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April 7, 2022

RESOURCE COMMITTEE

Pursuant to Standing Order 68, Lloyd Parrott, MHA for Terra Nova, substitutes

for Craig Pardy, MHA for Bonavista.

Pursuant to Standing Order 68, Pam Parsons, MHA for Harbour Grace - Port de

Grave, substitutes for Paul Pike, MHA for Burin - Grand Bank.

Pursuant to Standing Order 68, John Abbott, MHA for

St. John's East - Quidi Vidi ,

substitutes for Sherry Gambin-Walsh, MHA for Placentia - St. Mary's.

The

Committee met at 5.30 p.m. in the Assembly Chamber.

CHAIR (Warr):

Good evening, all.

Welcome

to our first set of Estimates for the 2022 budget season. I certainly want to

welcome the minister and his Department of Industry, Energy and Technology here

this evening. As well as I would welcome the Members of the Committee here this

evening.

And

probably before we start, I'll ask the Members of the Committee to introduce

themselves and just wait for your tally light to come and introduce your name

and your district, please.

Starting here.

P. FORSEY:

Pleaman Forsey, Exploits.

L. PARROTT:

Lloyd Parrott, Terra Nova.

M. WINTER:

Megan Winter, Researcher

with the Official Opposition Caucus.

J. BROWN:

Jordan Brown, Member for

Labrador West.

S. KENT:

Steven Kent, Political Sessional Support for the Third Party Caucus.

P. LANE:

Paul Lane, MHA, Mount Pearl

- Southlands.

J. ABBOTT:

John Abbott, St. John's East

- Quidi Vidi

CHAIR:

Thank you, Committee.

If I could have the Members from the department to introduce themselves,

starting to my immediate left?

G. SKINNER:

Gillian Skinner, Assistant Deputy Minister, Industry and Economic Development.

A. PARSONS:

Andrew Parsons, MHA, Burgeo - La Poile, and Minister of IET.

J. COWAN:

John Cowan, Deputy Minister of IET.

C. MARTIN:

Craig Martin, Associate Deputy Minister of Energy, IET.

A. SMITH:

Alex Smith, Assistant Deputy Minister, Mining and Mineral Development.

S. WILKINS:

Susan Wilkins, Executive Director for Renewable Energy.

P. TOBIN:

Perry Tobin, Assistant Deputy Minister of Energy, IET.

M. NESBITT:

Megan Nesbitt, Assistant Deputy Minister of Corporate and Strategic Services.

P. IVIMEY:

Phil Ivimey, Departmental Controller.

B. POLLARD:

Benjamin Pollard, Political

Staffer.

N. KIELEY:

Nicole Kieley, Executive

Assistant with Minister Andrew Parsons.

T. MUNDON:

Tansy Mundon, Director of

Communications, IET.

P. CARTER:

Paul Carter, Executive

Director of Mining Innovation.

CHAIR:

We have Kim Hammond at the

Table tonight. My name is Brian Warr. I'm the MHA for Baie - Green Bay, and I'm

happy to be your Chair this evening.

Before

we get into the meat of it, I just want to announce the substitutions tonight.

We have the Member for St. John's East - Quid Vidi substituting for the Member

for Placentia - St. Mary's. We have the Member for Harbour Grace - Port de Grave

substituting for the Member for Burin - Grand Bank. We have the Member for Terra

Nova substituting for the Member for Bonavista.

guess, with regard to the minutes, we need to adopt the minutes of our last

meeting. If I could have a mover to those. Moved by MHA Parrott; seconded by MHA

Brown.

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

CHAIR:

Carried.

Thank

you.

motion, minutes adopted as circulated.

CHAIR:

Okay, tonight we're

considering the Estimates of the Department of Industry, Energy and Technology.

Before we go ahead, I just want to make sure – we have obviously the Official

Opposition and Third Party and we have MHA Lane as an independent tonight. The

Committee have agreed to give MHA Lane some time at the end. He's going to be

offered some time to ask some questions at the end.

We will

move with asking the Clerk to call the first subhead.

CLERK (Hammond):

1.1.01 to 1.2.03 inclusive.

A. PARSONS:

(Inaudible.)

CHAIR:

I know you have a speech,

and I'm going to give you some time, because I like you.

Could I

have those subheads again, please?

CLERK:

1.1.01 to 1.2.03 inclusive.

CHAIR:

Shall 1.1.01 to 1.2.03

inclusive carry?

The

hon. the Minister of Industry, Energy and Technology for a few comments, please.

A. PARSONS:

Thank you, Mr. Chair.

everybody's delight, I do not have a speech prepared, and I'm probably giggling

because it's a bit delirious; it's been a long day.

What I

will say is happy to be here. I think Estimates is the best part of the budget

process. I've said it a number of times. Really happy to be surrounded by the

executive team of the department who I'm very proud to work with. We're missing

one ADM, Jamie O'Dea of Business and Innovation; she's on vacation. I'm joking;

she's actually ill, but we were giving her a hard time, saying we were going to

say she's on vacation.

couple new faces here that weren't on the team, I think, last year when we did

Estimates, but happy to have them here. I will say, having this be my 11th

Estimates on one side or the other, I've always prided myself on the fact that

we've let it be sort of loose, not just line-by-line-driven. We've got to do

line by line, but I like that fact that we can come out of it, hopefully being

able to answer questions. Although I would be remiss if I didn't point out that

last year, in one of those exchanges I made some jokes, said I was going to

throw Siobhan Coady under the bus, and that may or may not have come up in

Question Period the next day in the form of a question from the Opposition.

So what

I will say is that I can be loose and goose and happy and everything else, or I

can be Mr. Bad Cop going line by line. I will point out that the express purpose

of this – there's going to be information that may or may not come out of this

that's good fodder for Question Period. But I would hope that the fact that I

carry on a bit and be silly is meant to show that this is not meant to be an

adversarial process. It's meant to be an information-gathering process.

As a

person who's sat here – and I'm not talking political stripe; I've seen people

of multiple stripes get here and not treat this process the way they should.

When I was in Opposition and since I've been in government, I'm lucky that the

processes I've been involved, every single one on both sides has generally been

a good process.

So I

pride myself on that and hopefully people come out of it with the questions

answered that they want. I'll say in advance now, prior to, that any information

we do not have, we will compile in a list that we provide to people after. There

are some limitations with that, in the sense that we must wait for

Hansard to be done first, prior to

that.

But

again, anything that one person asks for will be provided to everybody,

including Mr. Lane for the independent; everybody that's here would be privy to

that information. I will say that part of the reason that we have staff here is

they really are the subject matter experts to this, so I'm looking forward to

them being able to talk about the work they do and being able to be questioned

on some of the stuff.

So on

that note, let 'er go.

CHAIR:

Thank you, Minister Parsons.

Just

before we start, I know that the Clerk had spoken to the staff. So if the

minister wants to recognize one of his staff members to take a question,

identify yourself for the Broadcast Centre, wait until your tally light comes on

and go ahead and speak. Again it's a to-and-fro.

Shall

1.1.01 to 1.2.03 carry?

MHA

Parrott.

L. PARROTT:

I'd be remiss if I didn't

say you guys are very fortunate to have Minister Parsons at the head of your

department. You should be very proud of what's happened in the last couple of

days, and while he's the best minister in the House, he's the third-best MHA,

next to the MHAs for Exploits and Terra Nova.

Listen,

hats off to the full department, you guys should be extremely proud of the

announcement yesterday. It means a prosperous future for the province for sure.

I look forward to more announcements in the coming months, hopefully. So thank

you very much for the hard work you've all done on that file. Minister Parsons

has no doubt where my head is on it I'm sure.

A. PARSONS:

Absolutely.

L. PARROTT:

So just to start off with

some general questions. I'm just wondering if we can have a copy of your

briefing binder.

A. PARSONS:

Yes, Phil? We have three

here, so we should have one for I guess the three people – Pleaman, are you

asking questions?

P. FORSEY:

No.

A. PARSONS:

Okay, so we do have the

binders here, yeah.

L. PARROTT:

Okay.

Could

the minister please outline the department's attrition plan and how many

positions have been removed through attrition in the last 12 months?

A. PARSONS:

I'm going to say what I

think the answer is and then Megan's going to jump in because she's going to

make the answers right.

we've already hit all of our attrition targets. There is no target right now.

There has been no position lost to attrition this year. We've hit those targets,

I think, in the previous year. In fact, I think you will see we've added a

couple positions this year in terms of executive directors, which will come up

in a certain part of the executive. I think it's maybe in the next slide or the

slide after.

Did I

hit that one right?

M. NESBITT:

That is correct.

L. PARROTT:

How many people currently

employed in the department?

M. NESBITT:

Two hundred and forty-nine active employees as of March 31, 2022.

L. PARROTT:

And how many retirements

over the last 12 months?

M. NESBITT:

Retirements, there were seven in the past fiscal year.

L. PARROTT:

How many vacancies are not

currently filled by the department?

M. NESBITT:

Fifty-four in total.

L. PARROTT:

And have any positions been

eliminated? If so, what are they?

M. NESBITT:

Not aside from eight contractual PCNs that was done through the regular HRS

audit of vacated contractual positions. Those PCNs aren't used for somebody

else. They were the only ones that were eliminated in the last year.

L. PARROTT:

Any layoffs in the last 12

months?

M. NESBITT:

Just the one, which is usual. That is part of the geoscience publications team.

It's a part-time position that's typically employed between around October or

November to the end of March. For the past about 25 or 30 years or so that

position is part-time to support extra publications work that's required from

the geological survey field season.

L. PARROTT:

And how long are they

generally employed throughout the year?

M. NESBITT:

About five or six months every year.

L. PARROTT:

How many new hires took

place in the last year?

M. NESBITT:

Fourteen.

L. PARROTT:

And contractual and

short-term employees, how many are in the department, currently?

M. NESBITT:

Ten contractual and two short term.

L. PARROTT:

How many long-term vacancies

do you currently have or positions that haven't been filled in the last six

months?

M. NESBITT:

I have the numbers for the last 12, it would be 54 and that would include a

number of existing recruitment actions that are under way.

L. PARROTT:

Did the department receive

any money from the contingency fund? If so, what was it for?

A. PARSONS:

None this year.

L. PARROTT:

Perfect. All right.

We'll

go to line items now, if that's okay?

A. PARSONS:

Yes, Sir.

L. PARROTT:

Line item 1.2.01, Executive

Support.

Last

year, Salaries went over budget, there was a total of $1.9 million. This year,

there is a budget increase to $1.85 million. Can you provide some detail on why

the jump and what the overture was?

A. PARSONS:

What that comes down to is

that there was a variance due to the fact that we have an acting ADM of

Corporate Services, which is Ms. Nesbitt. We currently have an ADM of Corporate

Services who is on secondment to the Health Accord NL, Tanya Noseworthy. So the

way that works, we're still carrying that.

We have

some newly appointed executive directors, I believe, that would also fall under

that, which were not, I guess, contemplated. When it comes to the Estimates for

this year, I think there are some salary adjustments that are coming in '22-'23

to support existing executive staff complement.

I don't

know if Phil needs to jump in maybe to just give a little bit more clarity on

the numbers.

P. IVIMEY:

So as the minister noted, the revised for '21-'22 was due to that secondment of

that ADM and carrying the cost of that as well as a newly appointed executive

directors. So those costs carry forward into '22-'23, however it is anticipated

that hopefully the secondment of the ADM would discontinue sometime within this

fiscal year so we wouldn't carry those two costs again for the full year.

L. PARROTT:

I'm sorry I haven't been

saying my name so I'll start, Lloyd Parrott.

CHAIR:

That's okay. And neither do

you, they know who you are.

L. PARROTT:

Under Transportation and

Communications, can you outline how you achieved the savings from last year and

is there an opportunity to find more savings this year?

A. PARSONS:

So the variance is due to

not travelling – cancelations. Plans to travel never happened. That is why

you'll notice that the budget was put back to what it was supposed to be or

anticipated to be, so back in the same range. We are actively planning on

travelling to various conferences, shows, the things that you would normally do

year to year.

Last

year, you still had some virtual stuff that happened but there was no – I'm

trying to think, I don't know if we went anywhere. There may have been some

staff that went but there was no big conferences still.

L. PARROTT:

Line item 1.2.02 under

Corporate and Strategic Services, under Salaries, there's a salary savings of

about $245,000 for '21-'22. Is it a vacant position?

A. PARSONS:

Vacancies. I am not sure who

I would ask about the – Megan can talk about the various vacancies.

M. NESBITT:

There was a number of vacancies throughout the year, some of those have been

filled and we have a number of active recruitments ongoing as well to fill those

vacancies.

L. PARROTT:

Okay.

A. PARSONS:

If I could make a general

comment about vacancies, and this is not meant to – you're free to ask more

questions.

One

thing we've talked about is the fact that there is no position that we're not

advertising for or not trying to fill. One thing I've noticed is in this

department the positions that we have are very specialized. When we're talking

about geologist I, geologist II, petroleum engineers, it's a pretty specific

skill set required for a lot of these. So they are hard to fill.

We've

had retirements but none of them are a case of we're delaying this or we're not

trying to hire. We're trying to fill positions but it's difficult. The skill

sets in many cases are either not there or they're gobbled up and it's on

account of a lot of competition.

L. PARROTT:

So would any of these

vacancies be filled by, I guess, the announcement that came out yesterday for

the student recruitment? Is that one of the avenues you'd utilize?

A. PARSONS:

Is that the executive

program?

L. PARROTT:

Yeah.

A. PARSONS:

I'm not opposed to that. I'm

a supporter of that idea. What I would say is it depends on the skill set and,

again, I don't know the full, full on of what the Human Resource Secretariat is

doing there. I'm not opposed to it but we're actively trying to get people to

apply, but, like I say, sometimes it's difficult.

L. PARROTT:

Just for general knowledge:

Do we go outside the province? I mean, obviously, we try here first and –

A. PARSONS:

When they're open, they're open to absolutely anybody. We have, in the past,

hired people from outside. Obviously, we would prefer to have people within,

but, at the same time, I think there's a plus to having people that want to

return home and bring families with them.

So our

biggest thing is fitting the skill set and retention is a big thing, too. You

want to get people in, but, again, the competition with the feds, some of these

specialized positions you've got to compete with them and we all know that

challenge.

L. PARROTT:

Absolutely.

Under

Transportation and Communications, again, in spite of having $71,900 in savings

last year, there's still $85,000 budgeted again this year. I guess it's the same

answer.

A. PARSONS:

Same thing. No travel for

various reasons, whether it's couldn't travel or things got cancelled or

whatever, but the plan is – and, again, this would be a general point that I

think would apply to all these headings throughout but feel free to ask at any

point.

I guess

on a general note, our plan is to attend. After two years off the field, I think

there is a need for us to get out there, to get out in the different areas,

whether it's in the oil and gas sector, whether it's in mining, renewables, to

establish face-to-face contact. There's a big plus to that.

Now,

that doesn't mean to say that we don't take advantage of virtual – especially

when it comes to within-province, I think there's a lot we can do there. My plan

is I think we need to go out and sell in an increasingly competitive market,

when you're talking about critical minerals and everything else.

So we

want to get out there; that's our plan, and hopefully we will be able to do

that, barring unforeseen lockdown circumstances, et cetera.

L. PARROTT:

There's quite a significant variance under Purchased Services; can you explain,

I guess, the variance and what was actually purchased?

A. PARSONS:

Tell me if I'm wrong, Megan.

I think that was mainly registration for trade shows?

M. NESBITT:

Correct.

A. PARSONS:

So these trade shows, some

of them – like, I use OTC – come with pretty hefty price tags to go, and we had

anticipated or budgeted for some. Again, you'll notice that what we budgeted for

last year and what we're budgeting for are different because even last year, it

wasn't up fully and running. This is what we're anticipating. Last year the plan

was to go there, never got there, and the plan is to try to increase hat.

L. PARROTT:

Under Revenue - Federal,

what's the $11,000 anticipated? Where's it coming from?

A. PARSONS:

That is money coming from

the feds; we will be hosting the Energy and Mines Ministers Conference this

summer, so there's a federal contribution. That will be held in St. John's in

July.

L. PARROTT:

Are you going to invite

Opposition?

A. PARSONS:

We can discuss that,

actually.

L. PARROTT:

All right.

Revenue

- Provincial: Last year $86,000 was expected, but only $8,400 was received and

this year it's $166,000 anticipated. Where's the revenue coming from, and what

accounts for the fluctuations?

A. PARSONS:

That's where the OTC,

Offshore Technical Conference, in Houston didn't happen, so we didn't get the

revenue from within the province for people that attend. So that would explain

what we budgeted, what we actually spent, and then why that should be going up

this year.

You'll

also note, though, that that revenue also includes registration for that mines

meeting as well. I think that's pretty much the biggest chunk of that, it's

about $161 – there's $5,000 there for smaller employee expenditures, refunds,

credits, things like that.

L. PARROTT:

I've just got a couple of

general questions now, if you'll allow.

It's

been mentioned to me about the Mineral

Act and the Mining Act and the

requirement for an update. I'm just wondering if that's something that the

department is looking at and, if so, could you comment on what updates you think

are coming.

A. PARSONS:

Yeah.

What

I'm going to do – and again, I'm lucky to have Alex Smith on the team. I think

the best bet here instead of me just yammering on for five minutes, probably

sort of half-cocked, and then he actually comes in with the answers, we'll let

him go with the answers and then I'll do the half-cocked and yammering on after

that.

L. PARROTT:

Sounds good.

A. SMITH:

I'll yammer on.

So the

review is under way. I have a near-final version of the consultation plan. The

idea is to have public consultations through the summer and fall and then bring

it forward with the input, do the analysis and see where the legislation goes.

L. PARROTT:

That's good news.

Last

year in the budget there was an addition $2.5 million for geoscience, and when

we got to the Estimates meeting there was some confusion because it wasn't

(inaudible).

A. PARSONS:

That's the one we talked,

yeah.

L. PARROTT:

Yeah. I'm just wondering, it

seems like it was a late budget decision and then it was done after it was made

for printing. Did the department get the full $2.5 million? Did they use it?

A. PARSONS:

I'll let Alex talk about

that. I will say it wasn't so much a late one, like made after the budget was

printed, per se. I will say that given the fact – one thing I will point out,

you'll remember last year we had a budget in I think the fall and then we had a

budget in the spring, which was an unusual scenario. I think these things

happen. The good news was that we actually made the case to get increased

funding, which was pretty difficult sometimes. But maybe what I can do is Alex

does have some information to put forward on that.

A. SMITH:

Yeah, so that money is shown in the revised for the Geological Survey, 2.1.01. I

don't know if you want to go into the details of it now or deal with it

(inaudible).

L. PARROTT:

Yeah, that's fine.

Geological field surveys for last year, can you just tell us a bit how it all

played out and what's planned for this year?

A. SMITH:

We undertook 15 projects last year with the Geological Survey. Four of them were

desktop studies. There was a study testing out use of aerial photographs to map

bedrock. There was an airborne geophysics survey under way, and I think there

were 11 different areas where geologists got out boots on the ground.

L. PARROTT:

Okay, good.

A. SMITH:

This year we're still in the midst of planning, but it's expected to be a little

bit more activity than there was this past year.

L. PARROTT:

Last year the minister

indicated that he wasn't opposed to purchasing equity in the mining industry. I

guess the question is simple there. Are there any projects now where equity is

being considered and has the province approached or been approached by any

proponents about equity stakes?

A. PARSONS:

I'll jump in – correct me if

I'm wrong – we are not actively in any kind of equity negotiation with anybody.

Nor have we been asked at this point. I think I got that right, Alex?

CHAIR:

I will remind the hon.

Member that his speaking time has expired.

1.1.01

to 1.2.03, MHA Brown.

J. BROWN:

Thank you.

Back to

the Mining Act , I'm sure Alex

(inaudible). Will this review also review the javelin act and the Labrador iron

royalty act?

A. SMITH:

No, those acts are historic acts and they provide rights to certain operators

that we wouldn't want to affect.

J. BROWN:

Okay, perfect. That is good

to know.

The

Strange Lake deposit and the Javelin iron ore deposit that are currently held by

the government, is there any activity going on there?

A. SMITH:

Yes, there is some active review internally about the path forward on those two

deposits, but there has been no decision made or direction determined.

J. BROWN:

All right.

Can you

provide a list of the current development activity? I know other than the

Marathon Gold one there are also a couple of other projects released from

environmental study. Can you provide any update on those ones?

A. SMITH:

On the Island, Maritime Resources are released from EA and due to have the

feasibility study out. They do have permitting to start clearing their site, but

have yet to submit their development plans for the actual mine. Matador

resources are still in EA and expected to submit an environmental impact

statement this summer or early fall.

Vale

has a project under EA for wind generation. Labrador Iron Mines, the Houston

Project, went through EA several years ago and the release they got for that is

still in effect. They are making noise about raising capital to start operations

with the price of iron ore. The Kami project, Champion are undertaking a

feasibility study to look at rescoping the project and updating the finances on

that. I think that is due out in the next few months.

What

else is out there?

J. BROWN:

Century.

A. SMITH:

Century. Joyce, they're in EA as well and they were required to submit an EIS.

To my knowledge, I think that is at the point where the table of contents needs

to be provided by Environment and Climate Change.

J. BROWN:

Perfect. Thank you so much.

In the

budget, it noted there was about a 20 per cent decrease in mining revenue. With

all the activity, can you elaborate a bit why we're going to see a decrease in

mining revenue this year compared to last year?

A. SMITH:

I'm assuming you're talking

about the revenue table in Estimates?

J. BROWN:

Yes.

A. SMITH:

So I did ask about that.

Last year, 2021, was a record year for value of mineral shipments, $6 billion.

The taxation collected last year was very high. Some of the taxation reflected

for '22-'23 includes cash contributions from last year's production. I'm told by

Finance that the projection for 2022 taxation is actually about $120 million,

which is more in line with a good year as opposed to the phenomenal year we had

last year because of commodity prices.

J. BROWN:

Okay, it's just more of a

conservative estimate, kind of.

CHAIR:

Order, please!

remind the Member that we're on Executive and Support Services, 1.1.01 to 1.2.03

for questioning.

J. BROWN:

Yes, thank you, Chair.

I have

a little bit of a passion for mining.

Under

Geological Survey, currently what projects are upcoming with the Geological

Survey this coming year?

A. SMITH:

I certainly can provide more

detail in writing.

J. BROWN:

Yes, if you can provide it

to me that would be great.

A. SMITH:

I do have a brief listing

here, though.

J. BROWN:

Okay.

A. SMITH:

There's some bedrock mapping

planned for the northern part of the Labrador Trough; a continuation of mapping

in Hopedale, Labrador, that's an ongoing project that's been going on for two or

three years in conjunction with the Geological Survey of Canada; mapping in

southern parts of Western and Northwestern Labrador as well. So that's bedrock

mapping.

The

mineral deposit

section is looking at base metals and gold in the Northern

Labrador Trough. The evaluation of rare-earth minerals and other critical

minerals in the Flowers River water zone, that's St. Lewis search minerals area

on a more regional context.

They're

looking at gold and critical minerals in Central and Southwestern Newfoundland.

That's the exploration boom that's going on.

The

Terrain Sciences, geoscience data management

section are looking at innovative

surficial exploration methodology development and surficial mapping in Central

and Western Newfoundland and till geochemistry and surficial mapping in

Hopedale, in conjunction with the bedrock mapping section.

J. BROWN:

Perfect, thank you.

Now,

under this what supports are currently going to be – are they any supports going

to be given to junior miners or anything like that's currently coming up with

all this extra exploration and all this extra development? Are there any

supports coming from the department into junior miners?

A. SMITH:

The Mineral Incentive Program was included in the budget again this year, that's

$1.7 million for exploration grants. That's broken down as $1.3 million for

junior exploration assistance; $350,000 for prospector grants; and then another

$50,000 in support of prospectors in marketing their (inaudible).

J. BROWN:

Okay, perfect. My next

question was support for prospectors, but perfect there.

I can

go to the line by line there now.

Under

the Geological Survey, I noticed that there was a large increase in the

Purchased Services.

CHAIR:

I've got to stop the Member

again. We're into Executive and Support Services, 1.1.01 to 1.2.03. You were

actually into 2. –

J. BROWN:

Oh, I (inaudible) sorry, my

apologies there.

Well,

I'm done there with that

section then. I'm done with this

section here.

CHAIR:

Thank you.

Is the

Committee ready for the question?

Shall

1.1.01 to 1.2.03 carry?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

CHAIR:

All those against, 'nay.'

Carried.

motion, subheads 1.1.01 to 1.2.03 carried.

CHAIR:

Can I get the Clerk to call

the next set of subheads, please?

CLERK:

2.1.01 to 2.1.03 inclusive.

CHAIR:

Shall 2.1.01 to 2.1.03

inclusive carry?

The

hon. the Member for Terra Nova.

L. PARROTT:

Just a quick general

question. In conversations with Marathon Gold, I know they're having some issues

with Victoria Bridge and I would say there's confusion over who's responsible,

be it Forestry, Environment or – I'm certain it's not you guys, but have they

approached you guys for help and is there help coming, I guess? I'm not asking

about financial help. My understanding is they were willing to (inaudible).

A. PARSONS:

So the background I can give

on that is that in one of my meetings with them – and I apologize because the

passage of time these days does not – I can't remember if this was – I think

this was a before Christmas meeting. In fact, I think they may have even met

with the Official Opposition –

L. PARROTT:

Same day.

A. PARSONS:

– so they had mentioned

Victoria Bridge. Now, that would fall either under Minister Bragg's shop, I

believe, but we did have that discussion and I did reach out to that department.

In the

next, I do think that there's a letter that actually came from the Leader of the

Official Opposition on that.

So I'm

aware. I don't know, Alex might know if there's been something done, but we have

an awareness. I'll leave it to Alex now.

A. SMITH:

So part of the issue with the bridge was the fact that they were under

environmental assessment and the project couldn't commence until they were

released. The bridge and the road construction and upgrade was part of the

project. So now that they're released I would assume that the issue can be dealt

with quickly.

Marathon didn't have any issue with the expense of the bridge; it was just

getting the work done.

L. PARROTT:

Okay. I just know that they

were having some troubles.

Listen,

the end goal is for them to be mining gold and this is you guys, and if there is

anything you can do to help them I –

A. PARSONS:

I don't think they left our office thinking that there was any issue. There was

nothing we could do and we certainly passed it over.

Again,

going back to what Alex said about the environmental assessment may have been

one of the hold ups. That hold up is not present. But, again, we have pretty

regular contact with Jamie or Matt or whoever. So if they were to be in contact

with you and there was still an issue, even if it's not our responsibility, I

think we serve, sometimes, as a facilitator to help connect other departments to

fix the issues.

L. PARROTT:

Thank you very much.

Line

2.1.0, Geological Survey, under Salaries. Last year, Salaries savings was

$260,000. Again, I assume it was a vacant position.

A. PARSONS:

Yes. So, Alex, you – I know

we have some vacancies there. A reduced field season, I think, might have been

one of the issues, but I'll maybe let you give a little more detail.

A. SMITH:

It was simply routine

vacancies. People would leave and then we would attempt to fill the positions as

soon as we could.

L. PARROTT:

And I'll just say you can

answer yes or no or you can ramble on, but under Transportation and

Communications, $389,000 is the reduction. How is that going to be achieved?

A. PARSONS:

Say that again.

L. PARROTT:

Under Transportation and

Communications –

A. PARSONS:

Yeah.

L. PARROTT:

– the budget is being

reduced to $389,900. It was $413,000 the previous year. Can you outline how you

are achieving those savings?

A. SMITH:

Transportation and

Communications includes helicopter time. The government's helicopter contract is

quite complicated in that in the old days you just paid for hours of time. Now

you pay for basing fees plus hours of time and your basing fees are based on the

last three or four years of helicopter use. So our use went down the last two

years. My understanding is that is a big portion of that cost.

L. PARROTT:

Under Supplies, last year's

Supplies went over budget by $70,000. This year the budget is being increased by

$142,000. Can you outline why and what supplies that are being purchased?

A. PARSONS:

That's laboratory

consumables, but I think Alex will get the actual specifics.

A. SMITH:

Laboratory consumables are certainly part of it. Boron gas, for instance, was

extremely expensive this past year because of supply issues related to the

pandemic. The increase part of that is repurposing or reprofiling funds across

different accounts to more appropriately reflect our historic overruns at the

lab on consumables.

L. PARROTT:

Do you guys contract any of

your lab services out?

A. SMITH:

Yes.

L. PARROTT:

No, I ask that as a separate

question.

A. SMITH:

We do basic assay work. We don't do gold assays. There's some geochronology and

other more specialized analysis that we send out.

L. PARROTT:

And is that carried out

in-province or is it sent out of province?

A. SMITH:

It depends on where the speciality is. Some of it is done at MUN, but some have

to go to England, I think.

L. PARROTT:

Okay.

A. SMITH:

Yeah.

L. PARROTT:

Under Professional Services,

there's what looks to be an unexpected expenditure of $2.1 million. What was

that for?

A. SMITH:

So that's the special funds last year announced for the geological data.

L. PARROTT:

Okay.

Purchased Services last year went over budget by $252,800 and this year they're

reducing the budget. How are you going to achieve the reduction? What was the

overture?

A. SMITH:

So some of those Purchased Services were also the additional funds, the $2.5

million that was announced last year. The reduction from budget last year to

budget this year, again, is trying to reprofile some of the division monies to

where it's best utilized.

L. PARROTT:

Yeah. Property, Furnishings

and Equipment went over budget by $89,500. I assume that wasn't for couches. Can

you explain what it was for?

A. SMITH:

Again, there was some equipment that was bought with the $2.5 million – some of

the $2.5 million was used to buy equipment, analysers, some lab prep equipment,

so that would fall in under that cost category.

L. PARROTT:

Under Salaries, there was a

savings of $100,000, I assume that was just a vacant position or – 2.1.02,

sorry, my fault.

A. SMITH:

Yes, again, a series of vacancies that were filled as soon as we could.

L. PARROTT:

And Purchased Services last

year, same line item, went over budget $141,500. Can you explain?

A. SMITH:

Yeah, that's Moneris fees, so our mineral claims-staking system, any quarry

application fees, all that's done with online payment.

L. PARROTT:

Okay.

A. SMITH:

So that $225,000 leveraged about $7.5 million of payments.

A. PARSONS:

It's a double-edged sword;

with so much business and so much interest, we had to pay more to the bank.

L. PARROTT:

Okay.

Quick

question on quarrying. I assume that you guys are responsible for the quarries

for Transportation and Infrastructure?

A. PARSONS:

I think so, yeah. We're

responsible for quarries.

L. PARROTT:

I'm talking about like for

class A and whatever Transportation and Infrastructure uses.

I know

in my previous life, I had six quarries and we used to – the word alludes me

now, but we used to give someone a sub-quarry permit to come in on our quarries

and work.

This

year, I've been reached out to by several companies who've tried to go to

Transportation and Infrastructure and get a sub-permit. In the past, I know

they've always been able to do that, but this year it's been turned down on

every turn. I believe it's Transportation and Infrastructure who's been turning

them down. That permitting process should go through you guys, should it not?

A. SMITH:

Yes, subordinate permit is a

permit where a permit holder can allow – it requires the person who is looking

for the material to apply for subordinate permit, but before we can issue that

permit the company that actually owns the permit has to agree to it. If

Transportation and Infrastructure are not amenable to someone coming into their

quarry, then the subordinate permit can't be issued.

L. PARROTT:

So do Transportation and

Infrastructure pay royalties on their permits?

A. SMITH:

Everybody pays royalties.

L. PARROTT:

Okay.

Is it

possible to get copies of the royalties that Transportation and Infrastructure

pays on their quarries?

A. SMITH:

We would have to generate a

report. I certainly don't have that.

L. PARROTT:

No, I know you wouldn't have

it here, but is it possible to get it?

A. SMITH:

Yes, and all contracts that

are done for Transportation and Infrastructure include royalty payments as well.

L. PARROTT:

I guess my question is: If a

general business is applying for a quarry permit, they have to renew on an

annual basis and the quarries are all published, obviously, online. You can see

where they are. Transportation and Infrastructure, are they held to the same

standard? If they are, or aren't paying royalties, how do they turn down a

private – as an example, a contractor who is paving roads coming through or if

the quarry is abundant, how do we turn down an opportunity to save money or make

money?

A. SMITH:

The Quarry Materials Act

is binding on the Crown. So they have to get permits.

L. PARROTT:

I'm not saying they don't

get permits. I'm saying Transportation and Infrastructure have turned down, as

an example, paving companies, concrete companies, certainly that I'm aware of.

In the past, that was never a practice but I have seen where it's happened in

the last two years.

A. SMITH:

It's never been brought to

my attention, or anyone in the department that I'm aware of.

L. PARROTT:

So what I'll do is I'll

commit to sending you specific instances where Transportation and Infrastructure

have turned down individual companies and then we can carry on the conversation

after.

CHAIR:

I remind the hon. Member

that his speaking time has expired.

2.1.01

to 2.103, MHA Brown.

J. BROWN:

Thank you, Chair.

Under

Mineral Lands, Purchased Services, there was quite a spike in Purchased Services

there. What was the reason for that and why are we budgeting lower than

previously budgeted?

A. SMITH:

That's the Moneris fees for online payments.

J. BROWN:

Okay.

A. SMITH:

And there's no way to predetermine the exact amount of activity will be.

J. BROWN:

It's going to be always –

okay.

A. SMITH:

Yeah.

J. BROWN:

That's fair.

Under

2.1.03, Mineral Development, we had a decrease in Salaries and then, obviously,

an increase. Is that due to a recent vacancy?

A. SMITH:

Mineral Development has one position that's difficult to fill. It's an open

competition, mineral development engineer, mining engineer.

J. BROWN:

Yeah.

A. SMITH:

And then there were a couple of vacancies that we resulted in immediate

competition to fill.

J. BROWN:

Okay, perfect.

Under

Professional Services, there was an increase and we did budget it lower again

this year. What were the professional services under Mineral Development?

A. SMITH:

So Professional Services and Purchased Services were higher this year than

budgeted. We did some dam repair work in Buchans: $124,000 in Professional

Services, $535,000 in Purchased Services. There was an issue with the dams that

were identified that needed repair.

J. BROWN:

Okay, perfect. And that also

carried over to Purchased Services, obviously.

A. SMITH:

Yeah.

J. BROWN:

All that work and

everything, okay. So that was the dam in Buchans. Okay, perfect.

Under

this there now, we're talking about Mineral Development and stuff like that. I

noticed under a lot of Mineral Development stuff there's not much federal money

available. Is there any reason why the feds don't help compared to other

industries right now, when it comes to Mineral Development?

I know,

it's a tricky one, but I've always noticed that there's never much federal, only

the Geological Survey last year, I think, you got some federal money, that was

it.

A. SMITH:

Yeah, so the Geological Survey does a lot of geoscience in collaboration with

the Geological Survey of Canada. So they both have in-kind contributions to

those projects. And there are – I don't know if I should be here defending the

federal government, but there are supports available to companies with federal

funding. IOC, for instance, is taking advantage of conversion of one of its

boilers using federal funds that flowed through Environment and Climate Change.

J. BROWN:

Yeah, I know. I noticed it

was last year and this year there was not very much federal into the mining and

surveys or anything like that but it is more of an in kind –

A. SMITH:

It is more direct contributions to company.

J. BROWN:

Okay.

A. SMITH:

There is no money federally that flows through the province at this time for the

mining industry.

J. BROWN:

Another thing I had there

was – I'm not sure, the Victoria bridge was kind of like one thing, but another

questions there is: Do you get a lot of requests from junior miners, exploration

stuff, for infrastructure development to get into certain sites or anything like

that?

A. SMITH:

Not directly. There are times when there may be a resource road that they are

looking to having upgraded, but it is not something that we generally do. I

mean, the resource roads are there; they're maintained by Fisheries, Forestry

and Agriculture as the woodlands work goes through an area.

I think

the mineral industry is happy to use what is there and until they get to a more

advanced exploration stage, then they're not really looking for much of anything

other than easy access.

J. BROWN:

Perfect there.

Another

one I would say is, as we move forward, are you getting a lot more requests from

mining companies to work on putting in direct power instead of diesel

generation? I know Century – I think you and I talked about this last year –

didn't really want to go and build a diesel generator up in Iron Arm, but

Menihek dam couldn't provide the power. I don't know if you're getting any more

requests to have transmission lines or anything like that for these projects to

go forward.

A. PARSONS:

I can say that in my

experience over the last year, I have had companies reach out when it comes to

power issues. Generally, what we have done, though, is that I see that as a

Newfoundland and Labrador Hydro issue. We direct them to them and they have to

work that out and then it comes down to the costs. So it is an issue. Again,

come back to the facilitation part where we –

J. BROWN:

Yeah. You're (inaudible).

A. PARSONS:

I specifically had one

company where I set them up with the executive team at Hydro, they got in

contact and they worked out the issue. I'm not aware of an increase, per se, or

if it is a normal thing every year. But, like you say, I have had people bring

it up perhaps more as a general thing, but it is not an issue that is preventing

them from –

J. BROWN:

No.

A. PARSONS:

– moving forward.

It is

the same thing I have seen in every front. I want power and I want it cheap.

J. BROWN:

Yeah, exactly. I was just

curious because I know I had this conversation with Century and they were like:

We'd love to tap into Menihek dam, but they don't have the capacity. Now I have

to buy a diesel generator, that kind of thing.

A. PARSONS:

I can honestly say that I

have never heard from them.

J. BROWN:

Oh, okay. They have

mentioned it to me but that was more of a chat, I guess.

A. PARSONS:

Yeah, they have never

mentioned it to me, so what I would put to you is that I haven't turned down an

email yet from anybody.

J. BROWN:

Okay.

A. PARSONS:

Or a call, because again it

comes back to that it's mutual wins. I mean success for them means success for

the province. So happy to chat with them. It's not something I've been presented

with yet, so it might one of those things where sometimes when we talk to

constituents and companies, they bring up an issue, but probably not as serious

that they felt that they needed to reach out to us, per se.

J. BROWN:

Yeah, exactly. I was just

curious if it's been –

A. PARSONS:

Oh, sorry, Alex.

A. SMITH:

I'd also point out that the

department participates in several federal-provincial working groups. Canadian

Minerals and Metals Plan is one of those. The issue of remote isolated sites and

diesel generation in the day of climate change and greenhouse gas reduction and

the desire for green metals, we're constantly raising that issue with the feds

that it needs more than just a provincial solution.

J. BROWN:

Oh, perfect. I really

appreciate that.

For

this section, I'm good there now.

Thank

you so much.

CHAIR:

Thank you.

2.1.01

to 2.1.03, MHA Parrott, do you have anything further?

L. PARROTT:

Just one question, yes, and

based on the last series there.

With

the announcement for wind energy, C61 – Voisey's Bay's desire to put in wind

turbines which is well known but that's for the elimination of diesel obviously

– I think about Wabush Mines, IOC and other major players out there that do draw

from the grid. I just wonder what happens from a cost standpoint for the

province if these larger industry businesses – I mean, listen, I know that you

guys and Hydro are doing their best to supply power to whoever wants it, and

that's what we have to do and we have to get green. But is there a concern that

some of these companies may decide to come off of our electrical grid and go to

wind or other sources? It's a huge loss –

A. PARSONS:

I've got a bit of practice

with this one, because it was literally the same question asked by the media

today in the budget lock-in, and it is an issue. That's one of the policy pieces

that we need to figure out going forward in terms of cannibalizing your system.

Again,

you come back to the sort of the Catch-22, where we want to encourage people to

get off diesel. We want to encourage people to build more capacity. We want to

encourage people to get green. But, at the same time, we have to ensure that we

have a grid that we must sustain and it's costing a lot. So that's one of the

policy pieces. I can get into it now or we can wait until the renewable section.

L. PARROTT:

No, that is good.

A. PARSONS:

Absolutely, it's one of the

things we're trying to figure out, but we're going to be willing – and again,

Susan, has been dealing with this a lot as the executive director for

Renewables, but it's an active policy conversation of where we want to do what's

right, but it's not an easy answer.

L. PARROTT:

Okay. No more questions for

you.

A. PARSONS:

And if I can, just one thing

on the point that the Member made earlier on the quarries. I will say that I

have had multiple Members, both sides – when it comes to quarries, if you have a

constituent who has an issue, tell them to reach out or you reach out on their

behalf to me because we get that a lot. I had no idea, prior to getting in this

department, how big –

L. PARROTT:

It's crazy.

A. PARSONS:

– that issue was, how

pervasive just people dealing with it is. I have had people reach out

independently. I've had MHAs of all over the place reach out. I think we have a

pretty good track record of trying to figure it out and get back to people and

work through it. In some cases, we're able to help them. In some cases people,

once they reach out, we're able to educate them on maybe some of the issues that

they've had. So I am happy to answer questions and, again, we go to Alex and his

team to figure that out.

L. PARROTT:

Sounds good.

CHAIR:

Thank you.

Is the

Committee ready for the question?

Shall

2.1.01 to 2.1.03 carry?

All

those in favour?

SOME HON. MEMBERS:

Aye.

CHAIR:

Those against?

Carried.

On motion, subheads

2.1.01 through 2.1.03

carried.

CHAIR:

Can I get the Clerk to call the next set of subheads, please?

CLERK:

3.1.01 to 3.1.09 inclusive.

CHAIR:

Shall 3.1.01 to 3.1.09

inclusive carry?

Mr.

Parrott, you still have time on the board.

L. PARROTT:

Can you give me an update on what's happening in Bull Arm right now and what the

plan is, I guess, going forward? Obviously, it all changed yesterday.

A. PARSONS:

So maybe what I'll do on that one, I'm going to let Mr. Tobin talk about some of

the activity we've seen in the last year and then maybe I can get into the

future and sort of where we see things going.

P. TOBIN:

So at Bull Arm in the past year, of course, we had the Terra Nova FPSO. The

scope of work required on that facility was completed at Bull Arm before it went

to Spain.

At the site, right now, we have two semi-submersibles that are stacked there.

One being the Henry Goodrich that's essentially cold-stacked and unlikely,

perhaps, to come into service again. Now, the other being the West Aquarius,

that is still certified for operation in Newfoundland and Labrador waters and

could, in fact, be brought into service.

We do have Maersk, of course, a major offshore supply vessel operator here that

uses the facility there for wharfage, dockage and those sorts of things.

Right now, the Bull Arm facility is being operated under a short-term lease with

DF Barnes. DF Barnes is undertaking to bring additional work to the facility.

That effort never ceases. Of course, when it comes to opportunity for Bull Arm

we mentioned Equinor

and Bay du Nord there earlier, that is by far the major opportunity on the

horizon. We do know that some of the major potential contractors for the Bay du

Nord Project have certainly been looking at Bull Arm. They visited the site, as

you would contemplate they would. So there's interest there. But, of course,

that is not firmed up yet.

That

essentially summarizes what's gone on out there over the last 12 months or so

and what the major opportunity for the facility is.

A. PARSONS:

So I'll jump in here. A

couple of things, just jumping ahead to 3.1.08 just for a second, that is the

expenditure under OilCo that's related to Bull Arm.

there will be money spent this year on various initiatives including – I think

there's some, I don't know if it's safety lifts – there's safety money being

spent there, because I remember we fought pretty hard to make sure that – so

OilCo comes in with their ask for Bull Arm, which is always fun because

everybody wants more and more and more. This was a pretty big ask, but we went

to bat for it because we felt that we wanted to ensure that the money was spent

on it to keep it viable, because we do anticipate that there would be more work.

Perry

can probably give a little more detail.

L. PARROTT:

Overhead crane in the module

hall, is it?

P. TOBIN:

As the minister pointed out,

some of the major capital parts, expenditures coming up in Bull Arm – it's

important to maintain roofs, of course, that's the lifeblood of any building,

you want to make sure there's no water entering those buildings. So there's

still significant roof work left to be done. As well, of course, the fall

protection systems that are required in order for that roof work to be

undertaken safely and for general access to roofs, there's money there as well.

All the sprinkler systems at the facility, they need to be checked and

recertified. That's certainly part of the fire protection piece mentioned by the

minister.

A. PARSONS:

So what I will say, whenever

we're going through a budget process, there's always the pressure, no new ask or

don't ask for too much, that's just how it goes. I will say that this was an ask

that we went to bat for and I was happy to get because we felt it was necessary.

We didn't like the argument of coming in here and saying that we didn't put the

money into that, because, again, hopefully, we're going to see more bodies out

there.

So a

couple things. One: I've had people reach out to me unsolicited and through –

your colleague from – I don't know Mr. Dwyer's district offhand.

L. PARROTT:

Placentia West - Bellevue.

A. PARSONS:

He talks about it all the

time, brings it up, and it's great. So what I would say, some of the interest

we've had, we've listened, we've looked, we've analyzed, OilCo's looked at it. I

mean, they've gone out and done, you know, expressions of interest. Nothing has

come in that has led us to believe that it would be a good investment for us to

get it out of our hands.

It's

one of those things were you have an asset and there's no doubt the asset has

not had the usage that it should have, but does that mean you let the asset go

for less than what it's worth and where do you end up later on?

In the

positive way, we've bet on it. We've bet that we will see something there.

Again, with yesterday, we feel that has increased the possibilities of what goes

on. We'll see where it goes. We can get into more questions when you get there

after or if you have more follow-up.

L. PARROTT:

Yes, I'm curious. For

background, I've done a whole lot of work in Bull Arm, certainly structure big.

We were the largest contractor during Kiewit.

there a tender process for any of this when you're going out to fix the roofs

and do fall protection and do the things that you're doing? Is that going out to

public tender or is it just being given to the proponent that's leasing? I'd

like to understand that process.

P. TOBIN:

That would have gone through

the provincial public tender process, Sir.

L. PARROTT:

Okay, perfect.

Terra

Nova FPSO, the minister indicated in the House that we're expecting it to come

back sometime this year. Do we have a timeline on when it's going to return to

production?

P. TOBIN:

I guess the FPSO is expected

back here later this year, with the understanding that, I guess, the plan that

it would go back in production late this fall.

L. PARROTT:

So when she comes back,

she's ready to go. There's no more work to be done on her? Everything will be

done over there?

C. MARTIN:

Yes, that's our

understanding. The FPSO will be back, I believe it's later on now this summer.

Refit work should be done at that point in time. That is their plan. So it will

have to be restocked, everything made available. The plan is that it will be

back out on station the latter part of September, early October.

L. PARROTT:

Will the subsea work be

completed before she comes back? Any work overs on the wellheads or any stuff

that had to be carried out?

C. MARTIN:

Yes, it's our understanding,

based on their project execution, that work will be starting now, literally,

this spring in order that that work will be complete, basically when it goes out

the latter part of September to hook up at that point in time.

L. PARROTT:

Okay.

CHAIR:

I remind the Member that his

speaking time has expired.

3.1.01

to 3.1.09, MHA Brown.

J. BROWN:

Thank you, Mr. Chair.

3.1.01,

Energy Policy, under Salaries there, you had your budgeted, then you had your

actuals, which was similar, but we have an increase in this current budget. Are

new positions being added to that?

A. PARSONS:

So this is to ensure the new

position as it relates to Renewable Energy. So that would be Susan Wilkins and I

believe we have two other positions under Susan related to Renewable Energy. So

it is new creation due to the fact we're expediting work on that front.

J. BROWN:

Oh, perfect. Thank you.

Under

Professional Services, we didn't use all that was budgeted. Is there anything

that we didn't choose to do but we budgeted again? Is there something coming

down that pipe?

A. PARSONS:

That would have been

Professional Services that were anticipated but that had been delayed.

J. BROWN:

Okay.

A. PARSONS:

So the plan is to still do

them but it didn't happen last year for multiple reasons. I'll say it was a

difficult year at various points for various reason. You think about last year,

between supply chains in some cases, we dealt with an election last year, we

dealt with the lockdown starting later on and then what's going on in other

centres. So the plan is to keep it at the same level.

J. BROWN:

Okay. Perfect.

Under

Grants and Subsidies, we budgeted $2.2 million but we did $2.5 million. What was

the reason for the overage and what were the grants and subsidies?

C. MARTIN:

The increase on the Grants

and Subsidies has to do with the Northern Strategic Plan, the cost associated

with the diesel subsidy were higher that year. They were about $200,000 higher

than what was originally anticipated.

J. BROWN:

Okay. That's part of that.

All right, that's where that's to. All right, prefect. Thank you so much there.

Just to

follow up on MHA Parrott's comments on Bull Arm. Have we ever been approached,

even before we dropped the moratorium on wind power and stuff, by any developer

to use any of our offshore facilities for wind development or construction of

offshore wind?

A. PARSONS:

Not a conversation; we've

had lots of conversations as it relates to wind but none as it relates to Bull

Arm of any substance whatsoever or any of our facilities.

J. BROWN:

Okay. That was just out of

curiosity more than anything else.

3.1.02,

Petroleum Development, Salaries and everything seems to be fine.

noticed there under Purchased Services, we didn't use up all of what we budgeted

or anything like that. Is there any reason why there's just –?

A. PARSONS:

There's a variance due to

less than anticipated purchased service expenditures due to training costs for

well-controlled training for staff being covered by the Centre for Learning and

Development. I think that's right, isn't it, Purchased Services? I have to make

sure I have my lines correct here.

The

other one, if you were talking about Professional, that was just less than

anticipated professional service requirements.

J. BROWN:

Just day-to-day stuff?

A. PARSONS:

Yes.

J. BROWN:

3.1.04, Royalties and

Benefits, I notice that the Salaries are significantly down between budgeted and

revised and then we're budgeting for less again. Any reason for that?

A. PARSONS:

The same thing for less;

it's the vacancy issue. Same thing it is with all of them. It's trying to get

these positions filled, difficulties throughout the year, maintaining and

keeping them. The new figure there is just a variance due to the salary

adjustments to reflect what's needed operationally.

I will

point out that sometimes the difference when you have somebody that leaves at a

higher salary bracket and then you get someone new to come in, you need less.

It's not a lesser position, we'll say; it's just different requirements.

J. BROWN:

Okay. It makes sense there.

notice under Professional Services and Purchased Services, what was budgeted

wasn't used. Is it the same as the other department or other section?

A. PARSONS:

So we didn't need any

professional service requirements associated with royalty administration during

the year; it would be under Professional. Under the Purchased, less than

anticipated purchased service expenditures for staff who worked from home. Work

from home brought savings on. Like when you look at printing and things like

that, we saw a big difference.

As you

can see, we would anticipate that going back to normal now that, right now,

everybody is essentially back to work, or on the way back, still working through

some of that throughout government. But we anticipate, in a perfect world, that

we'll be back to some semblance of normalcy.

J. BROWN:

Absolutely. This department

is bit more hands-on I guess than a lot of other things.

Question now on (inaudible). I know in the media, and you mentioned it and I

know we've had chats about it before, you did mention upgrades to Bay d'Espoir,

Churchill Falls and I think Bishop's Falls. Are those projects that are

currently talked about on the books or to be some sort of release or anything

on?

A. PARSONS:

So, right now, there's a

pretty significant conversation that is going about power and what do we do in

terms of upgrades, the possibilities. There is Churchill; there is Gull. It's

always a conversation that comes up. In terms of priority, I mean, Bay d'Espoir,

Churchill are the big ones that we hear about, especially when we met with

Jennifer Williams the other night and her team. Those are the main ones that we

talk about. There have been no decisions made.

What I

would say – and again, in a roundabout way here – we know there's demand

especially in Labrador. We know that once you make a decision then you're going

to have two, three, four, like however many years in order to develop that. We

are at the stage now where there are pretty intense conversations on what do we

do, what do we need to do and what does it require. Then, in terms of, okay, if

you have industrial consumers that require upgrades, what's their role in this

in terms of transmission? What's their role in paying for this?

Then

you get into conversations about, you know, the current power rates and what's

the new one going to cost. What do they want to bear? So it's one of those

things I can tell you there's no decision made, but I can tell you we're at a

point where – and you would know this because a lot of them are in your district

– they want more. We've got to figure out that. There is a willingness to pay.

They want the greener product. And they know that there's a premium to be paid

on that, so I think they're willing to make that investment.

We had

to figure out what's the best one for us to take. At the same time, we're

dealing with Muskrat which is so, so close but at the same time, not quite

there.

John

has probably forgotten more about this stuff than I'll ever know, but I don't

know if there is anything you would add for colour or I think I covered it all.

J. BROWN:

So you're saying I'm not

getting my power line this year.

A. PARSONS:

No. Again, a little bit of a

good run-through this morning. Just to give you some information. I don't think

this is – I mentioned it to media today. We constantly – and you know this – get

people coming in saying I want this; I want that. Whether it's data centres,

whether it's mining, whether it's you name it. So Hydro went out and did a

survey and added it up and it was 8,000 megawatts, and right now our grid – just

ballpark – is 2,000. Right? Might be actually (inaudible).

J. BROWN:

(Inaudible.)

A. PARSONS:

Yeah, so we know that is not

real. Then you've got to trim that down. So they went back out again and they

came back and it was more in the range of 2,000 but, again, that's double what

our grid is right now.

So we

have to figure what's real, what's not real. So we are at the point now of going

back again and now letting people know this is what we anticipate – not we, but

Hydro. This is what the anticipated cost is going to be moving into that range.

So it's

moving to that high level, but it's going to require some pretty big policy

conversations among Hydro, among government and amongst stakeholders about what

is the best way forward here. We know we need it. We know there's the desire.

But how do you pay for it? And who bears the cost? Who bears the burden?

J. BROWN:

Yeah, that's right. And then

to go back to the ratepayers, that's a hard thing to go back to.

I will

just segue into that. Any further conversations with the Atlantic Loop? I know

that all of the Atlantic provinces were supposed to release their report and it

still hasn't been publicly released yet. Are there any more conversations on the

Atlantic Loop?

A. PARSONS:

Yeah. So there's always an

ongoing conversation on the Atlantic Loop. Quebec has been a part of that too,

in the sense that obviously they have a role to play here. So they've been

invited to be a part of that on the other end. I've had contact with my

counterparts; I'll point out that the deputy minister has had contact with his

counterparts.

One of

the big things I will say is we love the idea. Why wouldn't we? We have the

battery here, and we know that the feds are really pushing this. But what I

would say to our friends in the feds is, if you want it, you're going to have

pony up.

that's one of the things that we keep saying to them; we want to get Nova Scotia

off coal. In my conversations with their Energy minister, like, they're so

interested in what's going on here. But like I say, we know they're going to

have to be off coal by 2030. I think New Brunswick actually tried to extend

that. I don't think that's going to happen. The clock is ticking.

Coming

back to the first part of the conversation we just had about development, that's

one of these things also that when we talk about the future – so it's an ongoing

thing. It's frustrating at times because you know, when you have so many

jurisdictions, sometimes that can be difficult, everybody's dealing with their

own day to day, then when you have the feds involved.

It's an

active topic. I don't know, John, if there's any other colour. There's no

definition here. I do think, given that there's been a federal Emissions

Reduction Plan that has been put out, given the fact that they've put out some

other guidance on other things, I think you'll see more of – and the other thing

too, just think about it though. We had a federal election that chewed up a lot

of time. We've had a provincial election that chewed up time. We've had other

provinces go through elections, which have chewed up time.

So now

that everybody is in that place, like Nova Scotia themselves now have stability

there. They went through their election. So part of it too is these premiers'

meetings that they have, this is probably one of the big topics that's on every

agenda for them. I know it is. It's being discussed at every one of those

meetings. I think you'll see it ramp up, but there's always logistical issues to

that.

But we

like where we are on it, and the fact that we can contribute to the need to help

the two next provinces, New Brunswick and Nova Scotia, move from their

non-renewables, there we are.

J. BROWN:

All right, thanks.

CHAIR:

Actually, the minister

mentioned that the clock is ticking, and your clock has ticked to zero, so your

time is expired and I'll pass it to MHA Parrott.

L. PARROTT:

I'm not asking you to

disclose any numbers. I'll start with that.

A. PARSONS:

Okay.

L. PARROTT:

The Greene report,

obviously, recommended to sell off our interest in the offshore and Bull Arm.

And obviously, I'm just making an assumption that the Rothschild report did an

evaluation on both of those assets. I guess my question is, has the Rothschild

report changed government's look at Bull Arm and our equity stake in the

offshore?

A. PARSONS:

So if I were to go back to

my days in law, I would call that a leading question.

L. PARROTT:

But my

preamble change to

leading.

A. PARSONS:

Listen, I have respect for

that.

So what

I can say, what I will say, is that – like this is just me sort of talking – the

Greene report comes out and you don't mean to disregard anything of what they've

said. I know they've put a hell of a lot of time in. You look at the

capabilities of these people, same with Rothschild. They came in and did their

work. Obviously, Greene is out. Again, I know Minister Coady has talked about

it. I'll put out there: As much as if I was in the Opposition, I would ask the

same exact question.

I don't

think it's in our best business interest to disclose certain things because it's

going to shag up our bargaining position. Now, when you say that, the next

assumption is well, hang on a second, you're bargaining. But it's a figure of

speech. What I would say is nothing has changed for me. Again, it sounds kind of

blunt when I say this, and not blunt to you but blunt when I get asked about it.

They say, well, Dame Greene said this. I say, yes, it's good, she's not elected,

I am. You're elected; our colleagues are elected. We have to make the decisions

and every one of us, we hear from average Joe, or we hear from really qualified

people with these reports.

All of

it forms, I think, a part of a conversation we have. Again, the reality is me

sitting in this chair. I'm the first one to say – I say it in every meeting I'm

in – I'm usually the least knowledgeable person in most of these meetings I have

when I'm sitting down talking about oil production. This is just how it goes.

But if

I hear all these points of view, if I hear the evidence and the information, the

financials, I'd like to think that, along with the team, I can figure out what's

the best thing to do.

coming back to it, I don't have any new direction to add, nor do I have any

direction to say will things be sold or will they not. What I would say, what I

think I'm willing to say is that if you're going to sell anything in your life,

you want to figure out evaluation. Is it better to sell now? Take it or do we

wait? What's the evaluation going to be later on? Is the market right for this

now or not right?

So, I

mean, at any point, government or anybody who owns anything can say, yeah, we're

going to sell or not sell or look into it. I mean, even if you want to put your

house on the market, you might not want to sell it, but you want to know it is

there in case you want to make that decision.

That's

the best I put – sort of a rambling answer. But it's funny, I've chafed a bit at

times because the Greene report or any report as good as they are, it's a

guiding factor in a decision that we have to make as legislators.

L. PARROTT:

Fair.

The

recent delay for the offshore call for land bids. I am just wondering if you can

offer any insight as to what the delay is. Why it was delayed and what the

process is going forward?

A. PARSONS:

So what I can say there is I

cannot offer from the federal point of view why the federal minister felt – as

per his right under the legislation – the need for that. I would assume that it

forms a part of bigger conversations that they're having as it relates to this

industry. I mean, I don't think that is a surprise or secret to anyone what is

going on up in Ottawa.

What I

will say, again, is when, given the opportunity by the C-NLOPB, we went right

away and said we want this. We are not agreeing to a delay. We don't want a

delay. You have your right to do what you have to do. So we have done our part

and then they have taken their prerogative and in the 90 days – and again, some

question, well, why don't you just go and do what you got to do. Well, there is

process, too. The process has to be followed. I think it is all going to be good

because with security of supply, I guess the hammer comes back down to us. We

get to call this shot and I can already tell you where that shot is going to go.

In the

grand scheme of things, I think we end up in the same place, which is where I

know you want and I want. I don't think that is going to be delayed even with

this sort of holding pattern. Can I tell you whether it is going to go the full

90? I don't – I thought there was a possibility Bay du Nord went until

mid-April; they went early. Could this happen? I don't know. But I would assume

there is possibly a review going on up there and who knows what other kind of

philosophical conversations they're having.

L. PARROTT:

Sure.

So when

seismic was suspended, I guess part of the conversation was it was suspended

partially due to the amount of seismic data that had to be analyzed. So can you

give us some idea how much data is left to be analyzed and if there is a

possibility of –

A. PARSONS:

So I'll give it more as a

general and then I don't know if Perry or Craig can jump in maybe with a little

bit more in terms of what's there, 2-D, 3-D, what's left to do.

Generally speaking – and I still stick by this – it is a pause. I will say, full

disclosure, since that time, I have had people come at me and say: Why are you

doing this? You guys ask these questions and that's what you're supposed to do.

I've had people in the industry that disagreed with it. I have had people in the

industry come to me and support it. The biggest thing I have said to everyone

is, look, it is paused. Part of that was fiscal and part of that is based on the

fact that we have, I think, a surplus of data that can be considered right now

going into this bid round.

Maybe

to get a little bit more detail or colour, we'll go to Perry or Craig or whoever

wants to jump in.

P. TOBIN:

Without getting into the

specific metrics in terms of kilometres of 3-D or 2-D or whatever the case may

be, essentially the seismic that was collected in 2021, so in the summer of

2021, is the seismic that needs further

interpretation, resource assessment

performed on it to make it valuable, ready for the planned 2022 call for bids.

That is

the main body of work that needs to be carried out. There are three or four

aspects to it. There is resource assessment. There's the actual

interpretation

of cells. There's electromagnetics. There are a number of different aspects, but

that is the main part of it.

L. PARROTT:

Okay.

Are you

ready to continue?

Natural

gas, anyone able to give me some insight as to where we are with developing

natural gas in the province? Has there been any discussion on a royalty regime

if we move forward? What work is left to be done, I guess, from a regulatory

perspective?

A. PARSONS:

So the good news is that, I

think, for the first time, possibly ever, natural gas is an actual live

conversation here in the province. I will say that the reason it's taken so long

is because back in the day the administration made a very clear choice, no,

we're not doing this. That's not where we want to go. They put their eggs in

other baskets. Plus, the operators themselves I don't think really put too much

sort of credence into this, everything else was going well.

So a

couple of things that have changed from my perspective. Number one: the

operators – especially in the last two years with everything going sideways –

are saying that maybe this is a revenue stream we need to consider. Number two:

to take something sadly positive out of tragedy, which is you see what's going

on in Europe, you see what's going on with energy volatility and essentially the

hostage taking of nations to Russia, that's increased that conversation.

So for

the first time we do have – and one of them is well known – Newfoundland LNG or

LNG Newfoundland, have got a project – you're aware of it. I think they've met

with everybody, as they should. They're drumming up support. They've got

Indigenous backing. In fact, to the point where I actually attended a natural

gas summit, myself and the deputy this year, in Toronto. They were there as

presenters, and the fact that the province actually attended a natural gas

summit, which was pretty high-level stuff, hearing from investors, hearing from

– actually BC spoke about their experiences politically from it.

So,

right now, they have to raise capital. There is a lot they have to go through.

There's going to be EA. Whether it's Crown lands, whatever part they're dealing

with. We are actively working on a royalty regime for natural gas. So that is

being worked on, which is also one of the things that they need to know going

forward.

We are

seeing renewed interest on this globally. I will say people are reaching out.

There's other renewed interest in production. Conversations going in with

producers or, I guess, owners of the fields. That's a conversation they have got

to have. We can't really get into this. That's their resource. What we're saying

is we'll develop the royalty regime. We'll work with you on that. So that's the

best I can say.

It's

still some time away, but for the first time it really is like a live

conversation that's going on. Does it succeed? I don't know. So I'll point out

that natural gas summit I was at, Minister Wilkinson spoke virtually at it and

talked about the need for Canada to fill the LNG void that exists there. We have

a product right now that can be used elsewhere. We need to step up on that – the

same way they talked about we need to step up on the oil front.

I know

that Leo and Chief Joe were saying – again, it gives you some support behind,

can this happen or not? So they are still a ways off. They even say that

themselves in their presentation. But I still think there's going to be demand

even in the coming years.

CHAIR:

I'd like to remind the

Member that his speaking time has expired.

Still

on 3.1.01 to 3.1.09, did you have anything further?

J. BROWN:

Thank you, Chair.

I guess

going from natural gas – the hydrogen front. I know that that's another big new

market and stuff like that. My question is: Are we having conversations both

about water-based electrolysis hydrogen and petroleum-based hydrogen? Are we

doing both or are we just talking about one or the other?

A. PARSONS:

What I can say is that there

may be petroleum-based conversations on the go. It's not really where our head

is. Our head is very much on green – on water-based or wind-based hydrogen.

Again, coming back to that conversation that we talked about, like the big thing

that the feds are going to want to see is carbon density.

almost joked about it. We talk about green and blue and turquoise and pink. We

use these colours. They want to talk about carbon density.

J. BROWN:

Yeah.

A. PARSONS:

So there is an extremely,

extremely active conversation – multiple conversations on multiple fronts going

on on hydrogen to the point, again, the last year that Susan has come on and she

and Christine Boland and other people in the department where they were the

leaders behind getting our renewable policy done, meeting with anyone and we're

pretty open for business. I've had people reach out on LinkedIn and say, hey, we

want to have a chat. And it's like, well, here's our email, get a hold of us and

we'll talk to everybody.

J. BROWN:

Well, that's good.

A. PARSONS:

We will absolutely listen to anybody, and then of course you have to decipher

whether it's some tinfoil-hat stuff, or there's something real there.

J. BROWN:

Yeah. That's right.

A. PARSONS:

What I will say is that we

have some real players, globally known capital to back them, and the desire to

do it, whether it's hydrogen – we're talking wind for grid, we're talking wind

into hydrogen to go to Europe, they're in conversations with – especially the

Germans, the Germans are the lead in Europe, in terms of that conversation.

The

Germans are saying yup, we're going to have that demand; we're expediting our

need to advance what we're doing in the long-haul trucking and everything else.

So it's really interesting and exciting, and again coming back to the point

that, that's why we've got positions created and a team to run it, which is

pretty exciting. Because this is the first time we've ever had it, so we're

taking it serious.

CHAIR:

MHA Brown, if I could just

steal a couple of seconds from you, I just want to remind the Committee and the

department that after MHA Brown is done, we'll break for 10 minutes.

J. BROWN:

Perfect, thank you, Chair.

CHAIR:

Thank you.

J. BROWN:

I know that IOC's parent

company, Rio Tinto, has been exploring the idea of using hydrogen to actually

make iron ingot, and I know that that's a big thing there now, but they're kind

of, do I do it in Quebec, do I do it in this province. I don't know, have you

had that conversation with them about their plans with secondary processing and

the use of hydrogen in their – basically it's going to be a first-in-the-world

kind of mill.

A. PARSONS:

I'm just going to look for

sure; I don't know if that's been a conversation. I haven't had that

conversation; they haven't reached out to us, but we do know that when it comes

to Labrador they are interested in increased power and what can be done to, I

guess, just make the operation more efficient and greener. I've had

conversations recently on the possibilities of hydrogen at Come By Chance, so –

J. BROWN:

Yeah. Okay, that's a lot of

work.

A. PARSONS:

It's going, and I mean

there's a bunch of different parts. A lot of people – it's extremely

capital-intensive, and while there's lots of capital around, people need to

acquire it. The feds themselves have the Infrastructure Bank. They have the

Indigenous Clean Fuels Fund. They've got a bunch of different that people are

applying to, so that will help drive some of this conversation too.

We've

been supportive of people even when they come in. Like we can't pick you, you,

and you or not you, but we're saying to everybody, we're supportive of anybody

getting federal funding to help with these initiatives, because we're going to

see the benefit down here. But we're certainly not picking sides or anything. We

want to see anybody who can get through that scrutiny that will entail when

you're looking for hundreds of millions of dollars.

J. BROWN:

Absolutely.

This is

actually very fascinating, and really interesting that it's from, I guess, when

you took this office that we had a conversation about it and it was very

minuscule, but it's almost like taking off extremely fast in the world right

now.

A. PARSONS:

It's one of those things;

it's the flipside of the oil and gas conversation. It's funny; I've spent a lot

of time – and this is just sort of – you spend some time, when you talk about

that, you almost have a fear that the non-renewable people thought you were

giving up, and you're like no, we have everything. Like we're one of the only

jurisdictions, we have renewable and non-renewable, and I don't think we have to

bet on one or the other. We can bet on all.

But

absolutely, one of the driving factors on the renewable side is obviously not

just the Canadian demand, but the American demand and the global demand for

renewables, which has been expedited for multiple factors including the

geopolitical, just a whole number of things.

that's why we've been trying to ramp up to keep up with that, and we're actually

going to be doing our part as a department to get out there and little things,

like going to places. Coming back has been hard because you can have all the

Zooms you want, but we need to get ourselves on site. We're competing with

Quebec who have consulates in (inaudible) Washington. Alberta has their people

on the ground there. Obviously, we can't afford to do that, so we need to make

sure that we are present there, but we've had these meetings. We talk about the

US when it comes to critical minerals, actually.

J. BROWN:

Yes.

A. PARSONS:

I mean, so we're getting out

there. We need to put ourselves in the market. I think as well known as we think

it is, there's still an awareness that we need to create as a province of the

resources that are here. Truly, it sounds cliché, but it's a global market now

that we're playing ball in. The thing that's going to save us is that we have

regulatory stability. We have the ethical standards that you want. I mean, you

know what you're dealing with here in terms of a stable government, as opposed

to other jurisdictions where you don't know what you're getting into.

J. BROWN:

Yes.

A. PARSONS:

Then when you look at the

quality of the resource, it really is second to none.

J. BROWN:

That's right.

Switching gears a touch there, I know there is a current policy in government

about nuclear energy. I know that the feds have been doing a lot of research

and, I guess, shopping around with different provinces about the reactors and

small-scale reactors. Have your department had any conversations about any of

the nuclear reactors or anything like that?

A. PARSONS:

No. I can tell you – it's

funny – my colleague or counterpart in Ontario is every second day on Twitter

talking about nuclear. They bet big on that. That's not where our heads have

been. One of the things you talk about is like you can't also do everything.

J. BROWN:

That's right.

A. PARSONS:

So for us, I mean, I'm sure

we could get in that field if we wanted but I think it would dilute our ability

to do better in the other ones that I think we have more strength in. So nuclear

is not really a conversation we've been having. We've been concentrating on the

other things that we have mentioned here.

J. BROWN:

Okay, perfect. I just

thought I'd ask.

3.1.05,

Oil and Gas Industry Supports, I noticed that we budgeted $325 million but we

only spent $183 million and then we are planning on spending $168 million. What

is the reasoning for that?

A. PARSONS:

This is the $320-million

fund.

J. BROWN:

Okay.

A. PARSONS:

The general answer is that

some of it had to be carried over because trying to get it out the door.

J. BROWN:

Okay.

A. PARSONS:

One of the issues we had is

getting the funding, dealing with the feds and then we went into the world's

longest election. That delayed everything. The other thing is that the interest

in it was ridiculous. The amount of work that people like Nena Abundo and all

her team did throughout the department to go – and, again, it ranged because

there was not just – I'd say about $35 million we spent on the supply and

service side. Just the amount of interest in the $35 million that went to the

supply and service sector, you had umpteen proposals, but they ranged the

gambit. Every one was different so there was a huge amount of scrutiny.

Long

story short, some of the money is pushed and will have to be spent later on.

Craig

might be able to have a – I don't know if you want me to go further than that.

J. BROWN:

No.

A. PARSONS:

The $320 million is going to

be spent; it's just that we couldn't get it all out in the fiscal.

J. BROWN:

More of an administrative –

A. PARSONS:

Yeah.

J. BROWN:

– trying to get it out

there.

So it

is all spoken for, entirely, at this point?

A. PARSONS:

Yes. Everything is spoken

for. We used the entire fund.

The

other thing, too, is that some of the contracts we had to extend them, so I

think they have gone further on than we originally anticipated, going back to

the same delays we had.

J. BROWN:

Okay. So at this point in

time, once this is all spent, this

section now will be folded, I guess, per se.

A. PARSONS:

I would say maybe there is a

placeholder.

J. BROWN:

Okay.

A. PARSONS:

Right.

J. BROWN:

For future.

A. PARSONS:

Or is it? Phil, Craig, John.

J. BROWN:

Somebody.

A. PARSONS:

Perry.

C. MARTIN:

Right now, the $320-million fund was parked in here, so it is a combination, as

the minister said, of projects coming and then projects take time for people to

complete, cash flows for projects, so it is going on into this fiscal year. The

expectation is the full $320 million will be expended in this fiscal year.

But

also parked in there as well is the $6-million IBDF. That also exists in there

so that will be continuing after this years. Also this year, there is $30

million in there for the Offshore Exploration Initiative.

J. BROWN:

Okay. So it is a multi-use

fund. At this time, this is holding that money. Okay, perfect.

Thank

you.

CHAIR:

Okay. I just want to remind

the Member that his time has expired.

J. BROWN:

Thank you, Chair.

CHAIR:

And we will break for 10

minutes. So if we could be back around 7:15 p.m. or so.

Thank

you.

Recess

CHAIR:

Okay, if we can have Members

back in the seats, please, of both the Committee and the department, we'll get

under way.

We're

going to continue with 3.1.01 to 3.1.09 inclusive. I'll turn it over back over

to MHA Parrott.

L. PARROTT:

Thank you.

3.1.03,

C-NLOPB: Cost of the C-NLOPB is billed back to industry. Now that C-NLOPB will

regulate offshore energy and wind, who will pay for the regulation of wind?

A. PARSONS:

Good question; yet to be

figured out. Probably don't want it to be us.

I mean

that's one of the things is that there's work left to be done. There were

conversations. I think I can say that when you talk about offshore getting to

that whole jurisdictional thing, we have a desire to have full control of our

offshore renewables.

L. PARROTT:

Happy to hear that.

A. PARSONS:

That's our goal. But, at the

same time, setting up a full, new functioning board and everything else that we

have to do with it may not be a timely way to start. So this a way of going in

starting off with them, and I think there's going to be an opportunity to look

at it after a couple of years.

As for

paying that, that's one of the things we'll have to figure out, but I will say

again it's not coming out of us. That's the big thing, I think.

L. PARROTT:

3.1.06, Oil and Gas

Corporation: Under Grants and Subsidies, this year, OilCo is asking for $19

million. Do they have other revenues coming in, or how do they determine the $19

million?

A. PARSONS:

This is the seismic.

L. PARROTT:

Right, okay.

A. PARSONS:

The biggest part of that –

and again, I will defer to Craig or Perry – you'll see there that encompasses

the decrease in funding required for seismic. Other than that, I don't know what

the other changes are. There is no less requirement for them, except what went

into that.

L. PARROTT:

So I would assume that's a

decrease for seismic, specifically for vessel rental and offshore operations.

A. PARSONS:

I think it's PGS and TGS or

whatever.

L. PARROTT:

So I guess with the amount

of data being that there was so much data that we delayed our seismic, then we

probably needed more money for individuals to analyze that data. Have there been

more people hired?

A. PARSONS:

I don't know. Go ahead,

Perry.

P. TOBIN:

No, there haven't been any

more people hired. This is the existing geotechnical staff at the OilCo.

L. PARROTT:

I guess my question is: Over

the previous years we've managed to analyze that data and never had to suspend

the program again. So do we have the sufficient staff to analyze the data or

were there delays, extra data, what's …?

A. PARSONS:

So part of this decision is

not just the surplus of data. We feel we are in a good spot data and we feel we

are in a good spot analysis. But part of this pause was the fiscal realities

that we are in. So we made a decision based on putting it all together with we

got enough. We've got the ability to analyze. We certainly weren't going to have

OilCo hire more people.

And,

again, there's going to have to be a reassessment done moving forward.

L. PARROTT:

Okay.

The

Labrador-Island Link is still experiencing trouble. I believe under the previous

premier was when we first started having trouble with the software and there was

a backup software option being considered at that time. Are you able to provide

any insight on that and was there another backup type option other than what GE

had considered? And are there other options under consideration?

A. PARSONS:

I'm going to throw this one

over to John because he's got more of this on the brain than anybody.

J. COWAN:

Hydro continues to work with

GE. GE is the vendor that they've chosen and they continue to work on it, so

that's really it.

A. PARSONS:

I think they have had

conversations but the cost of going elsewhere and going with another option may

not actually be a good option to go with. The cost, actually, may be more. Then

you have to deal with getting rid of one contractor even if you don't like that

contractor – getting rid of one, bringing in someone new – where does that leave

you?

Look,

it's been a pretty big conversation and it comes down to you have to trust in

the fact that we have this company and it needs to iron this out. Going

elsewhere, you might think that it might fix it, but the reality – if we've

learned anything about the entirety of the project is that nothing goes to plan.

L. PARROTT:

Is Emera using the same

software while putting power across the Gulf?

J. COWAN:

No, they are not using the same software. I mean GE, this is a purpose-built for

the Labrador-Island Link so it wouldn't be the same software used for the

Maritime Link.

L. PARROTT:

We'll continue here to talk

about developing our renewable resources like wind. Can you give some

information on what needs to happen from a legislative and regulatory

perspective before we can start up the industry? Will there be a provincial

royalty collected on wind? Will on-land wind be different than offshore? Will

there be a land sale process? And, last part of that, is there already wind

rights assigned in the province for our offshore?

A. PARSONS:

So I'll start off, but I

will toss it over to – perhaps Susan can jump in after.

So the

first thing in terms of wind rights already assigned – I just want to make sure

– that is not something that I'm aware of. Here's what I would toss out: We've

got onshore, offshore. Onshore, much easier in the sense that it's purely our

jurisdiction; we don't have to worry about it. Offshore, we're getting into the

joint management and all the fun that comes with that. Onshore, we're dealing

with Crown lands, and so that is a policy decision that we have to make.

I don't

think that it's going to require legislative change, but you get into this

conversation where okay, first-come first-served, is that the way you want to

go? Does that give us the best value? The Member for Terra Nova comes in, says

I'm first, hijacks all the land, but you might have a plan that doesn't give us

the best benefit, where you come in second and you're not as fast, but quicker

might not be better. So that's a fundamental conversation we're having. The

policy work got to be done not just here; we have to rely on Minister Bragg's

department to work on that, too. That's one of the ongoing pieces which we

expect done – I'm going to toss out four to six months.

And

going back for a second – I explained this to the media earlier – half of this

was getting out there. It's no different than, I'll give you an example, reading

allNewfoundlandLabrador the other

day, they talked about Pizza Huts opening. Pizza Hut doesn't open and say we're

open today. They've got it out there now; they're going to open in three months.

Word of mouth builds up, the costs aren't there, everything else – they've got

time to get at it.

So we

felt the same way when it came to this industry; even though we've got people

coming in, people talking to us, the reality is that number one, if we wait for

every piece of policy and legislation and everything else to be done perfectly,

we're putting ourselves later in the year. And not only that, we're stopping

ourselves from having parallel or adjacent conversations with companies that

want to come in here and do some of the work. So that's the thing.

And in

fairness, nobody's really questioned that, which is good, because I think it

makes all the sense in the world. That's one of the pieces. Then we get into the

EPCA and does that have to be amended. I don't think it has to be amended; I

mean, when you get into Bill 60, what does that entail?

Hydro is still going to be the domestic supplier; we're going to have to work

with them. Again, it comes down to what's your game? Do you want to get into

power purchase agreement? Do you want to get into selling to the grid? Do you

want to go into transporting offshore? Do you want to get into powering

yourself, as you mentioned earlier? And then the policy we already mentioned

there, about how do we deal with the self-production in terms of reducing your

own current. Is it a case of, well okay, you're already at 500 megawatts, you

want an extra 200, we can work with you on that, but you can't use less than

that.

I mean,

that's a consideration – no decisions made at this point. Again, we are doing

the jurisdictional scans to look elsewhere. I will say, looking at an

article

over in Scotland, this is sort of an offshore thing. They're making more on

their offshore-wind sales now on the land, than they make on their oil.

That's

another thing, we have to figure out how does the offshore bid process work. To

me the guiding factor is what makes sense? What has been done elsewhere? What

gets us best value?

Royalties is another conversation that is being had. How do you apply that? How

does it work?

So lots

of different moving parts. The good news being we're not the first place to ever

do it. We've got the wind that we've already done here in the province.

Before

I finish, I don't know if Susan wants a crack at it or if I've missed anything.

S. WILKINS:

No, Minister, you definitely

haven't missed anything.

I just

want to mention that one of our focus areas in the Renewable Energy Plan is

regulatory framework. There are a number of actions this year. There are two:

the wind moratorium was the first one. The second one is to look at the EPCA.

Then we actually have multiple actions from years two to five under the

regulatory framework, if you wanted to look at the plan.

L. PARROTT:

Okay, thank you.

Last

year in Estimates, the minister indicated that there were no conversations about

selling off transmission assets. However, we know that the Greene report

suggested that as a method of raising capital. Obviously, I would assume that

the recent Rothschild report took into consideration some of –

A. PARSONS:

There you go with them

leading questions again.

L. PARROTT:

So a couple of questions:

Have you seen the Rothschild report? I know you're not going to tell me. I

guess, is there any commentary, any change in the plan for –?

A. PARSONS:

No, no change in my answers

since last year, no.

L. PARROTT:

Okay, perfect.

CHAIR:

I remind the hon. Member

that his speaking time has expired.

3.1.01

to 3.1.09, MHA Brown.

J. BROWN:

Thank you so much.

I know

last year the provincial Renewable Energy Plan was released. So far, where are

we to on that? With our actions and everything like that, where are we to on

that one?

A. PARSONS:

Well, this is a great

opportunity for Susan, who I have to give a shout out. She's a very modest

person so she'll probably going to be extremely embarrassed. But the amount of

work that she and her team put into this to get it out, because we said very

clearly – I think you might have asked the question in the House, when we talked

about the Renewable Energy Plan, I said it's coming out in 2021; 2021 got

delayed for all kinds of reasons, but they still got it out on time, which was

awesome.

J. BROWN:

Yes.

A. PARSONS:

She would be best suited to

perhaps talk about the plan for this year and some of the targets that were

there and targets that have been hit.

S. WILKINS:

Thanks for the question.

We're

making headway with the plan. We are almost finished with our implementation

plan where we've engaged with a lot of our stakeholders. The number one thing

was the wind moratorium, which was announced this week. As the minister

mentioned, there is some follow-up policy that needs to be done over the next

few months. I can't remember how many actions are in the first year but we are

on target. I think there are around 22 but we have also added in three from

years two to three. As the plan moves forward, we are realizing that there are a

few that we need to do sooner rather than later.

J. BROWN:

Good.

S. WILKINS:

As the minister mentioned, we do have a team now in place so they're coming up

to speed.

J. BROWN:

Perfect. Thank you.

I guess

leading off that, congratulations on beating you own targets. Will the plan be

updated yearly or is it going to be more like a live document in the sense that

of your own internal targets?

S. WILKINS:

We committed to providing an update by mid-December. At that point, if we feel

it needs to be updated, we will do so.

J. BROWN:

Perfect.

S. WILKINS:

And every year after that we will provide an update as well.

J. BROWN:

Perfect.

A. PARSONS:

If I could just give it a

little bit of colour. When we did the announcement, which I think was down at

the Emera Innovation Exchange. What did it used to be called?

OFFICIAL:

The Battery Hotel.

A. PARSONS:

The Battery, there you go,

which makes sense. I never even put that together. The Battery, that's awesome.

What I

would say is that when we did the interview the media was: Well, you just got

this plan here, what's with it? We tried to explain to them, it really is a

framework. And they were like: What substance is it? So I would point out that I

am really pleased that four months in we've already moved forward to this

substance.

The

other side though, as Susan mentioned, this industry is changing rapidly. I have

no doubt that when December comes we will be moved forward, but there is no

doubt that we may have to reconsider different things that were not there in

December 2021. The other thing is that we have to adapt, not just to what the

province wants but we need to be ready to change to what the market is going to

want and what the options are in terms of globally and everything else. It is

probably going to continue on in some kind of form, but it is absolutely a

living document.

J. BROWN:

Perfect. That was all my

questions for this.

Thank

you so much.

CHAIR:

Thank you.

MHA

Parrott, anything left in 3.1.01 to 3.1.09?

L. PARROTT:

Yes.

CHAIR:

Okay. Thank you.

L. PARROTT:

3.1.08, Grants and

Subsidies.

Can you

please outline what the $4.3 million was for and what the $3.9 million was for?

P. TOBIN:

Most of that money, by far, is for capital works at Bull Arm. So I mentioned

earlier that there was roof work and fire suppression. As well as, I guess,

access work for roofs and so on and so forth.

So that

certainly makes up the bulk, but there's also a small portion of that that's

used for hardware and software by OilCo itself.

L. PARROTT:

3.1.09 under Energy

Initiatives.

Loans:

Nalcor was looking for $250 million last years and there was $250 million in

revenue provincial to offset this. But the $250 million was not received. Why

not?

C. MARTIN:

So that $250 million had to do with anticipated revenues once the

Labrador-Island Link is completed. So, obviously, based on what everybody is

aware of is it's been put out through the Liberty reports, that hasn't happened

to date. As a result, that revenue wasn't collected last year.

L. PARROTT:

I've just got one more

question. We're back to 3.1.08. The tendering process for the roofs and all that

good stuff, does that go through Transportation and Infrastructure or is it

going directly through the department?

P. TOBIN:

It goes through public

tender.

L. PARROTT:

Through Transportation and

Infrastructure, though, or through Nalcor?

P. TOBIN:

No, it actually goes through – it went through the public tendering process from

the province. Where OilCo is owned directly by the province instead of Nalcor,

it goes directly through the public tendering process.

L. PARROTT:

Okay. Thank you.

I'm

good. No more questions.

CHAIR:

Okay. Is the Committee ready

for the question?

Shall

3.1.01 to 3.1.09 carry?

All those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

CHAIR:

All those against, 'nay.'

Carried.

On motion, subheads

3.1.01 to 3.1.09

carried.

CHAIR:

I'll ask the Clerk to call

the next set of subheads, please.

CLERK:

4.1.01 to 4.3.01 inclusive.

CHAIR:

Shall 4.1.01 to 4.3.01

inclusive carry?

MHA

Parrott, you still have seven minutes on the clock.

L. PARROTT:

Thank you.

I guess

of note, there's been some recent announcements with the federal government

about increasing the availability of cellular and broadband Internet throughout

the province.

What's

the current coverage rate of cellular in the province? What's the current

availability of broadband in the province? Is there a yearly plan available in

terms of who will receive these services and when?

A. PARSONS:

So I have the stats here,

but I know they're burned into Gillian's brain, so Gillian can talk about what

the current access – because there's a difference between selling broadband. I'm

just thinking now highway cell coverage is like in the 65 per cent range.

Community cellphone coverage is up in high 90 per cent and 50-10 broadband. I

know the goal is to be 99 per cent by 2026. Did I get that right?

G. SKINNER:

Yes.

A. PARSONS:

Okay.

As for

year by year, or the game plan, there is still work that has to be done. I think

the feds are figuring out – am I right? When it comes to that announcement that

was just made, they're still working, I think, on finalizing the numbers with

the providers.

There's

some information we don't have because where they're still engaged in

negotiations to put out anything – if they say we're going to spend X dollars,

then we're going – so the good thing, in our opinion, is last year we put $25

million into it. So we leveraged the $20 million into $136 million from the feds

which was awesome.

I don't

know if I missed anything, Gillian?

G. SKINNER:

You were pretty right on

with your numbers there, Minister.

terms of broadband coverage, the 50-10 is what we've often talked about before.

That's about 73.9 per cent from the most recent CRTC data. That's about a year,

a year and half out in terms of numbers, but the coverage rate ultimately from

the federal-provincial collaboration is 100 per cent – that's what the federal

target is – by 2030 and 98 per cent by 2026. That collaboration is trying to

achieve 100 per cent of households in rural areas.

L. PARROTT:

Just one note on that. When

the announcement was made, the minister, I'm pretty sure, used the number 60,000

households in Newfoundland without Internet. That amount seems staggering to me.

If you take two people per household, that's 120,000.

A. PARSONS:

Full disclosure, I wasn't at

the announcement. I don't doubt the number you're saying but Gillian, again,

will probably have a little more insight.

G. SKINNER:

The idea of 50-10 is right

now, if you look at the province, some form of connectivity, it's actually

pretty close to 99 per cent, if it's satellite. Some people still have DSL, that

kind of thing. So when you're looking at 50-10 high-speed access, that figure of

60,000 households is something – we work with the federal government and their

department has technical expertise that does a lot of the mapping and

engineering. So there's a map actually, a public map, that you can go in and see

the different households at the granular level. That's an estimate that they've

put on that.

A. PARSONS:

If you'll indulge me, MHA

Parrott, so one of the things – this is just sort of a general comment. Again,

it's funny, because I sat on that side and I can remember there were multiple

ministers back – I mean, there was ITRD and IBRD; they've always changed over

the years. I did my job of like cell service, Burgeo Road, cell service, all

that stuff, and now that I'm in the shop – and again, I know my colleagues over

there have heard me say this on multiple occasions. The frustrating

part is that

I think we did a really good job of making Newfoundlanders and Labradorians

believe that it's a provincial issue.

L. PARROTT:

I agree.

A. PARSONS:

And the fact is that it's a

federal issue, but it's one of those federal issues where we can't sit back and

say no, no, it's yours, not ours. We know that we have a role to play, but when

you talk about the CRTC, when you talk about this issue, it truly is fed

mandated. Plus, the other side is you cannot force these big telecoms – who I

don't really have a lot of love for – can't force them to do certain things.

It's

the age-old frustrating conversation that each one of us got, because you get

the one pocket on one road where somebody's call gets dropped, they say well

when are we going to get that coverage? It's like well, there is no realistic

business case in the world that says do that there. When we look at the sheer

size of our province, the actual cost I think to provide this cell service that

I think our constituents would want, ranges into the hundreds and hundreds of

millions. It's one of those things where I don't blame people for complaining,

because I've done my share of it, and I still do my share of it. But the

frustrating

part is that it's completely outside our ability.

The

good news is – and I've said this to Minister Hutchings – I'm glad to see the

broadband, it's necessary and we all know that with COVID, especially we've all

had students who were having a hard time going to MUN, CNA, doing whatever. But

the cell service to me too is probably the one I get more complaints about than

the broadband.

L. PARROTT:

4.1.01 Accelerated Growth:

Last year there was a salary savings of $220,000. I just assume, again, that's a

vacancy that wasn't put over?

A. PARSONS:

Yes, that one is a variance

due to vacancies, and then the change this year, which is actually very similar

to the year before, I think there's a small $200,000 change there for like a

routine salary adjustment.

L. PARROTT:

Okay.

Purchased Services: Savings of $69,000, how is it achieved?

A. PARSONS:

So right here – and I think

this would apply to both. There's a small drop in Professional. There is a

bigger drop in Purchased. Both of them are budgeted at the same this year. This

was Atlantic Trade and Investment Growth Agreement missions lined up; never got

to do them; never got to do our trade shows; the client-site visit numbers

dropped. So the plan is to resume that.

L. PARROTT:

Okay.

4.1.02,

Investment Attraction Fund: Last year it was generally $8 million annually but

only $6.8 million got out the door last year. Is there any particular reason why

money was left on the table?

A. PARSONS:

It's not so much a case of

it left on the table. We can't control sometimes the disbursement of it or the

collection of it or when companies want to move forward. So we've got that $8

million, we'd be happy to put the $8 million out, and in fact I'd love the day

where I've got to come in begging for $9 million. But a lot of this is outside

the control of us, and we have to deal with clients.

L. PARROTT:

Okay.

Under

Revenue - Provincial, there's $5.4 million. Where did that money come from?

A. PARSONS:

So it says here in my notes,

variance due to loan repayments received during the year, but I don't know if

there's a little more detail or insight. Maybe, I don't know if Phil …

P. IVIMEY:

Yes, so that revenue is related, as the minister alluded to, to various loan

payments that were received during the year, so that would be any repayments

coming back into the department from any other loans that were disbursed under

that program in previous years.

CHAIR:

I remind the Member that his

speaking time is expired.

4.1.01

to 4.3.01, MHA Brown.

J. BROWN:

Thank you, Chair.

Speaking of cell coverage, and I know it's one of those weird places where we're

actually investing into it but it's a federal jurisdiction. Is there any talk of

maybe leaning more towards more homegrown telecom companies than the big

telecos?

A. PARSONS:

So I would take a shot at

this first and then Gillian will probably come in with the right answer. I'm

willing to work with anybody, but I will say that when you're going into

competitive processes, using procurement rules, it's extremely difficult because

sometimes there's just not that competition, which when we talk about fair and

free market, it's hard to compete with the big dogs, even if you don't want to.

But you also do see an actual, significant difference in what the end cost is to

provide the service.

empathize with what you're saying. I have a lot of disdain towards the bigger

ones, but that's the nature of it, is that they have the capital to take out the

smaller ones; they have the capital to outbid. That doesn't mean that – again,

we go back to our small cell work that we've done; we've done multiple projects

over the last number of years. I'll point out – I mean, Eddie Joyce got me drove

nuts, because we've done one out in York Harbour and one here and there. He's

like, they're delayed, they're delayed, and it's because the provider is not

getting the work done.

But

then you have the philosophical conversation, well, what do you do? You can't

put a penalty on it. Well, you don't give it to them next time. Well, there are

not a whole lot of people in that space that are doing it.

J. BROWN:

My other reasoning is,

obviously, the cost in this province for cell service is much more expensive

than any other province right now. When you see them put up a tower that has

provincial and federal funding and then you go and look at your bill. It's a

massive amount of bill and you stop and go, we're giving them money to put up

the towers but they're charging us an arm and a leg. It's just got me and my

constituents drove absolutely nuts.

A. PARSONS:

So totally preaching to the

choir. I can give you an analogy. It's like when we put subsidies into oil

companies and then you look at what's going on there, right. It's the same

thing. It's impossible to avoid. It's ultimately maddening, frustrating and it's

one of the things that nobody likes it, but I don't know if there's a really

solid alternative.

I don't

like what Bell charges. Every one of us sees these bills we're getting, they're

crazy, but what do you do? Unless we want to set up a state-run system and then

I don't know, man, that's a –

J. BROWN:

I know it's between a rock

and a hard place, I understand that. It's just that –

A. PARSONS:

We'll see if we can Ed

Martin to run Newfoundland –

J. BROWN:

Out of all of it, it's just

really maddening. We're giving money to these large telecom companies and

they're taking our money, giving us a service that we kind of paid for through

subsidies and then they turn around and take the other half of our money.

It's

just that I wonder if there is any internal talk in your shop to say maybe we

should starting talking to more home grown to see if there is a possibility to

add competition in this market?

A. PARSONS:

So I'll give you a change of

phrase that might make you feel better. So we're not actually giving the money

to them for their bottom line. We are giving them the money to put the hardware

in place so that people can get the service up to that point, or, but for that,

they would not have. Then they bill the hell out of you and that's the part that

none of us like.

Again,

I would come back to, I would love to work with Newfoundland and Labrador

company A, that small, independent group, but there are legislation requirements

that we have to abide by. Then it comes down to what are we getting? Then the

other side, you get into sole sourcing, too. There are a whole bunch of

considerations there that you get dinged on. Then you get into, but what are we

getting out of that?

It's no

different than the one that was just announced and people said, well, what about

Starlink? How come we can't use Starlink? Well, one of the issues there is that

the upfront cost to get the equipment is getting into the $600, $700, $800

range, which people cannot afford.

Again,

it's funny; I had people message me privately on Twitter about it. To the credit

of the department, I'd said: Good question, I don't know the answer. I go to

Gillian and Gillian gets the information and I go back to these people, which is

one of the benefits, if there is any of Twitter, is that sometimes you can get a

question and an answer, even if it has to be done in a direct messages as

opposed to out there with the rest of the bots and trolls.

J. BROWN:

Perfect. I appreciate it.

I think

we had this exact conversation last year, but I have to keep bringing it up. It

is maddening to see and a lot of people do come back and say to me: Why are we

doing this? Why aren't we – everyone is upset with the big three. Everyone is

upset with how much they charge and I guess they just want to know when we give

out funding and applications are we considering alternatives, more or less.

Anyway,

thank you. I appreciate that.

Another

question I do have right now is has anyone come through business and innovation

about wind or any alternative sources looking for grants or subsidies to develop

anything in-house in this province through wind or any other renewable power

sources, like tidal or anything like that?

A. PARSONS:

Again, Gillian would

definitely have some insight on this, but a couple things. We have had people

come to us looking for that. They have to be careful because when you're talking

about multiple competing interests and putting money in a grant or into a

company. Right now, I will say when it comes to wind, there are too many to

name. Right now, we haven't put a whole lot of money into them in terms of an

investment or infrastructure because the reality is that there was no market for

that up until now with the moratorium.

J. BROWN:

Fair.

A. PARSONS:

So you can't really do that.

We have

seen – and especially the feds have played ball here – I look up in, I think it

is Mary's Harbour, the feds invested in renewable energy up there. Small-scale

renewable, I think it was through the Nunatsiavut.

J. BROWN:

Yeah.

A. PARSONS:

I think they did the project

up there. In fact, I think they did high-efficiency wood stove. So they're

willing to do that. I know that is a bit different but still they are willing to

partner there. I don't know what else.

J. BROWN:

Good. All right.

Now –

A. PARSONS:

Oh, sorry. If I could jump

in and say there are local Newfoundland and Labrador companies that have come to

us. We have invested a ridiculous amount of money into MUN and CNA in terms of

science research development, on that side.

J. BROWN:

Yeah. That is my next

question.

A. PARSONS:

So that part we have gone

pretty heavy in. Some of it through that $35 million under the $320 million.

That was for emissions reductions – well, not really emission reductions, more

jobs and it had to fit a certain criteria. Growler Energy is just one example

that got money and that is the field that they want to be in.

J. BROWN:

Perfect. That is my last

question for this section.

Thank

you so much.

CHAIR:

Okay.

Thank

you.

4.1.01 to 4.3.0, MHA Parrott.

L. PARROTT:

4.2.01, Business Analysis,

under Salaries. Last year, $1.5 million was budgeted, a little less than $1.3

spent. Again, I assume it's –

A. PARSONS:

Same as before. Variants due

to vacancies, you'll see the budget amounts in the same ballpark with the

difference being routine salary adjustment.

L. PARROTT:

Under Purchased Services

there was a $313,200 savings. How was that obtained?

A. PARSONS:

Let me see now. There was a

variance there. I think it was Investment Attraction funding that was not spent

due to COVID-19 or COVID-19 issues.

L. PARROTT:

I assume the $200,000 that

was spent was spent on Investment Attraction?

A. PARSONS:

Yes. I don't know if you

have any details on that, Gillian.

What I

will point out here, the ADM responsible for this is the one I mentioned that