May 20,

RESOURCE COMMITTEE

Pursuant to Standing Order 68, Kelvin Parsons, MHA for Burgeo&

LaPoile, replaces Gerry Reid, MHA for Twillingate & Fogo; and Bob Ridgley,

MHA for St. John's North, replaces Charlene Johnson, MHA for Trinity-Bay de

Verde.

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

CHAIR (Harding): (Inaudible) a couple of members, but they will be here a

little later, I guess. We might as well begin.

This morning we are discussing the Estimates for the Department of Natural

Resources. I would like to welcome you all. At this time, I would like to ask

the members of the Committee to introduce themselves by name and district.

MR. PARSONS: Kelvin Parson, MHA for Burgeo & LaPoile district.

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

MR. O'BRIEN: Kevin O'Brien, Gander.

MR. RIDGLEY: Bob Ridgley, St. John's North.

MR. HARDING: Harry Harding. I am Chairman for this Committee.

CHAIR: The normal procedure we have been following is that, after the

Clerk has called the subhead, we then have the minister speak for up to fifteen

minutes on his department, followed by the Critic - in this case I think Kelvin

is taking that place - and then we try to give everyone on the Committee an

opportunity to ask questions, if they want to, and we alternate back and forth

for up to ten minutes.

This morning, as well, I would also like to welcome our Legislative Assembly

staff.

At this point in time I would like to ask the minister to introduce the

officials that he has with him from his department this morning.

MR. E. BYRNE: Good Morning, Mr. Chair, Ladies and Gentleman.

To my right is Mr. Allan Masters who is the Chief Executive Officer, Deputy

Minister essentially, of the Newfoundland and Labrador Forestry Service; Bruce

Saunders to my left, the Deputy Minister for Natural Resources; Ed O'Reilly,

Director of Policy and Planning with the Division of Agriculture; Allister

Taylor, ADM. for the Mining Division; and Len Clarke with the Human Resources

Division of the Department.

I will have some opening remarks, I guess, Mr. Chair. Thank you for the

opportunity to come before the Committee and answer any questions on what I

believe is one of the best, if not the most exciting, departments in government.

Essentially, the Department of Natural Resources comprises what was formally

two departments in government, the Department of Forestry and Agriculture and

the Department of Mines and Energy. Within the department, forestry is the

largest division in terms of budget expenditure. There are five essential areas

within the division: Silviculture Program; Forest Ecosystem Management Division;

Forest Policy and Planning Coordination Division; Forestry Engineering and

Industry Service Division; and Legislation and Compliance. I think I have

covered all of them, have I, Allan?

Under the Agriculture Division, within the department, we deal with Land

Resource Stewardship, Production and Market Development, Agricultural Business

Development, and Animal Health. One of the big programs within the department is

the federal-provincial program know as APF or the Agricultural Policy Framework.

That has five components or elements to it by where people, producers and

individuals, involved in the agricultural industry have the opportunity to apply

to this federal-provincial program which is cost-shared 60 per cent by the

federal government and 40 per cent by the Province under five essential areas:

Science and Innovation, Farm Renewal, Food Safety, Food Quality, Environmental

Aspects, and also Business Risk Management.

With respect to the Mines and Energy Division within the department, there

are nine areas, essentially, there: Geological survey; Mineral Lands; Mineral

Development; Policy and Strategic Planning; we are responsible for the

administration of the Canada-Newfoundland Offshore Petroleum Board; Petroleum

Projects Monitoring which is, I guess, an essential component of what the

department does in terms of ongoing monitoring of projects such as Hibernia,

Terra Nova, and eventually White Rose, to ensure that the agreements that are in

place, royalty or otherwise, are being lived up to and complied with and it is

really protection for the people of the Province; Electricity Industry

Development and the Industrial Benefits Division of the department itself.

That is a general overview. I am not going to take much more time than that,

Mr. Chair. I have been in attendance at a lot of these Estimates over time and I

always find it is best when you get into it very quickly. We are dealing with

members who have a good general knowledge of the areas we are talking about, and

we have the opportunity to answer questions and to provide as much information

as we can to members of the Committee.

Thank you.

CHAIR: Thank you, Mr. Byrne.

I just want to remind the officials with the department, if you are asked to

speak or answer a question, if you would identify yourselves before you speak

each time.

,I will ask the Clerk now to call the first subhead.

CLERK(MS MURPHY): 1.1.01 Minister's Office.

CHAIR: 1.1.01, Minister's Office.

The critic now, Mr. Parsons.

MR. PARSONS: For the record, we have been joined by Mr. Joyce, the Member

for Bay of Islands, and Mr. Butler, the Member for Port de Grave, should be

arriving soon, as well. He had a medical appointment but does intend to be here,

I understand.

Minister, if we could probably alternate between some specifics concerning

the actual details and figures in the Estimates book versus some general

questions about matters under your department.

MR. E. BYRNE: Sure.

MR. PARSONS: I may be back and forth here.

MR. E. BYRNE: Yes, we can free-wheel it a bit. That is fine with me.

MR. PARSONS: First of all, under the various headings, for example, in

1.1.01, Minister's Office, there is a subheading for Salaries, and likewise a

Salaries heading under Executive Support and throughout the Estimates for your

department. What we have done in the Estimates Committees for the other

departments, rather than take a lot of time explaining why something may be up

or down by a few thousand dollars, what we have asked of the minister is, would

you undertake to provide us with a breakdown, because in conjunction with the

Estimates book there is also a Departmental Salary Details book. We have asked

all of the other ministers and they agreed: Would you take the positions and

show us which are permanent, which are temporary, and which are vacant for this

year that you have here. If we have to go through this, it could take us a long

time, to go through all of the details of what every position is.

MR. E. BYRNE: So, you are looking for some baseline information, more or

less?

MR. PARSONS: Yes. In your Salary Details book, if you could confirm for

us- for example, we noticed in chatting that the Director of Communications,

which used to come under Minister's Office normally, there is still a Director

of Communications it is just that, as a policy decision of government, they are

now looked after by the Public Service Commission, apparently. They have no

political role. The position still exists, it is just that it has been shifted

to Executive Support rather than in the Minister's Office.

Rather than chasing all of these details and estimates, we thought it might

be easier if your office gave us the details, looking at the detail book, which

of these are there now, which are permanent, which are temporary, and what

positions are vacant. Every department that we have asked, as well, has

acknowledged that there are indeed vacancies. Different departments, of course,

have more employees than others. The Department of Education, for example, has a

lot more employees, as does Justice, and as does Health, than, for example, the

Department of Environment.

MR. E. BYRNE: We will endeavor to do that for you. I will say this, in

response, that there are very few vacancies in the department, but we will

endeavor to get that information for you.

MR. PARSONS: Also, if you could tell us which positions existed prior to

this year that no longer exist. If there been any layoffs or any positions that

no longer exist in your department, if you could identify, for us, what

positions no longer exist.

MR. E. BYRNE: We do not mind finding that information for you. Would you

be able to follow up with a note to me of what specifically you are looking for?

MR. PARSONS: Yes, not a problem.

MR. E. BYRNE: Okay.

MR. PARSONS: They have also agreed, Minister, to have the information for

us so that we could have it prior to the conclusion of the Budget discussions.

MR. E. BYRNE: Right.

MR. PARSONS: We have to come back to the House, of course, for the

Concurrence debates and so on, so we would like to have that information if we

could before the Budget debate-

MR. E. BYRNE: We will endeavor to get it at soon as we can.

MR. PARSONS: Okay.

MR. E. BYRNE: If it happens to meet with the timeline you suggested, fair

enough. I will endeavor to get it to you as soon as I can.

MR. PARSONS: Well I am assuming there should not be a problem.

MR. E. BYRNE: I do not anticipate one. We will get to you as soon as we

can.

MR. PARSONS: Minister, on the Lower Churchill issue, have there been any

discussions ongoing in recent months concerning the Lower Churchill or

possibilities of doing something with the Lower Churchill?

MR. E. BYRNE: No, there have not been any in recent months. What we have

essentially done is, as you are aware being part of the former government, out

of the Newfoundland and Labrador Hydro there were x number of dollars set aside

to deal with the negotiations that were ongoing that date back to 1998, and then

the most recent developments or discussions. Since that time we have basically

just continued to assess the viability of the project and options associated

with it. There have been no discussions on the development of that project, only

inside government.

MR. PARSONS: There have been none, for example, with Hydro Quebec or the

Quebec government?

MR. E. BYRNE: No.

MR. PARSONS: Do you have any timelines, Minister, as to when something

might happen or might get started?

MR. E. BYRNE: Again, government is at a point right now where, with

respect to this development - I mean, it is an important development, obviously,

to the future of the Province - we are at a point, I guess, where we are

assessing our options on what are the best opportunities for the development of

that project. There are no timelines associated with that yet, I say to the

member. I am not trying to be evasive, I am just trying to be as straightforward

as I can with you. We have not said, by September we are going to try to begin

this, or by October or November. We are assessing that project as we speak and

that is exactly where it is to at the moment.

MR. PARSONS: Minister, has there been any further consideration given to

the Upper Churchill piece? I know it was and people quite often now, even in the

public, through comments and letters to the editor- I saw one last week, in

fact, where people still say that we ought to pursue the legal remedy vis- -vis

the Upper Churchill and try to have the contract set aside. Any discussions or-

MR. E. BYRNE: What legal remedy? What do you mean?

MR. PARSONS: There was even one suggestion that the former Premier might

not have been in a proper frame of mind when he signed it, that some mental

condition might have existed.

MR. E. BYRNE: Maybe I can seek your advice, as a former Minister of

Justice. What would you suggest?

MR. PARSONS: Well, I know what we looked at and what we thought about it.

I am just wondering if any of the options, vis- -vis

possible legal actions, are still be considered? Because that was an option,

that some people thought that a legal remedy might still be possible.

MR. E. BYRNE: As a new government, in terms of trying to complete and get

a full picture of assessment and opportunities, legal or otherwise, that

potentially could be open to us, we are assessing everything, if I can put it in

that context. Having said that, I would not want to spin the Committee room,

saying that government is looking at a legal remedy to the Upper Churchill

because that would be very narrow and interpretative of the comment that I am

making.

We are assessing the Lower Churchill project, itself. Any potential impacts

that project could have on the Upper Churchill project, those are things that we

are assessing. We are just at that stage, as a new government, seven and a half

months old, eight months old, where it is obviously something that we are

interested in, and every former government has been interested in. Before we put

our toe into that lake, if I can put it that way, we want to be assured, based

upon all of the available information that has gone before us, all of the

available information that has occurred in, particularly 1998 and 2000, with

respect to potential agreements with Quebec on the development of that project,

that we are doing so on solid footing.

MR. PARSONS: Minister, moving on to another topic, the issue of

Newfoundland Hydro and Newfoundland Power, the consumer rep, Mr. Browne, has

been very vocal-

MR. E. BYRNE: Yes, I talked to Mr. Browne.

MR. PARSONS: - in suggesting that there should be an amalgamation of

those two bodies to get rid of overlap, duplicitous costs and so on. What are

your thoughts on that?

MR. E. BYRNE: Our thoughts are a matter of public record. We indicated, I

guess, back in January that we would release some of the information that was

done for the former government. What I said to the media at the time, and what I

can tell you today, is that we are not in the business of trying to buy

Newfoundland Power. We have set out a course, a direction, which is called the

production of an energy plan for the Province that we hope will look at energy

development in the Province, not only hydro, but gas, oil, and wind power in the

context of an expanding role for Newfoundland and Labrador Hydro, which we

strongly believe in. Part of that we have partially funded in this year's

Budget, an $80,000 expenditure for the development of that energy plan. We have

stepped back a bit and said we want to look at all issues surrounding energy,

how do we use that as an economic development tool to grow the economy of the

Province, how does that fit in with our own Crown corporation, Newfoundland and

Labrador Hydro, and the expanding role that we see for that corporation?

With respect to Newfoundland Power, it is not our intention to make an offer

to Newfoundland Power to purchase them. We want to step back, have a look at the

development of a provincial energy plan that is long-term, twenty to thirty

years in length, that would see a very coordinated and systematic approach to

the development of energy, number one, that would hopefully reduce our reliance

on Bunker C , at some point, and the burning of that in Holyrood. At the same

time, how do we use energy as an economic development tool to grow and expand

the economy of the Province? That is where our focus is going to be in the

upcoming year.

MR. PARSONS: Dealing with that whole issue of energy, hydro, development

of electrical power sources and so on, what are your thoughts - there is

currently an application before the Public Utilities Board, and I realize that

comes under and technically reports to the Department of Justice.

MR. E. BYRNE: Correct.

MR. PARSONS: In all practicality, your department, obviously, has a lot

of involvement and dealings with the Public Utilities Board, as well, since many

of the utilities your department would have a close relationship with. What are

your thoughts on the current application that is before the Public Utilities

Board? I believe Minister Noel, who was there formerly, actually spoke out, and

he was in favour, I guess, of their asking for a rate increase.

MR. E. BYRNE: Who is that?

MR. PARSONS: The utility, I believe it is Hydro.

He was of the view, if I recall correctly, that, well, yes, they had to go

ask for an increase because of development costs they have and recovery and so

on. Is that still the position of this administration, that the rate application

currently before the Public Utilities Board by Hydro is justifiable?

MR. E. BYRNE: Well, whether individuals agree or disagree, whether it is

justifiable or not, the fact of the matter is that Newfoundland Hydro is

regulated by the Public Utilities Board. It is enacted because of legislation

that was passed in this House dealing with the Electrical Power Control Act,

back in the Clyde Wells era, et cetera. The administration of energy, or the

administration of the policy of Hydro, in terms of their rate, their capital

budgets, whatever it maybe, the PUB has absolute jurisdiction over it. From that

point of view, if we were to take exception to that and wanted to put some real

legs to that, then we would have to look at changing how Hydro relates to the

PUB, because right now any rate application, any capital expenditure by

Newfoundland and Labrador Hydro, must be approved through a public process

through the Public Utilities Board.

On top of that, once they go through that process, any individual, group or

company who wants to seek intervener status and make an argument in support of

or counter to that, has the absolute right to do it through the public process.

We saw a number of groups seek intervener status. That is the process that we

have right now. That is the process that has been enacted by legislation in the

House, and how both the legislation and the regulatory regime associated with

the legislation deals with Newfoundland and Labrador Hydro.

MR. PARSONS: I am just thinking, and I am more here into a free

discussion of the policy issues surrounding it, not that I particularly fall on

one side of the argument or if I fully understand the argument. The process, as

you say, is that the Public Utilities Board currently has the authority to

decide, vis- -vis

rate applications and so on by the utilities in the Province. That was done, I

believe, as you say, under the Wells administration, that they took it away from

government and made it an arm's-length operation over in the Public Utilities

Board. That may be well and fine, i.e., it gives that independence to the

decision by these people on the Public Utilities Board, but what is your view?

For example, what if the Public Utilities Board makes a decision on hydro

applications that has a very, very negative impact on electrical rates that

people, like the paper mills in the Province, the industrial users, end up

paying?

If government were to decide, today, that we feel there should be some

special arrangement or consideration given to, for example, paper mills, because

they are so valuable as an economic driver in the Province and from an

employment point of view and so on, in Stephenville, Corner Brook and Grand

Falls, yet here is the Public Utilities Board that may impose a rate that could

possibly devastate the operations of one of these places. For example, I

understand Stephenville is very precarious in terms of its energy bill, that if

the energy bill goes through the roof, that mill, in the sense of the mills in

that company throughout Canada, may be in a very precarious situation, yet

government cannot step in, as I understand it, right now, and say: Thank you,

very much, Public Utilities Board, we appreciate your logic and your rational

reasons why you come up with it, but we want to make a special decision, vis- -vis

that industrial user.

Do you think there should be something done, given those possibilities, that

there ought to be a lever or a brake there so that government can intervene

rather than leaving the ultimate authority to the Public Utilities Board?

MR. E. BYRNE: Government must reserve the right to always judge what is

in the public's interest. You mentioned Stephenville - what is interesting,

and what most people are not aware of, is that because of the decisions made by

governments in the past, that have given Abitibi, for example, the right to

develop Star Lake and other projects on the Exploits River, if you look at

Abitibi, Stephenville and Abitibi, Grand Falls, in the last seven years, if you

were to look at it on a graph, their power rates have been flat and consistent.

They are not paying any more today for electricity, if you combine two of their

mills together, than they were seven years ago, because of their own

developments on Star Lake and on the Exploits River. They will tell you that, we

do not look at it that way, that Stephenville is not sitting on a power source,

so whenever there is an increase in costs or an increase in electricity rates,

that is going to have a detrimental effect on our Stephenville operation.

Government, I think, has an obligation, generally, to look at how a company is

doing.

I just want to answer, very specifically, to the issue you raised on Abitibi,

and generally say to you that, as a government and as a Legislature, all of us,

I think, must reserve the right that if there is an extraordinary event of some

kind that would compel us to act, then I think we would have an obligation to

look at that seriously.

MR. PARSONS: Do you think that should be done? I mean, obviously the

government can come back into session and deal with a catastrophic decision

whenever they wish, but I am thinking more along the lines of, should we amend

the Public Utilities Board so that we put it right in there, that any decision

that the Public Utilities Board makes is subject to the ultimate approval of the

government.

MR. E. BYRNE: Government can issue Orders-in-Council to do that, as we

speak now. Personally, I would not want members - I do not know if any of us

would want to get in the business of setting electricity rates independent of

some sort of process. That would be some slope to get on, and I do not know if

we would ever get off it, to be quite honest with you. If the forty-eight of us

in here, or government, decided that we are going to start setting electricity

rates, it would be an interesting discussion that would follow. The Public

Utilities Board is a Quasi-Judicial process that has been established arm's-length,

with experts appointed, you would hope, with the ability to call expert

witnesses, that provides for a public process for individuals, groups or

companies to put their viewpoint forward and then a decision is made. So, I am a

believer in the process, personally. I think it is an important process. It is

one that, you know, takes up some time. We have a Consumer Advocate who

(inaudible) out through the process, as well in terms of protection of the

consumer's interest. I am, personally, a believer in that.

I am also a believer, that if there are extraordinary circumstances that

present themselves to a government, or to the Legislature, that require some

action, then I think we have an obligation to have a look at that and to view

it.

MR. PARSONS: I guess I make some of these comments because it seems,

albeit everyone has good intentions on the purpose, intent and the process

regarding the Public Utilities, it's role in the affairs of the lives of the

people of this Province is coming to the point where they, potentially, are

exerting very large influences on people's lives in every role. Instead of

being the Public Utilities Board, which they started out to be - we now have the

insurance issue being referred to the Public Utilities Board, which takes in

people's residential, automobile and commercial insurance. We now have the

gasoline pricing commissioner responsibilities being put over to the Public

Utilities Board. I am a firm believer as well in the process, I am just

thinking, though, it is one thing to have things at arm's-length, and it is

something else to give up the Legislature's responsibility to deal with some

of these issues and put all of these major issues off into one body.

MR. E. BYRNE: I cannot speak from a departmental point of view to the

insurance issue or to gas regulations, they report to other ministries, as you

know. When it comes to the establishment of electricity rates, government has,

within its legislative authority, to direct the PUB. That is the bottom line. It

is not a matter of - on policies matters, yes. We have not, and I do not think

any government has, or would for that matter, just arbitrarily say: There is a

panel over here that decides all of that, we do not want to get into that. We

still have obligations, legislatively, that if we need to act there are levers

there where we can do that.

MR. PARSONS: Minister, on another topic, Voisey's Bay, you have been

there now for some months and we had the commentary yesterday concerning the -

MR. E. BYRNE: Bruce, do you want to add to that?

MR. SAUNDERS: Just one comment on the Public Utilities Board and setting

the rates. One thing that we should not forget is that the PUB has to set rates

whereby Hydro will recover all of its costs. If you look at going down the road

and saying, let's set a different rate for industrial customers, somebody else

has to pay, so therefore the general consumer may have to pick up the

difference. There is always that balance, and we should not lose sight of that.

I just wanted to make sure that everybody was aware of that.

MR. PARSONS: Thank you.

On the Voisey's Bay issue, Minister, obviously a very important issue to

this Province in our development, is everything on target so far as was

intended, in terms of the demonstrator plant, the progress on the ground up in

Voisey's itself, down in Argentia? Maybe if you could just make a few

comments.

MR. E. BYRNE: Yes, it is something that is monitored on a daily, weekly

basis, as you can appreciate, through the Industrial Benefits Division. This is

the construction season, this is the big year, as you would be aware being part

of the former Cabinet that put the project in place, that progress is going to

be made. We have no indication from the Voisey's Bay Nickel Company that

anything is off target according to the compliance of the agreement. They

believe that they are on schedule. They believe that they are going to be

meeting their targets. I think they made some reference in their shareholder's

meeting, that they might be able to look to government to bump up its

schedule

by six months. If that is the case, they would have to bump up at that point in

time in terms of telling government, as well, what sort of facility they are

going to have in Argentia. There is no indication from our assessment, from the

Voisey's Bay Nickel Company, that things are not on schedule.

MR. PARSONS: The detail escapes me now. Maybe Allister is familiar with,

I am sure, the timelines. What was the timeline again for the demonstrator to be

built, and the decision made as to which type of plant they were going to go

with?

MR. TAYLOR: The demonstration plant, the original plan was to have it

completed by July of 2006. That is the condition that they get to ship product

out of Labrador. The company are now talking about the possibility of being able

to move those timelines up to the end of 2005. I visited the mini plant in

Toronto yesterday and they are right on

schedule in terms of what they need to

do for the demonstration facility. Work is supposed to start at the

demonstration facility, I think it is the end of this month.

The other question you asked is, when do they have to make a decision on what

plant they are going to build? That decision has to be made by the end of

November, 2008, whether it will be a full blown hydromet facility or a

conventional refinery.

MR. PARSONS: So, as the minister says, if one thing gets moved up, all

the timelines move.

MR. TAYLOR: Yes.

MR. PARSONS: Again the figure alludes me. What was the economic impact? I

believe there was a

schedule actually done as to what economic impact the Voisey's

deal would have on this Province on a yearly, ongoing basis. What was the

expectation in our bump, in our economic growth as a Province, as a result of

Voisey's for this year, 2004-2005?

MR. TAYLOR: I do not know. I would have to get that information for you.

MR. PARSONS: I know there were some charts done up at the time, saying,

in each year depending on the amount of their business and development-

MR. E. BYRNE: I will find out for you.

MR. PARSONS: Maybe Mr. Joyce might like to - I have had my shot at it.

CHAIR: Probably we can give everyone an opportunity. We have been sort of

alternating Opposition and government members. I do not know if anyone on the

government side has a question for the minister or his officials. No one at all?

Mr. Joyce.

MR. JOYCE: I will only be ten or fifteen minutes, anyway, total. I hate

being called a critic because I am usually not, but I guess that is the role.

Thank you, Minister and officials, for attending this morning, and my

colleagues behind me.

On page 141, Silviculture Development.

MR. E. BYRNE: What is the subhead number?

MR. JOYCE: Subhead 2.1.03, Silviculture Development.

It looks like it is on par from last year, or pretty close. Would I be able

to get a list of the silviculture projects across the Province - we do not have

to go through it here - or the proposed projects across the Province?

MR. E. BYRNE: If that is available, I cannot see why not.

MR. MASTERS: The list we have to date with the projects you can certainly

have. There could still be some change between now and when they are

implemented, but not much, we are into May now. So, absolutely, yes.

MR. JOYCE: Okay, if you could forward that to me please?

Subhead 2.2.01, Insect Control. I am just looking at the total for insect

control. It has gone up by a fair bit. Is there a problem or are there steps

being taken for the insect control?

MR. MASTERS: In actual fact, the program for 2004-2005 is actually down

from last year's program. The insect populations, the forecasts we have show a

decline in populations. Last year we had a budget of about $6.4 million, we

spent about $6.1 million, and in this year's Estimates we have only budgeted

$5.4 million. There will be an increase in the Crown portion because how that

works is, if the insects are on the industrial limits, Kruger or Abitibi, they

pay the cost. Last year fortunately, from government's point of view, most of

the infestation was on industrial limits,

whereas this year's forecast is

mostly around Grand Lake and the Humber Valley and right in around east of

Corner Brook, and a lot of the Grand Lake area is Crown land. The size of the

program will get smaller, the cost to government will probably increase.

MR. JOYCE: Because of the land, the ownership.

MR. MASTERS: Yes, the bugs showed up on Crown land this year versus

industry land.

MR. JOYCE: There is no major problem with insects out on the West Coast,

it is just average?

MR. MASTERS: Obviously, there is a problem. It is still a significant

area but less than half of what we forecasted last year. That is the good news.

MR. JOYCE: Okay.

MR. E. BYRNE: If I could interrupt for a moment. The Forest Division is

an extremely well managed division, as you are probably aware, in terms of not

only insect control but, specific to the question you have asked, in being able

to forecast and pinpoint exactly what needs to be done and when it needs to be

done. These decisions are made, primarily, as you may be aware, based upon the

science that is available to us, the size of the problem, and what is required

to respond to contain it.

MR. JOYCE: 3.2.01, Production and Market Development-Administration, 05,

Professional Services: Why the major increase?

MR. E. BYRNE: That is a division within the budget. Under Production and

Market Development, there was a request came forward through the department,

vis- -vis

cold storage facilities. In terms of Production and Market Development of

agricultural crops in the Province, one of the things that government had talked

about was trying to put more infrastructure in place for producers. That is the

line item it showed up in.

MR. JOYCE: Can I get a breakdown of where those funds are going, or have

they been allocated yet?

MR. E. BYRNE: They have not been allocated. That would be for specific

proposals related to cold storage facilities in the Province for root crops, in

particular. That is what we have talked about. We have proposals in from a

variety of areas in the Province, from Labrador and other areas within the

Province. That is essentially what that is there for.

MR. JOYCE: That is the amount that has been allocated, $300,000 for cold

storage. Is it the building of cold storage or the use of cold storage?

MR. E. BYRNE: It could be both, because there are some areas in the

Province were there are absolutely no facilities. As you are probably aware, I

say to the member, right now the lack of infrastructure puts the Province in a

position, particularly producers, of not being able to store vegetables

throughout an entire year, so that we could grow that industry and be able to

supply ourselves and restaurants or grocery chains with local vegetables. Part

and parcel of the strategy, I guess, is to try to build capacity over time. That

is what that funding allocation is there for.

There was a pilot project out in Lethbridge, that you may or may not be aware

of, about three-and-a-half or four years ago, that was funded. There was some

provincial money into it, there was some federal money into it, and some from a

variety of different sources. HRDC was involved and ACOA was involved. It was an

attempt to build capacity for local vegetable producers. That is specifically

what that is there for, for projects like that.

MR. JOYCE: Okay.

Are there any other funds in the department for that or this is the only-

MR. E. BYRNE: Well, that is specifically for that purpose there.

MR. JOYCE: For cold storage?

MR. E. BYRNE: Yes.

MR. JOYCE: Okay. Subhead 3.2.03, Financial Assistance To Industry.

MR. E. BYRNE: Yes.

MR. JOYCE: That is down a fair bit.

MR. E. BYRNE: Subhead 3.2.03. Are you talking about Financial Assistance

To Industry?

MR. JOYCE: Yes.

MR. E. BYRNE: Capital.

MR. JOYCE: Yes.

MR. E. BYRNE: It was $4.5 million last year. Are we on the same-

Financial Assistance To Industry Capital?

MR. JOYCE: Subhead 3.2.03. What I have here is Production and Market

Development, $2.126 million.

MR. E. BYRNE: Subhead 3.2.03, I have. Let me get through it here.

MR. JOYCE: It says Production and Market Development (Cont'd). It is

under the marketing board.

MR. E. BYRNE: Subhead 3.2.03, yes.

MR. JOYCE: What I have here is $2.1-

MR. E. BYRNE: $2,126,200

MR. JOYCE: Yes.

MR. E. BYRNE: Down from $6 million.

MR. JOYCE: Yes.

MR. E. BYRNE: The reason for that is because $4.5 million of that, just

above, was money that was provided by yourselves, as a former government, to

Country Ribbon, a loan to them. That is the reason that is down. I would hope

that we would not have to provide another block of money like that.

MR. JOYCE: Not planning to?

MR. E. BYRNE: No.

MR. JOYCE: Perfect.

Subhead 3.3.01, Grants and Subsidies: That is down a fair bit, actually, from

$270,000 to $122,000.

MR. E. BYRNE: These were grants provided to the Provincial Pastures

Program, support to provincial farm organizations, 4H councils, and the

Federation of Agriculture. Block funding of fifteen is provided for the Daphne

Taylor Milk Quality Award, those sorts of things. These are areas where we,

under the budget process, were able to trim a little bit, and that is the reason

it is down.

I do not know if you want to add anything to that, Ed?

OFFICIAL: No, thanks.

MR. E. BYRNE: Okay.

MR. JOYCE: In 3.3.05, Salaries have increased dramatically.

MR. E. BYRNE: You will see them in the salary details, but those are

salaries directly related to the federal-provincial agreement and arrangement,

under the Agriculture Policy Framework, that deal with the five elements of that

program, elements of agriculture, science innovation, renewable, food safety,

food quality, and business risk management, potential for producers in the

department in terms of anything and all things associated with the development

of the agrifoods industry as it relates to that specific program.

MR. JOYCE: There has been an increase in employees, I would assume?

MR. E. BYRNE: Absolutely. Part of the information that the Member for

Burgeo & LaPoile has asked for, you will find, when we get that for you,

that will be in it as well.

MR. JOYCE: Okay. Subhead 3.4.01. Supplies has decreased a fair bit,

dramatically actually.

MR. E. BYRNE: That is the rabies program, in terms of what was up for

last year in terms of the rabies eradication program that was required to

eradicate the rabies risk. That threat has been eliminated largely due to the

work of Dr. Hugh Whitney and his crew. That is the big reason why that is down

so much.

MR. JOYCE: That was mainly to deal with rabies, the threat of rabies?

MR. E. BYRNE: Yes, on the Island portion of the Province. You remember on

the Northern Peninsula where it was found - I think it was in the St. Pauls

area. The department at the time - and Alan was the Deputy Minister - the former

Department of Forest Resources and Agrifoods, responded immediately and did a

great job, I thought, of containing what was a pretty big potential threat.

MR. JOYCE: Oh, is was, yes, major.

MR. E. BYRNE: No question about it.

MR. JOYCE: Subhead 4.1.01, Transportation and Communications took a major

leap there, 100 per cent.

MR. E. BYRNE: A Major leap there. This is under the Geological Survey?

MR. JOYCE: Yes, 03..

MR. E. BYRNE: Aircraft support, field travel costs, freight charges and

communication costs directly associated with the delivery of the field program.

The estimates are up due to, I think, a new federal-provincial agreement; if I

am not mistaken, 100 per cent federal funding for geological initiatives. There

is $42,000 there for salaries and I think $358,000 for operating. That was under

a federal-provincial agreement.

MR. SAUNDERS: Is you look a little further, you will see ( inaudible).

MR. E. BYRNE: Under 4.1.01, I say to the member, too - Bruce Saunders,

the Deputy, just advised me, as well, that under Revenue-Federal, you will see

it there, 100 per cent revenue. That is where that is to.

MR. JOYCE: Okay. Minister, I was just going to ask you a few general

questions.

MR. E. BYRNE: Yes.

MR. JOYCE: In the budget, there was an increase in the quarry permits,

the cost for quarry permits. How much is the department expecting to raise from

that?

MR. E. BYRNE: I will defer that question to Allister in terms of what we

are expecting.

MR. MASTERS: (Inaudible).

MR. E. BYRNE: I will give you the general policy direction on it. It was

part of a fee structure, or fee structures, of government that we looked at

during the budgetary process, and trying to raise a certain amount of money to

increase revenues at the same time. While we understand not everyone is overly

happy with that, at the same time, when increasing revenues, it provided

government with the opportunity of leaving other programs in place.

Okay, Allister if you could answer what we are hoping to raise from that.

MR. MASTERS: About $50,000 a year based on 1,000 applications per year,

which is our average.

MR. JOYCE: I understand that there is also an increase in the quantity of

material taken out of the quarry. Is there -

OFFICIAL: Royalty fees.

MR. JOYCE: Royalty fees. How much do they expect to raise, based on last

year, or projected from -

MR. MASTERS: About $150,000.

MR. JOYCE: Just two general questions, minister. One, wood supplies for

Corner Brook Pulp and Paper. Does the department feel now that it is stable?

MR. E. BYRNE: Is wood supply ever stable in the Province, no. I do not

mean to be facetious with it. We have a pretty good relationship with Corner

Brook Pulp and Paper. They are a company that is pretty very well committed to

the Province and to Corner Brook. Alan can answer anything that I do not add. He

can certainly feel free to jump in at any time. They are bringing wood in from

outside of the Province. They are into recycling, no de-inking but they are into

recycling paper, as you are aware. It is my sense that Corner Brook Pulp and

Paper are doing everything they can. This is a strategic asset for them in the

Province and they are treating it as such.

I do not know if you want to add anything to that, Allan. In the next couple

of years they are going to get into some of their managed stands that they are

not yet into. I will defer to Alan.

MR. MASTERS: Corner Brook Pulp and Paper has about 80 per cent of the

wood supply they require for their mill on their own limits. If you look across

the country, that probably has to be one of the best averages right across

Canada. From a wood supply perspective, they are certainly in good shape. The

other 20 per cent, they are offshore or recycled. As you are aware, with the

mill there, as they continue to increase their productivity they will increase

their reliance on offshore. There is a fine item now along the Island. They are

in really good shape, from where we are looking.

MR. JOYCE: I know there was a big issue, back last summer, with the mill

in Stephenville. They were seeking wood from Labrador, I think, a quantity of

wood. Can you update us on the status of that?

MR. E. BYRNE: They actually had a letter from the former Premier about

access to Labrador wood. Both companies, Corner Brook Pulp and Paper and Abitibi

Stephenville are in Labrador working out their own arrangements with people who

are in the business in Labrador. We have encouraged, and continue to try to

encourage, the companies to do that. No one is going to go in and dictate that

that must come from there to go here. Relationships have to develop, the

industry has to grow, and there is opportunity for industry to grow in Labrador.

The companies recognize that, and both of them are in Labrador trying to

establish those relationships and getting the chips that they require. That is

ongoing.

Wherever and whatever the department can do to facilitate those arrangements

between the people in Labrador and companies here that present win-win

situations for both, we are doing that on a regular and systematic basis. That

is, kind of, the status of the relationship with both the major mill companies,

Abitibi and Corner Brook Pulp and Paper, as it relates to potential in Labrador.

MR. JOYCE: They are actually still ongoing, seeking wood out of Labrador,

if possible?

MR. E. BYRNE: Yes, with bilateral arrangements with people there. It is

not something that government has directed to be done. It is something that,

from a policy perspective, in terms of developing the industry and potential for

Labradorians - because there is tremendous potential there for that industry to

grow in Labrador, for benefits for people in Labrador. The companies are up

there, as they would be with other sawmillers in other parts of the Province, in

terms of exchange of sawlogs and getting chips. Those are the sorts of

relationships that we are trying to facilitate and encourage, from the

departments point of view, to present win-win situations for everybody.

MR. JOYCE: I will just finished up, Minister. The salaries and so are

going to be provided to us. I just want to let you know the excellent employees

you have, especially on the West Coast that I deal with, and, I am sure, in the

department that I have dealt with over the years. I would be remiss if I didn't

acknowledge the work that they do.-

MR. E. BYRNE: I appreciate you saying it. There is no question about it

being true.

MR. JOYCE: I know the relationship they have with a lot of industries out

on the West Coast, and I know sometimes discussions may be frank, but there is

always the desire to move ahead and help out. I just want to be on record as

thanking the staff and the full department.

MR. E. BYRNE: As a minister, you have to rely on the people who are

around you. I remember when we were in Corner Brook and Alan introduced me, I

got up and introduced him as my babysitter for the last six months, in some

ways. There is an excellent staff in the Department of Natural Resources, very

professional, very knowledgeable, technically advanced, and they know their

business. I certainly rely on the information and expertise and knowledge that

they have and that they provide to me on a day-to-day basis. I would be foolish

not to.

MR. PARSONS: Minister, just a couple of questions to clue up. More of an

education thing, I guess, for my purposes more than anything.

I noticed under item 3.3.06, BSE Recovery Program. BSE, I do believe, is the

mad cow issue?

MR. E. BYRNE: You got it.

MR. PARSONS: What does that have to do with our Province? I am just a

concerned. I did not know there was an issue of BSE here in Newfoundland and

Labrador.

MR. O'REILLY: Do you want me to answer that?

MR. E. BYRNE: You go ahead, Ed, and I will give you some input after.

MR. O'REILLY: That is a good question. You would think that BSE and

Alberta would have little implication in Newfoundland. I guess the implication

is the fact that BSE has impacted negatively the markets and the ability of

slaughter houses to take cull animals, as an example. It has reduced the price

of beef significantly to a point where I think it was somewhere around

twenty-five cents a pound, somewhere around that area. In fact, we have beef

producers in Newfoundland and Labrador who actually send animals out to the

auction houses and so on, up to Montreal and that area, so, in fact, they were

impacted. Our dairy farmers who have a cull rate in their operations of

somewhere around 30 per cent, they move younger animals in and take the older

animals out. They were having difficultly getting rid of those animals, plus the

price that they were actually receiving for those animals was substantially

reduced. There was some negative implications and the federal government, in

conjunction with the Province, put together a program that helped offset those

market prices.

MR. PARSONS: I would have thought, given the scare vis- -vis

Alberta beef, that what we are raising here on the Island would have been a more

valuable product then. With the scare on, you would think with what was good,

presumably, here on our Island, at least not being subject to the same rate of

contamination, our product would have been more valuable rather than less

valuable.

MR. O'REILLY: I guess it is the marketing system that some beef

producers have. Rather than get into the growing of the cattle, then

slaughtering and meat cutting and so on, they would often sell their animals to

a dealer who would then take it, and they would be finished with it. Many

producers still do go to the freezer trade and basically will have their animals

slaughtered here, will get them cut up and then, basically, work with the

consumer and sell door-to-door more or less. They are still maintaining a fairly

good price, but again you are getting into all aspects and it certainly

complicates things a little bit.

MR. E. BYRNE: The other thing, too, BSE hit Canadian products, period. We

are not as isolated as we think we are when it comes to what has occurred on

this sort of issue. Allan, who is the former Deputy of Forestry and Agriculture,

indicated to me as well, and it is a solid point, that as a result of it Alberta

beef flooded the Canadian marketplace, almost overnight. Alberta beef is

different than most beef in the country in that - I should not say most beef in

the country, but it has been sold as Grade A beef, as a top eating beef around

the world, and, in particular, in the US. The short answer to your question -

there are two things - one, we do not have the luxury of being as isolated as we

may think we are. When this issue hit, it hit all Canadian beef. I know it was

just in Alberta, but as a result of that the Alberta beef that was destined for

export markets flooded the Canadian beef industry market itself.

MR. PARSONS: Minister, on subhead 3.2.03, page 145.

MR. E. BYRNE: Subhead 3.2.03?

MR. PARSONS: Yes, Financial Assistance To Industry. I noticed last year

it went from $1.9 million to $6.3 million and now back down to $2.1 million. In

that $6.3 million, does that include -

MR. E. BYRNE: Just one second now, what is the heading?

MR. PARSONS: Subhead 3.2.03.

MR. E. BYRNE: Okay.

MR. PARSONS: I am talking about Financial Assistance To Industry on page

145. It went from $1.9 million to $6.3 million revised last year, now back to

$2.1 million. Did that include the Country Ribbon issue?

MR. E. BYRNE: Yes.

MR. PARSONS: What is the status right now on that operation?

MR. E. BYRNE: Our understanding is that the operation is stable. The

issues that were surrounding it, as you would be aware being a former member of

Cabinet - the government still has some indemnities out there related

environmentally and such. My understanding, in terms of what has been relayed to

myself as the minister, is that the company is stable at the present time, that

it is working through with government the indemnities that we still have with

them that we are obligated to, that were signed on by the former government, but

there is no reason to be alarmed or concerned about the operation of that

company at this point.

MR. PARSONS: Minister, to an issue again - and I say my ignorance of this

issue and the farming industry in particular, being from Port aux Basques, where

crops and such are not -

MR. E. BYRNE: They are up the road, though.

MR. PARSONS: Up in Codroy Valley maybe, but in Port aux Basques proper I

do not know much about farming and so on.

The particular issue on the Salmonier closure, under Justice - we realize

there is a very valuable piece of property there, 2,500 acres adjacent to a golf

course. The disposition of that, no doubt, will take place once the place is

decommissioned. We also have a certain number of animals. In my questions the

other day to Mr. McNutt, who works with the Justice department and is

responsible for the decommissioning, actually, the issue of the milk quota

arose. How does that get handled in this case now, in terms of process? I take

it the Department of Justice is not going to be doing it.

MR. E. BYRNE: No.

MR. PARSONS: What happens to the quota?

MR. E. BYRNE: Does the quota itself get handled?

MR. PARSONS: Yes.

MR. E. BYRNE: That would go through the Newfoundland and Labrador Milk

Marketing Board. That is my understanding. That industry, I guess, represents

about 33 per cent. The milk industry, dairy producers in the Province, represent

about 33 per cent of the agriculture industry in the Province. The assignment of

milk quota: For example, if Hector Williams in the Goulds retires tomorrow and

he has 1,000 litres, there is a price attached to that, so much per litre, that

goes back into the pool with the Milk Marketing Board, which then assigns quota

according to the rules, regulations and legislation set out in this Legislature.

There is a new entrance policy that is just about finalized, as well. That is

well managed and well regulated, how that works. For them to have it, it would

have had to have been assigned by that group as well.

MR. PARSONS: There is a transparent, fair system that deals with this

quota.

MR. E. BYRNE: Oh, yes.

MR. PARSONS: It just will not be up on auction or -

MR. E. BYRNE: Government has no role in the assignment of milk quotas.

MR. PARSONS: What would be the approximate value of the Salmonier milk

quota? I understand it is very valuable.

MR. E. BYRNE: About $700 a litre, is it?

MR. O'REILLY: I guess $600 or $700 a litre.

MR. PARSONS: Per litre?

MR. E. BYRNE: Per litre.

MR. PARSONS: Do you have any idea how many litres?

MR. E. BYRNE: Nine hundred out in Salmonier.

MR. O'REILLY: Somewhere between 500 and 900. In any event, if it went

on the market then it would be substantial. It would be $700 times whatever the

number of litres per day that a particular farm produces.

MR. PARSONS: Minister, on another issue: You indeed have spoken out on it

and I feel quite rightly that you did, and that is the Wine River herd in

Labrador. What is the status on that issue right now?

MR. E. BYRNE: Well, I have to compliment the strategy put forward by the

department, first of all, and the department officials. The safety of officials

is obviously a primary concern. I guess the status is that, the Innu from Quebec

- and we are continuing to monitor it, our staff are continuing to monitor it -

have not been back since that time. I think, the action that they took - you

know, they were nationally embarrassed; no question about that.

I went down to my office one Saturday morning when this issue was ongoing and

I had over, I think it was, 322 or 323 e-mails from across the country on that

single issue. The leadership provided by Peter Penashue who, both provincially

and nationally, was an excellent spokesperson, Chief Michel Joe from Conne

River, who entered into the debate, particularly as it related to the National

Chief's office - it was a coordinated effort among the Department of Justice,

Natural Resources and Intergovernmental Affairs, in terms of how we responded

and monitored it. The approach that we was taken ultimately worked, and worked

very well.

MR. PARSONS: On another issue - again I am somewhat confused as to what

is appropriate questioning to yourself as Natural Resources Minister.

MR. E. BYRNE: That is okay.

MR. PARSONS: The Wine River herd, which is an animal type issue, is under

your jurisdiction, but yet the coyote issue is not?

MR. E. BYRNE: The Wine River herd came under our jurisdiction simply

because the force that would normally respond to it was conservation officers.

They are our officers who report directly to the Department of Natural

Resources. The coyote issue falls under the wildlife division in government

which reports to the Minister of Conservation.

I know, in first getting appointed to Cabinet, the question I asked was: How

come wildlife is not with forestry, and conservation officers are and wildlife

officers are not? Because wildlife officers, at that point, were with the

Department of Tourism. The fact of the matter is, the reason why we responded -

and I was the lead minister on it, because the enforcement side of this issue

came under the jurisdiction and responsibility of the Department of Natural

Resources.

MR. PARSONS: Do the enforcement issues of other wildlife issues come

under your department?

MR. E. BYRNE: Yes, for conservation officers.

MR. PARSONS: The regulations concerning the coyote issue that were

recently announced by the Minster of Environment and Conservation will still be

under your -

MR. E. BYRNE: The enforcement side.

MR. PARSONS: The enforcement piece of it.

MR. E. BYRNE: Yes.

MR. PARSONS: I am not on this Committee of Estimates, I am only here in

my capacity -

MR. E. BYRNE: As the critic.

MR. PARSONS: - for your department. I did not get an opportunity to ask

this question to the Minister of Environment, but it probably fits under your

department as well. It concerns - I guess it is logic - the program re the

coyote, as I understand it, announced recently. Obviously we did not have coyote's

before. They are not natural to Newfoundland, they came in here through whatever

means, ice pans, tractor-trailers or some other source, and they are a problem,

and everybody acknowledges that they are a problem. The purpose, I understand,

of the new program is to eliminate. They are not something that we had, it is

not a case of, if we get rid of every coyote in this Province, there would be

really - we are not making them extinct, they exist elsewhere in Canada.

MR. E. BYRNE: We are not going to eliminate them.

MR. PARSONS: No, but I thought the purpose was to try to eliminate them.

MR. E. BYRNE: Control.

MR. PARSONS: Yes. That is where my issue lies, I guess. I thought we did

not have them. It has been determined that they are not natural to our system,

and they are reeking great havoc among the other animals that we do have here.

We bring in this program to allow people to hunt them, and yet we put in a

condition saying that you cannot hunt them from July to September, because they

are breeding at that time. Albeit, the environmental groups and whatever - it is

lost on me, the logic of saying, do not hunt coyotes from July to September

because they are breeding, and the whole purpose of us trying to do this program

is to get rid of coyotes. We let people hunt from September on through to July -

if you see one kill it - but, meanwhile, take a break there in the summer months

because they are breeding. We are going to let them build up again, so then you

have lots more to go back and kill when it comes September. That logic is lost

on me. I do not understand why we would have a non-hunt period. I do not know if

there are any comments to that.

MR. E. BYRNE: The only thing I can say to you is, our responsibility with

respect to this issue lies in enforcement. Our department did not generate the

regulations. We are not responsible for the creation of those regulations or the

policy, but we are responsible for the enforcement of them.

To the question itself, I can only say, in trying to achieve some balance,

the intent of the new policy and direction was to control the coyote population.

I see your point, a valid one, but it was not to eliminate. The intent of the

policy is not to eliminate that species altogether but to control them.

MR. PARSONS: I throw this out, because I think it will be a problem in

enforcement as well. I think to have a regulation such as that and expect the

courts to - because ultimately your officers are going to lay charges and it

becomes an enforcement issue.

Another problem I see with them, from enforcement in particular, is,

apparently you cannot use a 22 caliber weapon to hunt the coyote, you must use

something other than a 22 caliber. However, if I am out on the bog in September

and October with my 22 caliber weapon hunting some birds, pursuant to bird game

regulations, and I come across a coyote, I can use my 22 caliber weapon that I

am bird hunting with to shoot the coyote. It is lost on me again why -

MR. E. BYRNE: I say to you, as the minister for this department, I can

respond to the enforcement side of the regulations, but those are issues and

questions that are much better directed, to be quite frank about it - and I

appreciate the points that you are making, I honestly do. Anyway go ahead. Sorry

I interrupted you.

MR. PARSONS: The reason I point this out is, because of the split in the

departments, vis- -vis

creation of the policy and enforcement of the policy, all I am saying is that

the two minds have to meet between what the policy is going to be and the

enforceability of that policy. I do not know if those two minds met, but I think

these are a couple of issues where, albeit the policy is great and I am

supportive of the policy, but I do not know if the minds in your department that

deal with enforcement met with the minds in Environment and Conservation, so

that we have a policy that not only is good but reflects some logic and common

sense and will be enforceable. That is why I raise the point.

MR. E. BYRNE: It is an important point.

MR. MASTERS: The minds certainly met. I am not sure if they melded but

they did meet.

MR. E. BYRNE: That is exactly right.

MR. MASTERS: It is a new policy, it is a new direction, and like

everything new there are skeptics and there are those that are all for it. I

think our guys see the need for it, I think they will go out and do a good job

of enforcing it, but I am sure a year from now it will be tweaked. I should not

say I am sure, I suspect it will be, based on what we find and what we

encounter, because we are doing something that we have not done before. You have

to start somewhere, so we are starting with this. Our guys, as I said, most of

them took it on very willingly. It is just now a matter of: we will see how it

works the first year and we will take it from there. My understanding is that is

exactly how it is set up, as a one-year thing. We are going to try it and see

how it works.

MR. PARSONS: Thank you.

Talking about the minds meeting and merging and whatever, melding, the

merging of the different departments: What has been your experience to date, in

terms of the merging of Agrifoods and Mines and Energy into one department? How

smooth a transition was it? Also, from a cost-saving perspective, what was the

rationale for it, has it worked to date, and any costs that are obviously

noticeable by doing so?

MR. E. BYRNE: I think it has been generally smooth. When it comes to

Mines and Energy and Forestry and Argifoods, they are probably the biggest

individually significant contributors to the provincial economy. Forestry alone

is a huge contributor, I think about 6,600 people employed directly in the

industry, worth about $1.5 million or $1.6 billion, through their Gross Domestic

Product, to the Province. Mining, obviously, in terms of not only the potential

of mining, but what it occurring in Labrador, the Voisey's Bay mine as well.

These are all natural resource issues that I think, generally, have worked well,

and in terms of potential and development of agriculture, have worked fairly

well as a Natural Resources Division. There have been some savings, obviously.

There are not two ministers, there are not two ministerial budgets, there are

not two ministerial stats, so there have been some savings from that point of

view.

On the issue of, you know, what are the issues going forward, particularly on

land issues in mining, forestry and agriculture, having that under one political

head, I think, makes it a little more of an efficient operation in terms of

potential value sets of land in the Province. On the milk quota, industrial milk

quota that was assigned to the Province, potentially we need about another

20,000 to 25,000 acres of forage land, agriculture land. There are about 6,000

acres that are available right now that could go into production tomorrow, but

we need another 14,000 to 20,000 on top of that.

How does that impact the forestry service, or will it have any impact on the

forestry service? Will it have any impact upon areas where there is mining

taking place? The interplay and the interrelationships between the Natural

Resource Divisions, I think having it under one political head makes it somewhat

more efficient. Although it is a big department, there is no question that it

takes a great deal of effort and coordination, and I believe that is being done

in terms of managing the issues that are before it. It is an exciting department

to be part of. as well.

MR. PARSONS: My last question, Minister, deals with the offshore and

onshore exploration and development activities, vis- B -vis

oil and gas exploration. Finally, after seeing the Laurentian Sub-basin issue

resolved in our favour, I think there is no question. Maybe if you could comment

on where we are, vis- B -vis

the boundary line between our Province and Quebec in the Gulf of St. Lawrence.

MR. E. BYRNE: Where are we ever with the Province of Quebec?

A couple of situations: Quebec believes the 1964 line is the 1964 line. That

is the boundary they believe. Unlike the process that was agreed to between the

Province of Nova Scotia and Newfoundland and Labrador - we were two provinces

that both had Accords. That is the fundamental difference, Quebec has no Accord.

It is an outstanding issue. The federal government is very reluctant to get

involved as you can appreciate. Quebec believes it is a sovereignty issue, as

they would, I suppose, as we believe it is where our line should be.

To where we are, we are not anywhere at this point, in terms of a resolution

to that boundary line, as we would have been. Let me say this, if Quebec, as a

Province, were in the oil and gas industry as we are and they were operating

under their own Accord as we are, I think we would stand a far better chance of

probably going through a similar process of what yourselves, as the former

government, did in terms of bringing a resolution to that boundary issue. One of

the fundamental problems that we do have with the Province of Quebec, in trying

to seek a resolution to the boundary issue, is that they are not the province

that is engaged at the moment in offshore oil and gas and they do not have an

Accord with the federal government. It has been a big block to us at this point.

MR. PARSONS: It is nice to see, as well, that there is indeed some

exploration activity going to go ahead in the Laurentian Sub-basin area as you

recently announced.

What is the situation, exploration wise, on land? There is a lot of activity,

from media reports, on the Port au Port Peninsula area and so on. Can you give

us some idea -

MR. E. BYRNE: Parts of the Northern Peninsula, the Parsons Pond area as

well. The two companies escape me now. I know they should not because I met with

them recently. Deer Lake Oil and Gas and Vulcan Minerals Inc. are continuing to

explore, they are optimistic. They have not hit the reservoir but they have

discovered oil. They are continuing to delineate, I guess, their drilling

activities and raising money to do it. There is reason to be optimistic, albeit

it cautiously, but there is reason to be optimistic about what potentially could

be found there.

MR. PARSONS: Thank you.

MR. E. BYRNE: Wouldn't it be nice?

MR. PARSONS: I appreciate the frank and candid answers from yourself and

your staff. Thank you.

MR. E. BYRNE: Okay.

CHAIR: Before I ask the Clerk to call the subheads, are there any further

questions from the Committee members?

MS FOOTE: Absolutely.

CHAIR: Okay.

MS FOOTE: Just one question, and my apologies, Mr. Chair, for trying to

be in two places at the one time this morning. I was listening upstairs and I

came down when I heard my colleague say he had a couple of more questions to

ask, and that was ten questions ago. I did not hear any questions about where we

are with respect to development of wind power in the Province, and I would like

to get an update on the government's policy, first, in terms of where you are

with that, but especially, of course, what is happening down around St.

Lawrence.

MR. E. BYRNE: My view is that we have probably one of the best potential

- it is not my view, it is a statement of fact- we have probably the best wind

resource in North America and amongst the best in the world on the Island of

Newfoundland and Labrador and in Labrador. I would hope that during the energy

policy process we are going through, in terms of development of an energy plan,

a big component of that will be wind power and the further development of it .

That would be one of the resources by which we can reduce our dependence on the

burning of Bunker C.

With respect to St. Lawrence as well, a decision will have to be made on that

very shortly. I have met with the company or the proponent, and I know how

important it is to the area. It was established or viewed as a piolet project,

to get one up and going. One of the challenges that we are facing, the proponent

and us, in terms of getting it going, is the price, where they are at right now.

There are federal programs available that can assist with the development of

this important emerging resource in terms of energy resource. Without getting

into too much detail, because I do not want to release any proprietary or

confidential information on the proponent, but the price is the issue at the

moment. In order to take advantage of some of the federal funds that are

available to us, we have to get closer to a certain level, and we have been

working with the company to do exactly that. I think the company has been

generally satisfied with the response from the department. That is where we are.

It is our hope to get it going. I do want to say that, because I think it is an

important project.

MS FOOTE: Is there a time frame?

MR. E. BYRNE: I do not have a specific target in mind. I would like it to

be yesterday.

MS FOOTE: Absolutely.

MR. E. BYRNE: That is, sort of, the premise that I am operating under, to

try and push it as fast as we can. I do not know if you want to answer, Bruce,

add to it as well.

MR. SAUNDERS: The only thing I can add to that is, number one, the

previous government had looked at this and had made a decision that Hydro should

enter into a power purchase agreement with the proponent on the basis of a

certain amount of federal government participation coming forward. That has been

an issue. We have not been able to attain what we had hoped to attain, so we are

trying to find other ways and means of doing that and we think we can, and we

think we can close that gap. That process is ongoing.

With respect to timing - I guess you are wondering if something is going to

go ahead this year or not - I think we are very late in this year to see any

real work go ahead. That is not to say that we have lost sight of the project,

we have not, as the minister said. The government remains committed to moving

this forward, but we are probably a bit late in this year to see any real

activity.

The other side of that is, we do not really need the energy at this point in

time either, so whether the project goes ahead this year or next year, from an

energy perspective, really does not matter a whole lot. I can certainly

appreciate, from the proponent's perspective and from the community's

perspective, the sooner the better. That is kind of where we are time wise. I do

not have a definitive answer, but it is getting late in this year, and we are

not about to see any real activity this year.

MR. E. BYRNE: Some of that depends on the company as well, in terms of

their ability to access equipment. As the Deputy said earlier, the project onto

itself is a good project. We need to get a demonstration wind project up and

running. That site was chosen for a number of reasons. It is not the best site

in the Province and it is not the worse, but it was chosen as the best site for

this reason - I believe you know this as well - to gain some experience with

icing, but it would not be so prohibitive that it would stop from generating the

power.

The issue, in terms of the price and the premise on which you entered into

the agreement when you were in government - and I support that - in terms of

getting the project up and running, based on getting to a certain price and

accessing certain monies from the federal program that is there, we have to get

to that, that is critical. We are getting closer to it, I guess, is the best I

can say to you. We have not said we do not want to do this project, I want to be

clear on that.

MS FOOTE: That is good to hear. I realize, of course, we do not need it

for energy reasons at this point in time, but I think it would be a missed

opportunity if we did not do a pilot project to determine how efficient it would

be for us in this Province. I think, as the minister has said, if any province

can lay claim to having the wind that we would need for power generation here,

it would certainly be Newfoundland and Labrador. I think it would be a lost

opportunity. In fact, I heard a man on, I guess it was CBC, the other day,

talking about an initiative that he has, that seems to be looked at in other

parts of the world, but he has difficulty getting anywhere with it in his own

Province, in our Province. I would hate to see-

MR. E. BYRNE: That is the gentleman who runs all of the electricity in

his cabin on one windmill in the back?

MS FOOTE: Yes, that is right.

Of course, when you have someone who is innovative and creative, I would like

to see us promote and find ways of working with whomever it is, who is looking

at developing wind power. I do know the issue with respect to Hydro, of course,

and that was a stumbling block along the way, but I do know, too, that there is

a great opportunity with the federal government because of the Kyoto and the

credits that we can get as a result of this. I am pleased to hear that, in fact,

you are moving forward on that initiative.

I would also, I guess, ask the question: At some point in time, in terms of

other than moral support and having a policy, if there is financial support from

the government in terms of this type of energy development.

MR. E. BYRNE: Just to reiterate, it is still a priority for the

department. I want to be clear with you on that, as the member representing the

area. Secondly, with respect to the development of a wind power policy, it is

our hope and our intention that when we go through what will be part of a public

exercise, as well, where members will be invited to participate in the

development of an energy plan, that part and parcel of what comes out of that

process will be a very sound, well articulated and coordinated sort of plan for

wind energy. There is not only an opportunity to develop energy, but there is

also an opportunity to develop an industry. If we come through the process of

public discussions and the ability to get expert advice and indications on

certain targets of where we need to be, if we were to get to a point where we

could say to ourselves that potentially we need x number of megawatts of energy,

and that we could accomplish this by fifty megawatts a year over ten years - and

that is a directive and a policy initiative of the government - associated with

that, then, there is the potential to supply and develop an industry, to supply

that policy development, locally. These towers are big. We have facilities to do

it, Marystown and elsewhere, and we have the port facilities which you can come

into. It is better to do it upfront, in terms of taking the necessary time

upfront, to develop a well thought out, strategic plan for energy, part and

parcel of which potentially will be wind, and, then, how do we use all of that

as an economic lever to diversify the economy and create industry. There is an

opportunity to do it there, I think, so that is where we are headed.

MS FOOTE: That was going to be my second point, as the critic for

Innovation, Trade and Rural Development, when you see the type of initiative and

opportunity it will be for rural Newfoundland and Labrador. Of course, when we

look at trying to revitalize rural Newfoundland and Labrador, here is a unique

opportunity, from an industry perspective, but as well from a tourism

perspective. I think at one point they were talking about thirty-five of these

towers down around St. Lawrence, on the plateau there. A real opportunity to

grow an industry, to have energy development, wind energy to power, and, of

course, for the tourism industry as well. It is a win-win. That is why I am

rather anxious -

MR. E. BYRNE: A wind-wind!

MS FOOTE: A wind-wind, that is right. That is why I am rather anxious to

see the development of the policy, but, more importantly, to see this pilot

project move forward.

Thank you for your answers and I will be watching closely to see how it moves

along. Thank you.

MR. E. BYRNE: The same here.

CHAIR: Thank you, Ms Foote.

Are there any further questions from the Committee members? None.

I ask the Clerk now to call the subheads.

CLERK(Ms Murphy): Subheads 1.1.01 to 6.1.02 carry inclusive?

CHAIR: Shall subheads 1.1.01 to 6.1.02 carry inclusive?

AN HON. MEMBER: :Carried.

CHAIR: Carried.

On motion, subheads 1.1.01 through 6.1.02 carried.

CHAIR: Shall the total heads carry?

AN HON. MEMBER: Carried.

CHAIR: Carried.

On motion, total heads carried.

CHAIR: Shall the Estimates for the Department of Natural Resources for

the year 2004-2005 carry without amendment?

AN HON. MEMBER: Carried.

CHAIR: Carried.

On motion, Department of Natural Resources, total heads, carried.

CHAIR: A couple of things before we conclude. We have the minutes of the

last Resource Committee meeting that was held on Thursday evening, May 13. I

would like for someone to make a motion as to adopt these minutes as circulated.

MR. JOYCE: So moved.

MR. O'BRIEN: Seconded.

CHAIR: The motion is moved by Mr. Joyce, seconded by Mr. O'Brien, that

the minutes as circulated be adopted.

All those in favour say aye'.

AN HON. MEMBER: Aye.

CHAIR: Those against?

Motion carried.

On motion, minutes adopted as circulated.

CHAIR: At this point in time, I would like to thank the minister and his

officials for doing a commendable job here this morning, speaking on the

department and answering the questions.

MR. E. BYRNE: Thank you very much. I appreciate the opportunity.

CHAIR: Also, since this is our last Resource Committee meeting, I would

like to thank the members of the Committee for their participation and

co-operation. Also, I would like to thank our House of Assembly staff here again

this morning for being here.

I call for a motion to adjourn.

MR. O'BRIEN: So moved.

CHAIR: Mr. O'Brien.

This meeting is now adjourned.

The Committee meeting now stands adjourned.