does it come from; what department?

MR. SKINNER: The period of time was three years on a declining basis;

and, if I recollect, that money is paid from Municipal Affairs?

OFFICIAL: Yes.

MR. SKINNER: Yes, Municipal Affairs.

MS JONES: Okay. So, now that it is set to expire, is there any other form

of compensation that the government has looked at for these towns, or is this

the weaning off period so it is done now?

MR. SKINNER: From my perspective, speaking as Chair of the Task Force, I

was asked by the towns to assist with a transition period for them. At the time

that I spoke with the towns, we decided on a three-year period that mirrored,

basically, what was done in Stephenville. So, as far as I am concerned, we have

concluded our arrangement with them. Whether or not they will approach other

agencies, other departments of government or whatever, but from the task force

perspective I feel that our obligation has been met, and I have not engaged any

further discussions with any of the towns on that.

MS JONES: Okay.

Just one question on Abitibi Stephenville, and that is the environmental

cleanup cost at that particular mill. What was the total bill on that? Is that

all finished now?

MR. SKINNER: I do not have that information. I do not know if anyone can

help me with that. I will have to endeavour to see if I can find some more

information for you, Ms Jones. I do not have any information on that with me.

MS JONES: Okay. Thank you.

I have just a couple of questions on Labrador. We are aware that there was a

proposal call for forestry development in Labrador. We are also aware that there

was a proposal submitted by the Innu Nation.

I am just wondering what the status of that proposal is, and if there were

any other proposals, and where government is going in terms of direction for a

forest industry in Labrador right now.

MR. SKINNER: Just for clarity, there was no proposal submitted by the

Innu Nation to government.

MS JONES: Oh, sorry, the Innu Development Corporation.

MR. SKINNER: No, not even the Innu Development Corporation. I just want

to point that out.

MS JONES: Okay, thank you.

MR. SKINNER: The proposal that we received there was a proposal, you

are quite correct Atlantic Fibre was the company name. It is my understanding

that they may have had some discussions, or negotiations with some Innu

partners, but I am not sure of the formal arrangement there. The actual proposal

that we received came from Atlantic Fibre. We were in discussions with them, and

reviewing that proposal, and very recently they came back and told us they were

withdrawing from the process they being Atlantic Fibre.

MS JONES: Okay.

MR. SKINNER: So, they have withdrawn from the process. We have engaged

with them, in terms of trying to see if we can find some other way to work with

them, but they sort of self-withdrew from the process.

MS JONES: Was that the only proposal from Labrador?

MR. SKINNER: There was also another proposal in a different area; they

were in two different areas, if I am not.

OFFICIAL: (Inaudible).

MR. SKINNER: Okay, there was a second proposal from Pennecon Limited, and

the Atlantic Fibre proposal initially was deemed to have more value, for lack of

a better word, more value in Labrador. That is why we were in discussions with

them. They have now withdrawn, and so, again, we have gone back to Pennecon to

see if we might be able to engage with them.

MS JONES: Okay.

Is there a harvesting plan in place right now for Central Labrador?

MR. SKINNER: I will ask Mr. Moores to speak to that for you.

MR. MOORES: Yes, there is; there is a five-year harvesting plan in place

for Central Labrador.

MS JONES: Okay. Is there any harvesting going on there now?

MR. MOORES: As you are probably aware, just on a very small scale. There

is no large-scale commercial harvesting going on.

MS JONES: That would be the only activity in forestry in Labrador right

now, or is there still something going on in Postville?

MR. MOORES: I am not aware there is anything I think Postville is still

down.

MS JONES: Yes.

MR. MOORES: So it would only be in Central Labrador, or on the Coast of

Southern Labrador the same scale, just some small operations.

MS JONES: Yes, very small

MR. MOORES: Very small.

MS JONES: what is going on in my district, I can tell you that, very

small, yes.

MR. SKINNER: If you have any ideas, we would be happy to hear them.

MS JONES: Thank you, I appreciate that. If you have money, we have ideas.

MR. SKINNER: If you have good ideas, we have money.

MS JONES: The Natural Resources office in Labrador West is currently

being staffed on a part-time basis, I have been told. I am just wondering what

the department's plan is for future staffing of that office, and future

positions in that area of Labrador.

MR MOORES: Labrador West, I guess with the changes we have one full-time

person in the office now.

MS JONES: In the forestry piece?

MR. MOORES: On the forestry side.

MS JONES: Okay, so there is a full-time person there.

MR. MOORES: Yes.

MS JONES: Last year, when we were doing the Estimates, you talked about

the fact that the department had hired a consultant from Quebec to do a

marketing strategy for the sawmilling industry. Can you tell me if this report

was ever completed, or if it has ever been released to the public, or where it

is?

MR. SKINNER: In terms of the strategy, there was a report done by a

Quebec firm that was completed and received by government. We have discussed

that with the sawmillers, and we have given the sawmillers a copy of that

proposal and asked them to use the information contained in that study that was

done, and come back to us with more detail in terms of where they see the

industry going, and how we may be able to support them as an industry.

MS JONES: Okay. So the study is done; it has not been made public but it

is being used by vested interest, is it?

MR. SKINNER: By those involved in the sawmilling industry in the

Province, yes. We have asked them to review the study and use the information in

there - there are various options and scenarios and things presented there - and

we have asked them to consider all of that and come back to us with their sort

of recommendations, I guess, as to where they see the industry going.

MS JONES: How much did we pay for that study?

MR. MOORES: Somewhere between $150,000 and $200,000, I believe.

MS JONES: Okay.

I still have some questions around the conservation officer piece. I know we

raised it already. I know that Lorraine has raised it as well, but I am still

not comfortable with it because what I am getting is a different story than what

I am getting here. The two things are not jiving for me.

First of all, I will just tell you, I am being told that three-quarters of

the conservation officers in the Province are going to be stripped of their side

arms, to start with. I am being told that they would have no other

responsibilities, other than strictly related to forestry, which mostly

includes, these days, issuing permits for cutting wood, and things like that,

because there is so little forest activity going on in some regions of the

Province.

I am also being told that we are going to go from about 140 conservation

officers down to about forty in the Province. I really need to get some comfort

level in what the plan is by government; because, I am telling you, today there

is a fear with conservation officers out there, and I have heard from several in

the last week. So, it is obviously making its rounds between different offices

in the Province, and I have not been able to get the real story of what is

happening.

It seems really ironic that there would be so many people expressing that

concern to us if there is nothing to it. If there is not going to be anybody

lose their jobs, if nobody is going to lose their responsibilities or their fire

arms, or their enforcement duties, if we are not going to go and drop 100

conservation officers in forestry in our system, why are these employees feeling

that kind of anxiety? Why are they questioning that?

MR. SKINNER: I will say to you, there are no plans to drop 100

conservation officers. There are no plans to displace people from the positions

they are in. There is changing of personnel from the Department of Natural

Resources to the Department of Justice to take on enforcement duties that are

deemed to be better done by the Department of Justice personnel.

The only one thing you did mention which I will say yes, is happening, is

that the forestry officers who were issued fire arms when they were doing all of

the inland fisheries enforcement will not now be using side arms, will not now

be carrying side arms, but the individuals who are transferring over to Justice,

who will be performing that duty, will be having side arms. The forestry

officers, as I understood, did not have them originally anyway, but were given

them when they took on these other duties that are now being transferred to

Justice.

That is all I can tell you at this point. What you are hearing, and who is

telling that to you, I cannot speak to where it is coming from, but it is

certainly not what we are doing and it is not what we discussed in the

transition of the personnel from one department to another. If anything, I would

argue with you that we have upped the resource in terms of there is more money

going into it. It is not a thing where we are trying to downgrade or degrade a

level of service. It is meant to more appropriately place the service where we

feel it can be better managed from in terms of the Justice department.

That is it. I do not know, maybe I will ask Mr. Moores just to give you more

of an overview.

MS JONES: Is it true that you are looking at having about thirty-seven

officers left in forestry in the Province?

MR. MOORES: Eighty-one.

MR. SKINNER: No, thirty-seven are transferring; eighty-one are still in.

MS JONES: Okay, so eighty-one are still in.

MR. SKINNER: Yes.

MS JONES: You are telling me that there are not going to be any jobs

lost, all of these people are going to be looked after?

MR. MOORES: There are no layoffs within all the permanent employees. The

only place where

MS JONES: There are like forty seasonal workers or something.

MR. MOORES: Seasonal workers, my understanding from Justice - because we

looked at it, you would have to confirm with the Department of Justice - is that

their seasonal employees will not be impacted. That is the last I heard from

them.

On the Forestry side, there are fourteen seasonal employees who will not be

called back as a result of the specialization enforcement.

MS JONES: Okay. You are saying fourteen, we are being told about forty.

So there is a big difference.

MR. MOORES: What I would say to you, someone has probably - if I am to

guess, it is a combination of the seasonals with the inland fish program and the

call backs on forestry. Probably if you combined those two numbers you would get

pretty close, I would think, to forty.

MS JONES: What you are telling me is of that estimated forty, the ones

who are seasonal with inland waters will maintain their jobs?

MR. MOORES: That is the last I heard this week from the Department of

Justice.

MS JONES: The ones who were seasonal with the department of forestry will

lose their jobs?

MR. MOORES: They will not be called back. They will go into the regular

seniority for call backs for silviculture, for the roads program and spray

program, but it will not be for the field of work they were doing before.

MS JONES: How many workers are we talking about, all together permanent

workers?

MR. MOORES: On conservation officers?

MS JONES: Yes.

MR. MOORES: In just forestry or forest

MS JONES: You said all the permanent workers would be looked after. How

many are there?

MR. MOORES: Well I guess between there are thirty-seven positions gone

to Justice and there are eighty-one left over in Forestry, so none of them are

losing their jobs out of this.

MS JONES: So, about 128?

MR. MOORES: Yes, and over in the inland fishing program now, they had

five positions in their headquarters for the transition and they are all still

in place. In our legislation and compliance division on the Forestry side, there

is no loss in their positions.

MS JONES: The thirty-seven who are going to inland waters, have they

already been selected?

MR. MOORES: Yes, and notified.

MS JONES: Okay.

One other issue that I received from conservation officers in the Province

has to do with the protocols of conservation officers. When they are asked to

assist in a lot of areas around the Province, the conservation officer might be

the only official officer of capacity in a community, and lots of times they are

asked to go out and participate in things like rescue operations, if someone

gets lost or things of this nature. I am being told the protocols around their

jobs have changed and they are no longer allowed to do that, and that is not

considered to be part of their duties.

MR. MOORES: Not that I am aware of. The only change in duties was that

the wildlife enforcement act and regulations and part of the enforcement of the

wilderness reserves act related to wildlife would be transferred over to

Justice, but there is no other change in duties.

MS JONES: What is the current protocol for a conservation officer,

for example, if they come across an individual who acquires assistance and it is

in a wilderness area? Do they have the ability to respond or are they directed

to contact the RCMP or the nearest RCMP station? What is the protocol around

that right now for those officers?

MR. MOORES: I would have to check. I am not sure what the exact protocol

is if they found a person who needed medical attention, I am assuming. What I

have heard is most of the time they support getting them medical attention if

that was required, in that particular example.

MS JONES: Yes. I would like to know the answer to that because that is

one of the issues that have come to my attention in the last few weeks as well,

and it has to do with some specific incidences that happened in the Province. I

would like to get a better understanding of what the protocols are around their

particular jobs.

Just a couple of more questions; you guys are still responsible for the

George River caribou herd are you? Do you have anything to do with that anymore?

MR. MOORES: No. We were responsible for the enforcement piece but that is

now with the Department of Justice.

MS JONES: It is now transferred to the Department of Justice?

MR. MOORES: The enforcement piece would be, yes. It is wildlife

enforcement.

MS JONES: Okay.

That would be it for me on Forestry. Well there is the agrifoods, I am sure.

CHAIR: Thank you, Ms Jones.

I will now go to Ms Michael for some questions.

MS MICHAEL: Thank you.

Before I go into line items; just a couple of more in the Forestry area,

simple ones. I am just curious about the wood pellet rebate program; do you have

feedback on that? Is it going better this year, the past year? Has it been going

well?

MR. SKINNER: The program, Ms Michael, was a three-year program that just

ended in March. I think it was 528 people who availed of the program in that

three-year period. The program has not been continued into the future.

MS MICHAEL: Was there an evaluation done to see if it might be good to

continue it or did you just decide it was a three-year program and that was it?

MR. SKINNER: There was no formal evaluation done. We are reviewing it, I

guess is the way I would put it to you. We are currently reviewing it to

determine whether or not we should look at doing it but I think it would be fair

to say the sense was that there was not a great take up and maybe we needed to

look at doing something different. We have put it on pause for a year and we are

going to have a look to see can we do something to ensure there is more take up.

MS MICHAEL: Right, okay.

Do you have any sense of why the take up was so low, or not as great as you

might have thought?

MR. SKINNER: I am not going to speculate. I am new to the department but

I will ask maybe Mr. Moores if he might. He bought one, by the way, so he knows

a lot about them.

MS MICHAEL: Okay, that would be helpful.

MR. MOORES: I think it is just knowledge and getting new technology into

the Province and people to understand what the technology is like and what it

means. I always tell people I probably helped sell more stoves than the stores

have, because they see it and they see the technology and how it works. Some of

the feedback we have had over time - one thing people look at, number one, it

requires electricity all the time because there is a blower and an auger on it.

MS MICHAEL: Right, yes.

MR. MOORES: Some people find that a downside. Usually people buying the

pellet stoves - not all, but a majority - are people who do not have any wood

heat source. So, if you have a wood stove already in your home, and you are

buying your wood or you are cutting your wood for your stove, I am aware of

some, but most people do not convert to wood pellets; and we are heavily into a

society that burns wood in rural Newfoundland and Labrador. So, the recruitment

in the wood heat industry has been with new people. That has been the reasoning

for the uptake.

MS MICHAEL: Okay, that makes sense.

Two years ago, in Estimates, the minister of the day told the Committee we

were talking about the whole thing of the diversification around pulpwood. I am

just wondering, where are things with that, and the uses of pulpwood and

diversification?

MR. MOORES: You heard me mention earlier about the HewSaw?

MS MICHAEL: Yes.

MR. MOORES: Sexton Lumber has put a HewSaw in, and Burton's Cove Logging

in Hampden is putting a HewSaw in now. That is one of the things we can do,

because it permits you to saw a smaller stick of wood, that before would have

gone for pulpwood, but now we can get a 2x3 out of it.

MS MICHAEL: Right.

MR. MOORES: So, that is one of the things we have tried to do to reduce

the reliance on pulpwood for the newsprint industry.

MS MICHAEL: Right.

You said some other things about what they were doing that are related to

that; I can think back now to what you said, in terms of the staining and stuff.

MR. MOORES: That is right.

MS MICHAEL: Very good. I remember last year that was hinted at, but now

it is actually being done. Thank you.

Okay, I have some line items, then; I will just go back to the lines again

and see where we are. It is under Land Resource, Large Scale Land Development.

Under 3.1.03, which is the Large Scale Land Development, which was a contract, I

think, between the government and the Dairy Farmers of Newfoundland and Labrador

Association to clear land, there is no money in the line now for this coming

year, so I take it this has just ended, has it?

MR. SKINNER: No.

MS MICHAEL: No.

MR. SKINNER: What actually happened was, it was a program that we were

looking to have the federal government assist with, as a cost-shared

provincial-federal.

MS MICHAEL: Right.

MR. SKINNER: The application that we brought forth for large scale land

development to the federal government was not approved, basically.

MS MICHAEL: That is too bad.

MR. SKINNER: They did not approve it, so we could not move forward with

it.

MS MICHAEL: That is a shame. What reason did they give?

MR. MOORES: Just from the federal position, it just did not meet the

objectives of where they feel they are with agriculture in the country. I guess

for most of the country, land development, or getting land into agricultural

production, they feel that has already been done, and they do not see it as a

priority for funding; but it is important for us, as you know.

MS MICHAEL: This is it; it is very important here.

MR. SKINNER: I did attend, Ms Michael, one federal-provincial-territorial

meeting, as Minister of Natural Resources, and that was one of the points that I

made to the federal government: that, although we may be a little bit different

than the rest of the country in that regard, and it may be insignificant in

terms of the overall picture, it is very significant for us to be able - in

terms of our food security, food safety and so on - to be able to make more land

available. With the Growing Forward program we are trying to do that. I

mentioned some of that in my opening remarks, but at that particular time the

federal government was not open to the idea. We have engaged in a debate with

them, and I intend to continue that at the meetings that I will attend. We see

it as being very much a priority.

MS MICHAEL: If we are really going to be concerned about self-sufficiency

in food security, it is a really important point, so I am glad to know - so, you

are continuing on with this; you are not giving up?

MR. SKINNER: Absolutely. It is a priority for us, and we have not given

up on it.

MS MICHAEL: That is great. I am glad to hear that.

Under 3.2.01, and I am looking at subsection 10, could you describe for me

what the Grants and Subsidies are in this area, please? There has been quite a

change. Last year it was $1.4 million, then down to $600,000, but this year up

to $1.7 million. It looks like you have some expectations for this year, if you

have put it up from last year.

MR. SKINNER: I will give you a little overview, and then if Cindy sort of

wants to add to what I have, by all means I will get her to jump in.

This was related for the most part, I believe, to the cranberry industry

development, and there were some delays in getting projects started. There were

some weather condition type of things that we could not control; therefore, the

expenditure was less than we thought it would have been in the past year, but in

the coming year we see that as being an area that we can do more in. So, we

budgeted more money anticipating that we will be able to get more work done.

Maybe, Cindy, if you could add to it, I would ask that you add to that.

MS MACDONALD: Most of the cranberry development is occurring in the Grand

Falls area, and there was federal money from ACOA for cranberry development, so

they utilized that program last year. That is why there was a lower uptake on

our program. That program did end, at the end of March, so that is why we are

now projecting to have more expenditures for 2011-2012.

MS MICHAEL: Okay.

Are there new growers coming in?

MS MACDONALD: Yes, there are.

MS MICHAEL: That is good. So you are satisfied with how things are going,

then, obviously.

I was going to ask about the cranberry industry. I do not have to now, do I,

because that is it.

MR. SKINNER: If you get a chance, if you are going through Grand Falls,

the Wooddale Nursery, I took a run out there before I actually was minister. I

just happened to be in the area and popped in and looked at some of the work

they are doing there. It is absolutely fascinating, some of the berries and

stuff, and what their plans are. I think it is going to be very much an industry

of the future.

MS MICHAEL: How labour intensive is it? How high is the employment

factor?

MS MACDONALD: There is quite a bit of employment on the construction

phase of the cranberry bogs. There is a lot of work in actually creating the

berms, and creating the irrigation systems to flood the bogs. When it comes to

the actual operating of the cranberry bogs, most of it is at the harvesting

time. Then, if they get into processing, that is where there will be more

employment as well.

MS MICHAEL: Has this new industry - because it is a really new industry

for us - I am assuming there have been environmental assessments done in the

areas where the farms have been created?

MR. SKINNER: Yes. That would have been a part of the normal process to

establish, yes.

MS MICHAEL: Right.

In general, what is the impact if we continue with this industry with regard

to our bogs and the ecology around our natural bogs?

MR. SKINNER: I will ask Cindy to help with that.

MS MACDONALD: Before you can get a permit to start a cranberry farm, you

actually do have to go through an environmental assessment process. The

Department of Environment would release you, then, as to whether you met the

conditions of their permitting. As well, the department is undertaking a study

this year, actually, to look at the impacts of farming cranberries in peat bogs.

MS MICHAEL: Okay, your department?

MS MACDONALD: Yes.

MS MICHAEL: Okay. Well, that is good. Is Environment involved with that,

or you are just doing it on your own initiative, or will you be reporting to

them?

MS MACDONALD: I am not sure, but I know it is happening through the Land

Resource Stewardship Division.

MS MICHAEL: Okay, great. We will keep our eye on that, because I would

like to have a sense of that. Thank you.

That was 3.2.01. Under 3.3.01, Professional Services, that is subsection 05,

you budgeted $18,000, revised down to $5,000, but this year it is $168,000. What

is happening in that area?

MR. SKINNER: The decrease, first of all, from $18,000 down to $5,000 was

basically just less anticipated services than we thought we would need

throughout the year. The increase actually is the fact that we are now

implementing the new entrants program as a part of Our Farms, Our Future, the

Growing Forward Program. That was a just a Budget announcement. There is

$150,000 that has been budgeted there, for that portion of it.

MS MICHAEL: Could you describe that a bit more, with regard to the new

entrants?

MR. SKINNER: Yes, I am happy to do it.

MS MICHAEL: Okay, great.

MR. SKINNER: I will ask Cindy, by the way, sorry.

MS MACDONALD: The $150,000 is going towards the design and development of

new entrants initiatives. That could include mentoring programs, scholarship

programs or agricultural career days. As you are probably aware, there are fewer

people getting into farming now, so we are trying to create an awareness,

through agriculture career days and through scholarships, to get more youth into

agriculture. As well, for those new entrants getting into agriculture, it is

important that they are mentored by an existing producer, so we are looking at

developing a mentoring program, and looking at mentoring programs across Canada

and in other jurisdictions to see what works there, and trying to introduce that

in this Province.

MS MICHAEL: Now, this really shows my ignorance because I really - with

regard to how things are developing in the Province, is the College of the North

Atlantic involved in this? What is the kind of training that is going on? Is it

just on the job and working with mentors, or are there programs that people who

want to get into the industry can do?

MS MACDONALD: There is not an agricultural university in Newfoundland.

Most people looking for a degree in agrology would go to the University of

Guelph, in Ontario, or go to the Nova Scotia Agricultural College in Turo, Nova

Scotia. The department does put off lots of conferences and training courses for

producers; and, as well, the College of the North Atlantic also do training on a

demand basis. I believe they just recently announced some cranberry training,

actually, going on the first week of May in Grand Falls.

MS MICHAEL: The money for new entrants, is any of that money earmarked to

help with people's education if they needed assistance?

MS MACDONALD: Well, the $150,000 share, that is the first stage, the

design and development of what the programs are going to look like.

MS MICHAEL: Okay.

Obviously, it is costly to be going outside the Province. I know these are

great universities, Guelph and Nova Scotia in particular, but it is still costly

for people to have to do that; so that is a bit of a deterrent, I think, for

getting into it.

MR. SKINNER: The money that we will spend, the $150,000, will help us to

identify some of those barriers and some of those things that would hold people

back from being able to either enter or advance in the industry, so we will come

up with a strategy based upon some of that work.

MS MICHAEL: I would assume that you are probably consulting with people

in the industry now, and the association.

MS MACDONALD: Yes, we will be working with the Young Farmers of

Newfoundland and Labrador, as well as the Newfoundland and Labrador Federation

of Agriculture.

MS MICHAEL: Great. Thank you. It is all exciting to hear, actually.

MR. SKINNER: That is good.

MS MICHAEL: Under 3.3.04. "Appropriations provide for incentives to

stimulate and attract large scale investments in agriculture." The budget last

year was $2.9 million, you spent $2 million, and this year it is up to $3.2

million. Is that related to the other, or is this - well, it would be different

because this is not new entrants, obviously.

MR. SKINNER: No.

MS MICHAEL: This is investment.

MR. SKINNER: Some of these projects, because of the size and scope of the

projects, could not get finalized - and maybe even completed, I am not sure

and completed as well in the one budget year, so something that we had thought

we could get done in a year did not get done, so that would be part of the

reason why there would be the decrease.

In terms of the increase, I would have to ask officials, if they would, to

help me and you with why the increase there. I do not know if there are new

projects in line; I am not sure.

MS MICHAEL: That is what I am wondering.

MR. SKINNER: Maybe Cindy?

MS MACDONALD: The increase of $320,000 in 2011-2012 that is a

re-profiling from some of the large scale land development piece; the federal

program that did not get approved. It is allocating that back to the development

fund.

MS MICHAEL: Okay.

I wonder, under both 3.3.03 and 3.3.04, could we have lists of what the

different initiatives are, that are funded under the Grants and Subsidies on

both of those?

MR. SKINNER: We will get that information.

MS MICHAEL: Thank you very much.

Under 3.3.05 Growing Forward Framework I still am fascinated by that name,

by the way, every since the first time I heard it - again, under the Grants and

Subsidies you under spent, but still going back to the same amount this year.

The same two questions, I guess; the under spending probably is because you just

did not get as many applications as you expected.

MR. SKINNER: No, just for clarity, it was not the lack of applications;

it was more of not being able to complete the project in the fiscal year.

MS MICHAEL: Okay.

MR. SKINNER: There were lots of applications, but it was more of a timing

issue.

MS MACDONALD: (Inaudible).

MR. SKINNER: Okay, we will go to Cindy.

MS MACDONALD: The Growing Forward Program was fully committed last year,

and as program and project savings are identified we recommit the program

funding right up until March, actually, but those last few projects they may not

go ahead because if someone had to fabricate equipment or something they could

not get in by the end of March. That is why there is about $600,000 that was not

spent.

MS MICHAEL: Once again, could we have a list there of the projects under

Grants and Subsidies?

MR. SKINNER: Yes, we will provide that as well.

MS MICHAEL: Okay, thank you.

Under 3.4.01, which is Animal Health, the Administration and Support

Services, there are quite a number of variances there: one in Salaries 01; in

Transportation and Communications; in Purchased Services; and in Property,

Furnishings and Equipment; if I could just have explanations of the various

variances.

MR. SKINNER: Salaries is less because of maternity leave, positions that

were vacated and not filled, and people who we may have brought in were brought

in because they were new at a lower step than somebody who would have been there

a longer period of time, so what I would consider to be sort of normal kinds of

things, nothing that I would consider to be strange or odd there.

Purchased Services, I believe you mentioned.

MS MICHAEL: Transportation and Communications.

MR. SKINNER: Transportation and Communications. That one is basically

just simply a matter of less than anticipated travel. It is as simple as that.

We budgeted for it, but we did not need to do as much; therefore, it was not

used up.

MS MICHAEL: Purchased Services

MR. SKINNER: Purchased Services; that has to do with I asked this

question in my briefing and I hope I pronounce the word right - is it equine?

OFFICIAL: Yes.

MR. SKINNER: It is equine. Okay, I was not sure.

We, being the Province, now provide all services related to the equine

industry as opposed to purchasing. In the past, we would have purchased some of

those services; now we provide them ourselves. That is why you will see an

increase there, in those; but, because we do it there would have been an

increase in vehicle expenses because we are going out to the places to do the

work that needs to be done.

Just by way of maybe helping us understand in terms of the kind of services,

if you want to, Cindy, what do we do?

MS MACDONALD: The Animal Health Division would basically provide

veterinary services to the livestock industry in the Province; or, if you have a

sick animal, the vets will go out and treat it.

MS MICHAEL: Great.

How many vets do you have in the department?

MS MACDONALD: I think there are approximately eight vets in the Province.

MS MICHAEL: Some of them are obviously located closer to where they work;

they just do not all travel in from one spot.

MS MACDONALD: Yes.

MS MICHAEL: Thank you.

What would the Grants and Subsidies be about there? Who would be getting

them, and for what reason?

MR. SKINNER: It is just the one grant, and the grant is actually to the

SPCA in the amount of $110,000.

MS MICHAEL: Okay.

Last year, for some reason, you had an extra $5,000 in there.

MR. SKINNER: Maybe they needed an extra $5,000 and we gave it to them. I

do not know if you can explain that, Cindy; I am not sure.

MS MACDONALD: The $5,000 last year was a grant provided to MUN in support

of the Canadian Society of Mirobiologists Conference they hosted.

MS MICHAEL: Okay, so it was not to the SPCA.

MR. SKINNER: (Inaudible).

MS MICHAEL: Nice try.

MR. SKINNER: So, I shouldn't guess.

MS MICHAEL: No, that is right; guessing gets us in trouble all of the

time. I try not to do it.

MR. SKINNER: It was only $5,000 so I didn't mind taking a shot at it.

MS MICHAEL: I will just finish off the agrifoods area with my questions.

Yvonne might want to go over some of the

Under 3.5.01, the Research and Development, under Professional Services it

has gone up quite significantly, $1.48 million more this year from last year's

budget. What is that about?

MR. SKINNER: I will turn that over to Cindy. Can you explain that?

MS MACDONALD: This is one of the projects, the programs that we got

cost-shared with the federal government, so they actually are putting in

additional funding to us.

MS MICHAEL: I see that, the $1.5 million.

MS MACDONALD: Yes.

We have $1 million into the program, and the federal government is putting in

$1.5 million. That money was put mostly into Professional Services to do the

research projects for us, analytical, whether it is expertise that we would

bring in.

MS MICHAEL: Right, okay. I did not notice that, the federal revenue.

Under Purchased Services, last year you had budgeted $1.7 million but only

spent $120,000. Of course, this year is more in line with $120,000. Were you

anticipating something last year under Purchased Services?

MS MACDONALD: Yes, I think that was related to - we had anticipated

getting that $1.5 million federally last year.

MS MICHAEL: Okay.

MS MACDONALD: The agreement did not get signed off until March 2011, so

it will be spent in 2011-2012.

MS MICHAEL: Okay, thanks.

Under 07 Property, Furnishings and Equipment, there is an extra $120,000

spent over the budget. It must have been something you did not expect.

MS MACDONALD: Well, with research projects it is hard to determine in

advance of a year what exactly the projects are you will be funding. For

property and furnishings, it was for equipment that we use, like in the research

trials with things like seeders and planters, so if they are doing research like

a new crop variety, sweet potato trials, corn silage.

MS MICHAEL: Right.

Okay, those are all the questions I have in the agriculture and agrifoods

area.

CHAIR: Okay, Mr. John Dinn, do you have a question?

MR. DINN: I am listening to the agricultural part of it very intently

because I have a big interest in it. I am glad to see that

CHAIR: Mr. Dinn, your mike is not on.

MR. DINN: Okay. I thought I might have eaten it when I had a bit of

cheese there.

Anyway, I was saying that I am very interested in agriculture, as some of you

know. I am glad to see that you have some money put in for new entrants. I talk

to farmers very often, and farmers are indicating that it is difficult to get

people involved in farming, because today farming is not an easy life.

I was just going to suggest, I do not know if it is the right place to do it

or not, but I always thought that a place to start to get people interested in

agriculture would be in school. Years ago, when I taught school and, Lorraine,

I think you can verify this - there was a Grade 9 Geography which had a

chapter

always on agriculture, another one on forestry and stuff like that.

At the time when I was teaching that, I used to grow stuff in the classroom

and develop interest. I think that we need to probably start down in the junior

high with at least, say, a

chapter on agriculture; and probably even later on

you could even expand it a bit further. I do not know if any of you are doing

anything like that, are you? Cindy, do you have any inclination to do something

like that?

MS MACDONALD: Actually, under our Growing Forward program, we are funding

a project with the Federation of Agriculture to do an

agriculture-in-the-classroom project.

MR. DINN: Perfect.

MS MACDONALD: And that is exactly what they are doing; they are trying to

bring agriculture to the youth, to give them an awareness of where their food

comes from, an appreciation for agriculture, and even try to promote agriculture

as a career.

MR. DINN: That is a good place, a good place to do it.

Also, I am glad to see that you have the five-year action plan, Minister.

That is what we have been talking about all along. That is to get us more along

in the food security side of it, I think, and that is good. That is really good.

One other comment or question, or what you want to call it, the Land

Consolidation Program, I saw this as a very, very productive way to get

agricultural land back into the system. Years ago, when they brought in the land

freeze in the Kilbride and Goulds area especially, it caused a lot of anxiety. I

think at the time, if the governments who did it at the time I do not know who

did if they had to have $1 million or $1.5 million at the time, you could have

bought Goulds and Kilbride. Today, I see the Land Consolidation Program as being

a very worthwhile program over the years, and it did a great job, because you do

not hear near the complaints anymore from people who have agricultural land,

because they have an option. I assume you have money also in this program again

this year, don't you?

MS MACDONALD: Yes.

MR. DINN: That is perfect.

Anyway, that is all I wanted to say. I am glad to see us moving forward on

agriculture, because I am concerned, and I think we are all concerned, about

food security, especially when we look at what has happened in Japan, and what

could happen if transportation to this Island stops. We have to get after the

feds to ante up, I think, and let them know the position that we are in.

Thank you.

CHAIR: Okay.

We will go back to Ms Jones, I assume.

MS JONES: Thank you, Mr. Chair.

I just have a few questions, and hopefully I will not be repetitive in terms

of what my colleagues have already asked. First of all, on the Limestone Sales,

section 3.1.02, are all of our limestone sales being made in the Province now,

or are we bringing it in from outside the Province?

MR. SKINNER: It is all in-Province, yes.

MS JONES: Okay. It is still coming off the West Coast of Newfoundland?

MR. SKINNER: Yes.

MS JONES: Okay.

Under

section 3.1.03, the Large Scale Land Development, obviously this

program looks like it has ended - I am just assuming that - so I would just like

to get some clarification.

MR. SKINNER: It did not actually end. We made an application to the

federal government under a federal cost-shared program, and the federal

government did not approve it. So the program never happened, basically.

MS JONES: Yes.

MR. SKINNER: Although we still believe that large-scale land development

is an important area for us. You may have been out of the room when I spoke to

Ms Michael about it, but we are pursing that and we are going to continue to

pursue that with the federal government and look for monies to be able to do

some large scale-land development to increase the acreage that we have for use.

MS JONES: Okay. When you are talking about large-scale land development,

what are we talking about in terms of land size, the number of acres of

property? How does that usually work? What defines large scale, I guess is what

I am looking for?

MR. SKINNER: I will ask Ms Cindy to define large for you.

MS MACDONALD: I think the intent of this program was that as a government

we would actually go out and identify acreages of land that was suitable for

agriculture. It could be like 1,000 acres, it could be 500 acres. We would

actually go out and clear that. Then we would do through a call for proposals,

applicants could then apply to farm that land.

One of the disadvantages, if you are trying to get into faming now, is that

you would have to go through and obtain an agricultural lease; you would have to

clear the land. There is a time lag between when you actually get that land into

production and you are getting farm revenue. In most provinces you can go out

and buy cleared land already. There are lots of farms for sale;

whereas here, we

are just starting out with land clearing. So the intent would have been to clear

larger acreages of land.

MS JONES: Okay. You would lease that back to the individuals?

MS MACDONALD: Correct.

MS JONES: Okay.

In terms of land development - and I obviously do not know as much about

farming as what Mr. Dinn knows behind me, I can tell you that. In terms of the

acquisition of land, how is that working in the Province? Are you acquiring huge

amounts of property that can be used for agricultural purposes, and is there a

take up on that?

Oh, I am sorry,

section 3.1.04. I am not necessarily concerned about the

numbers. I am just concerned about how the program is working and what the take

up is on it and stuff like that.

MS MACDONALD: The uptake is actually quite strong. There has been about

2,800 acres to date that has been purchased since the program came into effect.

My understanding, there is probably about 600 acres at the moment that is under

consideration that people have offered up to sell that land back to government.

That is granted land that was either farmed at one time and no longer farming.

Where we have such a small land base, that is the land we would certainly want

to buy back for farmers to use.

MS JONES: Okay. How many farms, commercially operated agriculture farms

do we have in the Province?

MS MACDONALD: It is about 500 farms.

MS JONES: About 500. Most of the excess land that is being made

available, I do not know if it is excess or not but whatever you have that you

are making available, where is most of this farmland based in the Province?

MS MACDONALD: The land that is currently being farmed?

MS JONES: Well, you talked about 2,800 acres that you let out and you

said there is another 600 acres that is being offered up that you could use.

Where is most of that? Is it the West Coast of Newfoundland or the Avalon

Peninsula?

MS MACDONALD: Mostly on the Avalon.

MS JONES: On the Avalon, okay.

The marketing piece of this, can you explain to me how it works, the

government management marketing piece of the agriculture industry? Because, as

you know, one of the things the fishing industry has been asking for a long time

in this Province is a marketing format, a marketing agency in terms of their

product and how it works. Can you give me an idea of how this works in the

agriculture industry? How we set it up, how we invest in it, and what it is we

do as a government in terms of being able to put these products out there?

MS MACDONALD: Depending upon the commodity, some of the commodities are

supply managed, like milk, chicken and eggs. They have their own marketing

boards that market on behalf of them. Other commodities, if you look at

vegetables, if you look at beef, for instance, they would have industry

associations. As government, we do have marketing specialists on staff. We also

have funding through our programs like Growing Forward, where individual

producers can get funding for marketing plans, but, as well, industry groups can

get funding for marketing.

One of the projects we are funding under Growing Forward with the Federation

of Agriculture is the agriculture awareness program. I do not know if you

remember, in the past we used to have these TV ads promoting locally grown

product.

MS JONES: Yes.

MS MACDONALD: They are looking at developing a new campaign ad this year.

They will be both print and TV media ad to promote buy local product.

MS JONES: Yes. Where is that budgeted for in here, the ad campaigns and

stuff?

MS MACDONALD: Pardon?

MS JONES: Where is it budgeted in here? Is it 3.2.01?

MS MACDONALD: There is funding under 3.2.01, under Salaries, there would

be marketing staff there. They would also have funding, for instance, under

Professional Services and Purchased Services if they are doing marketing

campaigns.

As well, under the Growing Forward program, which is 3.3.05, under that

section under Grants, that is where we are giving funding to the federation to

undertake some of the marketing initiatives they are doing. As well, the

department just recently, if you look at our Web site, just came out with a

listing of farm markets across the Province. So, it is kind of advertising. I

think there are about fifty of them there, actually, showing what products they

have, when they are available, and what their hours of operation are.

MS JONES: Okay.

Who has the contract to do the marketing work for Agrifoods? What firm does

that, what company?

MS MACDONALD: Well, our work is internal, but the Federation of

Agriculture, the project they are doing, I do not believe they have anyone

contracted yet.

MS JONES: Who did all your ads that were on TV and stuff like that? You

do not do that in-house, I am sure.

MS MACDONALD: No, no, we did not do that. I am thinking it was M5

Advertising, but I am guessing, it was a few years ago.

MS JONES: Okay. You are looking at doing some new ones this year, but you

have not contracted the work yet?

MS MACDONALD: Yes, that project is through the Federation of Agriculture.

They have a steering committee set up and meeting with the different industry

groups as to what kind of messaging they would like to have. They have to get

that work done first.

MS JONES: Okay.

I guess a lot of the grant money that you see I know Lorraine did ask for a

breakdown of the Grants and Subsidies there, but a lot of that, I would assume,

is going to the Milk Marketing Board, the Chicken Marketing Board, and the Egg

Marketing Board. Is that where those kinds of grants are going?

MS MACDONALD: The grants would go to associations, but mainly they are

going to individual producers.

MS JONES: Okay, under

section 3.2.01 Production and Market Development.

MS MACDONALD: Oh, sorry, the Grants under 3.2.01?

MS JONES: Yes.

MS MACDONALD: Those grants, actually, are mostly the funding for the

School Milk Program and for the cranberry program.

MS JONES: Okay.

In terms of the cranberry program, how much has the Province invested to date

into the cranberry farms piece, the development of that industry?

MR. SKINNER: I am not going to guess. I tried guessing at $5,000 and I

was wrong. I know it is a lot more than $5,000, so we will get the number for

you.

MS JONES: Okay, great. Thank you.

What has been the return so far in the cranberry industry in terms of - what

have we created in terms of jobs and farms and all the rest of it? Where are we

in that?

MS MACDONALD: We are at, actually, the very early stages. We had four

pilot sites that were established, but the recent investment, those farms are

just getting started, so on average they have perhaps about twenty acres of

cranberry land developed, but it will take a couple years before they actually

get a crop off that land. Most of them, I think, are now looking to expand

between the fifty to sixty acre farm size. Most of them are just within the

first two to three years of development; there are in the very early stages.

MS JONES: Okay.

So, to get a cranberry farm developed, off the ground and producing, you are

looking at a span of four or five years.

MS MACDONALD: Yes.

MS JONES: Okay.

The four pilot sites that have been selected, where are they?

MS MACDONALD: There is one operated by the department in Deadman's Bay,

there is one out by Stephenville Crossing, one by Stephenville, and there is one

in Terra Nova Park.

MS JONES: They let you put one in the park.

MS MACDONALD: Pardon?

MS JONES: They let you put one in the park.

OFFICIAL: (Inaudible).

MS JONES: There are not all operated by the department, though, are they?

Are some of them by the private sector?

MS MACDONALD: The one in Deadman's Bay is operated by the department, but

the other ones are owned by individual producers.

MS JONES: Okay.

These producers - are they existing farmers in the Province or are they new

people coming in?

MS MACDONALD: Some were existing producers. We had one that was a sod

producer, we had a new entry getting in who was previously a dairy farmer, who

just sold his dairy quota and is now getting into cranberries, but the majority

of them would be new to farming.

MS JONES: Okay.

Under the Growing Forward framework, is this where the new initiatives are

that were announced in the Budget? Would they come under that?

While you are looking for that, my staff were just asking me a question about

spraying blueberries in the Province. Are we spraying blueberries?

MS MACDONALD: That I cannot answer; I do not know that.

MS JONES: Okay.

MS MACDONALD: Not that I am aware of, but that is outside my field of

expertise.

MS JONES: I am just asking because of the organic piece right now. That

seems to be the highest quality marketable product that you can put out there,

and that is what a lot of people are looking for. I am just wondering if we

spray blueberries, or if we spray any of our crops for that matter.

MS MACDONALD: Government certainly does not spray. Government is

certainly not spraying the wild blueberry crop, if that is your question.

Producers who have their own cultivated fields of blueberries, they would be

applying different herbicides and pesticides.

MS JONES: Okay.

MS MACDONALD: No, government is not spraying any wild blueberry crops.

MS JONES: There is no regulation around it in terms of what private

operators do, is there?

MS MACDONALD: Actually, you have to have a pesticide applicator course to

actually purchase and apply pesticides in the Province, so it is regulated; and

you have to take a course and pass an exam.

MS JONES: Okay, but there is nothing that says you cannot spray your crop

in this Province, right?

MS MACDONALD: No.

MS JONES: Okay.

The other question is: The initiatives in the Budget that you announced under

Our Farms, Our Food, Our Future, where is that budgeted for, in the Estimates?

MR. SKINNER: That would be under

section 3.3.01, under Professional

Services, and also 3.1.04; that would be under Purchased Services.

MS JONES: Okay, 3.3.01.05, and the other one you said? I am sorry.

MR. SKINNER: 3.1.04 under 06 Purchased Services.

MS JONES: Can you explain to me, those particular grants, are they for

commercial developers or family-based farm operations, or both?

MR. SKINNER: Just for clarity, when you say grants, what do you mean by

grants?

MS JONES: You are talking about having okay, maybe it is not grants;

maybe it is loans, I do not know. You are talking about $150,000 for the

development of new entrant initiatives, and $100,000 to assist new entrants with

legal land survey costs and so on; and, you are talking about the five-year

Agriculture and Agrifoods Action Plan. Maybe I am making the wrong assumption,

but I am assuming that the whole purpose of this is to try and get people to

start producing more on their own in the Province.

MR. SKINNER: Yes, not just for people to start producing more on their

own, but also to have more new people get into the farm industry, to attract

people to it as a career path.

MS JONES: Okay, that is my question. Is it just for a commercial-based

operation, or is it also any grant program; for example, if families want to

start developing their own farmland and growing their own vegetables for their

own consumption, and all that kind of stuff?

MR. SKINNER: Okay, I think I understand what you are asking me now. It is

what I would classify as commercial, not for personal use. In other words, there

would not be any money available for me to do a little farm, to look after my

own personal needs, if that is what you mean.

MS JONES: Yes, so not for family-based farming.

MR. SKINNER: No.

MS JONES: Okay.

How do you access the money? How do you access it, if you want to get into

this? Is there an application process? What are the criteria? How does all of

that work?

MS MACDONALD: The funding for the new entrants initiative, that is

actually for the design and development work, so it is not actually individuals

applying for funding. It would be for us to engage industry, as well to look at

the different mentoring programs that are available across Canada, across the

US, across Europe, and design a mentoring program that would be suitable for

Newfoundland.

MS JONES: Oh, so you are not giving out any money to anyone at all?

MS MACDONALD: Not under that $150,000, no. This is the design work.

MS JONES: Okay.

It includes $150,000 for the development of new entrants' initiatives, and

$100,000 to assist new entrants with legal and land survey costs.

MR. SKINNER: The $150,000 is for us to - it is a five-year program, so we

are using the $150,000 to do some consultation with some of the groups, and do

some research across the country to determine the kinds of programs we would

bring in and develop to attract people into the industry. The $100,000 that we

referred to in 3.1.04 would be for people who are new entrants into the farming

industry, that we would help them, I would assume it would be offsetting; I do

not know if it would pay 100 per cent of their cost.

OFFICIAL: (Inaudible).

MR. SKINNER: It pays 75 per cent of the cost of land surveys.

MS JONES: When you read it, if I was out there today looking to be a

farmer and I read that, it sounds like I can actually apply for money as a new

entrant, to get into the business, but I see what you are saying.

MR. SKINNER: Just for clarity, you still could as a new entrant. If you

were out there wanting to do that, there would be programs available for you but

not just from that particular pot, I guess, is the distinction we are making.

MS JONES: Okay.

CHAIR: I wonder if I might take some direction from the members of the

Committee. We have been sitting for two-and-a-half hours and looking at the

Estimates. There are a couple of other areas, I am sure, that we will really get

into some questions that might take quite a bit more time; so, if members like,

maybe we could take a five-minute recess.

MS JONES: Mr. Chairman, if I could just finish up the agrifoods section,

I am just going to be a few more minutes, so when we come back we can start on a

different section?

CHAIR: Okay, that will be fine, Ms Jones.

MS JONES: Thank you.

One of the things I was going to ask about is with the mink farms, and the

issue around the Leutians disease, is it? I am trying to remember the proper

name for it.

MR. SKINNER: I think it is Aleutian disease.

MS JONES: Aleutian disease. It was an issue a few years ago, and I know

there was a program that government did put in place that they were going to

help offset some of the expenditure that these farms had incurred. Where is that

in these Estimates? Is that program finished, or

MR. SKINNER: Cindy?

MS MACDONALD: Yes, there was a program called the Aleutian Disease

Management Program, and that program has now ended.

MS JONES: Okay.

Were there any lawsuits against the government as a result of that disease in

farms in the Province? There wasn't, was there? I just remember the media, going

back to then, and there was one issue with one farmer, I know, and I was just

wondering if they ever filed any charges.

MS MACDONALD: No, I am not aware of any lawsuits.

MS JONES: Okay.

I think that is about it for my questions on that section.

CHAIR: Maybe I will go to Ms Michael first.

Are you finished with the agriculture?

MS MICHAEL: I am finished with agriculture.

CHAIR: Okay.

My suggestion is - it is 8:03 p.m. now - that we return at 8:10 p.m. to