April 23, 2002 RESOURCE COMMITTEE

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

CHAIR (Walsh): Good morning, folks.

Just for the sake of clarification, my name is Jim Walsh and I am Chair of

the Committee. I will ask participants to introduce themselves and remind each

person that, when speaking, if you could identify yourself as well, simply for

the sake of Hansard. For the MHAs, it might not be too bad even though we are

sitting in different seats than they normally would expect us to be in; if we

could do that.

I apologize for being late. Elizabeth reminded me that I was picking up where

Paul Dicks left off, being a little late getting here. The irony of it is, I had

to pull over to the side of the road this morning because he was on the phone

with me. Once again, Dicks is haunting the building.

WITNESS: (Inaudible).

CHAIR: We were talking about a meeting tonight in Carbonear. If you would

like to come along, I will make arrangements.

Before we do our introductions, I have minutes from a previous meeting that

was held on April 16. The minutes were for the Department of Forest Resources

and Agrifoods. There was a motion from Mr. Sweeney, seconded by Mr. Butler, and

Mr. Taylor was elected Vice-Chair. The department, of course, came before us and

with that was the minister and his officials. The committee reviewed, without

amendment, the Estimates of Expenditure of the Department of Forest Resources

and Agrifoods. On motion, the Committee adjourned at 11:30 a.m. on Tuesday,

April 23.

On motion, minutes adopted as circulated.

CHAIR: We will deal with the Fisheries portfolio this morning and, with

that in mind, I will invite the Committee to introduce themselves and then we

will go to the minister, if he wishes to have an opening statement. Then we will

begin our proceedings.

George, maybe starting with you.

MR. SWEENEY: George Sweeney, MHA for Carbonear-Harbour Grace.

MS M. HODDER: Mary Hodder, MHA for Burin-Placentia West.

MR. BUTLER: Roland Butler, District of Port de Grave.

MR. TAYLOR: Trevor Taylor, The Straits & White Bay North.

MR. HUNTER: Ray Hunter, Windsor-Springdale District.

CHAIR: Thank you very much.

Mr. Minister, if you would like to begin by introducing or having your

officials introduce themselves, then we will come back to you for an opening

statement, if you wish.

MR. REID: On my right is Mike Samson, he is the Deputy Minister. On my

immediate left is Brian Meaney, Assistant Deputy Minister responsible for

Aquaculture. Next to him is Mike Warren. He is the Executive Director of Policy

and Planning. I have Elizabeth Matthews who is the Director of Public Relations.

CHAIR: Mr. Minister, if you wish.

MR. REID: I am not going to take a long time with the overview. Last year

we had a fairly decent year in the fishery, but it was down roughly $120 million

from the year previous.

I think the export value of fish products in the Province last year was $867,

$868 million, down from about a billion the year before. The reason for that was

twofold. The price for crab was down and more importantly, I guess, we left

somewhere in the area of 25 million pounds of shrimp in the water as a result of

closure in the shrimp fishery last summer which was brought about mainly because

of the low price in the marketplace. They were successful in getting back to

fishing shrimp from mid to late September. The catches were somewhat better than

they were earlier in the summer, but again the market price was down so the

processors only took about 25 million pounds or 35 million pounds at that time.

This year we are off to a good start with the seal fishery. We have about

220,000 seals taken to date. We are hoping to take the entire quota, plus some,

if possible. The prices have never been seen before in the Province - up to $70.

It is a good start to the season.

We have prices negotiated with the union and FANL for pretty well all the

species right now. It looks like there is not a lot of change from last year. We

are hoping this year that the fishery will go over a billion dollars again.

In Aquaculture, we had a pretty good year last year, in terms of our

Salmonids. We produced 2400 tons, up from 1700 the year prior to that. In

mussels, we went to about 1500 tons from roughly 1200 the year prior to that.

The problem with the Salmonids was that the Chileans were dumping. Even though

we produced more, we probably did not make as much money on it because the

Chileans are dumping salmon fillets into the U.S. markets for below cost. They

are dumping salmon fillets onto the U.S. market for ninety-five cents a pound.

If you think about that, you cannot produce anything for that today. So we are

hoping that will come around.

The aquaculture industry is growing and we are hoping that it will continue

to grow. There are a couple of things that will happen in the very near future.

One is that there should be an announcement made on a cod hatchery for Bay

Roberts. The member for that area, Port de Grave, should be happy about that. It

will cost somewhere in the area of - what, Brian - $2 to $3 million?

MR. MEANEY: Inaudible.

MR. REID: Three million dollars. We are hoping that ACOA will help out

with some of the funding for that, to get that started. That group is a

combination of three processors, three well known processors in the Province, as

well as an investor who is already in Bay d' Espoir. Last fall they had

hatched from eggs, down at the Logy Bay facility, 60,000 cod and they moved them

to Bay d' Espoir last fall without any mortalities, I think. Brian, am I

right?

MR. MEANEY: Very few.

MR. REID: They have survived the winter and they are growing. With the

hatchery, we are hoping to get more of that on the go because there seems to be

a keen interest in it. I think that is one product that we can easily market and

market for quite a good price. Last year cod fillets went in the United Kingdom

for - how much, Brian, a pound?

MR. MEANEY: Ten pounds.

MR. REID: Ten pounds a pound. So that is $20 a pound cod fillet. If we

can get into this cod aquaculture and again try to get around the tariff going

into the EU, we can certainly make some money on that.

It looks like it is turning out to be a half decent year in the fishery, but

who knows. As the Member for The Straits knows, anything can happen. We were not

expecting a shut down in the shrimp fishery last summer. We are only hoping that

the season will continue the way it started with the seal fishery. Basically,

the longliner crews on the East Coast took a quota of 120,000 animals in two

days, and that is certainly a record. We are hoping to be able to take the

entire quota this year. We are dealing with the federal government to try to

have that increased, as we speak. We are asking for a rollover into our

multi-year TAC for seal, such that in any given year, if we do not take them, we

can take them the following year. We have taken as little as 70,000 in some

years and the quota, I think, is 275,000. That would mean we could transfer

200,000 over into the next year. God knows, we need to do something with the

seal population, even though some people do not want to talk about it, and I

think it is best not to, publicly, because every time we do we bring the wrath

of the IFAW down upon us. This year we have been somewhat successful in not

having much attention paid to the seal fishery and I would prefer to leave it

that way. When we get out talking about extra quotas and culls, the media always

seems to want to talk about it, and then we bring all those groups down upon us

here in the Province. I should not even be talking about it here now, because I

just remembered that this is going out as a live feed - isn't it? - to all

those people we are talking about. So, I apologize.

With that, I pass it back to you, Mr. Chairman.

CHAIR: Thank you very much, Mr. Minister.

I would like to move heading 1.1.01. With that, we will begin with Trevor.

MR. TAYLOR: I will start off with a few general questions. I will just

ask probably two or three questions here before we get into the actual

Estimates.

You mentioned salmonids production and mussel production growth in the

previous year. I was wondering: What are your projections for growth in both

those areas this coming year?

MR. REID: We are expecting to produce more of both the salmonids and the

mussels. The problem we had is, the year before last, I think - Brian, was it? -

we had more mussels in the water than we could sell. This year the opposite is

true. In fact, we had a processor in last week who wants to get into it, and his

biggest problem is finding the product. So there is lots of room for the

expansion in mussels as well as in the salmonids.

As well, Trevor, there is a bit of a change down in Bay d' Espoir. We are

now finding interest from outside the Province and outside the country actually.

I think it is Stolt Sea Farm that has just purchased the Conne River aquaculture

sites. Stolt is one of the largest aquaculture salmon producers in the world.

While it is unfortunate that the Conne River group could not stick in there and

make it viable, the fact that Stolt is in there - they have the expertise and

they also have the money, so I am expecting expansion in that regard.

With regard to the mussels, as well, it looks like it could be even a better

year, because right now, I think, in P.E.I. there is some- and I think it also

spread into New Brunswick yesterday. Brian?

MR. MEANEY: Yes.

MR. REID: They are having a problem with water quality. What is in the

water over there?

MR. MEANEY: It is domoic acid.

MR. REID: Domoic acid, whatever that is. Apparently it makes you sick. If

you eat the shellfish, you can get violently ill and even suffer memory loss,

according to the news last night. So they will not be selling many mussels this

year until they get that problem solved. That is an opportunity for us to even

sell more.

Along with that, we have a number of processors in the Province who are now

becoming involved in the mussel industry, and they are doing secondary

processing. Grand Atlantic down in St. Lawrence are doing two or three really

nice packs along with Greens and Woodman's. We are seeing an interest by the

processors in aquaculture which is a good sign, because usually they hold back

and wait to see if there is going to be a dollar made in that, as you know. It

looks like there must be going to be one or they would not be investing in it.

So, it is a good sign. They have more money, as well, than the individual

farmers and it is great to have a market. It is good for the farmers to have a

market for that product.

CHAIR: Just for the record, Trevor is sitting in the Leader of the

Opposition's seat, so if we can get the microphone that way. Also, they

notified me from downstairs to remind us that this is strictly for Hansard, we

are not live. We are not talking to the people at large, although I know there

were many phone calls, hundreds of phone calls, I am told, where people wanted

to have this broadcast this morning. It is just us and Hansard.

MR. TAYLOR: Second question: You mentioned the shrimp fishery closure

last year - I know the prices have been negotiated for this coming year, the

summer price - and less of a closure in the fishery this year than we

experienced last year. At least that is the way it looks right now. I have been

getting some concern coming back from the processing sector and some, to a

lesser extent, from the harvesting sector. While things have changed and the

negotiations have covered off the summer fishery and stuff like that, there is a

fair amount of concern that even though that has taken place, we could still see

ourselves hit a wall, probably from a cash flow perspective, in mid- June. Maybe

it is not a fair question but I will ask it anyway and you can judge whether it

is a fair question. Do you have any concerns that we might find ourselves in a

similar situation to that which we saw last year? I know the markets have

improved somewhat, but I sense, with the competition for crab and the prices

being driven beyond what was expected, some people are concerned about the

affect of that on the shrimp fishery, especially once we pull into mid-June.

MR. REID: I always have a concern about that. With regard to cash flow,

one of the major problems that we have with our shrimp fishery, unlike Iceland

and the other European countries, is that they harvest and process shrimp over a

twelve-month period,

whereas we do it basically between April and, I guess, the

end of September or October. We are doing in a six-month period and, therefore,

we have to hold that processed shrimp in inventory. Not only are we tying up

large amounts of cash to processors but they are also having to, I guess, pay

the interest on that. There is always a problem with regard to that.

I am glad to see that they have made some attempt to have remedied the

situation with regard to the summer fishery. There are two problems with that.

One is, back in 2000 we almost had a glut. The argument could be made that we

have an over capacity in the processing sector. The way we harvest most of our

species is that we do it in a very short period of time and if we never had the

processing capability, we would end up dumping the product.

The other problem is one in terms of quality and yield. If we are going to

harvest shrimp in the warmest time of the year, obviously, it is going to have

an impact on the quality, when you consider that they are out there in July

month. You have shrimp onboard a vessel for three days, it comes in, you lay it

upon the wharf, then it has to go onboard a truck and trucked for as many as

fifteen hours, and then maybe wait another day after it arrives at a plant

before it is processed.

In the panel that we just had examining the fishery they said we should not

allow any shrimp that is any more than six days old to be processed. I think it

is a very good idea. But, there are going to be some problems inherent in that

for the harvesters. Even though they only had it for three days, the problem is

the trucking.

The other thing, like I said, is the yield. Apparently, while the shrimp are

bigger, even at the end of June, the yield on the shrimp is lower. Even though

it appears that the shrimp are larger, the actual yield, after you process it

and take it out of the shell, is smaller than it is in the spring of the year

when the shrimp are smaller. I guess it is fuller inside in the spring and in

the fall than it is in the summer. All of those are problems associated with

fishing at that time of the year.

But, having said that, in those vessels that are forty-five feet in length,

as the Member for The Straits knows, it is difficult to have them fishing in the

early spring or late in the fall because of the environmental conditions, ice

and wind, and because the vessels are much smaller. When you think that you are

out there, anywhere on the Northeast Coast up to 200 miles in the fall of the

year in a forty or forty-five foot vessel, it is not conducive to safety for

sure; not to mention the difficulty in working on a platform like that at that

time of the year. So, there are a lot of problems that we are going to have to

try and overcome to make the shrimp fishery a much more viable one, and one

where the quality of the product can be much higher than it is.

MR. TAYLOR: You mentioned our competitors being able to process over a

longer period of time, basically a fifty-two week production year,

whereas we

have, at best, a twenty-six week production year. We all know of the significant

amount of industrial shrimp that are landed here in the Province. Have you made

any moves? Is there any possibility of success in getting the minister,

federally, to require as a conditional licence to have industrial shrimp, off

the Canadian boats anyway, processed in Canada, if we said that it was a

requirement to process it in Canada? I guess we could assume that we would catch

80 per cent or 90 per cent of it here in the Province anyway. I do not know if

there is some trade agreement somewhere which would prevent us from doing

something like that.

MR. REID: I am not sure if there is a trade agreement that would prohibit

us from doing it, but last year some of that industrial shrimp was processed

onshore. I think FPI, as well as SABRI -

MR. TAYLOR: St. Anthony Seafood is running right now actually on

industrial.

MR. REID: The problem they have there is that they have to pay world

market price for it.

MR. TAYLOR: Yes.

MR. REID: That is a problem. There are a few concepts out there that

might be worthy of exploring. One was whereby we would have the offshore fleet

land their industrial and in return we would give them more quota, but that is

only something that we are looking at and discussing. Obviously, there would be

problems associated with that because you would have to increase the quota for

the offshore, and I am sure the inshore harvesters are certainly not going to

agree to that. So there are a number of problems with it.

MR. TAYLOR: They are controversial anyway.

MR. REID: I have not spoken directly to the federal minister about

enforcing that, Trevor, but it might be something that we could look at. The

problem we have right now is almost twofold. The plants are saying that they do

not have enough shrimp. Each of the individual plants are saying that they do

not have enough shrimp to survive this year. When you tell them: Well, lets all

go together to Ottawa and ask for an increase in the quota. They are basically

saying: Yes, we agree with that, but if we get any more we are going to have

problems marketing it. So, there is a bit of a problem. Some of the industrial

that is being caught offshore is obviously finding its way into the same market

that our own is finding it in. So that is also a problem.

I think what we really need, more than anything else, is to expand the

markets for shrimp. For those of you who do not know, in 1996 the Total

Allowable Catch for shrimp landed in Newfoundland and Labrador was somewhere in

the area of 5,000 tons; 10 million pounds. In 2000, we caught 110 million

pounds. We multiplied the amount of shrimp by ten with very little effort into

the marketplace. FPI and a few of the larger companies have been doing some work

marketing.

If you look at crab, for example, this year we are going to take around

50,000 to 53,000 tons. If, for example, next year we had ten times that -

500,000 tons of crab - crab would drop from the price it is today to probably

twenty or thirty cents a pound because you would have an over-abundance. That is

one of the problems that we have in the shrimp fishery. While we expand it -

which is great for the people who are employed in the plants and for the

harvesters, even though they are not making a lot on shrimp. We moved in that

direction without developing the markets first. It is like anything that you try

and market, it is the supply and demand. When you have a big supply you are

going to get less money for it. That is one of the problems that we have.

We need to launch an all-out market campaign. That was one of the

recommendations in the panel report that they gave us last week. They are

talking about spending a million dollars a year. We have been in discussions

with the federal government last fall, and will continue to be, to see if they

can come up with some money for marketing. We will look at what we can find as

well.

I was thinking about it last night, if FANL and the union could put in some

money, and the provincial and federal governments, we could come up with a

campaign like that to try and find new markets for shrimp because very little of

our shrimp is sold in the US. What is it, 20 per cent? I think 20 per cent of

our shrimp is sold into the US. We have to try and break into that market. I was

thinking last night on that million dollars, if the feds would put in 50 per

cent of that, the Province, along with FANL and the union, would put in the

other 50 per cent, between us it would not be - I was thinking last night on 100

million pounds of shrimp. I estimated that, between the harvesters and the

processors, if they put in a quarter of a cent a pound that would give them

roughly - maybe my math is wrong - $250,000. That is not a lot to ask for, a

quarter of a cent split between FANL and the union.

WITNESS: (Inaudible).

MR. REID: We have, yes. We put in around $600,000 in the last three years

under FDB into the seafood marketing council, but obviously we need more

directed at shrimp.

MR. TAYLOR: A final question on the general stuff, I suppose, is hooded

seals. Since you mentioned seals, I have to bring up blueback seals. As you

know, we cannot kill hooded seals in our industry. It is the most foolish

regulation. One of the craziest regulations that we have in the seal hunt is

that you can kill a beater but you cannot kill a hooded seal, a young blueback.

If we want a hooded seal, a blueback here in this Province, we have to go to

Greenland to buy them basically.

MR. REID: That is right.

MR. TAYLOR: It is the same herd, basically. They are not necessarily the

same herd but certainly the same overall stock or whatever. The courts have

ruled against our industry. What move is the Province trying to make to get the

federal minister to change that regulation so that it reflects more the

regulation on the harp seal?

I have had discussions with people who are in the sealing industry recently,

as I am sure you have, and the price that is being tossed around for a blueback

hood right now is $140 a pelt. Now, that is without anybody killing any. I am

sure if a couple of thousand showed up at the wharf that might even go a little

higher than that, according to what happened with the beaters. I wonder if there

is any move on that front? I know it is something that you can't really talk

about publicly. Maybe this is a place -

MR. REID: It is a good opportunity to do it.

CHAIR: We all should bear in mind that although we are here in the House

of Assembly and it is not televised, I just want to protect members on both

sides. This is Hansard and Hansard will be available within the week, whether

you want to come and pickup, or if you just want to log-in and pickup Hansard. I

will make all members aware, that although we want to believe we are in

committee or in private, in theory, we are not. It is still a Hansard meeting

and unless we make a decision that we are totally going off the record, then I

will have the microphones turned off, but just for our own sake, in comments

that may be made in terms of information that one might want to share - hon.

members may want to share with each other personally as opposed to in this

venue.

MR. REID: The reason I am smiling, Mr. Chairman, about two to three years

ago there was a discussion on seals here in the House one afternoon and the then

Fisheries Minister was asked a question by the Leader of the NDP: What would you

do with all these seals? I think he answered the question: I don't care, you

can (inaudible) if you want.

We sent an all-party committee to Ottawa to do a presentation to the Standing

Committee on Fisheries, trying to get them to do something with the seal

population out there. After the minister got away from the microphone, he was

talking about having markets for the seals and how we are going to use all the

pelts and the meat, and everything else. We were not going to be just out there

slaughtering seals for the sake of slaughtering. Rick Smith, with the IFAW, did

a presentation right after us and he had a copy of Hansard, actually, where that

quote was made. So, you do have to be careful.

We have made representation to the federal minister. I have told him myself,

the fact that we cannot take bluebacks is absolutely ridiculous. For those of

you who do not know, the harp seal gives birth to a whitecoat seal and after

three weeks the white coat comes off and then you are allowed to harvest that

harp seal. The hooded seal, the whitecoat, it sheds its white coat in the womb.

It comes out as sort of a bluish-black animal when it is born. It does not shed

its bluish-black coat for thirty-six weeks, I think, it is. Therefore, you are

not allowed to harvest that animal. So you have two seals, the harp and the

hood. You can harvest the harp seal after three weeks, basically, because the

white coat is gone. You have to wait thirty-six weeks to take the hooded seal,

the blueback, until it loses its coat. So, it is absolutely ludicrous. You are

allowed to accidentally kill one of them, but you are not allowed to sell,

barter or trade.

What happened last year or the year before last, there were a number of those

seals taken. There was no problem with the fact that they were taken, it was

just that some of these sealers went and sold the pelts. That ended up in the

court here. DFO took the sealers to court, and in the court case it ruled

against the sealers. The sealers were charged and the court ruled against them.

They took it to the Supreme Court of Newfoundland and Labrador and it was thrown

out. It was overruled, so the sealers had won. Then DFO took it to the Supreme

Court of Canada and they overruled the Supreme Court of Newfoundland and

Labrador. They were charged and I guess we will see what is going to happen to

these individuals, but it is an absolutely insane rule and regulation.

Therefore, what is happening is that the hooded seal population is expanding. We

are not taking any of them.

The other problem we have in the Gulf is the grey seal which is also

expanding. The FRCC talked about it last week, that something needs to be done

about the seal population in the Gulf. Apparently, the biomass of cod over there

is declining and it cannot be attributed to the harvesting effort. Apparently

cod are being born over there and they are not showing up in the three-year

class, so they are out there. We know they are there for a while and then they

disappear, so it is obvious what is happening to them. They are being consumed

by seals, but nobody seems to want to talk about that, at least on the mainland.

MR. TAYLOR: Minister, we move to the assessment -

MR. REID: If you don't mind, I would like for Mike to have a comment on

that.

MR. WARREN: I just want to mention, Trevor, that we had made a

recommendation to the eminent panel on the seal resource and strongly

recommended that there be a category for a hopper hood to allow for a blueback

seal harvest. The panel reviewed the recommendation and they came back in

support but they would not make a recommendation without more population studies

for the seal, so we are sort of caught in between. So, until DFO does the

additional scientific research on the population, they are not prepared to

support this recommendation that we put forward, and industry put forward as

well, so we are caught on that one.

MR. TAYLOR: Whoever is tangled up in research on seals has a lifelong

make-work project. They will never get an answer.

MR. REID: You know, these scientists need to observe things in order to

say that it is happening. That is the way it is with science, right? The only

way, basically, that they are going to be able to determine how much fish seals

are eating is to get down there and swim around with them. I can remember in

1989-1990 attending the Sealers Association meeting in Twillingate where DFO

scientists would not admit that seals were eating cod. They just refused to

admit it. No scientific advice to prove that, so they would not admit that it

was happening. So, it is only in the last few years that they have agreed that

seals could, indeed, be eating cod.

MR. TAYLOR: We will move to the Estimates now. On page 104, I have a

couple of questions here. Under 1.3.02., it says, "Appropriations provide

for participation in the resource assessment and management processes of the

Federal Government and international bodies responsible for fisheries assessment

and management."

I asked a question in the House the other day and, with all the ruckus, I am

not sure yet what the answer was. It has been in my mind ever since the NAFO

meeting back in late February, was it?

MR. REID: Yes.

MR. TAYLOR: How does you department receive information from DFO on what

is happening outside the 200-mile limit? All of a sudden in February, everybody

was seized with what was going on outside the 200 miles, even though it has been

going on for years, decades, now. While it tapered off to some extent in the

mid- to late-nineties, it is obvious that in the last couple of years, 2000-2001

in particular, there has been a steady significant increase in the amount of the

level of abuse, I suppose, in the number of infractions anyway, out there. I

think it was twenty-five in 2000 and twenty-six in 2001, or vice versa,

documented infractions. If we do, why isn't it made public? I will give the

benefit of the doubt and say: How come we don't - you don't, as a minister

in a department - have, on a daily basis, a report of what is going on outside

of 200? What infractions have been documented, what ships are there, and so on

and so forth? Maybe you do.

MR. REID: I have wondered basically the same things as you are wondering

out loud. Up until February of this year, we heard very little about foreign

overfishing outside of our 200-mile limit. It appears to me that it is probably

a result of a new minister in Ottawa, and that the information has not been

flowing as freely between us and them as I would like it. We can obviously have

reports from DFO as to how many boats are fishing out there and what nation they

are from, and what they are fishing, but in actual terms of if they are

overfishing and stuff, that information is not readily available, which is

unfortunate.

MR. TAYLOR: Yes.

MR. REID: The fact of the matter is, it seems to me, for two or three

years there was no mention of it, which does not mean it was not happening, but

since this new minister came in - actually it happened just within the week

after he got sworn in, in Ottawa. I know that two or three days after he was

sworn in, he called me and said they were going to the NAFO meetings and that he

was going to instruct his officials to tell the Faroese that if they did not

refrain from overfishing, he was going to bar the ports. The officials went to

the NAFO meeting in Denmark in February, gave them that message, and about three

weeks later Thibault closed the ports. At that time, he told me as well he was

looking at the Estonians. I got cornered by the media out in the lobby one day

and probably said what I should not have said, that: Yes, they are looking at

other nations, the Estonians. I almost blew their cover out there because they

were observing them. I almost tipped the Estonians off, that they were moving in

on them. I think it is a result of Thibault moving in there; not that I am

praising any federal minister for doing his job, but at least there has been

some action on his behalf, because foreign overfishing hasn't been mentioned

since about - when did we send the gunboats out?

WITNESS: 1995.

MR. REID: Since about 1995-1996. So, we were lulled into this false sense

of security, I guess, that this was not taking place out there, but I am hoping

that Thibault will continue with what he is doing; but his problem in Ottawa is

going to be the same problem that his predecessors had: convincing his

government to act, because it is not easy.

As I said to you the other day, I remember distinctly the time that I went

with Walter Carter into John Crosbie's office in Ottawa when we asked him to

stop this foreign overfishing. That was back in the early 1990s. He said: How

are you going to do it? We said: Send out the gunboats. Crosbie literally

laughed at us. No disrespect for Crosbie, because I have a lot of respect for

him. He did a lot for this Province, but his problem was that he could not

convince his Cabinet colleagues to do anything about it. He said at that time

that one of the biggest problems he had was the Minister of International

Affairs. What is it called now? - DFAIT - Department of Foreign Affairs and

International Trade. That was Joe Clark at the time. They did not want to rock

any boats, and they still don't. If Thibault today wanted to do it, he would

have a difficult time convincing his colleagues in Ottawa to go along with him.

Yes, there is a problem out there. DFO is not sharing the information with us

like they should. As far as I am concerned, every single day we should have a

record of what is out there posted right on the television screens here in the

Province, how many are out there and what they are fishing. If they are

overfishing and we know they are overfishing, they should post that as well

because the people in the rest of the country do not know it and do not care;

really and truly do not care. It is an issue that affects us and the people in

the other Maritime Provinces do not even realize that it is affecting them

because Nova Scotia certainly had a fishery going out here. Nova Scotia fished

off our coast here for the last 200 or 300 hundred years, with the schooners and

stuff on the Southern Grand Banks, so it is having an impact on them as well

because they are not allowed to fish out there.

When I raised it at the Atlantic Ministers' Conference three or four weeks

ago - Mike you were there with me - there was not a word said. No one in the

audience, no one from P.E.I., New Brunswick, Nova Scotia, Quebec or Nunavut,

even commented on it. I congratulated the minister for closing the ports to the

Faroese - that day he did it, or the day before - and that it was a step in the

right direction. No one even mentioned it. Ah, we don't want to talk about

that. We want to talk about the Marshall plan. It is insignificant. So, we have

a lot of work ahead of us because not only do we have to convince federal

government; we have to convince our colleagues in the Atlantic Provinces that

this is an issue that will affect them as well as us. You are right; I think

they hid the information for a period of three or four years. They did not want

us to know. They did not want to rock the boat, because that is Canada's way.

We are the peacekeepers. We are the nice guys.

MR. TAYLOR: Under 1.3.02. still, number 10., Grants and Subsidies, there

is $300,000 identified there. Would you be able to give us a breakdown of what

that is for?

MR. REID: The small grants?

WITNESS: No, that is the Chair of Fisheries Conservation.

MR. REID: Okay, I am sorry.

MR. TAYLOR: 1.3.02.

MR. REID: That is the Fisheries Chair over at the university.

MR. TAYLOR: Okay.

MR. REID: We have put $300,000 into that, I think, since 1996, is it?

WITNESS: $2.1 million to date.

MR. REID: $2.1 million to date, but it is money well spent.

MR. TAYLOR: Moving over to 2.1.01., page 105, again number 10., there is

$350,000 for Grants and Subsidies.

MR. REID: I wish I had $3 million in that one, actually.

MR. TAYLOR: (Inaudible) $3 million?

MR. REID: I said, I wish I had $3 million to put in there. That is for

fishermen's committees around the Province. We usually give grants up to

$3,500 to do repairs to their slipways and wharves and stuff, but it is a

program whereby all we do is supply the materials up to $3,000 or $3,500.

Usually the fishermen's committees will do the work themselves or they will

get a grant through HRDC, the JCP program, to supply the labour if we supply the

materials. That is why I said I would like to have $3 million, because we never

have enough money in that. It is an excellent program. If you talk to the

fishermen's committees around the Province, they will say it is probably the

best program that we have.

MR. TAYLOR: Would it be possible, either today or some time in the

not-too-distant future, to get a breakdown of how it was spent?

MR. REID: Yes. Well, I have some of it here.

We did sixty wharf repairs; twenty-six slipways; eighteen community stages;

Harbour Authority building improvements, twelve; baited trawl facility repairs,

ten; and access roads, we did three of those.

MR. TAYLOR: Okay.

MR. REID: There is not enough money, there is no doubt about it. I do not

know how many wharves and stages you have in your district, but I have

thirty-nine towns in mine and each one of them has a wharf that was at one time

built, I guess, under some of those - I hate to say it - make-work programs back

in the 1970s. In some towns they have as many as three. The fishermen's

committees who are using these are looking for money every year to put a few

plank on it or fix the fenders on it, or do something with it.

MR. TAYLOR: Unfortunately, most of the ones in our area are gone because

most of the small boat fishery is gone.

In the same section,

section 10, Grants and Subsidies, I would like to get a

breakdown by - I have had some of my colleagues bring it up, the difficultly of

obtaining it. I realize that there is going to be difficulty with only a

$350,000 budget there. When I ask for a breakdown, I would like to have a

breakdown of what -

MR. REID: Per district?

MR. TAYLOR: By district, but also what it was actually for. You just gave

sort of a -

MR. REID: Yes, we can give you a list of every item. What happens is

that, on a regional basis, the applications come into the regional offices. They

put forward a list to me and I just sign them off, for the most part.

Now, I do have some MHAs who call me and say that this group has an

application in; can you possibly find $3,000 for them? I don't think that I

have refused an MHA in the House, to be truthful with you, but the money doesn't

last very long, believe me, because already, right now, I could spend all of

that today from applications that have come in the last two or three months or

that were left over from last year.

MR. SAMSON: Minister, if I could interject just for a second?

MR. REID: Yes.

MR. SAMSON: Trevor, the information that I have indicates that in the

last fiscal year we did 129 individual projects which were spread across

twenty-four different electoral districts. Of course, we could be able to

provide you a breakdown of that by district and, in fact, by community and

individual project.

MR. REID: We didn't give any to Mount Pearl.

MR. TAYLOR: Mayor Harvey didn't get any? Harvey was looking for a wharf

for the Waterford River.

MR. REID: I always promised Harvey a meal plant.

MR. TAYLOR : Subhead 2.1.01.06., Purchased Services, $241,200 was budgeted

there. What type of services would be purchased in that section?

MR. REID: That is a good question. That is one I don't know. Do you

have it there? Give it to them, Mike.

MR. WARREN: Purchased Services: office rental, copier costs, repairs to

printers, these kinds of things.

MR. REID: Is that for our regional offices?

MR. WARREN: Yes.

MR. REID: I believe there are six, are there, around the Province?

MR. WARREN: Five.

MR. TAYLOR: Okay.

Under 01., Salaries, I see it is $1,553,000, down from 2001 where it was

$1,639,000. I know that is the revised from what was budgeted. So there is a

$80,000 or $90,000 difference there. How is that $80,000 or $90,000 going to be

- how are you projecting, you know, saving that money?

MR. REID: In a lot of these offices -

MR. TAYLOR: Why was it up or why is it down? I do not know which way to

ask it.

MR. REID: That is a good question, because we started out and it went up,

and now it has gone back to what it was originally. I do not know what happened

to that.

WITNESS: (Inaudible).

MR. REID: Obviously, we spent more last year than we had budgeted and we

are bringing it back to what we originally estimated in the budget last year.

MR. WARREN: I guess at the end of the last fiscal year we had a number of

voluntary departures. So there will be a reduction in the budget as it is

carried through.

MR. TAYLOR: A couple of voluntary departures?

MR. WARREN: Yes.

MR. TAYLOR: The salaries here would be the people who staffed the field

offices?

MR. REID: We assumed that (inaudible) headquarters.

MR. SAMSON: And one in the regional office. The increase in the revised

figure for last year would be attributable to savings achieved elsewhere in the

department being transferred into that account to allow us to finance the cost

of departure for two or three staff who were associated with this. The voluntary

departures that the minister referred to.

You will notice there is a marginal decrease over the original budget from

last year to this year and that would reflect planned savings as a result of the

5 per cent reduction in salary budgets for next year. You will notice through

this - just for the information of the committee. You will notice on the way

through, the 5 per cent salary cut has been allocated really pro rata, or very

close to pro rata, across all of the sections in the department. That is with

the view too - as the year goes along you will of course, in an organization

with 100 employees, encounter from time to time - people will leave, get other

jobs, and this sort of thing. You will achieve the savings as you go along and

then make adjustments in salary allocations of a few dollars here or there to

allow it to balance out at the end of the year.

MR. TAYLOR: How many staff, roughly - maybe you can give me exactly -

would the department have - not counting people who are involved with your

Quality Assurance Program now, and maybe you cannot separate them, I do not know

- in your field offices and the like?

MR. REID: We have 100 employees and we have about thirty temporary

inspectors. That is in terms of quality.

WITNESS: In regional positions I would say half the staff are, or maybe

more now, more than half of that -

MR. REID: Are you talking about how many are here and how many are out in

the field as well?

MR. TAYLOR: Well, actually -

MR. REID: About fifty, about half.

MR. TAYLOR: Yes, okay. About 100 permanent, thirty seasonal; roughly half

and half. Half and half of permanent would be field, St. John's, and

(inaudible) seasonal would be almost all.

MR. REID: We have the aquaculture division moved to Grand Falls as well,

and then we have the regional offices. We are looking at sort of restructuring

in the department because, I guess, back in the 1980s when we had the Marine

Service Centres - we were building Marine Service Centres around the Province -

we had the mid-distance fleet and a bunch of things like that. We have a

division that has since basically disappeared after we privatized the Marine

Service Centres and things. We have moved bodies around. We also had a number of

cost-shared agreements with the federal government. We are coming to the end of

those. So we are going to try to reorganize the department in such a way where

we can change the focus, pay more attention to quality, and also more attention

to planning and fighting things like foreign overfishing and things like that.

MR. TAYLOR: As opposed to running facilities?

MR. REID: Yes. It is unfortunate that our federal-provincial agreements

are running out. That is something we are going to have to fight Ottawa with as

well because that FDP program, which was a good one, is gone. We have none now,

for the most part. Brian?

MR. MEANEY: We still have this year under FDP (inaudible) the last year.

MR. REID: This is the last year, but that money is pretty well committed.

MR. MEANEY: Absolutely.

MR. TAYLOR: Under 2.1.02., $100,000 down from $200,000. Can you give us a

bit of information on - I know basically what it is, but in your own words what

it is, why it is, and where it is?

MR. REID: The $200,000, that was the Labrador plants. The Province owned

those at one time. We passed them over to Torngat to operate, Torngat Fisheries.

We still own two of them, Nain and Hopedale, and we were subsidizing them to the

tune of $200,000.

In discussions with Torngat late in the year they told us that they could

live with $100,000 next year rather than $200,000, which is good on their

behalf. They are giving us back $100,000. They seem to be working and operating

well down there and as a result, they will not need the $200,000 subsidy next

year.

MR. TAYLOR: On 2.1.03., the $10,000 and the $90,000 associated with

maintaining Marine Service Centres, community stages and other fisheries

facilities. How would that have been spent or where is that being spent? What

Marine Service Centres or community stages? What are you responsible for in

Marine Service Centres now?

MR. REID: We had a number of them and we have divested them. We also have

the Baited Trawl Holding Units that we put some money into.

MR. TAYLOR: Okay. So most of that -

MR. SAMSON: Perhaps I could interject.

The two lines there; Professional Services, the $10,000 budgeted, that is as

we continue to try and divest - our direction, of course, is to try and divest

of facilities. The $10,000 is used in getting appraisals done and those kinds of

professional services to value the facilities.

The Purchased Services stuff primarily relates to maintenance work on Baited

Trawl Holding Units and purchase of equipment, this sort of thing.

MR. TAYLOR: Just a bit aside from that, you are saying you are trying to

divest of facilities. It just crossed my mind, Flower's Cove, is that done

now? The Flower's Cove Marine Service Centre?

MR. SAMSON: As far as I know, Trevor, it has been completed.

MR. TAYLOR: So, Riteway has it and it is all -

MR. SAMSON: Yes, as per the tender process.

MR. TAYLOR: Okay.

MR. REID: Those Marine Service Centres, the divestiture of those seem to

be working very well. I know that when the Province owned them - the one in

Twillingate, for example, the Province employed one-and-a-half to two people

year round down there.

MR. SAMSON: They went in the hole every year.

MR. REID: Right now, after we divested it, last year the company which is

now running it employed as many as thirty people. It is operating very well.

That goes for most of them in the Province that we have divested. It just goes

to show that the private sector can run those things far more efficiently and

employ far more people than the Province ever could.

MR. TAYLOR: Throw in the shrimp fishery, the need for bigger boats and -

MR. REID: The problem we had was we were always in competition with

locals and we were not allowed to compete with them.

MR. TAYLOR: On 2.2.02., page 106, again I will jump down to 10. Grants

and Subsidies. The $263,000, would that be -

MR. REID: Which one?

MR. TAYLOR: 2.2.02.10., Processing And Marketing, under Grants and

Subsidies. There was $263,000 estimated there down from a Budget of $278,000

last year and up from a Revised of $163,000. What is it, and why such a variance

over a year?

MR. REID: Go ahead Mike.

MR. SAMSON: The response to that, Trevor, is that there were a number of

initiatives which were deferred during the year, projects of one sort or

another. This represents some of the Province's contributions to the FDP

Program. Money that did not get expended in the last fiscal year will now get

expended in the current fiscal year, which is the payout year for the agreement.

Therefore, there is about $100,000 or so that we did not spend last year that

has been shifted ahead because initiatives were slow getting off the ground. One

of them is the saltfish marketing initiative, which will be preceding in the

current year.

MR. TAYLOR: Okay. So, it would be pretty well, entirely related to the

Fisheries Diversification Program?

MR. SAMSON: Yes.

MR. TAYLOR: You have answered my question on that one. Do you guys want

to jump in with some questions there now? I will stop for awhile.

MR. HUNTER: I guess I can make a few comments first. I understand a

little bit about the fishery, not a whole lot.

I remember back in 1993, during the federal election, George Baker came to

Grand Falls-Windsor in his campaign. Everybody could see the frustration that he

had dealing with the fisheries issues at the time. But, I think there was a

glimmer of hope because at that time, as you know, the government changed and

Mr. Baker said to the people there that night: If we form the government, the

112 - I think it was - boats fishing on the Nose and Tail of the Grand Banks

would not be there after thirty days. Everybody there that night, about 200 or

300 people - even though Grand Falls-Windsor is not a fishing community, it is a

service community to the fishing industry - believed that something could be

done. Mr. Baker said at the time: If it is not done after thirty days, I will

resign. Fortunately, he did not have to keep his commitment, because for this

Province to survive we would need that control. Ever since then most

Newfoundlanders and Labradorians have been bothered with this issue of

overfishing off the Nose and Tail of the Grand Banks and the Flemish Cap.

Surely goodness, collectively, this Province can do something. I know the

minister has been agonizing over it and dealing with it, but all of us together,

as a support to this initiative - and myself, someday, will be so proud when

Newfoundland and Labrador can control the fishery off our shores. I say that to

the minister as more or less a support and an encouragement, but there are still

a lot of problems inside those limits, close to our shores.

Minister, in Green Bay, in my district, farmers produce about 70 per cent of

the mussels grown in this Province. We do not see 70 per cent of the secondary

processing. Could you tell me what your department is doing in trying to

increase the secondary processing capacity for the central area of Green Bay,

particularly? Is there anything on the move? I know there is a company in Triton

that is trying to get off the ground and has been talking to you. When can we

see something?

MR. REID: I have been dealing with the individual that you are talking

about. He has spent a fair amount of money already in developing the product

that he has. You are talking about Mr. Roberts, right? It is an excellent

product. I tasted it myself. I expect that he's going to get up and become

operational.

One of the problems we have now is the fact that we need more mussels. We

need more mussels being farmed because what is happening is everything that is

being farmed today is being processed and most of it - Brian, am I right? - is

going into secondary processing. What is happening is that the mussels which are

now in the water are committed through deals that the individual farmer has made

with two other processors. What we need to fix the problem of not enough

processing in Green Bay is we need more mussel farmers. I guess what will happen

then will be the same as what is happening in the processing sector in general.

Then the competition arises between processors and who is going to get the

mussels that are in the water. First and foremost, what we need is more people

involved in mussel farming. We need more mussels because we can sell - we sold

everything we had last year and we can certainly do it again this year. So

first, we need more mussel producers or mussel farmers and then there is going

to be some very healthy competition for that product with the existing

processors, along with others who might want to come into it.

MR. HUNTER: Is there any dumping being done now with oversized mussels? I

brought that up at last year's estimates. I do not know if it was last year,

but the former minister said that there was no dumping done. But, there was a

lot of dumping being done in the Green Bay area of oversized mussels.

MR. REID: What is happening with the blue mussels, like we have, a lot of

the processors just want a particular size and a particular color. It is that

blue shell type of thing, and if you get some discoloration then they do not

want it, but I do not think there is that much dumping.

Brian?

MR. MEANEY: The department, through the aquaculture agreement last year,

provided $300,000 to assist processors in marketing that oversized product. We

canvassed and we are in discussion with each of the mussel processors across the

Province. All of that product was marketed through one of the marketing

companies in the US to ensure that any of that oversized product was taken care

of.

MR. HUNTER: Can we see any financial assistance available to anybody who

want to get into secondary processing of mussels? Will there be any grants or

anything available?

MR. REID: The program that we had there under the FDP, as I said, is

already committed. We do not have any other federal-provincial agreements but we

are hoping that there is going to be an agreement signed off in the not too

distant future with ACOA under the CEDA program to put some money back into

aquaculture, but that will not go directly into - it will not be involved in

processing. It will be more involved in the farming of mussels. That is where we

need it right now, too. We are working with Mr. Roberts, as we speak, trying to

help him out on the marketing initiative.

MR. HUNTER: In the last few days, I have been listening to some Labrador

fishermen. They have a concern about getting out to the ice fields to harvest

seals, and their boats are being barred in wherever they are stationed.

Is the minister going to try to do something to help these people who have to

use other vessels without registering them for the full year? Is there any

attempt to help people like that on the Northeast Coast of Labrador to avail of

a seal fishery?

MR. REID: Are you talking about the under thirty-five?

MR. HUNTER: Yes.

MR. REID: There are always problems associated with that, too. If you

allow them to go and get a longliner to catch the seals for them, the problem

arises then just who is actually harvesting the seals. Is it the inshore under

thirty-five or is it the over thirty-five footers? You are going to have a

problem there with the sealers themselves rather than with the Province or the

federal government, because then how do you determine whether or not that boat

is actually harvesting the seals for the guy who owns the thirty-four eleven or

if he is harvesting them for himself. It is no problem for a fellow who owns a

sixty-five footer to go around and get a crew who already hold licences for

under thirty-five footers to say that they are going to go aboard these boats

and they are going to harvest them on their licences. That would be a bit

difficult, to definitely determine who they are actually fishing for.

(Inaudible) arises is the quota that is set aside for the under thirty-five. Is

it actually being harvested for the benefit of the under thirty-five or for the

benefit of those over thirty-five?

There are problems inherent in it. Most of the small boat fishermen in the

Province don't want to see that quota moved because every year what happens

is, once the quota for the longliners is taken, there is always a move or an

argument made that, if we do not take the inshore small boat quota then it is

going to be left in the water because these fellows are not going to be able to

get out there to do it. But the fellows in those boats under thirty-five

certainly do not want the quota transferred to the boats over thirty-five, so

you are going to run into all kinds of problems.

I know in my own district that there are fellows who actually went as crew

members out to the ice already in the larger boats, who have their own licences

for under thirty-four eleven, so it is very easy for them, if they wanted to, to

say that the seals they are catching are for me rather than the skipper of the

longliner. I don't know how you would place it or how you would determine

actually who is getting the benefit of it.

MR. HUNTER: Mr. Chairman, if I could, I would like to get back to the

Estimates. That concludes the comments that I am going to make. Like I said, I

am not really up on the fishery, but I know there are a lot of problems there. I

see in my district, with poor fishermen, and fishermen who want to pass their

licences on to their sons and grandsons and whoever, there are a lot of problems

dealing with that, but I will let our critic deal with that.

In the Estimates, Mr. Chairman, 1.3.01.03., Transportation and

Communications, could the minister tell me why, in the Estimates, the Budget was

$56,500 and $160,400 was actually spent? Why was there a big difference in that?

MR. REID: The fellow next to you helped spend some of that.

MR. HUNTER: He didn't tell me.

MR. REID: No, that was a result of -

MR. TAYLOR: We didn't cost that much, did we?

MR. REID: When we did the FPI thing, where we travelled around, some of

that came out of there. We also did the Special Panel on Corporate Concentration

and the special panel on the review of the shrimp industry, so that is where

that money went.

MR. HUNTER: Further down in 05. there was nothing budgeted -

MR. REID: That is right.

MR. HUNTER: - and then $241,000 was spent. Is that the same-

MR. REID: That is where the $241,000 went. That went on those three. It

went on the FPI, on the all-party committee, the special panel on shrimp that

was just released last week, and the Special Panel on Corporate Concentration.

Costly things.

MR. HUNTER: Oh, it is. Absolutely!

MR. REID: Especially when you are involved with numbers of people

travelling.

MR. HUNTER: Could you tell me where in the Estimates - the relocation to

Central Newfoundland - where the cost would have come from? Would it have come

out of Aquaculture Development?

WITNESS: Page 109.

MR. REID: Page 109.

MR. TAYLOR: I would say, if we had a couple of ore Harveys and Eddies, it

would have cost something.

MR. REID: Pardon me?

MR. TAYLOR: If you had a couple of more Rogers and Eddies, it would have

cost something.

MR. REID: Yes, I guarantee you, and a scattered Yvonne.

MR. TAYLOR: I did pretty good. He even phoned me to see if I had any more

to claim. I couldn't think of a thing.

MR. REID: That would be on page 109 under Property, Furnishings and

Equipment, I guess.

WITNESS: Purchased Services.

MR. REID: Purchased Services, I am sorry.

WITNESS: And Information Technology.

MR. REID: And Information Technology.

The total cost of relocation was $282,000. That includes the lease for nine

months. Having said that, I am sure you don't disagree with having them in

your district.

MR. HUNTER: Absolutely not.

MR. REID: The other thing too, Ray, is that when that division was

established in the Department of Fisheries, the Aquaculture Division, it was

said at the time in a Cabinet document, in an MC, that the Aquaculture Division

should be located off the Northeast Avalon. The reason it went to Grand

Falls-Windsor is because most of the aquaculture that is taking place in the

Province now is either down on the Connaigre Peninsula or up in Green Bay, White

Bay, and Notre Dame Bay, so that area is central to all of that.

WITNESS: Two hours' travel.

MR. REID: Within two hours' travel. It is far better to have them

located in Grand Falls-Windsor than it is located on the Parkway here in St.

John's and to have to travel back and forth to the Northeast Coast and down to

the Connaigre Peninsula.

I don't apologize to anyone for moving those people to Central

Newfoundland. In fact, it should have been done long ago. The same goes with the

forestry moves. I don't know why we need large numbers of people employed in

St. John's when you are talking forests, because there are certainly none

around here.

MR. HUNTER: Minister, subhead 3.2.01., Aquaculture Development, the

Economic Renewal Agreement, I would assume it has run out. Will this be

renegotiated and replenished in the near future?

MR. REID: Under 3.2.01.?

MR. HUNTER: The Canada/Newfoundland Agreement on Economic Renewal.

MR. REID: CEDA you are talking about?

MR. HUNTER: Yes.

MR. REID: Can it be renewed?

MR. HUNTER: Are you expecting it to be renewed?

MR. REID: Not in the immediate future, no. I certainly would like to see

it renewed, any cost-shared federal/provincial agreement, but it seems to me

like the federal government, for the last couple of years, have no appetite for

any cost-shared agreements. Not only do we need them in fisheries and

aquaculture but we also need them in forestry. More so, we need them in

transportation in this Province.

MR. HUNTER: That is it for me.

MR. REID: Can I go back to that overfishing that you talked about with

George Baker?

MR. HUNTER: Yes.

MR. REID: I don't know how George figured that he could have removed

them all in thirty days -

MR. HUNTER: I don't know either.

MR. REID: - from the Nose and Tail of the Grand Banks, because it is not

illegal for those people to be fishing out there. It is only illegal to overfish,

or to fish species that are on motorium, or to use illegal gear; because you are

talking international waters out there, unfortunately. The problem with it is,

if we have to - now, they did make a move, I have to hand it to them. That was

in 1993 when they took the government in that election, and in 1995 they did,

for the first time in our history, try to do something about foreign overfishing

on the Nose and Tail of the Grand Banks. They did send the gunboats out and they

did fire shots across the bow, which was, by the way,

an act of war, because

that was on the high seas in international waters. We did not own the Nose and

Tail of the Grand Banks, unfortunately. We own what is under the ocean, but we

do not own the water that is there, and to get that to change is going to take a

lot of work. I do not think that Canada can just unilaterally go out and say we

are extending jurisdiction, taking the Nose and Tail and the Flemish Cap. That

is why we are proposing custodial management whereby we will take custody of the

Nose and Tail and Flemish Cap but we will allow countries that have a historical

presence to fish, but they fish by our rules, our regulations, and we do the

enforcement, which sounds to me to be a very reasonable approach. Even the

offending nations, I cannot see how they could argue against it. The only way

they could is if they intend to overfish.

MR. HUNTER: I will certainly support that. We need to do that. How you do

is a tough job.

MR. REID: Yes.

MR. HUNTER: Thank you very much, Minister.

MR. REID: You're welcome.

MR. T. OSBORNE: I have a few questions; just a couple of general

questions first, Minister, if I could. The sinking of the vessel the Katsheshuk ,

I believe it is pronounced, off Cape St. Francis last week, that went down on

prime crab grounds, as you are aware. Is there going to be any testing by the

provincial government of -

MR. REID: The provincial government? No.

WITNESS: We are co-operating with (inaudible).

MR. REID: We are co-operating with Environment Canada and DFO. In fact, I

think I have a meeting this week with some of the residents from the Bay de

Verde area pertaining to that. I am at a loss, just like a lot of people in the

area, why we would have towed that boat from off St. Anthony, trying to get it

to St. John's, when we could have hauled it in to any port along the way and

taken that fuel off that boat.

MR. T. OSBORNE: That was my next question. There was no consultation, I

guess, with the provincial fisheries or environment as to -

MR. REID: No, it was strictly Coast Guard and -

MR. T. OSBORNE: And owners.

MR. REID: Yes.

I am at a loss why you would -

MR. T. OSBORNE: So they have given no explanation to the Province as to

why they brought that vessel from the Coast of Labrador all the way to - trying

to bring it into St. John's?

WITNESS: They had to bring it down for insurance reasons, I was told.

MR. REID: They had to bring it down for insurance reasons.

MR. TAYLOR: She wasn't actually all that close, right? She was 160

miles, I understand, off St. Anthony, and there was a helluva lot of ice to haul

her in through.

MR. REID: Okay.

MR. TAYLOR: The only place she could have gotten in was Catalina,

Bonavista, or somewhere like that. She couldn't go into Fogo.

MR. REID: No, not at that time she couldn't.

MR. TAYLOR: She couldn't go into Twillingate, unless they were prepared

to haul her through a lot of ice. My guess is, and I don't know what could

have been done, but it would have been difficult - it is unfortunate that she

went down where she did.

MR. REID: Yes.

MR. TAYLOR: She should have probably been hauled into a place like

Catalina somewhere.

MR. REID: I would also assume that, if that fuel is coming out of her,

she is probably coming straight up. So, where you are going to see it

distributed the most is on the surface rather than on the floor where you are

going to catch the crab. I don't think you are going to see such a

distribution of that fuel below the surface as you do above.

MR. T. OSBORNE: I guess the way diesel breaks down, we are lucky it is

diesel as opposed to a crude product, because it would be a real mess out there.

MR. REID: Definitely, we would have had some mess there.

MR. T. OSBORNE: Another question regarding bivalve shellfish. I know that

in order to obtain a licence for commercial harvesting it has to meet

environmental standards, if there are sewer outflows or commercial developments

and so on. What about somebody who goes out and privately - you oftentimes see

on the side of the road people selling mussels and that type of thing. Are there

any controls in place to ensure that, because of the nature of a bivalve

shellfish - I mean they filter the water so the contaminates would actually

remain within the meat itself. Are there any controls in place to ensure that

the product people are purchasing on the side of the road is not contaminated?

MR. REID: I used to buy them all the time myself. I lived on New World

Island. It is only since I got involved with the Department of Fisheries and

know the impact of one bad mussel, what it could do to you, that I watch it

myself. There are rules and regulations pertaining to the harvesting of mussels.

WITNESS: Commercially?

MR. REID: Yes, and all these sites are commercial sites. With regard to

an individual going out and collecting a few mussels near the shore with a rake

and going up on the highway and selling them, that is very difficult to control.

But, I do not think there is too much of that happening.

MR. MEANEY: If I could make a comment.

Under the federal fisheries regulations all shellfish, including that for

private consumption, can only be harvested from approved areas under the

Canadian Shellfish Sanitation Program. All those areas are posted. Most of the

popular harvesting areas for personal use - for example, Bellevue Beach, and

there are a number of areas around - have been sampled under Environment Canada

guidelines. But, if an individual harvests from an area that has not been

approved it is at their own peril. It has not been tested.

MR. REID: The peril of the buyer as well.

MR. T. OSBORNE: Buyer beware.

MR. REID: So, you would have to be careful. It only takes one bad mussel

to kill you.

MR. T. OSBORNE: Yes, I guess it is buyer beware.

One other general question, it is pertaining to draggers. Has there been any

studies done, either by the Province or the federal government, as to - we know

the damage that dragging causes to the ocean floor and so on. Has there been any

studies to determine the effect it is having on fish stocks? We have been trying

to determine the seal consumption or what seals consume, what effects that has

on fish stocks. Has there been any studies at all on the effect that dragging

and the destruction it causes to the ocean floor is having on fish stocks and

the regrowth of stocks that are in danger and so on?

MR. REID: There are a number of theories out there. We have not done a

study, no. There are a number of theories on the impact that dragging has on the

stocks out there. I guess it depends on whether or not you are a dragger

operator. I think Trevor knows what I am talking about.

I will give you an example. I spoke to individuals who dragged for shrimp in

the Gulf and I have spoken to people who dragged for shrimp on the Northeast

Coast. They will tell you when you drag for shrimp, you go and set your crab pot

there after, and you will have a better catch than prior to your dragging. That

is that side of it. But, if you talk to individuals who do not drag, they will

tell you that they are breaking up crab, knocking the legs off them and

destroying the resource. So, I guess it is where you are coming from.

With regard to bycatch in the shrimp fishery, they use what is called a

Normore grate - right, Trevor? - which prevents or is supposed to prevent the

capture of any other species because it is the size of the grate that is in the

net; but it probably needs to be done. Unfortunately, the Province does not

control the harvesting. It is a federal responsibility. We would like to know

the answers to those questions. We do not have the money to carry out all those

studies because they would obviously be costly. Our budget certainly would not

be able to accommodate it.

With regard to federal scientific advice, the federal government does not

spend one one-hundredth or one one-thousandth of what is required for fishery

science in this country. In fact, what they spend is very little compared to the

value of the industry to this Province and the other Atlantic provinces.

Compared to other fishing nations, what DFO spends, the Canadian government is

miniscule.

MR. WARREN: One of the issues, I guess, is not necessarily the

technology, it is the use of the technology. It is the misreporting, it is the

use of liners and trawlers, it is the high-grading, it is the excessive bycatch.

It is these kinds of things that are a big problem for us, especially in

relation to foreign overfishing. I remember the liner that we took off the Kristina

Logos . It was just like a sieve, and they were using that in their gear.

These are the big issues we have to address.

MR. REID: In terms of gear here in the Province, I have always said it is

not the gear it is the individual using it. People talk about gill nets and the

destruction that it is doing, but if you use gill nets properly then it is not

as destructive as one might be led to believe. That is the problem, it is not

the gear it is the person using it.

MR. T. OSBORNE: Thank you, Minister.

A couple of questions pertaining to the estimates themselves. Subhead

2.1.01., under Professional Services, there was $120,000 budgeted last year but

there was nothing actually spent. I am just wondering what that was intended

for.

MR. REID: That was one-time funding in support of divestiture of marine

centers, but we did the work internally; in-house staff completed it. Therefore,

we took $100,000 of that and transferred it into the money that we spent on

those special panels. We did it internally and saved ourselves some money.

MR. T. OSBORNE: Would there have been a cost?

MR. REID: Yes, but the proponents who wanted to buy the Marine Service

Centres also contributed themselves to putting it together.

MR. T. OSBORNE: Was there a provincial cost? Where the work was done

internally were there appropriations made for any costs? Where would those funds

have come from?

MR. REID: We just did it in-house with our own staff. So there was no

extra cost associated with it.

MR. T. OSBORNE: Under 2.2.01., Resource Development, under Transportation

and Communications. There was $94,400 budgeted both last year and this year, but

only $30,000 spent.

MR. REID: That probably is a result of the freeze that we put on prior to

Christmas.

WITNESS: (Inaudible) regional projects.

MR. REID: We also did it at the regional level rather than do it from

here.

MR. T. OSBORNE: Under 2.2.02., Processing And Marketing. Under Purchased

Services, there was $104,000 more spent there than was actually budgeted last

year.

MR. REID: That was an increase in costs associated with the Boston

Seafood Show. That was increase in travel, increase in the cost of rental space

for the booth, and all costs associated with that.

MR. T. OSBORNE: So, there were more people went down than -

MR. REID: No. Actually, fewer went this year than last.

WITNESS: You didn't take me.

MR. REID: I didn't take myself.

That is the main show for the year in fisheries and it is one that is well

worth attending. The employees of the department who go there actually work, and

work hard. They go, they take a booth, they set it up, and they also have to man

it for the three days that it is open. Then they help knock it down and bring it

back.

MR. SAMSON: As well, Boston is the major component in that line item of

the budget. Also, you will note a little further down, it is showing a $64,000

offset in Revenue. That is because costs associated with the Brussels

International Seafood Show are also covered under that line; again, for the cost

$64,000, which is 100 per cent of the cost of the Brussels booth. Really, you

can deduct the $64,000 in offsetting revenue away from the expenditure of

$318,000 in the last year or $278,000 in the existing year. So, there is a cost

recovery of $64,000 against that line.

WITNESS: (Inaudible).

MR. T. OSBORNE: Under 2.2.03., Licensing And Quality Assurance. In

Salaries there was approximately $49,000 less spent last year than was actually

budgeted.

MR. REID: That is just a delay in the hiring of the temporary inspectors.

MR. T. OSBORNE: Okay.

MR. REID: That will be out there but it is just a delay. As you know, in

a department during the year people -

MR. T. OSBORNE: So, it wasn't as a result of a layoff or -

MR. REID: No, just a delay in the hiring.

MR. SAMSON: (Inaudible).

MR. REID: Like Mike was just saying, some of those inspectors who are on

temporary positions, we usually hire them this time of the year. By the time

this time of the year rolls around they may have found a job somewhere else. So

by the time you advertise, get them in, get them set up, you save a few bucks

that way.

MR. SAMSON: Perhaps I could further clarify that a little. Prior to last

year we were receiving funding for those temporary inspectors on a year by year

basis, so we were not in the position to recruit permanent seasonal staff. Last

year that funding was annualized in 01., 02., and has become part of our A Base

for salaries. So now we are in a position to be able to recruit and train, and

retain seasonal employees who are given a guaranteed date on a callback. Last

year was the first year we had lost some people in the interim. I think this

year we only need to recruit two. Of the temporaries, virtually everyone, with

the exception of two are returning.

MR. T. OSBORNE: Thank you.

Subhead 2.3.01., Canada/Newfoundland Agreement On Economic Development And

Fisheries Adjustment. Under Purchased Services, 06., there was $2.2 million

budgeted last year and only $738,000 spent.

MR. REID: These were projects that were approved, but the funding has not

been paid out yet. It will be paid out in this year. This is all falling under

the Fisheries Diversification Program. It is cost-shared with the federal

government; and a lot of the project applications come in. We had estimated that

we were going to spend $2.2 million last year. It did not get rolled out at the

time, it was $700,000. The remainder of it will go out in this fiscal year. The

projects have been approved, it is just that we have to pay them out over the

next fiscal year rather than have them paid out in the past.

Go ahead, Mike.

MR. WARREN: The nature of cost-shared agreements is that these are

application driven. When we start off the year we assume certain things about

projects, but it all depends on what kind of projects you get in. You might get

one that requires equipment. So, you have to put it into Property, Furnishings

and Equipment. You might find one that requires more professional services. You

have to kind of mix and match as you go along. In the final analysis, we pay our

share and the feds pay their share. So, the final year is the wrap up year where

you reconcile all your accounts.

MR. T. OSBORNE: Okay.

WITNESS: Will it be spent?

MR. WARREN: Absolutely!

MR. T. OSBORNE: Compared to what was spent last year, on the estimated

amount in the budget this year, there is an overrun of about $60,000. Is that

coming from the Newfoundland or the federal side of that?

MR. WARREN: Once again, it is a mixing and matching sort of arrangement.

This year we will spend $4 million. That will be the remainder of the funds. We

will see whether DFO does some of the projects. We will do some projects. So,

like I said, we will mix and match that way. It will reconcile in the end.

MR. T. OSBORNE: Under line 10., Grants and Subsidies. There was

approximately $300,000 more spent last year in Grants and Subsidies than was

budgeted.

MR. REID: That was just to cover the increase in applications for funding

for financial assistance. We carried out various projects which were budgeted

for under - can you speak to that one?

MR. WARREN: I guess it is similar to what I just said. It is where we

dropped down one area and we increased another area to cover off, based on the

kinds of projects we have been getting in, the applications we have received.

MR. REID: Basically, Tom, this was just a cost-shared program. The

applications go out. By the time they come back in and you get it done sometimes

the money is not spent in one year. But, basically, this will all go out there

to aid industry. None of this is going to be spent by the Province - for

example, by the government - except for administration costs and things. So, by

the time you get the application in we were hoping - for example, last year this

time we were saying that we expected to spend $2.5 million or $2.2 million. By

the time the applications came in and you go through them, and do a whole bunch

of things and you get them refined, the end of the fiscal year is here. So you

are just pushing into the next year. That is what all of that is about. At the

end of the day it should all balance. The money will be spent. It is not line

funding for the department. This all has to do with that federal/provincial

cost-shared agreement.

MR. T. OSBORNE: Under 3.1.01., Administration And Support Services, line

01., Salaries.

MR. REID: Under 3.1.01.01. Salaries, $940,000 and we dropped her back.

That was due to the delay in the recruitment of the staff for the aquaculture

branch relocating to Grand Falls. I think, for the most part, that is all done

now. What happened, Tom, is when we advertised, or when we told the employees

that we were moving to Grand Falls some of these people transferred to other

departments, therefore the position was vacant.

MR. T. OSBORNE: That was the result then, the drop in salaries?

MR. REID: Yes. The positions were vacant and this was the savings as a

result of the period that it took to recruit and rehire. I must say, we have a

good bunch of very energetic people hired in Grand Falls - young, bright, highly

skilled, highly educated - who are bright-eyed and bushy-tailed and want to go

to work.

MR. T. OSBORNE: Thank you, minister, and your staff.

MR. TAYLOR: That's good, because if you want to live in Newfoundland

you have to be prepared to work twice as hard for half the money.

I have a couple of quick, final questions. On 2.2.03., Licensing And Quality

Assurance, Tom asked a question there about Salaries. I assume, I think wrongly,

that the 2001/02 Budget and Revised differences of $40,000-odd was as a result

of the shrimp closure in the summer. I am incorrect in that, am I?

MR. REID: No, because they would have been kept on anyway.

MR. TAYLOR: Okay, they would have been kept on anyway.

Back - I do not even know what

section it is under now. I guess it would have

been under Aquaculture Development. Anyway, Ray raised a question about - and in

the minister's response, you spoke about subsidies, monies being made

available to assist harvesters and processors in cleaning up some of the old

stock mussels. Is there a plan for anything like that for this year? As I

understand it, there is still some of that, albeit, probably not that much of

the larger over-mature stock out there. Is there any plan to direct some funds

to clean up some of that, the remainder of it?

MR. REID: I do not know. I will have to get you an answer.

MR. TAYLOR: I do not even know if anybody has asked you for it.

MR. REID: No.

MR. TAYLOR: I do know there are, in my area for example, a couple of

mussel farms. Because of the distance and the lack of processing facilities in

the area and so on and so forth, the mussel farms there in Canada Bay, Main

Brook area, have really over-mature stock. It is sort of a Catch-22. You need to

get it cleaned up in order to move on. You can't get anybody to help you move

on, so you can't get it cleaned up.

MR. REID: The individual that Mr. Hunter was talking about earlier up in

Triton, with the secondary processing that he is doing bottling, he figures he

can clean up a lot of that himself. You know, the discoloured (inaudible) take

them out of the shell and bottling them. He is going to be able to take a lot of

what we would have considered rejects in the past. That is his intent, because

right now there is a shortage of farmed mussels for the processors who are

already in business. So, his intent is to clean up a lot of that himself.

CHAIR: Do you want to zero in on the actual Estimates? If there are, we

can do those. You have had pretty well two hours now of open discussion. I know

we have touched on some of the issues, but I would like to either: one, move the

Estimates as they are; or; two, let's zero in on them.

MR. TAYLOR: Actually, Mr. Chairman, we have been on the Estimates point

by point for most of the last hour and twenty minutes, I would say.

CHAIR: We realize that.

MR. TAYLOR: I think we are pretty well ready to clue up anyway.

CHAIR: Okay.

MR. TAYLOR: In cluing up, I just ask again for that breakdown by area and

by -

MR. REID: District.

MR. TAYLOR: Well, no, by project of the funding for those fishermen's

committees initiatives.

Also, I would like to have - and I have been trying to get this for some

time. Dave Lewis has called me back, so maybe he has it. Could somebody check

and see - because I will not get a chance today - while you are checking on the

fishermen's committees stuff, a list of crab plants and shrimp plants in the

Province, and I would like to have a breakdown of production by species, by

zonal board region or by peninsula or by 100 feet of coastline. I don't care

how it is broken down, really, as long as I can see, by some kind of an area,

how the processing sector in the Province - sort of how it is spread out. As I

said, I spoke to Dave about this and he has called me back, but we just haven't

hooked up. I am sure I am not going to hook up with him this week. I am pretty

well sure of it. If you could?

MR. REID: For protecting confidentiality, we will not be able to give it

to you on an individual plant.

MR. TAYLOR: No, I understand that.

MR. REID: But we can do it by region.

MR. TAYLOR: That is fine. I have no problem with that.

MR. REID: The boys are doing it already.

MR. TAYLOR: Okay.

MR. REID: The argument on the Northern Peninsula has always been: Is

there more coming off than going on? You are well aware of that. I guess it

depends on what you consider to be the Northern Peninsula.

MR. TAYLOR: Yes, that is right. That is (inaudible) -

MR. REID: If you include Jackson's Arm, what the officials tell me is

that it is pretty well a wash, the amount coming on and going off, but you would

never convince the people in the Black Duck Cove area that is true. I am not

even going to try.

MR. TAYLOR: No. You would have a job to convince anybody that Jackson's

Arm is on the Northern Peninsula. You might as well include Cox's Cove, right?

Or draw a line from the bottom of the Bay of Islands across to White Bay.

MR. REID: The fact of the matter is, the year before last, I think, after

24 million pounds of shrimp landed in the St. Anthony area, the plant in St.

Anthony processed 12 million pounds but six of that was trucked on to the

Northern Peninsula. So, that means that eighteen of the twenty-four went off the

Peninsula and six came back on.

CHAIR: I would like to move Estimates 1.1.01. through to 3.2.01.

On motion, subheads 1.1.01. through 3.2.01. carried.

On motion, Department of Fisheries and Aquaculture, total heads, carried.

CHAIR: I would like to thank the minister and the officials, and indeed

the Committee as well. As in previous meetings, we have allowed our colleagues

in the Opposition to, as Hansard will show, pretty well dominate the questions.

It is a good opportunity for them to clarify issues that they may wish to have

covered. I guess, as government members, we have access to the minister,

certainly during our own caucus meetings and so on, on a weekly basis, where we

can cover some of the same issues. It is a good opportunity this morning to

allow our Opposition colleagues to have access to that information as well. With

that in mind, thank you very much and we adjourn today until Thursday, April 25.

We will declare the meeting adjourned and we will discuss the

schedule

privately.

On motion, the Committee adjourned.