May 5, 1997

RESOURCE ESTIMATES COMMITTEE

Pursuant to Standing Order 87, Mary Hodder, MHA

(Burin - Placentia West) substitutes for Bob Mercer, MHA (Humber East).

The Committee met at 9:00 a.m. in the Committee

Room.

CHAIR (Mr. P. Canning): Order, please!

I appreciate everyone getting around this morning

and beginning this Resource Committee meeting on the Department of Fisheries and

Aquaculture.

I would first ask members, perhaps beginning with

Rick, to introduce themselves.

MR. WOODFORD: Rick Woodford, Humber Valley.

MS THISTLE: Anna Thistle, Grand Falls - Buchans.

MS M. HODDER: Mary Hodder, Burin - Placentia

West.

CHAIR: Perry Canning, Labrador West.

MR. FITZGERALD: Roger Fitzgerald, Bonavista

South.

MR. BULLEN: Department of Fisheries and

Aquaculture.

MR. BLACKWOOD: Department of Fisheries and

Aquaculture.

MR. DEAN: Department of Fisheries and

Aquaculture.

MR. WARD: Department of Fisheries and

Aquaculture.

CHAIR: The first order of business will be to

deal with the Minutes of the last meeting, of the Resource Committee Estimates,

dated April 29, 1997.

MR. WOODFORD: What about the chairman part of

that, does that just revert now to the original chairman?

CHAIR: Yes.

MR. WOODFORD: Okay, no problem. I move that the

Minutes of the last meeting on the Department of Tourism, Culture and Recreation

be adopted.

On motion, Minutes adopted as circulated.

CHAIR: I ask the Clerk to call the first

heading so that we can begin debate.

CLERK: Subhead 1.1.01, the Minister's Office.

CHAIR: Maybe, Minister, you can open with a

brief statement, then we can begin the debate with respect to the Estimates.

MR. EFFORD: Thank you, Mr. Chairman,

colleagues.

Before I begin, I just want to clarify the

introductions. Jerry Ward, sitting to my right, is the new Assistant Deputy

Minister responsible for Aquaculture Development and Glenn Blackwood is the most

recently appointed Assistant Deputy Minister responsible for Fisheries

Development, two new changes in the Department of Fisheries and Aquaculture and

we look forward to a major year on both sides in aquaculture, as I will get into

in my statement, and in fishery development.

I have a prepared statement here and I do not know

if there are copies given to everybody, but I am certainly not going to read

everything that is in there, I will just highlight some of the things in the

interest of time and then we will get on to the usual debate questions and

commentary.

First of all, I want to say it is a pleasure for

me, myself, as Minister of Fisheries and Aquaculture, representing the Province

of Newfoundland and Labrador and my colleagues, my associates, to be here this

morning to highlight some of the issues that the Department of Fisheries has

been doing in the past year, the accomplishments that we have made and the

direction we want to take in the future. It goes without saying, that I believe

and we believe, that the fishery is the backbone of the Province, of rural

Newfoundland and Labrador, and we have to continue that focus to develop every

opportunity in the fishery that we possibly can to stabilize the industry and

certainly not to repeat the mistakes of the past both provincially and

federally, in industry, with private citizens and those involved in fish

harvesting.

We have been very vocal and made some major changes

in policy and direction as to where we are going in the future and have gone

over the last number of months, and we are going to continue to do that in the

future.

One of the things that concerned me is that most

people in the Province, for some strange reason, believes that because there is

a moratorium on the ground fish stocks, there is no fishery. That could not be

further from the truth.

In 1996, harvested landed was 170,000 tons of fish,

with a landed value of $240 million and the production value of these landed was

$530 million, 13,000 individuals were engaged in some level of the fishery while

at peak and 10,000 individuals were employed in the processing sector.

The average monthly employment in the processing

sector in 1996 was 4,500 compared to 3,800 in 1995, an increase of eighteen per

cent. In July 1996, the fishery and the fish processing industry employed 11 per

cent of the employed labour force in the Province. Now, that is due mainly to

the shellfish industry in the Province, some pelagics and a lot of work by the

department, in underdeveloped species and in the sealing industry.

We have been very, very active in diversifying the

fishery in the Province. In the past we made a major mistake in depending on a

few species. That must never happen again.

In order to have a successful fishing industry in

the future, we have to take advantage of every opportunity in marine life. We

all know that everything in the ocean is of some value, there are markets for

everything. I often use the phrase that `Everything that creeps, crawls, swims

or sticks to the bottom is a valuable resource and we have to concentrate on

utilizing that resource. I mean, the kelp on our rocks, the seaweed, it is just

unimaginable the potential in that alone; but we have not yet got the

understanding out there in the industry how important that resource is to the

pharmaceuticals, to the make-up industry - the mascara that people wear, and

have made a multi-million dollar industry, and to the food industry, Korean,

Chinese and Japanese.

We just have not been aggressive enough. We are now

turning our attention to all sorts of underutilized species. Just naming a

couple: the whelk fishery, the marine cucumber; and now the latest one that is

going to be profitable to the Province, and that I will touch on a little later,

is certainly not underutilized in some areas - the shrimp industry.

In Newfoundland and Labrador, we have approximately

13,000 tons worth $20 million to the Province - 21,450 metric tons of shrimp

announced just recently by the Federal Government, and that is only the

beginning. We have been maintaining for years that that shrimp fishery should

have been the resource that Newfoundlanders and Labradorians could utilize both

in the harvesting and processing. We all know that an industry in excess of $100

million is fished off the Coast of Labrador, mainly given to a few companies;

the boat crews got the work, just a few jobs, and that is where it stopped. I

have been a strong advocate for that industry in the past, and fortunately and

luckily for us the minister and DFO have agreed with it. The most recent

announcement supported the point that this is only the beginning.

The 21,000 metric tons could just as easily have

been, Glenn, 150,000 metric tons, or 200,000 metric tons. The resource is there.

But we wanted a cautious approach, because we recommended that from the

Province's point of view. Because we are certainly not ready for the harvesting,

and we are certainly not ready for the processing. If we had too much of an

allocation this year and did not catch it all in 1997, then you know what

happens when we go back for 1998, 2000: they will recommend a decrease, and

certainly we would not get an increase. The cautious approach was certainly for

those reasons.

We have some problems in the crab industry. That

has been our main fishery in the last number of years, especially since the

groundfishery closed; we have some market problems this year. The crab fishery

has not yet opened and the negotiations are not getting off to a very good

start. There is a poor market outlook in the Japanese market and in the American

market because of the increase in the Alaskan crab quota and the Russian crab

quota. Our increase went up this year by 4,000 metric tons, of which, if we

harvest any this year, it will be around 95 million pounds.

We are also looking at opportunities in other parts

of the world. I just had a recent visit to Italy in relation to the tannery in

Baie Verte. The company that is putting that there has a major trading company

called Teleos Trading in Italy. I think it is important that we connect into

some of those countries, because they are major fish consumers and we are not

exporting any fish to those countries. If we can expand our markets from Japan

and the United States and, say, go into Italy and possibly a couple of other

countries, then that will broaden our competitiveness in the market. It will

improve our chances of getting a better price for our product and also enable us

to sell the product. We would not be facing a closed shop, as we are today

because of the competition from other countries.

We are working on that very aggressively. We have

had people into Newfoundland. We have had them view the plant down in Port Union

- Catalina just a week ago. They are interested there. We had them meet some of

the companies, several of the major processors - they don't want to get involved

in processing themselves. They want to buy the products packaged, ready for the

consumer, and ship it. They just want to do the trading part of it. There are

interesting things happening there.

There are also major interesting things happening

in the sealing industry. Last year we harvested 250,000 seals, this year 283,000

seals. We have markets for in excess of 400,000 seals. My recommendation to the

federal minister was not to put a number on the quota but to put what the market

demands. Unfortunately, after about twenty-five letters and twenty-five phone

calls, and a lot of talks with DFO officials, they maintained the quota at

283,000 seals. Last week I had supper with Mr. Nygaard of Carino. His company

itself today has orders for 100,000 seals that it is not going to get. It is a

crime to know that we have 8 million seals out there eating our fish stocks, we

have markets for 500,000-plus animals, and DFO say because of the IFAW and other

problems, they are not going to increase the quota. But we do not quit - we will

keep working on it, and hopefully in the 1997-1998 season, we will get another

100,000 - 200,000 increase. We are certainly going to keep applying pressure.

The aquaculture industry is a very exciting one. We

have a few problems there. We have some duplication of rules and regulations

between departments of government, which we are working on, and through Minister

Ernie McLean we have some of those straightened out. We are having meetings now

with Minister Aylward on the environmental issues, to try to lessen the

regulations and the frustration that people experience when they apply for

licences. We also have some problems of duplication and timing with DFO and the

coastguard when somebody applies for an application.

We are going to try to make it environmentally

friendly when it comes to regulations, to lessen the regulations and make people

more accessible to the applications when they submit a proposal. We can do that

here within our government agencies, both federally and provincially, and we

have taken some major steps.

One of the big problems that we have in aquaculture

is the very high risk in getting financing. We cannot get the banks to

co-operate where it is satisfactory to the investor or investors to come in and

get the financing that is necessary. We are having ongoing talks with the

financial community, and hopefully that will improve. Again, we will not stop

until we do get some satisfactory moves towards the financing of the industry,

but we also have to look provincially into things, and one of the things that I

am considering is getting the government, the Department of Finance, involved in

helping the aquaculture industry get off the ground. I have had some meetings

with Minister Dicks and look forward to some meetings in the near future to get

some light at the end of that tunnel.

We have made some changes in the reorganization of

the Department of Fisheries and Aquaculture to better serve the aquaculture

industry and we have, as I introduced to you, Mr. Jerry Ward, who is now the new

ADM. We have a new director for fin fish, and another for shellfish. We have fin

fish development officers in three regions, and the department's veterinarian is

now located permanently at Bay d'Espoir. We have a salmonoid aquaculturalist who

is also located permanently at Bay d'Espoir. In short, we are making a very,

very strong commitment to be hands-on, from my office right down through the

whole department in the aquaculture division, to ensure that the aquaculture

industry develops to the position that it should be, because we are far behind

other provinces in Canada, and certainly far behind the rest of the world.

We have recently put some major monies into

research and development out at the Ocean Sciences Centre, at Jerseyside,

Placentia, and we will soon be announcing a research and development centre at

Bay d'Espoir, so there are major monies going into it and the industry is

excited.

We had a conference in Gander last week where 300

people, I guess, attended the aquaculture conference. I tell it, it was very

positive and upbeat from the beginning until the end of the conference, so that

goes to show you, if we are working, all of us together in the one direction,

with a positive attitude, it has to work, and that is the feeling I am getting

right across the Province.

As I said, I personally will be playing a hands-on

role for the rest of this year, the same as I did last year, in developing a new

policy for the processing industry. Most of you are familiar with that, so I

will just touch on it briefly in conclusion.

We developed a processing policy for the Province,

not for 1997, not a Band-Aid approach, but for on into the future. We have

reorganized the whole industry, hopefully to make it more stable, more

sustainable to the communities and to the people who are depending on the

industry for jobs in different communities. We have put a core establishment in

place, a core policy framework, where we will have a minimum of sixty-five core

plants with a multi-species operation. That is the only way it is going to work.

You cannot have plants out there processing one or two species, opening their

doors and closing them after a two- three- four- five- eight- or ten-week

period, and leaving the people out there in despair, looking to government to

supplement their income. That has to change. We have announced a policy and it

is working well. We already have several applications in for transfer of

licences to where they could meet the core criteria.

The major one that I was most keen on in that core

policy was quality. We have created an awful atmosphere out there in the markets

about the type of product we put into the market. I have announced a policy

where the Province is going to take a lead in ensuring that the fishery is

oriented towards a top quality product, in other words from the time the fish -

whatever species -comes out of the ocean until it reaches the consumer's table,

you must handle it as if you are going to eat it yourself. If not, you are going

to be severely punished.

Not a Band-Aid approach, not a $5,000, $10,000 or

$100,000 fine; I have told the industry that we will lift their licence if they

do not follow the quality standards and if they attempt to dump a bad product

into the market. I have met with Japanese people, I have met with other industry

people when I was down at the Boston Seafood Show. One of the main reasons we

are not getting a good price for our product is because we are not concerned

about quality. That has changed and I am very serious about it.

If you saw the press conference when I got asked

the question: `Will we be as forceful, as I am saying?' My answer to them was:

`Test me, try me and you will see how forceable we are.' If we continue that

train of thought and we are very serious about it, it is going to work. It will

benefit not only the people in the processing and the fishermen and the plant

workers but it will benefit all of the Province because the spin-off factors

from the fishing industry is important to the whole survival of rural

Newfoundland and to the economy of the Province of Newfoundland and Labrador.

So colleagues, with those few remarks, I am just

going to say in conclusion that we are excited at what is happening in the

Department of Fisheries and Aquaculture. We are talked about province-wide for -

the department is alive and everywhere we go we are getting a good response, a

good feedback and we just do not want to stop there and say, well, we are

satisfied. We are not satisfied. We are going to be continually working as

aggressively in the remainder of 1997, on into the future, as we were last year

and the first part of this year.

CHAIR: Thank you very much, Minister. It is

always a pleasure to sit at this particular committee and listen to you speak on

behalf of the fisherpeople of this Province and your vim and vigour certainly

comes through. You are a fellow who wears his heart on his sleeve and does not

mind saying it. We are very pleased to have you here and to have you

representing, as you have, fisherpeople throughout this Province.

Having said that, I will open the floor to

questions. Perhaps, Roger, you might want to start.

MR. FITZGERALD: Thank you, Mr. Chairman.

First of all, I apologize for having laryngitis. It

has nothing to do with the line dancing or it has nothing to do with the singing

-I think there is something wrong with the ice at the Gander Hotel.

AN HON. MEMBER: Perhaps the yodelling?

SOME HON. MEMBERS: Hear, hear!

MR. FITZGERALD: Minister, you are right when

you talk about what the fishery means to Newfoundland and Labrador. Even though

there is a lot of revenue being generated and there is still a lot of activity,

the problem has been, I suppose, that our traditional fishery has disappeared.

That has been very evident right across Newfoundland and Labrador, especially in

my district of Bonavista South, when you go down to Port Union, Catalina,

Bonavista, Charleston and those areas and see what the people down there are

going through and the uncertainty that they face as they wonder what is going to

happen to them, whether their fish plant is going to open or whether they have

to leave their towns, their communities and their homes and go somewhere else to

go to work.

Those plants traditionally depended on the cod

fishery and the flat-fish fishery, and that has certainly not returned to

anywhere near the numbers and probably never will, that they enjoyed. I think

the plant in Port Union, back in 1997, processed something like 50,000 tons of

cod and the whole quota for Newfoundland and Labrador is something like 16,000

tons for this particular year.

You continued to talk, as you travelled across the

Province, about the new fisheries; the whelk fisheries, seaweed, kelp and sea

cucumbers. What, in your opinion, is the reluctance of Newfoundlanders in our

business industry out there today to get involved? Even though you talk about it

wherever you go, there seems to be very little activity - I do not know of

anybody who has gotten into this particular production here in the Province

today.

MR. EFFORD: Roger, I do not know where you have

been to say that people are not getting into the production. Anyway, I will get

into that in a second.

The traditional fishery is gone for a long, long

time to come. Is it gone forever? No, it is not. It will come back eventually

when we address some major problems. Now, while mankind caused the groundfishery

to be in the situation it is - well, I guess the combination of man and nature.

Right now, the biggest predator and the biggest problem we have in Newfoundland

facing Labrador, the whole of Labrador, all of the Province put together, there

is nothing as major as the sealing population, the sealing herd. So the

groundfish stock is not going to come back, especially along the Northeast

Coast, the northern part of Newfoundland, while we have those seals. I tell you,

we are getting very little support from the Province as a whole. I am talking

about the people who are getting out there and getting that message across.

While we are talking about it as a Province, as a department, we are not getting

much support other than that.

What is happening out there and why is it

happening? Newfoundlanders traditionally and historically do not seem to want to

change. All the species of fish that are in the ocean just did not come there

since the moratorium. They have been there forever and a day, but always we

depended on a few fish stocks, like in the groundfish industry. Even when the

crab and everything came on stream first, such a rich resource but look at the

problems and look at the time it took to get people right across the Province

interested in the harvesting, processing, and the development of markets. Even

to this day, we have not done it to my satisfaction, as I would like to see it.

But there are a lot of things happening. Sea

urchins this year - we had several plants operating with sea urchins. In

November, December, January, February and March, Bell Island employed

thirty-five to forty people, a little plant right there where the ferry ties up

on Bell Island, all of those months, eight, ten, twelve hours a day, November,

December, January, February and March. Derek Green over in Trinity, in Green's

Harbour, and Willie Waterman down in Wareham have been working on sea urchins,

and in Long Cove, Derek Philpott, Pat Quinlan's. It is happening out there. It

is just that we are slow to get off the ground.

The whelk fishery: There are hundreds of fishermen

right across this Province now the last couple of years, through the

experimental work at the whelk fishery pots, developing the markets. It just

takes time. The problem with it was that when the moratorium was called in 1992

- I said it all through the years, and the Premier used to look at me saying:

John, you are not the Minister of Fisheries, you are the Minister of Works,

Services and Transportation, or you are the minister of something else, or

whatever. But we should have begun in 1992 looking at other species and we would

have been five years ahead of the game - I mean, it was looked at, but not on

the scale on which it should have been.

It is happening. It will not replace all of those

tens of thousands of jobs that the groundfishery created over the years - in the

long term it will, but you have to combine it with the shrimp, the crab, the

pelagics, the underutilized species, and that is what I am talking about,

multi-species operations. For those people who remain in the fishery, they will

get a long season employment sustainable to their needs in the environment and

the community where they live. That is the reason why I am saying you cannot

have 212 or 240 fish plants. You have to have sixty-five or seventy or whatever

the number that will sustain it over a few years down the road, but starting

with sixty-five, to give work to those communities.

Port Union, Roger, very quickly. If the people of

Bonavista would listen to me, and Port Union, transfer those licences to that

multi-species-oriented plant, their operational plant there in Port Union -

Catalina, I can see three or four years down the road where that would employ

not 1,000 people like it did before, but I can tell you 400 to 500 people for a

very long season, with the shrimp, and with the crab, and with the pelagics, and

with the other species. I think the company would invest if the people down

there would co-operate.

We need a change in our attitudes and we need

thinking - like up on the Northern Peninsula. I got kicked from here to you know

where and back last week because we wanted to consolidate four plants in the one

in Brig Bay. Because they had to drive fifteen minutes to work, nobody wants to

hear talk of it. My answer is: What is wrong with driving fifteen or twenty

minutes or half an hour to work if you have a job? It is a darn sight better

than staying in the community with no work at all. That is the problem in

Bonavista. You know that, of course.

MR. FITZGERALD: That is up to Vic Young, I

think, to decide, Minister.

MR. EFFORD: Well.

MR. FITZGERALD: Until he assumes responsibility

for that, he the fellow who owns the licence, he is the fellow who owns the

plants. Until he comes out and says: This is going to be the way it is, then it

will not be any different. Because all he has done now is generate a fight

between two or three communities, and you know what the fall-out is there. But

let him come out and make his announcement, let the fall-out happen, and get on

with getting people back to work.

MR. EFFORD: May I interrupt for a second? I

just wanted to make one point on that, Roger, and not to cut you off. It is

strange. You are right, Vic has to make application, he is the owner of the

plant, but he will not do it because he does not want the people of Bonavista.

But I went down there to a public meeting last year. Mayor Tremblett was one of

the most vocal people up in front of the microphone, 700 people in the audience.

I was the only one who turned up to the meeting. Four or five people were up

turning the people on. I found out the next day that Mayor Tremblett was the

most vocal in keeping the crab plant in Bonavista from transferring to Port

Union - he is selling his own crab in Trouty. There is a problem we have. The

mayor of the community will not allow the licence to be transferred so the

people in Port Union - Catalina can get to work. He is not even selling his crab

in the area, he is selling it out in Trouty.

MR. FITZGERALD: Selling it somewhere else. I

know what you are saying. But that is not for me to decide, and I am not

intending to be the one caught in the middle on that. That is up to Vic Young or

MR. EFFORD: Ah! (Inaudible).

MR. FITZGERALD: - John Efford to decide. I do

not decide where the licences are going, I do not make the rules and

regulations, and I do not own the plants, so I am not about to -

MR. EFFORD: Would you make a recommendation?

MR. FITZGERALD: - be caught in the middle. Let

the people decide. If you have this between the plants, have a little

plebiscite, if you would, to let the people decide that whichever way they want

to go, let us do it, let us get on with it, one way or the other. But I do not

blame the people in Bonavista, and this is not an argument for this morning.

I do not blame the people in Bonavista for wanting

to keep the major industry in their town. Bonavista has been a fishing community

ever since John Cabot came here. It is one of the holding licences, I suppose,

on the Island, and I do not blame them. Because it means much more, Minister,

than the fifteen-minute drive. It means the biggest taxpayer in a community, it

means people will probably be moving out of that community and living in

another, businesses across the street, and the list goes on. I know what you are

saying, I understand what you are saying, but that is not for us to decide here

this morning.

Foreign fishing is another issue. We talk about the

wonderful things that have been done. There is no doubt about it, foreign

overfishing has been reduced tremendously from what it has been, but still there

is a lot of activity out there. I am wondering why our own people here, our own

processors, do not take

part in the shrimp fishery on the Flemish Cap. Is there

a particular reason why we do not see Fishery Products International, or some

other processors who have licences to harvest shrimp, out there competing? There

have been as high as ninety foreign boats fishing shrimp on the Flemish Cap. It

is not uncommon to find forty. We saw nine out there a couple of weeks ago, but

I did not see any of our own Canadian boats.

MR. EFFORD: Yes, Roger, I am going to touch on

something else, and I am not going to let it go until I get something done with

it. If you think the foreign fishery is a problem - if I said to you tomorrow,

if I had the authority as Minister of Fisheries for Newfoundland or for Canada,

to allow 500 factory-freezer trawlers, 500 draggers, and every Newfoundlander

and Labradorian who could get in a boat, to go out there fishing, you would say

I was completely crazy and off my head. Yet, there are 8 million seals out there

eating fish 365 days a year and you ask me a question about outside the 200-mile

limit.

The few boats outside the 200-mile limit have

observers on them - they are very heavily controlled - but even the twenty or

fifteen or eighteen on a day-to-day basis is not even a scratch on the problem

that we have facing this Province with 8 million seals, and that is where every

Newfoundlander and Labradorian should put their energy.

As far as the Flemish Cap goes, the reason FPI and

Canada are not fishing on the Flemish Cap is because we disagree, number one,

with the way in which it has been overfished, and if we go out there and

participate in the overfishing we are going to be as bad as the rest of the

countries out there. We have to stop the way in which the Icelandic and the

other people are fishing on the Flemish Cap. Otherwise, that is going to go the

way of the groundfish stocks and there will be nothing for anybody.

CHAIR: If I could just interject for a second,

I would just like to welcome Tom Osborne, another Member of the House of

Assembly, to today's meeting. Welcome, Tom.

MR. EFFORD: You slept in this morning?

MR. OSBORNE: Another meeting.

CHAIR: Continue, Roger.

MR. FITZGERALD: Nobody, Minister, will argue

against that. We have a real problem with the seal fishery, and until we

eliminate a heck of a lot more than the 283,000 that we have been licensed for

this year, it will not get any better. We continue to wait at home and try to

find out what the problem is, but you cannot very justify it to say that the

seal industry is the only problem. There are several problems.

MR. EFFORD: It is the only problem (inaudible).

MR. FITZGERALD: The foreign overfishing is a

very big problem as well, and maybe we cannot stop all of it but we can try.

My understanding is that probably a couple of the

reasons we are not out there fishing on the Flemish Cap is not because of some

of the reasons you stated but, number one, because those people pay their crew

in a different way

whereas they can afford to go out there and fish, because the

crew is paid a percentage of the catch - no catch, no pay. The other part of it

is because of the colour of the shrimp, that we cannot find markets for that

particular colour of shrimp that is caught on the Flemish Cap. It does not have

the texture or the colour, that the Japanese market is looking for.

MR. EFFORD: I wish I could get all the shrimp

that I could sell from the Flemish Cap. It has more to do with the overfishing

and the size of the shrimp that is out there now than anything else. They are

very, very small. It has nothing to do with the colour.

I can tell you, the Icelandic people are landing

shrimp and selling it, and all of the other countries that are out there fishing

are landing their stocks and selling it. That is not a problem. It is the size.

If we go out there now, we are supporting what is

happening. How can we say we should be reducing the catch out there if we are

going out and harvesting 2,000, 3,000, 4,000, 8,000 or 10,000 tons? That is the

real problem.

The other thing, I guess, if you get into the

economics of it, is the cost factor, but certainly the overfishing is a major

problem on the Flemish Cap. But we do not, as a Province or as a Country, have

control of the Flemish Cap. That is a NAFO - is that right, Les? That is a NAFO

and there have to be some changes made at NAFO before NAFO has the teeth to do

anything with overfishing anywhere.

MR. FITZGERALD: Minister, why do we still

charge a licence for people to go out and harvest seals? I think we are allowed

to take six per person if you have a licence, is it? That is what it was last

year. Why do we charge a licence for anybody - a Newfoundlander - to go out

there and kill six seals to, I suppose, help us control the nuisance, pest, that

is destroying our way of life?

MR. EFFORD: The problem we have is an attitude

problem in DFO. We are into discussions in the department every day of the week.

In fact, it consumes most of our time, because it is a major problem.

You have the IFAW show the example of what happened

here in St. John's and out in New Harbour last week. We do not care here in the

Province, we have no respect for them. We do not care how much noise or how much

news media attention they bring, but that is not the same in Ottawa. Our problem

in Ottawa is External Affairs and DFO. Those people are afraid of the IFAW

causing problems with the export of other products from other provinces in

Canada and we are suffering because of it. Should we have an open seal fishery?

I believe we should have a sea fishery in accordance what the market demands,

total utilization. I think that signs - DFO, the Canadian scientists in the

fisheries and ourselves have to reach an understanding of what the sustainable

number is. I believe that sustainable number should be 2.5 million. We have an 8

million population of different species out there. If we could get DFO and the

scientists to support us, the sustainable number should be at 2.5 million, as it

used to be back in the 1940s, 1950s and 1960s and we should have a hunt over the

next four or five or ten years to get it from 8 million down to those numbers,

but we have a lot of work to do in changing the attitudes of people in Central

Canada.

To take it to the next step, how do we do that and

how do we get the people to agree with that sort of thinking, is simply that we,

as a Province, and everybody in this Province has to be vocal on this issue. It

is vital to the survival of Newfoundland and Labrador and if we do not get

something done about it, I tell you, government will not be able to bring in

policies enough and changes enough in the fishing industry to keep those

communities alive, because without fish, you can have all the policies you like.

It is an attitude problem in Ottawa.

MR. FITZGERALD: Do you feel one way to control

it might be to bring back the bigger boat seal fishery again?

MR. EFFORD: The success of the industry, last

year and this year, was certainly proven by the smaller boats; but if the quotas

are increased to bring down the numbers to the sustainable number that I believe

it should be - and I think a lot of people agree with me on this because I have

had some discussions, even with some people in DFO, and they think I am right on

it, too - yes, you are going to have to have the bigger boats. And you have to

think, too: how do you get 1 million seals a year with the environment that we

have here? And if we go down to the 2.5 million - because at 8 million seals and

only ten per cent pups a year, that is 800,000 pups a year with a success rate

of only ten per cent. And we are only hunting 275,000, so the numbers are going

to go up.

The thing that bothers me about it is - and I

mentioned this when I was down in Bonavista on Friday to the students, because

one student said, `We should not have a seal hunt.' `Well,' I said, `if we do

not kill them, nature will kill them. So, is it not better for man to hunt them,

to utilize them for food, for the starving people of the world, pharmaceutical

and all the other reasons why we can utilize the resource? It is the highest

protein product of meat of any animal in the world, because as the food-chain

runs out, nature will surely kill them and we know what the end result is then,

the fish stocks are gone and the seals are being killed by nature.

MR. FITZGERALD: It was interesting the other

day when there were some questions raised regarding the sale of Newfoundland

Farm Products and they showed some scenes from the abattoir down here, where the

chickens were in on the racks and the wings were flapping and the feathers were

flying, and not one call came in, not one call. If that were the seal fishery, I

can hear the Open Line shows now.

Minister, licensing fees, as it relates to the new

fee structure that you put forward the other day, a proposal, I think, was what

it was and you asked for input, and they had until April 30 to return back to

your office. I have had a couple of calls, one letter which has been sent to

your attention -

MR. EFFORD: Yes, I read it.

MR. FITZGERALD: - from a fish processor in my

district, a small fish processor and I can understand her concerns. She is a

small operator there and her processing fees have gone up tremendously from what

they were in other years. And when you look at some of those other core plants

and the costs they are going to be faced with compared to the increase in hers,

well, I agree with her, it is probably not justified. Are you looking at those

fees, the structure that you are planning on implementing, or are you wide open

as to changing them and reducing the fee structure for some of those small

operators?

MR. EFFORD: There is nothing frozen to the

point that we do not have any flexibility, but you have to remember, the fee

structure we put forth is very reasonable in relation to what the potential of

earnings are for any fish plant, whether it be small, medium size or large. For

years, we had no fee structure whatsoever and previously to that it was $200 a

year. What we are looking at now is $1,000 a year for a small operation, $1,500

for non-core and it goes up significantly for core fish plants. Before we make

the final recommendation, we will be taking everything into consideration - the

size of the plant and the ability of that small operation to generate profits.

We will take a look at it. I understand where they are coming from, but we have

to have a fee structure in place because we cannot have those fish plants

operating without paying some sort of fee, and $1,000 or $1,500 is not

astronomical for an industry. You take the caplin industry this year, those

plants in the caplin industry could make as much as - who knows? - $100,000 in a

two- or three-week period, some $50,000 and some $25,000.

MR. FITZGERALD: I think you are talking about a

different type of plant from the one this lady is operating, because when it

comes to pelagics, she is a buyer only. She takes them and just transports them

to another plant, and her fees have gone up from $300 or $400, I think, up to

$2,200.

MR. EFFORD: Not from the Province.

MR. FITZGERALD: Well, you are paying $1,500 for

a non-core licence and $700 for a buyer's licence so that's $2,200.

MR. EFFORD: Yes, she is wrong there. If she has

a buyer's licence, she has a processing licence, and she thinks that - there is

a buyer's licence, there is a processing non-core and a processing core, and she

thinks one is going to be stacked on top of the other - that is not right.

MR. FITZGERALD: Well, that is not the

information that is coming from your department.

MR. EFFORD: Well, yes, it is, Sir, and I tell

you this: the Director of Fisheries Development and Processing in my department

is Frank Pinhorn, and nobody in this Province is better informed or has any

better knowledge of the structure. Geraldine is not understanding it correctly.

We have a letter being drafted now to send out to her so she clearly understands

it.

MR. FITZGERALD: I talked to a gentleman in your

office as well and that is the way it was explained to me. The only one that was

stacked there was one of the ones down below that for the -

MR. EFFORD: The buyer.

MR. FITZGERALD: Not the buyer's licence, no.

The buyer's licence -

MR. EFFORD: Retail.

MR. FITZGERALD: The retail licence, exactly.

The buyer's licence was stacked on top of the processing licence and that is the

way she understood it. I called for clarification and he said I will check it

out and get back to you and that was the information that was brought back to

me. So she probably is understanding it wrong, and if she is, then maybe we can

make a point of clarification to ease her mind.

MR. EFFORD: (Inaudible) sit down and try to

explain anything to her?

MR. FITZGERALD: Anyway, when you look at some

of the comparisons she has made there with Prince Edward Island and New

Brunswick, there is quite a difference in the price there that they charge for

processing and for buyer's licence compared to what we are charging.

MR. EFFORD: Where? In New Brunswick?

MR. FITZGERALD: The information she has put

there for Prince Edward Island and New Brunswick, if it is accurate.

MR. EFFORD: It is not accurate.

MR. FITZGERALD: Okay, you have to let us know -

MR. EFFORD: Now, if you want me to charge it to

her, I will do that. Do you think we should?

MR. FITZGERALD: Well, maybe the rate she has

there she would not mind paying, if those are the accurate rates.

MR. EFFORD: If you want me to stack it, I will

stack it.

MR. FITZGERALD: You are not going to stack it

if you can give the lady a break. That is what we have to get into, boy, keeping

people employed, not putting them out of business.

Minister, your department is now getting into

inspections of processing operations?

MR. EFFORD: Yes.

MR. FITZGERALD: Will the Province now be taking

over all the inspections of processing operations, including export, or would

the export market still be controlled by the Federal Government?

MR. EFFORD: That is still going to be

controlled by an arm of the Federal Government, the food -

MR. FITZGERALD: The food processing agency.

MR. EFFORD: - the national food agency, but the

problem with DFO is that they set a minimum standard, and the minimum standard

means exactly that. So they go into a fish plant and look at the operation, the

plant and how it is set up, the cleanliness and everything else, and they have a

minimum standard. That minimum standard does not put out a top quality product.

All they care is what the minimal needs are for the industry. As a result, we

have been sending products into the market that have been getting returned. We

sent out turbot last year that was returned, we sent crab. In 1995 we harvested

65 million pounds of crab; 40 per cent of that was cooked dead and shipped into

the Japanese market. Now, you do not think we never got much of a bad name for

that? Our standards are, treat the fish, from the time it comes out of the

ocean, as if you are going to eat it yourself. We are going to bring in

inspection standards to ensure that will happen.

Another example, a fisherman comes into a crab

plant or a fish plant where they treat the fish and it is not a good product. So

Mr. Smith says: I am not going to buy that because I want a good quality

product. The fisherman goes down the road and sells it to the next fish plant.

They will buy anything. And that is not right. In about 75 per cent of the

operations in this Province, the processing industry is doing a darn good job.

But we have some guys out there who care about one thing only - no code of

ethics, no standards, and the inspections that we are going to carry out will

ensure that will not continue. Now, if we lift a licence of one fish plant this

summer through those people putting up a bad quality product, I tell you, the

attitude will change very quickly. So we are saying, our officers are going to

be out there and if we catch anybody, just watch what will happen. We do not

have a choice - we do not want to do it, but we are forced to do it.

MR. FITZGERALD: Vessel replacement - the rules

and regulations that were brought down by the Federal Government a couple of

weeks ago, that we all had been waiting for since November. Now that you have

had a chance to look at those and assess them, are you getting many calls from

fishermen regarding the unfairness of having quotas in a competitive fishery,

where other fishermen who have the bigger boats in that particular category are

allowed to go out in the competitive fishery and operate in an open -

MR. EFFORD: My position on the vessel

replacement program is that we should not be involved in the size of a fisherman

boat, any more than I can tell or the Minister of Industry, Trade and Technology

can tell Sobeys or someone who wants to build a supermarket, what size of a

supermarket, how many square feet should be in it. It should be built according

to one's needs and one's ability to go out and harvest fish. We have set quotas

and we have set IQs to control conservation measures.

Quality - if you get into a boat and go out there

and we are insisting on quality product, you have to be able to properly ice and

box that fish, crab, shrimp, cod, caplin or whatever else, and if you have to

box that fish and bring in a good quality product, you have to have the space

onboard your boat. The other issue is safety and comfort. For safety and

comfort, we should allow a fisherperson to build the size of boat he needs.

The measures that came down last week did not go

far enough, we are still involved in people's lives too much on a day-to-day

basis and we should change that. But at least we made some rules, and people can

go from a twenty-foot boat up to a larger size or thirty-four-foot-eleven can

move up, a thirty-five can move up to a forty-five and a forty-five can meet to

a sixty-five. The biggest problem that I have is quality, not being able to

handle a quality product and the sixty-five footers should have gone to at least

an eighty-five. Because if you have fourteen or fifteen men out for 200 days on

the Grand Banks, in all kinds of winds, and with seven bunks onboard the boat

and you have sixteen men, one has to get out of bed and the other fellow jumps

in. That is crazy. It is not healthy, there is no comfort. It presents a safety

problem and a health problem. While it is a move in the right direction, still

it did not go far enough.

MR. FITZGERALD: I totally agree. How about your

thoughts on the quotas being put on those people now that they are allowed to

increase the size of their boats in an open competitive fishery.

MR. EFFORD: I do not think we have an open

competitive fishery on everything, I think we should have IQs. It is the best

way to go for conservation, the best way to bring in a high quality product. The

caplin fishery - I mean, what has killed us on the caplin fishery in the past is

a competitive fishery. The caplin fishery is a very, very short season, but it

is a very lucrative fishery, if we handle it right. They brought in 25,000

pounds on larger boats and if they did not do that they would come in with

200,000 or 300,000 pounds in the holds of the boats, `squat up' and everything

else. And the other thing is that when you have IQs on the caplin fishery,

instead of blocking the plants, one mad rush to get into the plants, they could

take their time and fish according to the needs of the plants so you can put in

a quality product. IQs is not a bad way to go, I can tell you.

MR. FITZGERALD: For harvesters.

MR. EFFORD: For harvesters and for processors.

MR. FITZGERALD: It did not work very well last

year in the caplin fishery.

MR. EFFORD: Yes, but do you what caused the

biggest problem last year in the caplin fishery? It was the time the caplin

fishery was opened. They opened the caplin fishery before the caplin were mature

enough to be harvested. That was the biggest problem last year.

MR. FITZGERALD: They did had some problems. I

did not get an answer to the question. The question I asked was: Now with the

new vessel replacement size and people being allowed to get into larger vessels,

should one group be involved in a competitive fishery and another group have

quotas for that same fishery? You said you agreed with IQs. Should not everybody

have IQs?

MR. EFFORD: Yes, I did not know there was -

what are we talking about?

MR. FITZGERALD: If I am going to be allowed to

MR. EFFORD: In a caplin fishery.

MR. FITZGERALD: No, no in a fishery. If I am

going to be allowed now to increase my boat size from twenty-four foot to

thirty-four-foot-eleven, and I am going to have a turbot license, what they are

going to do is say, Yes you can increase the size of your boat to a thirty-four

foot-eleven. We will go back over the past three years and see how much turbot

you caught and the average of that will be your quota for this year, but in the

meantime, you have been in a sector where you always had a

thirty-four-foot-eleven boat, you have not looked to increase the size. You can

go out in a competitive fishery and fish openly until the quota is caught.

MR. EFFORD: But my position is that, if we are

going to have a controlled fishery of the future and have it fair to everybody

that we should be looking at IQs for everyone.

MR. FITZGERALD: Treat everybody alike.

MR. EFFORD: Treat everybody alike.

MR. FITZGERALD: Minister, salmon licenses,

topic of the day for people - 200 commercial, I think it is 100 in Newfoundland,

is it?

WITNESS: One hundred.

MR. FITZGERALD: The commercial versus the

recreational. What are your thoughts on that? Should there be a -

MR. EFFORD: Only when we are satisfied that the

numbers of the stock is at the sustainable level where we can harvest them

recreationally and commercially without hurting the stocks. The numbers are not

yet back, and certainly the review has not yet been done.

When it comes to a salmon fishery, for a Minister

of Fisheries, naturally I have to say that I support a commercial salmon

fishery, but I have to be reasonable about it in understanding there is no point

having a commercial salmon fishery if the numbers are not there. When the review

is done, which will be done later this year, after the Summer, then I will make

it more publicly known what my views are.

We have some problems in the recreational fishery.

I do not agree with the way we are doing the hook-and-release at certain times

of the year, killing fish. I have some problems with setting out a caplin trap,

or a cod trap - well, a caplin trap in particular; I do not suppose a cod trap

this year.

I will give you an example of a caplin trap that

was put out just for one week for the caplin fishery. One fellow in Trinity Bay

- I was over there, actually, in my boat and was talking to him that morning

because he helped me to motor up my boat off his stage head. He had 107 salmon

meshed in his caplin trap, dead, and he had to take that 107 salmon and drop

them down in the water and let the crab and the sea lice eat them. That I

disagree with.

We have to change our attitude to the way we bring

in and administer our rules and regulations. But the bottom line is, a

commercial salmon fishery for those people who have the 100 licences should be

looked at very seriously when we get our review done this year, if the numbers

are up. But, I tell you, there is not much evidence of the numbers being at that

level yet, except in Labrador; there seems to be a great lot of salmon in

Labrador, according to what the fishermen told me last year. Then we have other

factors. We have a Greenland fishery, we have other factors, and again I go back

to the seals. The seals are not eating salmon? Everything that we talk about in

the fishery points directly back to that major problem.

MR. FITZGERALD: Minister, the idea of core fish

plants, I guess, is like core fishermen; they will be able to receive whatever

licences are available to them. I have two questions. Number one: Do you think

there should be any such thing as a core fisherman designation now that we have

the professional fishermen's board in place?

MR. EFFORD: My god, yes.

MR. FITZGERALD: Number two: Are you looking at

giving crab licences and shrimp licences to all sixty-five core-designated

plants?

MR. EFFORD: First of all, I believe in the

principle of core. It coincides with and supports the professionalization

legislation that we brought in last year. Because you have to have a core

establishment in Newfoundland; otherwise, you cannot open up to everybody.

The professionalization - we are the first and only

Province of Canada that has brought that in yet, and I think it is going to

prove very, very good in the future.

As far as the sixty-five core plants are concerned,

the goal that we hope to meet, they do now have a shrimp licence. All they have

to do is submit a good proposal to the Province, in line with our policies of

maximum benefits to the workers and to the industry as a whole, and they would

automatically be given a shrimp licence. We are already now reviewing and

hopefully within the next two weeks will make an announcement on an increase in

crab licences. I am looking, in the very near future, to have crab issued to

every core plant.

Right now, because I am concerned in the case of

Bonavista, if we issued two crab licences now before the core status, the

multi-species plants get set up, it could take away the employment from those

people in Bonavista, so we have to make sure we do not fragment the industry any

more than it is fragmented.

My policy announcement was that we were going to

give out a minimum of five licences, so within the next short while there is

going to be an announcement on more licences.

MR. FITZGERALD: Do you want to tell us where

those licences are going?

MR. EFFORD: Mainly in the Port de Grave

district. No, I am not going to tell you this morning.

MR. FITZGERALD: It is obvious, I would think,

that probably Twillingate and La Scie may be considered -

MR. EFFORD: Where? And Port de Grave.

MR. FITZGERALD: - for a licence, and that will

be very detrimental to the fish plant in Bonavista.

MR. EFFORD: You are guessing, Roger.

MR. FITZGERALD: I am assuming, and I would

think that you would probably look at the report that was brought back from Mr.

Cashin and his people. They suggested St. Anthony, Twillingate and La Scie,

because of their historic attachment to the fishery and their geographic

locations, so that will certainly have a big impact.

I am wondering about Triton, as well. I understand

that FPI has applied for a licence for Triton.

MR. EFFORD: I have not made any decisions on

any area in which the plant licences will be going. What we have asked for is

proposals to be sent in from the processing industry that would give us the

confidence that the crab that is going to be processed will be processed to its

maximum value, creating the most jobs in a multi-species plant. So if someone

sends in an application that he just wants to process crab, he does not stand a

chance. If he sends in a proposal saying: We are going to do mackerel, herring,

caplin, or whatever, and a multi-species, the crab is going to be added, and not

just to cut it and ship it into the market, but the maximum value will be gotten

out of it, the maximum number of work days, work weeks or work months, it will

be considered. So, it will be those people who send in the best proposal on a

regional basis, where there is not now an over-capacity in the processing of

that particular species.

Triton is a nice area. I used to teach school in

Triton, by the way.

MR. FITZGERALD: Liberal area or P.C.?

MR. EFFORD: It will be Liberal when I am

finished with it.

MR. FITZGERALD: Minister, the shrimp licenses

that you talked about or the shrimp quotas this year -

MR. EFFORD: It is Liberal now - Graham Flight.

What am I saying?

MR. FITZGERALD: It is yes, that is what I said

- but when you taught there.

The shrimp licenses or the shrimp quotas, you are

saying that it was done this year on an exploratory basis, I suppose, and it

will probably be increased next year and the year after.

MR. EFFORD: Not an exploratory, a cautionary

approach.

MR. FITZGERALD: Okay. Do you see it being

extended to the 3(

L) area?

MR. EFFORD: I sure hope so, Roger. I sure hope

that the people south of Cape Freels, which will take in all Bonavista, Trinity,

and right around, get a greater opportunity than they had this year. We made a

major step for the Province as a whole this year, but I tell you, there is a lot

of effort that can be worked in those fishing as you are familiar with and we

are all familiar with, along that coast. They have the ability, in fact, they

have already been involved in experimental work in the past. The 2,000 ton quota

they have this year is certainly not enough. I do not know what is going to

happen to the St. Anthony quota, if their inshore fleet will catch that; I doubt

it, but it is possible.

But nevertheless, the steps that have been taken

this year are positive and I look forward to a major increase to the advantage

of our fishermen along our coast next year.

MR. FITZGERALD: How many marine service centres

does the Provincial Government maintain today?

MR. EFFORD: We have about twenty-four, but they

are mostly all leased to private operators and we have a policy, now at the

direction of government over the last budgetary process, and it is now being put

in place to sell them to interested stakeholders.

MR. FITZGERALD: How many do you not have

leased? How many do you still look after?

MR. EFFORD: We do not have any not leased. They

are all leased.

MR. FITZGERALD: All leased?

WITNESS: And have been for a number of years.

MR. EFFORD: Have been for a number of years,

working very very well, by the way.

MR. FITZGERALD: Yes, I know the one in

Bonavista is doing very well there. The only problem with the fellow down there,

Minister, is that whereby he is designing a shrimp winch, if you would,

fashioned after one he got from - the prototype came from British Columbia, and

he is not very happy with your department trying to implement the design of one

from Nova Scotia. Is that true or not?

MR. EFFORD: I was there on Friday morning. My

assistant deputy minister and myself went down there just to visit some

fishermen, as we do when we visit any area. The first thing they said to me was:

`Efford, I wish you would come down here and run for us.' That was the first

thing they said.

MR. FITZGERALD: I doubt that - I am surprised

they even let you in on Saturday.

MR. EFFORD: Did they not, Glenn?

MR. BLACKWOOD: I am sorry, I cannot get dragged

into that one, but one of them did, yes.

MR. EFFORD: Yes, one of them did.

MR. FITZGERALD: That was the next question: How

many?

MR. EFFORD: That is true, they did.

MR. FITZGERALD: Not they, one - correction -

for the record.

MR. BLACKWOOD: There were a lot of people

standing behind him.

MR. EFFORD: That is right, Sir, I can assure

you, they would love it.

Anyway, to get back to the issue at hand, we had a

chat with the fellow in the marine centre on Friday morning, I went down there

to say hello and to meet some of the fishermen. And he is quite right, that

whatever opportunities can be derived from the shrimp industry should be to the

maximum benefit of the people of the Province. Just coincidentally, about a week

before that I was talking to `wassisname' Barnes, in our department.

WITNESS: Brian Johnson.

MR. EFFORD: Brian Johnson, I am sorry, who is

sort of in charge of giving out information on the opportunities in the industry

and I have said very clearly, `Do not buy as much as a nut or a bolt outside of

the Province of Newfoundland, I do not recommend, if it can be manufactured here

in this Province.' We are not going to be bringing in anything - the marine

centres or private industry will get full advantage of manufacturing whatever

the needs of the fishermen are.

MR. FITZGERALD: He explained to you what he

though his problem was here.

MR. EFFORD: He showed me the winch.

WITNESS: I checked on that this morning, Sir.

We have not ordered a winch from outside the Province.

MR. EFFORD: No.

MR. FITZGERALD: I think they were looking at

the design and probably suggested -

MR. CHAIRMAN: If I may, for a second, when the

officials speak I would appreciate it if they would identify themselves for

recording purposes and writing the Hansard.

MR. FITZGERALD: Minister, secondary processing,

value-added. It seems that here is another area where we continue to say it is

going to provide a great opportunity and we should never allow anything that we

process here to leave this Province without having it ready for the supermarket

shelf. We still have a long way to go, I say to the minister.

I went in - and I brought it to your attention -

down in Charleston some time ago; and it was criminal what the operators down

there were doing. I do not know if you checked it out afterwards or not, but it

was a situation where they were packing herring ready for the export market,

from what I understand. You did not know if they were packing them to be sold as

hockey sticks or boomerangs or what. It was just being thrown in as it came -

sea-run - as it came from the (inaudible), into the boxes and put into a master

carton into cold storage, and then, I would suspect, outside the Province. Are

you looking at ensuring that this is not allowed to happen, or those people are

brought to realize that this is not the way to process and provide an export?

MR. EFFORD: First of all, just let me bring you

up on the finished product. There are thirteen companies now engaged in further

processing of fish products in the Province. The value of exports is about $50

million. It is not enough. The government can only set the policy and set the

direction. It has to be up to private industry to do the value-added and the

secondary processing. We are encouraging more to get into it, and there seems to

be a greater interest.

One of the policies that we brought in in our

recommendations and that was approved by government this year, was that no

products are going to be shipped out of this Province, only what the market

demands fresh. In other words, if it is going to be further processed outside of

the Province of Newfoundland and Labrador, it is going to stop. Are we looking

at it? Yes. It is not only looked at, it is being implemented now as we are

talking. Now, that is not to say fresh mackerel or fresh herring or fresh caplin

cannot go out if it is going to be used. In the case of herring and mackerel

used for bait, you cannot process mackerel -

MR. FITZGERALD: (Inaudible) for food.

MR. EFFORD: If it is going to go out for food

and be further processed, it must be done here in this Province. So hopefully

before the end of this calendar year, we will have some major changes in that.

The companies know I am not playing games, that I am very serious about it, and

the first one we catch, they will regret that they did it. We are getting a good

response right across the Province. In fact, even most of the processors agree

with it.

But if the consumer or the market demands a fresh

product, then we have to allow it. Tuna goes to the Japanese people fresh and

they eat it raw; headed and gutted halibut or turbot that goes right to the

consumer, and they buy a whole halibut or a whole turbot from the Boston fish

market, or the Japanese fish market, or whatever. So it depends on what the

market demands. Our policy is very clear. If it is intended to be further

processed outside of the Province, then I am sorry. It has to be done here.

Now, on that one, it is not going to be as easy to

maximize the benefits on caplin - What do you call it?

WITNESS: Shishamo.

MR. EFFORD: Shishamo. I get confused on that

name. Anyhow, the Japanese are set up to do that in Japan. They take the fresh

female caplin and they process it to its maximum for the market in Japan. We are

saying now that we have to look at doing that more in the Province. We have a

couple of companies now, one in - Breakwater Fisheries -

WITNESS: Cottlesville.

MR. EFFORD: Cottlesville, and we have one down

in Happy Adventure. Moss is looking at it, and Quinlan's is looking at it now.

We just cannot bring that to its maximum this year, but we have started it. To

take caplin, 40,000 tons or 20,000 tons, whatever the female run would be, put

it in freezers, and hold it until you process it, it takes months. You have to

have a lot of money to support that. But anyhow, that is the only one, anyway,

that we are not going to maximize right away, the rest of it we are.

MR. FITZGERALD: Lump roe is another prime

example, I mean, where (inaudible) -

MR. EFFORD: Lump roe?

MR. FITZGERALD: Yes. It is shipped out in

brine. I do not how big the barrels are but (inaudible).

MR. EFFORD: We already now have a company that

has an application in for secondary processing, which really pleased me, on lump

roe. We are moving in the right direction.

MR. FITZGERALD: Minister, is there anything

positive about to be announced for the plant in Port Union? Anything that you

know of that may relate into some activity there that might provide those people

with some hope of getting into their plant there and going to work?

MR. EFFORD: No. I am not going to announce or

talk publicly about the interest that has been shown to our office about that

plant. I told you about the Italians who were down there. We have two or three

companies which want a part of the plant, not all of it. Remember, I mentioned

to you before about the chitin.

MR. FITZGERALD: Yes.

MR. EFFORD: In fact, I heard a good story on

the radio this morning about the marketable opportunities for that product. I do

not want to talk publicly about it until I am absolutely sure that something is

going to happen there. Because people's hopes get built up, and then let down,

and built up, and let down, and that is not fair to the people who live in any

community. Too much of that has gone on in the past. When we are absolutely sure

that something positive is announced, we will make sure the people know it as

quickly as possible.

We do have some serious interest in that plant.

When I was in Bonavista on Friday, in presentations I made to the children down

there, the high school kids, they asked me that question several times.

I said, and I will still say as I said earlier,

what should happen is that the licence should be transferred from Bonavista into

Port Union and make it a multi-species operation, and then you would have lot

more positive feeling about what is going to happen in the future. Then the

other things could fall right in line with it. They all agreed with it, by the

way. The kids agreed with it. Like they said: What is wrong with driving up the

road? That hopefully will come over time, but the interest shown now, certainly

I would not talk about it publicly.

MR. FITZGERALD: But some people are interested?

MR. EFFORD: Yes. It is a big plant. It is a

major -

MR. FITZGERALD: It is, yes.

MR. EFFORD: Just imagine staffing (inaudible).

MR. FITZGERALD: I was down with the Italians on

Sunday and went through the plant there. It is massive.

MR. EFFORD: It is massive.

MR. FITZGERALD: Massive. But the only thing is,

you know, you can close doors and you can put up petitions, you do not have to

operate at all.

MR. EFFORD: Well, yes, but if you had the

shrimp and the crab and the caplin, if you had the other species, and you had

some of the groundfish stocks, then you could make it worthwhile.

MR. FITZGERALD: Yes. It is a core plant, so you

can get all the licences, right?

MR. EFFORD: It is not a problem.

MR. FITZGERALD: Last question. When you were

down to Bonavista on Friday, did everybody you talked to down there tell you

what a wonderful member they had?

MR. EFFORD: Not one. In fact, Glenn was down in

the cafeteria, and when the kids were talking after I made my two or three

presentations, they said: Isn't that Efford something?

MR. FITZGERALD: Something or something else?

MR. WOODFORD: (Inaudible) Efford.

CHAIR: Thank you very much for that, Mr.

Fitzgerald.

Ms Hodder, would you like to ask a few questions of

the minister?

MS M. HODDER: Actually, I do not have too many

questions. I think the questions have been pretty much taken care of by the hon.

member.

MR. EFFORD: Spend five minutes praising me up.

MS M. HODDER: I certainly could do that for

much longer, because I certainly feel, and I am sure everyone else around this

table does, as well as the rest of the Province, that the fishery is in the most

capable hands - the most capable and most knowledgeable person in the whole

Province to take care of this portfolio.

It is also very nice to meet your staff this

morning. I think it is the first time that I have met your Deputy Minister since

I came in here, but we have had several conversations on the phone. The reason

we have not met is because I have had such immediate response to everything I

have called about. Even last week, I called, and I had a major crisis there for

a few moments, but when I came in on Monday morning, everything had been

resolved. When you get that sort of action there is nothing to complain about.

Everything is looking really well in my district. I

understand the Marystown fish plant will reopen in June -

MR. EFFORD: Yes it will.

MS M. HODDER: - and there is a lot of

enthusiasm in the business community about that, because, of course, it is the

fish plant that everyone depends on. The hairdresser, the taxi driver, everyone

reaps the benefit when the fish plant is open, so everyone is quite enthused

about that.

I am filling in here this morning for another

member so it is not normally my Committee. I just glanced through this before I

came in. One of the questions I was going to ask - there seems to be a variance

there in the Grants and Subsidies. Could you fill me in a little bit on this? On

page 117, 2.3.01.10, Grants and Subsidies, revised. Last year it went from

budgeted $495,000, to revised, $748,000.

MR. EFFORD: That is the sealing. Last year we

subsidized the seal meat. Actually, when we started up last year, we did not

know how successful the hunt was going to be. As a result, it proved to be a

total success. We harvested the 250,000 animals and a lot of the meat - some

went into food for human consumption, but a lot of the meat went into animal

food. As a result of opening and developing new markets, we subsidized to, what

was it, 15 cents?

WITNESS: Fifteen cents (inaudible).

MR. EFFORD: Fifteen cents, yes.

MS M. HODDER: Thank you very much.

MR. EFFORD: Let me say just a couple of words.

You are very fortunate on the Burin Peninsula and up around your area that the

processing industry is very successful. There are a couple of other things I

would like to see happen out there. We have had some talks with FPI. It is a

very good company. I visited the Burin plant, I visited the Marystown plant, as

you know. I only wish we had another half-a-dozen of those around the Island

because in the secondary processing -

MS M. HODDER: Absolutely.

MR. EFFORD: It is one of the top companies

worldwide. Down at Boston seafood show this year, it was a pleasure, it gave you

that feeling of pride to be down there and see the way the FPI booth was set up,

and the response it was getting. It was tremendous, you know. There is room for

more of that in this Province. Hopefully, that company is going to expand, and

people, through a little bit of forcefulness from ourselves, and yourselves,

everybody, that we can encourage and - but the opportunity is out there.

The St. Lawrence, of course, is going to be a major

addition because that is an integration of fishermen and private industry and

they have a major supply of resource, multi-species. I think the official

opening is scheduled for around the end of this month, so that is going to be

another major addition to that area.

MS M. HODDER: Great times to be (inaudible).

MR. EFFORD: Yes it is, really, seriously.

CHAIR: Thank you, Mary.

Now the Chair recognizes Tom Osborne.

MR. OSBORNE: Thank you, Mr. Chairman.

Just one question to the minister: Under

section

3.1.02, the Strategic Enterprise Development Fund. It was over budget in the

revised in -

MR. EFFORD: Where?

MR. OSBORNE: In the Strategic Enterprise

Development Fund.

MR. EFFORD: I do not know what it is, the

Strategic Enterprise Development Fund. Is that fisheries?

MR. OSBORNE: No, I am sorry.

MR. EFFORD: You got development.

MR. OSBORNE: Yes, I apologize about that.

Are there any grants and subsidies allotted this

year for development of small enterprise within the -

MR. EFFORD: What in the fisheries, species?

MR. OSBORNE: No, within the fishing industry?

MR. EFFORD: No.

MR. OSBORNE: I guess, more specifically, other

St. John's districts, mine is probably more involved in the fishery than any of

the others. As you know, I have three communities in my district that are

involved in the fishery. The north side of the St. John's harbour - which is in

another district, actually - as of this year, is no longer going to allow small

and medium-sized fishing vessels to dock. They are going to have to dock on the

south side, which is in my district.

MR. EFFORD: That is right.

MR. OSBORNE: As you know, the Fort Amherst boat

basin right now is over-utilized and they are looking to expand. They are going

to need to expand with the reopening of the ground fishery, as well as

development in many other sectors of the fishery. The demand on that boat basin

is going to be overwhelming, especially considering the fact that the small and

medium vessels are no longer allowed to dock on the north side. I guess what I

am driving at: is there anything available for those guys to help them expand

their finger-piers and so on?

MR. EFFORD: Tom, as you know, all of that comes

under the federal initiative, DFO, Small Crafts and Harbours, and Public Works

Canada. There has been a major shift in harbour development by the Federal

Government. In fact, they have gotten away from a lot of the duplication of

building harbours. Out in my area, if you look at from Holyrood down to Harbour

Grace, I mean, all of those harbours, wharfs and docks in each one is certainly

an over capacity. So what they have decided to do now is make a couple of major

harbours out there and get away from up-keeping all of the harbours.

In the case of where there is an over-utilization -

in your case, I am sure there are programs in there by DFO. Certainly in all of

the discussions I have had with Small Crafts and Harbours, where there is a need

they will certainly look at it, but they are not going to duplicate. As you just

explained, there is certainly going to be a demand for more space because of the

changing in the operation of the whole port of St. John's. So yes, there will be

some, but it is not provincially, it is federally.

As far as grants and subsidies provincially are

concerned, in the processing industry, the only thing that we are going to get

involved in is job training and research and development. I do not believe that

the fishing industry -

The processing industry should be subsidized for

its capital expenditure. I think it should, like any other business, operate on

its own merits and not be propped up by government. Because in the past there

was too much money given to the processing industry and that is the reason why

we have so many plants that are now not operating around the Province,

multi-millions of dollars wasted.

In the case of infrastructure, federally, yes,

there will be monies where the need is definite. In fact, last year I had

announced that in Port de Grave harbour we are spending $5.8 million over a

four-year period, and down in Harbour Grace now they are doing an infrastructure

there for fishermen because they have a problem similar to the one you have. The

whole Harbour Grace port - where it used to be the Harbour Grace fish plant is

not able to take the capacity of boats that are down there, and they are

shifting them and building another marina. So my only suggestion would be to -

when the need arises, discuss it with DFO - well, your federal MP and then,

Small Crafts and Harbours.

MR. OSBORNE: Okay, thank you.

CHAIR: Thank you, Tom.

Ms Thistle.

MS THISTLE: Thank you.

Minister, as you know, I represent an inland

district where forestry is everything, although I hear a lot about the fishery,

being married for a long time to a guy from DFO, so I have always had a keen

interest in it.

I was sitting here this morning and I was kind of -

actually, I sat in the same chair last year and I heard your plans on what you

hoped to do in 1996 after first being elected. That was not the first time

elected.

MR. EFFORD: That is Fisheries and Aquaculture.

MS THISTLE: In your Fisheries and Aquaculture

portfolio. You did bring about the new under-utilized species, which you said in

the meeting this time last year you would do. I think what that has done, you

have brought about a new type of optimism throughout the Province. People now

believe that the fishery is coming back and it is coming back in a different

way. I commend you for that. Keep up the spirit that you are bringing to the

people. You have a lot of encouragement going out there. Continue to do that,

because it is giving a new hope where for the past four or five years there was

no hope. I commend you for that.

When you introduced your staff this morning, or

they introduced themselves, this guy on the end, Jerry Ward, I have an

appointment set up with him for the end of the week to talk about aquaculture in

my district. I must say, keep up the good work, John, you are doing a good job,

and we are interested in hearing more positive things in the future.

MR. EFFORD: Anna, thanks very much, but just a

couple of words on that. While you directed your thanks at me, and I appreciate

it, I just want to mention the staff of my department. I tell you, they are a

tremendous staff. There is a lot of excitement down there. There is never a dull

moment. We do not agree on every issue, but certainly what makes us healthy is

we agree to disagree. There is an overall optimism right around the Province.

Most Newfoundlanders and Labradorians hear so much

negative all the time and they need to hear positive things. Then it grows from

that. You are right, there is optimism right around the Province. I know

everywhere I go - like, I went down to Roger's district on Friday to make a

presentation to high school students, and I dropped down to the wharf. One of

the fishermen I talked to was just getting his whelk pots. They are interested

in the shrimp and the beam-trawling and all these things. So people are starting

to think differently and get away from the idea: well, there is no fish. Because

that is what kills me, when I hear someone saying there is no fish. There is

fish, you just have to go out there and get it. They hear so much negative all

the time, but it is changing, you know. Our job in the department is to keep it

changing. Thanks very much.

CHAIR: Thank you, Anna.

Rick Woodford.

MR. WOODFORD: I would just like to make a few

short comments, Mr. Chairman. I just wanted to make the minister and his

officials aware, and I am sure they are, in any case, of how important the

fishery is to my area. You might say: Well, you represent the District of Humber

Valley - what do you have to do with fish, other than when you eat it? Not so. I

have the Bonne Bay South part of the district, especially where it pertains to

Trout River and the Bonne Bay area, the Woody Point area. Then, I have the

Jackson's Arm area, which has been ongoing for years. I am sure this gentleman

here, who has just taken over the Assistant Deputy Minister portfolio for that

department, is very much aware of what P. Janes and Sons are doing in that area.

For instance, I met with some people on Friday

night who were talking about the squid. If that comes back this year like it did

last year - I mean, the community of Hampden had some problems with it, because

the fishermen did not want anybody else catching it and so on. But there was 6

million pounds of squid landed in Hampden last year. No plant, no fishermen in

the community - now no licensed fisherman. There might be one licensed fisherman

in the community of Hampden, but no plant, no anything, a little wharf there

that they had over the years, and a lift they put there ten years ago that was

not utilized for ten years. They picked up all the parts and got it all back

together and got it working. That catch amounted to $1.3 million in the pockets

of the people there last year. It helped students go back to university,

students go back to high school, and so on. It is unreal the trickle effect, the

employment effect, that one little species can have on an area.

However, I would like to make one comment, a

statement, I suppose, and it is a cautionary one, to the minister. I am sure he

is well aware of it. He brought up about the five crab licences that are going

to be put out around the Province. Jackson's Arm, down at the bottom part of

White Bay, in my area, is primarily existent and dependent on the crab industry.

I would caution him to be very much aware of that in issuing new licences. It is

no good to put a licence into another plant, a new plant, and put the other one

out of business, especially when one is primarily dependent on the crab fishery.

Other than that, I could make all kinds of comments

with regard to other parts of it, and go into it, but it would only be

prolonging it. I do not know if anybody else has any other questions, if so, I

would pass it over to him.

MR. EFFORD: Before you do, let me make a couple

of comments.

The first issue that Rick raised is a valid one. We

have to look at the squid fishery, and we have to convince DFO to look at the

squid fishery, differently from other fisheries. The difference is, it is a

certainly a unique species of fish. You do not know when it is coming, and when

it comes it comes in spurts, and you do not know what time of the day or night

it is going to end. But the quota for squid is 150,000 metric tons. We give the

Japanese automatically, off the top of that, 35,000 metric tons, which I

disagree with if we have the capability of catching it.

We have to allow people to fish that squid, to

utilize it in the different communities, because it means the survival of some

of those families in the Fall of the year, so we cannot close it off to just a

strictly core fishery. We have to be flexible in that one fishery alone because

of the reasons you just gave.

Down around Bonavista and those areas, going out

and catching a few squid, drying it on the fence -

WITNESS: Especially for drying.

MR. EFFORD: Especially for drying, people have

to be involved in it.

The other thing I have a problem with, we have a

150,000 ton quota. We will probably catch, in a good year, 8,000 or 10,000 tons,

and we leave the rest in the water. Yet, we have a regulation where a purse

seiner, a sixty-five footer or forty-five footer, cannot purse-seine squid, but

we give 35,000 tons to the Japanese.

I am making presentations to Ottawa, and hopefully

we can get some flexibility in that type of fishery. We all have to understand

that we have to get the FFAW, or whatever union is going to be representing the

fishermen in the future, on side, and fishermen's committees, because that is a

real problem. How can you go down and refuse the people of Cottlesville or

Bonavista or Port Union or others, and say: You are not allowed to go out and

catch that fish but we will allow the Japanese to take 35,000 tons and we will

have 120,000 tons stay in the water?

MR. WOODFORD: Let it wash up on the beach. It

does not make sense.

MR. EFFORD: Let it wash up on the beach, yes.

Squid is a totally different fishery, and it is crucial to the people's income

at that time of year. It means a lot to families - kids going to school, and all

the other reasons.

MR. WOODFORD: Can you imagine, over a million

dollars in a small community like that, in the Fall of the year? It was life or

death last year. This winter it made the difference in survival for people.

MR. EFFORD: Yes.

As far as the crab is concerned, we are going to be

very aware, and we will not allow a plant to obtain a licence for crab, or any

species, to do processing at the expense of another community. We have to be

very careful of that, and regional balance is a key factor in the criteria.

CHAIR: I think Roger has a question.

MR. FITZGERALD: I have just a couple of more.

Rick touched on the squid fishery, and I am very much aware of how important

that particular fishery is.

I compliment the government of the day, I suppose,

for changing the rules and regulations of how it had planned to carry out the

squid fishery last year, because there were a lot of concerned people out there.

I have never seen happier faces than back in 1979, 1980, and 1981, when the

twelve-mile limit was extended to the 200-mile limit and when the squid fishery,

I suppose, was at its peak right here in this Province. Clotheslines, fences,

everybody was making money and everybody was smiling. I do not think people with

a boat licence should be allowed to go out and compete in selling green squid,

but fishermen - if there is an abundance of squid to the point where the plants

cannot process it, and we have the everyday fishermen not be able to sell his

catch, I disagree with that; nobody should be denied the opportunity to catch

squid and dry it. There has always been a market for that particular product,

and hopefully it will continue.

Minister, I noticed when somebody asked you a

question on the appropriations here that you talked about a subsidy paid on seal

meat. There is obviously a subsidy again this year?

MR. EFFORD: Yes.

MR. FITZGERALD: Is it back to eight cents

again?

MR. EFFORD: No, it is reduced this year from

fifteen down to five cents?

WITNESS: Nine cents.

MR. EFFORD: Nine cents, I am sorry.

MR. FITZGERALD: Nine cents.

MR. EFFORD: What they did this year - I am

sorry - they paid so much a carcass.

MR. FITZGERALD: Yes, so they did.

MR. EFFORD: They paid so much a carcass, and

that has to be reviewed.

MR. WOODFORD: A flat rate.

MR. EFFORD: A flat rate for a carcass.

MR. FITZGERALD: So they did. There was some

concern about that as well.

MR. EFFORD: I had some concern, because the

fishermen were not satisfied with it, and I was afraid they were leaving too

much in the water.

MR. FITZGERALD: Yes, and the people who were

buying it for meat had some concerns about it because they could see the smaller

carcasses coming in rather than -

MR. EFFORD: It is a job to achieve a balance

between what is the right decision - because if you keep the subsidies, then the

processor will never up the price. If you do not pay the subsidies, then the

fishermen will not bring it in. So we have to determine what the market is

paying, and then ensure that the processor is going to pay the fishermen the

better price, because we cannot keep subsidizing forever.

MR. FITZGERALD: No.

Is there another proposal being put forward to your

office for a second seal tannery in this Province?

MR. EFFORD: I have not received a proposal yet,

but I have had three different companies that have already talked to me about a

tannery. You have to remember, there is some confusion about the tannery in Baie

Verte.

MR. FITZGERALD: Yes, I know what you are

saying.

MR. EFFORD: That one is not a seal tannery.

That one is doing all animal hides, importing all over. But interest has been

expressed.

MR. FITZGERALD: Port Union would be an ideal

place for that, the Mifflin facility there. I do not know if you have had a

chance to go through it.

MR. EFFORD: Yes.

MR. FITZGERALD: There is a lot of floor space

there with cooling accommodations, and the plant is such that you can move into

it today. It has been well-maintained and well-kept, right on the dot.

MR. EFFORD: It is not only the tannery, it is

the sea oil processing and the meat. The sealing industry is only now starting

to come on stream and it has to get bigger because the population is out there.

And the markets are there, so it has to get bigger.

MR. FITZGERALD: Yes, that is all I have.

Minister, you are trying, I will give you credit for that.

MR. EFFORD: We are doing.

MR. FITZGERALD: You are trying. If you can only

convince your cousins up in Ottawa to get on-side with you and realize the needs

here in this Province, then maybe we can take steps, make some progress, and

move much faster than we are moving. Keep trying and one of these days I might

get you back to Bonavista again.

CHAIR: Thank you, Roger.

MR. EFFORD: If I come back to Bonavista again

they will never look at you any more.

CHAIR: Are there further comments or questions

before we call the headings?

MR. WOODFORD: I move the adoption of the heads

from 1.1.01 to 3.3.02, inclusive, Mr. Chairman.

On motion, subheads 1.1.01 through 3.3.02, carried.

On motion, Department of Fisheries and Aquaculture,

total heads, carried.

CHAIR: Before we conclude, Minister, I just

want to say that although I am representing a district that obviously is not

connected to a sea, we are connected to it through a heritage and culture and

family tradition, and on behalf of the residents in Labrador West, we appreciate

what this department is doing for rural Labrador and rural Newfoundland. When we

look back and see our families, all of us came from somewhere else and migrated

to Labrador West to work in the mines. We all have family who are directly

involved with the fishery throughout the whole of this Province and it is

important to us to see that there are new opportunities being evaluated and new

opportunities being met and dealt with in the marketplace. So, on behalf of

those I represent, I want to say I appreciate your efforts and the efforts of

your staff.

With that, I ask for a motion to adjourn.

MR. WOODFORD: so moved.

The Committee adjourned until 7:00 p.m.