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April 16, 2018

RESOURCE COMMITTEE

Pursuant to Standing Order 68, Kevin Parsons, MHA for Cape St. Francis,

substitutes for Tracey Perry, MHA for Fortune Bay - Cape La Hune.

Pursuant to Standing Order 68, Colin Holloway, MHA for Terra Nova, substitutes

for Pam Parsons, MHA for Harbour Grace - Port de Grave.

The

Committee met at 6 p.m. in the Assembly Chamber.

CLERK (Murphy):

The first order of business is to elect a Chair.

Are

there any nominations for Chair?

MR. K. PARSONS:

I nominate Brian Warr.

CLERK:

Any further nominations?

Further

nominations?

Mr.

Warr is acclaimed Chair.

CHAIR (Warr):

A pretty painless procedure.

Good

evening and I'd like to welcome everybody to the Estimates on Fisheries and Land

Resources. Before we get into the good stuff this evening we need to, first of

all, elect a Vice-Chair.

I'd

certainly open up the floor to nominations for Vice-Chair.

MR. BRAGG:

I nominate Kevin Parsons.

CHAIR:

Kevin Parsons has been

nominated.

Any

further nominations?

Any

further nominations?

Kevin

Parsons has been elected as our Vice-Chair.

Next,

we need to entertain a motion to adopt the minutes of the Resource Committee on

March 9, 2017.

I need

a mover.

MR. DEAN:

So moved.

CHAIR:

So moved by Jerry Dean.

All

those in favour, ‘aye.'

SOME HON. MEMBERS:

Aye.

CHAIR:

All those against, ‘nay.'

Carried.

motion, minutes adopted as circulated.

CHAIR:

First of all, I would like

to get started by having our Resource Committee introduce themselves by name and

district, please.

Before

we start, I just want to say with regard to when I recognize you to speak, or if

the minister recognizes one of his staff to speak, just wait until your tally

light illuminates and go ahead with your talk at that particular point in time.

We'll

start off with Mr. Parsons, please.

MR. K. PARSONS:

Kevin Parsons from the

beautiful District of Cape St. Francis.

MS. BONIA:

Laurie Bonia, Researcher, Official Opposition Office.

MR. COLLINS:

Sandy Collins, Researcher, Opposition Office.

MR. LESTER:

Jim Lester, Mount Pearl

North MHA.

MS. MICHAEL:

Lorraine Michael, MHA, St.

John's East - Quidi Vidi.

MR. MORGAN:

Ivan Morgan, Researcher, NDP Caucus.

MR. BRAGG:

Derrick Bragg, MHA, Fogo Island - Cape Freels.

MR. DEAN:

Jerry Dean, MHA, Exploits.

MR. HOLLOWAY:

Colin Holloway, MHA, Terra

Nova District.

MR. FINN:

John Finn, Stephenville -

Port au Port.

CHAIR:

I will say that we have Mr.

Paul Lane representing Mount Pearl - Southlands, and Mr. Holloway is

substituting tonight for MHA Pam Parsons.

I'll

ask the Clerk to call the first subhead.

CLERK:

1.1.01.

CHAIR:

1.1.01.

Shall

the motion carry?

Mr.

Byrne, you have an opportunity to speak now and introduce your staff yourself

and have a few short remarks and we'll get into the process.

MR. BYRNE:

Are you instructing me, Mr. Chair, that I only have short remarks because I have

intend to have long, exhaustive, extended remarks.

No, I

will be short.

CHAIR:

You can please yourself,

Sir.

MR. BYRNE:

Thank you very much,

everyone. Thanks for all the attention to details that I'm sure we'll have this

evening. I'll just be quick and introduce, to my immediate left, is Lori Anne

Companion, who is the Deputy Minister at Fisheries and Land Resources; Phil

Ivimey is our Controller shared with Natural Resources, so Phil has the capacity

to be able to answer 99.999 per cent of all questions. He's going to be our

go-to guy.

We have

subject matter experts. Joined with us is Tony Grace who's the Assistant Deputy

Minister for policy and compliance and enforcement; then is Stephen Balsom who's

the Assistant Deputy Minister for Forestry; Keith Deering is Assistant Deputy

Minister responsible for Agriculture and Lands, amongst other things; Wanda

Wiseman is the Assistant Deputy Minister, well acquainted with Fisheries and

Aquaculture.

To the

far back is John Tompkins who is the Director of Communications with Fisheries

and Land Resources; and my EA, who you've probably come across a couple of

times, Gordon MacGowan. For those who haven't seen him before, that's Gordon

right there in the back.

We'll

go right into questions and go into the subheads rather than sort of go into a

long discourse. This is a really interesting department. For me, personally, I'm

delighted to take some of the responsibilities for fisheries, for aquaculture,

for forestry, for agriculture, for lands, for protected areas and for wildlife.

It's just a fascinating department and one that I think affects so many

Newfoundlanders and Labradorians very directly and very personally and also from

a socio-economic point of view is very, very important and powerful to our

province.

With

that said, Mr. Chair, I think the better thing to do is to allow as much time as

possible, why don't we just get into the questions of the Committee.

CHAIR:

Thank you, Mr. Byrne.

The way

we're going to proceed tonight is we will call the subheads. The Official

Opposition will get 10 minutes, then the Third Party will get 10 minutes and we

will vote on all subheads in the end. If you don't finish, you need extra time

for something in a particular subhead, we'll certainly offer you that time as

well.

Based

on 1.1.01, Mr. Parsons, your 10 mins.

MR. K. PARSONS:

Thank you very much.

really appreciate everybody here tonight; I appreciate you all showing up.

Minister, I'm just going to ask a general question at the beginning just so that

when we go through the Estimates tonight I won't be repeating a lot of things.

When we look at the budget this year we see a lot of different – I don't know,

there are some areas not in this year's budget that were in last year. Can you

explain some of the big changes that happened in the department this year?

MR. BYRNE:

Certainly. I appreciate

that.

Some of

the big changes – of course, we're aware there was a major departmental

reorganization that brought Crown Lands into the department itself. The function

of that – which actually is what caused or precipitated many of the changes –

was that there were synergies that were identified.

When

you look at a department, a renewable natural resource department existing that

had functions in fisheries and aquaculture – but also especially in land-based

resources such as forestry, agrifoods, wildlife – there were several areas where

the purpose of the blending, the creation of the new department, was to allow

those synergies to be able to take full hold. When we get into the various

subheads you'll notice there are areas where salaries will have switched or

changed. It's because there has been movement in personnel. Not elimination of

personnel per se, but movement from one area of the department into a new area

of the department. Functionalities have changed.

For

example, with the blending in of Crown Lands into the department there was a

major move, major capacity. Each and every one of the shops in forestry and

agriculture had GIS, geographic information system and mapping capacities. It

was determined that there could be greater synergies with greater utilization

and efficiency through one sort of major GIS department or branch or division.

And so you'll see things like that occasionally and I think that will be a bit

of a recurring theme.

MR. K. PARSONS:

Yeah.

MR. BYRNE:

As we explain why one

particular area is down, we'll be able to refer it to which area it was picked

up in.

MR. K. PARSONS:

Okay.

MR. BYRNE:

The other thing is that with

the Atlantic Fisheries Fund, with the switch from Growing Forward to the

Canadian Agricultural Partnership, you'll see some grants and contributions

areas that will have switched around a little bit, those kinds of things.

Generally speaking, I appreciate the question because it is a recurring theme. I

don't mean to repeat myself but that will be how some things will be explained.

MR. K. PARSONS:

Yeah and I don't want to

repeat myself either asking the question because it might be the same answer as

in the others.

I have

some general questions first that I'd like to ask. The first question is can we

have a copy of your binder after? You have it all ready?

MR. BYRNE:

We have it here.

MR. K. PARSONS:

Okay, that's good.

MR. BYRNE:

(Inaudible.)

MR. K. PARSONS:

Is there anything that's in

the Estimates that we don't – any errors or anything like that? I know last year

there were a few errors that we had found. There are no errors or anything in

it?

MR. BYRNE:

There are no errors that we

are aware of because we do –

MR. K. PARSONS:

Perfect, okay.

How

many people are employed in the Department of Fisheries today?

MR. BYRNE:

In the Department of

Fisheries and Land Resources?

MR. K. PARSONS:

Well, just the Fisheries. I

was interested because last year we had an answer that came back. I know the

whole department probably has about 1,000 or 1,100, but what is actually in the

Department of Fisheries branch alone?

MR. BYRNE:

I'll ask Lori Anne or Wanda.

Would you be able to provide the number to this date?

Recognizing that there are seasonal – fish inspection, for example, employs a

relatively large number of seasonal workers.

Wanda,

would you be able to …?

MS. WISEMAN:

There are between 80 and 90.

As the minister said, it depends on the seasonal staff that's on at any point in

time, but that's for Fisheries and Aquaculture branch.

MR. K. PARSONS:

Were there any layoffs or

terminations in the department this year?

MR. BYRNE:

No, not in this fiscal year.

MR. K. PARSONS:

Okay.

Your

number is very similar to what it was last year. Actually, a little bit lower

than what it was last year but similar.

How

about the attrition plan? Has the attrition plan been working in your

department? Have you used it? The attrition government has right now, is that

part of the Department of Fisheries also.

MR. BYRNE:

Lori Anne, I'll ask you to

take that.

MS. COMPANION:

Yes, the attrition plan has been incorporated. It is $200,000 for salaries that

has been identified in the Forestry branch and it's just a block. We'll

determine where those positions are as they become vacant over the year and as

retirements occur.

MR. K. PARSONS:

Okay.

Always

in the department, too, we'll find some areas where there are a lot of

vacancies. Last year, too, there were some vacancies in the department. Have any

of these vacancies been filled or have these positions been eliminated?

MS. COMPANION:

The department had 830

positions funded last year. This year we have – we had 855 positions funded last

year. This year we have 824 positions funded. It's a change of 31 positions.

They were funded but they've been vacant for more than 24 months.

MR. K. PARSONS:

Okay.

MS. COMPANION:

They weren't positions that

we have been filling for any time.

MR. K. PARSONS:

Okay. That's good. Those are

just the general questions, now I'll go into subhead 1.1.01.

I'll do

line by line here now in a little bit. I'll have questions as we go through the

different sections. On this

section alone, I just want to look at the Salaries.

Can you

explain the variance that's here? How many positions are included in these

amounts? What are the positions? Have the positions been added or have any been

removed?

MR. BYRNE:

Which line specifically?

MR. K. PARSONS:

This line with Salaries is

in subhead 1.1.01, Minister's Office.

MR. BYRNE:

The three positions that are contained within that particular line on Salaries:

one is the minister, the executive assistant then the departmental secretary. In

terms of variations, the variation last year, between what was budgeted versus

what was actually spent – the variance was due to severance and leave payouts

required for a former employee. A long-time secretary to the minister had

retired during that period of time.

MR. K. PARSONS:

Okay.

Were

there any new positions in the office added or any removed?

MR. BYRNE:

No.

MR. K. PARSONS:

No?

MR. BYRNE:

No.

MR. K. PARSONS:

Okay.

We'll

go to

Section 1.2.01, Executive Support. I'd like you to explain the amounts.

We'll go to Salaries. How many positions are included in this amount? What are

the positions? Can you explain the variance? Were there any removed or added?

MR. BYRNE:

Okay, so last year the budget – in the salary line, as we can see, the original

budget was for $1,182,100 which was subsequently revised to $1.2 million. There

were severance payments that were paid with the departure of some employees and

leave costs. This year's salary budget of $1,223,500 is basically in line with

what the salary layout would look like with the existing remaining same

positions being funded.

There

were 13 positions in total: the deputy minister – that included within executive

and support services – four ADMs, four administrative support and three

communications staff, plus one contractual employee.

MR. K. PARSONS:

Okay.

Now,

Transportation and Communications is probably the largest expenditure there. Can

you give us what's included in the Transportation and Communications there?

MR. BYRNE:

In Transportation, deputy

ministers and assistant deputy ministers would be expected to, and do,

participate in federal-provincial conferences and, as well, with this particular

department, as we know, the headquarters for forestry, for agriculture and for

Crown Lands is based in Corner Brook. So there's a fair bit of travel between

the provincial capital and Corner Brook. As well, there's national travel and

domestic travel related to attendance to various federal-provincial-territorial

conferences. In addition to that, there are some other travel expenses that –

deputy, I think, that captures –

OFFICIAL:

(Inaudible.)

MR. BYRNE:

Yeah.

MR. K. PARSONS:

Okay. I'm very interested in

one line there, and I know there's no change there, but for Property,

Furnishings and Equipment you only have $900. You're not going to buy a lot of

pens and paper out of the amount of money that you have there. I'm wondering –

it seems a bit low to me for supplies and whatnot that you need in your office.

MR. BYRNE:

Well, thank you, we take

that as a compliment.

Lori

Anne, would you like to field that?

MS. COMPANION:

So, for Property, Furnishings and Equipment, it's $900. We only had $1,000 there

last year and we didn't buy any office chairs or tables.

MR. K. PARSONS:

Okay, chairs and stuff like

that.

MS. COMPANION:

But for the supplies, for our pens and papers and stuff, we use Supplies, which

we had $9,000, we spent $6,000 and we have $7,200 budgeted this year.

MR. K. PARSONS:

Okay.

All

right, we'll move on to General Administration,

section 1.2.02.

Now,

this must be somewhere where we've seen changes from last year to this year

because things that were budgeted in last year's budget are not – last year's

budget for Property, Furnishings and Equipment was showing $491,100, but this

year the budget said it was $300,000. So there must be some changes.

This is

what I was talking about earlier when you go back and look at last year's budget

compared to this budget. So there had to be some numbers that changed. Can you

explain that?

MR. BYRNE:

I can move quickly with

that, and Wanda, you can step in if I say anything that's not true.

The

$300,000 last year which was budgeted was for the purchase or the acquisition of

an appropriate boat for aquaculture activity –

MR. K. PARSONS:

Okay, yeah.

MR. BYRNE: –

for analyzing bay management

areas for collecting various scientific or hydrological information.

We have

been working with Transportation and Works to find a better way. It's $300,000.

We've gone to the marketplace to get a certain kind of a boat but not

necessarily the best kind of boat. We are working with Transportation and Works

to see if we can source, internally, within the government inventory, a suitable

vessel to be able to perform that work, particularly on the South Coast. I

think, Wanda, is that fair to say, that's where the boat would be headquartered?

The

$100 that's there is, in fact, a placeholder. It's to maintain a position that

if we weren't able to acquire a vessel from within the government inventory or

assets, we'd be able to transfer money into the appropriate vote.

As my

deputy minister just pointed out, last year there was an additional $197,000 for

vehicles.

MR. K. PARSONS:

Okay.

MR. BYRNE:

Vehicle acquisition and management has been now moved to Transportation and

Works, so that's a theme you might want to pick up on with other departments as

well. So we had that.

MR. K. PARSONS:

Okay.

looked at what we voted on last year and the budget was actually $491,000 but

this year's budget is indicating that it's $300,000. So you're saying that is

because the vehicle fleet was moved to the Department of Transportation and

Works.

MR. BYRNE:

Exactly, and they're doing fleet management there.

MR. K. PARSONS:

Okay.

This is

one of the sections that I talked about as I began, Regional Services last year

was

section 2.1.01and it had a budget of $2.3 million, but there's no

section in

this year's budget that shows where this is. Can you explain what's happened

here with the Regional Services budget?

MR. BYRNE:

2.1.01, okay.

I'm

sorry, would you –?

MR. K. PARSONS:

Do you want me to repeat it?

MR. BYRNE:

Yes, please, if you could.

MR. K. PARSONS:

Last year, there was a

section here, it was

section 2.1.01. It was called

Regional Services. That

section is gone this year out of the budget.

MR. BYRNE:

Yes, okay.

MR. K. PARSONS:

I'm just wondering where

it's gone.

MR. BYRNE:

I will get Lori Anne – would you field that one because, you're right, it's a

part of that reshuffle.

MS. COMPANION:

It has been reshuffled and Regional Services, the Administration and Support

Services, Licensing and Quality Assurance and Aquaculture Licensing have been

all put together into Licensing and Quality Assurance. That's where the Regional

Services are because it's now all under the one director.

MR. K. PARSONS:

Okay.

Seeing

now that I'm finished this section, you can –

CHAIR:

What was you're question,

Mr. Parsons?

MR. K. PARSONS:

No, I said you can go ahead.

CHAIR:

Ms. Michael, we're trying to stay in the same subheads.

MS. MICHAEL:

Yes.

CHAIR:

Mr. Parsons has gone through

1.1.01 through to 1.2.02.

MS. MICHAEL:

I don't have any questions

on what he's done, so I'm going to continue on. Is that okay?

CHAIR:

Absolutely.

MS. MICHAEL:

All right, thank you.

2.1.01, Seafood Marketing and Support Services, first of all the salary line.

The Salaries are going to be down from what had been revised. The budget was

$834,600, then there was a revision down to $760,200. This year we're back up to

$859,500. Could we have a whole explanation of that line, Minister, please?

MR. BYRNE:

Certainly.

Last

year, you're correct, the budgeted amount was for $834,600 and there were some

vacancies that occur during the course of the fiscal year, which actually caused

the actual budget, the expenditure, to drop to $760,200 due to an unforeseen

vacancy, but, now, of course, the position being re-profiled, there was a salary

adjustment that was required for this coming year. One position has been

re-profiled from Agriculture Production and Research, a market development

officer that now puts that position back into place, so it's back up to

$859,500.

Within

the overall salary envelope there are 13 positions in total: one director, three

market development officers, four fish development officers and a financial

planning supervisor along with a fishery resources plan supervisor, a senior

engineer and administrative support. Those are within that particular – within

Seafood Marketing and Support Services now.

MS. MICHAEL:

Thank you, Minister.

presume all of those details are in the briefing book.

MR. BYRNE:

Yes.

MS. MICHAEL:

Thank you very much.

Under

the same subhead looking at Professional Services, the Professional Services are

going from $99,000 up to $189,000. What are you anticipating as the reason for

that?

MR. BYRNE:

Within Professional Services

in this category, that's included the funding for the Fisheries Advisory

Council. We have budgeted approximately $100,000 to be able to provide

professional services to the Fisheries Advisory Council if they need outside

expertise, additional information. There is a small pot of funds of money

available to them to be able to draw upon outside resources experts to be able

to do that work.

MS. MICHAEL:

And that's new this year under this heading.

MR. BYRNE:

That's correct.

MS. MICHAEL:

Okay, thank you.

Do you

anticipate that that will remain there?

MR. BYRNE:

We do. We do indeed. I think an argument might be made that we may – there may

be pressure to increase it depending on how this year goes.

MS. MICHAEL:

Right. Thank you.

Then

under Purchased Services, again we have a slight increase, up by about $55,000.

What is causing that? Well, it's $53,600 I think.

MR. BYRNE:

Phil

Ivimey, would you be able to take that one? Because Purchased Services are

always

that ' s

the photocopies in relation to the printing services or

– ?

MR. IVIMEY:

(Inaudible.)

MR. BYRNE:

Mr. Ivimey has reported that this is in relation to services towards the

Fisheries Advisory Council as well.

MS. MICHAEL:

Okay. Thank you.

That

makes sense. Don't you like it when I say that makes sense?

MR. BYRNE:

I do. You make me nervous when you say that.

MS. MICHAEL:

Why? Implying that nothing else does? No, that's not the case.

MR. BYRNE:

It means you're warming up.

MS. MICHAEL:

Under Grants and Subsidies, we have a big shift there. So I'm assuming you're

going to be able to explain that, from $2.2 million down to $200,000.

MR. BYRNE:

Yes. The cause and effect of this is we had the Seafood Innovation and

Transition Program, which was our most significant fisheries innovation program,

but, as we know, we also now have the Atlantic Fisheries Fund which is much

larger in scope. So rather than close the line entirely, there was a decision to

keep access to $200,000 in provincial-only sourced funds.

Most of

the activity, obviously, for seafood innovation and fisheries innovation will

come in the form of the Atlantic Fisheries Fund, which is a federal and

provincial agreement to which a significant pot of provincial money has been

introduced to as well.

MS. MICHAEL:

Right, and I think that has a separate

section here in the budget. I've seen

that.

MR. BYRNE:

Yes.

MS. MICHAEL:

With regard to the Fisheries

Advisory Council, is it too soon to be able to give us some report of how that's

working?

MR. BYRNE:

No, not at all actually. You are right, we are in the early days of the council,

but the council hit the ground running.

When

the Fisheries Advisory Council was named, which includes representation from the

FFAW, from the Association of Seafood Producers, it's not really a collection of

individuals. It's a collection of both institutions and individuals that see

things, not from their own – the intention of the terms of reference was that

they not come with the agendas of the organizations they represent, but with the

knowledge they bring and the expertise that they bring to the industry as a

whole.

The

early days, in the first period this fall when the Fisheries Advisory Council

began its formal meetings, the early meetings were about briefings, about

getting a common data set or a common knowledge set. We had the Department of

Fisheries and Oceans in to give resource profiles; Fisheries and Land Resources

officials in to give overviews of not only the department, but some of the

statistics.

What

we're going to do with the Fisheries Advisory Council, my advisory council –

there will always be an assumption that it will come out with a single grand

plan for ground fishery building. Which is true, but it will not be a single

grand plan. There will be a number of short-term, medium-term and long-term

initiatives that they will investigate and report on.

For

example, in the short term, one of the issues which is, I think, of absolute

importance to the Newfoundland and Labrador fishery is the question of

adjacency. Should adjacency be built into the

Fisheries Act ? So I asked the

Fisheries Advisory Council to provide an opinion or to provide a review and

submit a report to me on the industry's considerations, the industry's point of

view on adjacency and, in particular, within the context of inclusion in the

federal Fisheries Act .

The

Fisheries Advisory Council did report to me after a – not a lengthy but an

extensive self-consideration, but also outside stakeholder consideration. They

did report that given the fact that adjacency for – and this is just one example

of things they do. They looked at adjacency being built into a significant

amount of DFO programs and policies already.

They

did advise that fishery stakeholders should be advising the federal government

to include adjacency in a revised

Fisheries Act , to which we reported that, not only to the Department of

Fisheries and Oceans but to the federal minister. I will use that, as can you,

all Members of the House can then use that information if and when – and I

presume when – we make presentations to the Standing Committee on Fisheries and

Oceans on the Fisheries Act , which we

expect will occur in the next matter of weeks.

The

invitation has not gone out yet, but I understand the Standing Committee will be

inviting witnesses to come forward in the short term. That report, which is now

a public report, can be cited, not as a government report, but as a report of

the Fisheries Advisory Council, which you would be free and at your discretion

to use as part of your own testimony to the Committee itself.

MS. MICHAEL:

Right.

It's

rather disappointing that after everything we've been through with the fishery

that we have to fight for this one.

MR. BYRNE:

It is, especially since

there were pronouncements that were given about adjacency being given full

consideration within the Fisheries Act .

As I have stated on numerous times, just recently adjacency was included in the

memorandum of understanding between Canada and the Government of Newfoundland

and Labrador on over the side sales protocols, that adjacency was part of the

language in 2013, I think it was – Wanda?

MS. WISEMAN:

MR. BYRNE:

– 2013 on the protocols for

the federal consultations on over the side sales.

It's a

topic which has been around since the 50s, since the introduction of the Law of

the Sea, since the creation of the 200-mile limit, since the creation of the

Canadian fisheries licensing policy in 1996, since the access criteria for fish

licencing in 2008, and as early as 2013 and the memorandum of understanding of

over the side sales.

MS. MICHAEL:

Then we had the All-Party

Committee on Northern Shrimp where that was one of our basic things that we

fought for and thought we had agreement with the federal government on that

point.

Anyway,

I think my time is up, but thank you so much for all that information.

CHAIR:

Thank you, Ms. Michael.

Mr.

Parsons.

MR. K. PARSONS:

I'm just going to touch,

Minister, on the point of adjacency. Myself and Ms. Michael, both of us were

part of that committee. We went with the federal government, and it was a major

thing that when we looked at LIFO and the shrimp, that was the number one thing

that we wanted the federal government to look at was adjacency to the resource.

I would

assume that was something that everybody, because we were all committee – not

only was it in the shrimp fishery, it should have been in all fisheries in the

province. I really believe that in order for us to protect our resources, it's

something that we have to lobby together and we have to make sure it becomes

part of the act. It's very, very important.

I know

you made a statement sometimes – there are a lot of times where adjacency is

something that they look at, but unless it's in the act itself, it's something

we can't fight for as a province. We saw that in our surf clams, and we see it

in different parts of our whole industry when it comes to our fishery.

So I

just think it's important, and with Ms. Michael, we all put our points across

when we did LIFO and it's a good result that we did get, and adjacency was a

major part of that. So I really hope that all the information that we get when

they come here, that we're all on the one page.

MR. BYRNE:

Absolutely.

MR. K. PARSONS:

Okay.

MR. BYRNE:

And if I could very quickly

just add to that, it was simply that – there's nobody who owns this. In fact,

one of the statements made when I briefed a DFO official on this some time ago

there was kind of a passing glance and said: Minister, what exactly is

adjacency? How do you define adjacency?

looked at him and I just put my elbows on the table and said: Well, I don't

know, why don't you define it? Because it's in every one of the Department of

Fisheries and Oceans policies since 1970, if not 1996, if not 2008, if not 2013.

If you, Sir, I said, can't define it, if you're asking me to define adjacency,

why is it embedded in just about every policy of the Department of Fisheries and

Oceans?

What

you're telling me now is a policy statement of adjacency which you can't even

define yourself. And that's a message we can all share with each other.

MR. K. PARSONS:

Anyway, I want to just go

back to, if I can, Mr. Chair,

section 2.1, and I wanted to look at your Grants

and Subsidies. The seafood development program – is that what the $200,000 is

left there, or is that program still in place?

MR. BYRNE:

Sorry?

OFFICIAL:

(Inaudible.)

MR. BYRNE:

Why don't you take

(inaudible)?

Which

topic are you on now?

MR. K. PARSONS:

I'm on

section 2.1.01 and I

want to go to Grants and Subsidies.

MR. BYRNE:

Oh sorry, okay. Yes.

2.1.01.

OFFICIAL:

Right, the Grants and

Subsidies is right here. It's the $200,000.

MR. BYRNE:

Yes, that's the same program

that MHA Michael had –

MR. K. PARSONS:

Okay.

Now

under this

section last year, which was

section 2.2.03, Fisheries Innovation and

Development, there was a budget there of $2.4 million. Now, last year's request

on this budget of $2 million was $6.7 million. Was the $2 million spent, and

what was it spent on?

MR. BYRNE:

(Inaudible.)

MS. COMPANION:

Yes, the $2 million is the Seafood Innovation and Transition Program and the

list of what it was spent on is in your binder.

MR. K. PARSONS:

Okay.

All

right.

MR. BYRNE:

It's in the binder; there's

a yellow page –

MS. COMPANION:

It's in the binder.

MR. K. PARSONS:

Okay.

I think

Ms. Michael asked about your Salaries here and the Licensing and Quality

Assurance. There's a variance there. I'm wondering can you explain the amounts,

positions and what the variance is.

MR. BYRNE:

Okay, again, I'm going to have to chase you – which tab?

MR. K. PARSONS:

Section 2.1.02 and it's Salaries.

MR. BYRNE:

Okay, and Salaries. So originally the budget last year was almost $1.9 million.

It actually went to almost $2.2 million as you can see from the revised. Again,

there were severances and leave payout costs associated with the – there were

some employees there that left the civil service through retirements and other

things.

This

Salaries envelope includes 33 positions: a director, six licensing staff and 26

inspection staff. I believe 20 of which are permanent and six are part-time. Is

it –?

MS. COMPANION:

Seasonal.

MR. BYRNE:

Seasonal. So the salary

adjustments for this year, there are some vacant positions there now, I believe,

Deputy?

MS. COMPANION:

Yes, the salary adjustment for 2018-19 is as a result of some vacant positions.

MR. K. PARSONS:

Okay.

Last

year when we got to this section, I asked some questions about buyers and the

processors. There was a freeze at the time on licences. Is the freeze still in

place for the buyer's licences? So the only way to get a licence now would be to

transfer it. Is that the way it works and it would have to be approval? There's

no way that anybody can go buy a processing licence right now.

MR. BYRNE:

The existing processing licence, you can go through the licence appeal board to

transfer a licence. For example, there was a licence that was available that was

being unused that was still considered active, it could be transferred from one

location to another through the mechanisms of the fish licensing appeal board.

MR. K. PARSONS:

I had some harvesters that

wanted to purchase a licence to be able to do some processing themselves and

there was a freeze last year. I'm just wondering if the freeze is still in place

this year.

MR. BYRNE:

I'll ask Wanda. Would you be able to field that question?

MS. WISEMAN:

Yes, the policies that were in place last year are still in place. For any new

restricted buyer licence they could actually apply, which is $100 fee to the

department. That actually would only allow them to process a minimal amount of

raw material.

MR. K. PARSONS:

Okay. Because we –

MR. BYRNE:

(Inaudible.)

MS. WISEMAN:

No, there is no new buyer's

license but there would be ability to have a licence for the restricted buyer's

licence which gives them a limited amount.

MR. K. PARSONS:

Okay.

Let's

go to the Fisheries Fund. I had some questions here on the Fisheries Fund.

First, I'm going to just ask some general questions that I'd like to ask and

then I'll go to the line by line.

How

much of the Fisheries Fund has been accessed to date?

MR. BYRNE:

To date – and there's a list of actual contribution agreements in the back of

your binder.

MR. K. PARSONS:

Yes.

MR. BYRNE:

We've expended – Wanda, the

specific number right now is how much?

MS. WISEMAN:

Minister, we approved up to 30 projects to date, not all of them have been

issued in terms of contracts. That's really where that is in terms of a total

cost. It's in the list. It's about $2.4 million; of which our share is about

$1.5 million, give or take a few dollars.

MR. K. PARSONS: I

have to apologize. I can't hear you very well.

MS. WISEMAN:

The projects to date, there are about 30 that have been approved. Our share is

about $1.5 million and the total amount is over $2 million.

MR. K. PARSONS:

Over $2 million?

MS. WISEMAN:

Sorry, that's the harvester's amount as well, so the federal share is 70 per

cent.

MR. K. PARSONS:

The lists of projects are in

our binder? Okay.

How

many applications have been received so far?

MR. BYRNE:

(Inaudible) applications to the portal, so I'd ask Wanda if you'd field the bulk

of these questions so we make sure we get up-to-date information.

MS. WISEMAN:

We've received over 200. The last number I got was 201 earlier this week.

MR. K. PARSONS:

201, okay.

Who's

making the final decision on the applications?

MR. BYRNE:

(Inaudible) does go through a secretariat but the final sign-off appears from me

and then to the federal minister.

MR. K. PARSONS:

Okay.

Have

any of the funds been used for aquaculture?

MR. BYRNE:

Not to this date.

MR. K. PARSONS:

Okay.

Will

any of the funds be used for the Greig aquaculture project? Is it Grieg?

MR. BYRNE:

It's not intended but it could, if there's a potential there, but there's been

no application into the Atlantic Fisheries Fund for Grieg.

MR. K. PARSONS:

Okay.

question I got, I know the union was involved in a lot of the pre-Atlantic

Fisheries Fund. Do they have any projects or anything that they have requested?

MR. BYRNE:

I know that no funds have been disbursed to the FFAW. I don't think they have an

application in, Wanda? I don't believe so.

MR. K. PARSONS:

Okay.

CHAIR:

Excuse me, Mr. Parsons; I

have to remind you that your time has expired.

MR. K. PARSONS:

Okay.

MR. BYRNE:

Would you be able to confirm

the answer though, Wanda?

MS. WISEMAN:

We'd have to go through the list because we have over 200 different types of

applications, the majority of which are from individual harvesters.

MR. K. PARSONS:

Okay.

CHAIR:

You can come back, Mr.

Parsons.

MR. K. PARSONS:

Yes, sure.

CHAIR:

Ms. Michael.

MS. MICHAEL:

Mr. Chair, I don't mind us

continuing this and finishing – I just have a couple of questions – rather than

having Mr. Parsons go back to it, if he wanted to finish this head.

MR. K. PARSONS:

Thank you. I appreciate that.

With the current situation we have, especially now with our

shellfish and our groundfish, is there any part of this fund that's going to be

used to buying out commercial harvesters?

MR. BYRNE:

Wanda, would you be able to speak to what elements the program could be used for

industry restructuring, if any?

MS. WISEMAN:

The funds for innovation, for infrastructure and for science partnerships?

MR. K. PARSONS:

Yes, I'm just wondering

though, right now our shell fishery and our ground fishery is in rough shape.

There are harvesters out there that are talking about getting out of the fishing

industry altogether.

thing: Is any of this fund going to be used to buy out any of the commercial

licences that these harvesters have?

MR. BYRNE:

I'll simply say there's not an intention to use the fund for a buyout, or a

licence retirement, or a buyout program.

MR. K. PARSONS:

Okay because there was some talk and some consideration, especially from

harvesters. They were wondering if this fund was going to be used to be able to

get more people out of the fishery. That's what they were saying.

MR. BYRNE:

For example, in 3Ps there's a standing request by the FFAW, for example, for a

licence retirement for an industry restructuring program. We have supported

that. We think that it is necessary. We are asking the federal government to

participate in that project. It is not being contemplated within the Atlantic

Fisheries Fund. It would be outside; it would be a stand-alone program to

itself.

There's

already a request in, a very specific request for an industry restructuring

program for the 3Ps area. It's not being considered within the Atlantic

Fisheries Fund.

MR. K. PARSONS:

Okay.

For

harvesters, in the fund itself we saw I think it was like $641,000 that was

allocated there a little while ago. I'm not sure how many – I think it was

eight. Was it eight different enterprises? They were used for haulers and

different things. What other things are you getting applications for from

harvesters out there now?

MR. BYRNE:

The bulk of the applications

have been for gear technology and for slurry systems, basically projects which

would add value and maintain the cold chain to fish products. Just in terms of

summaries, in terms of the applications itself we are starting to move outside

in terms of receipt of applications. We're receiving some applications from

processors and from other fish harvesters for other things.

I'll

ask, Wanda, if you would like to comment on the range of programs that have been

applied for or projects that have been applied for.

MS. WISEMAN:

As the minister indicated,

there are a lot of applications in from harvesters. Those applications are more

gear type, in terms of quality, longline systems, automatic jiggers, cod pots.

Also, we're receiving applications from the processing sector for new innovative

technology in facilities, not just on groundfish but other species as well.

We're

also getting applications under the program for science partnerships as well as

for the aquaculture sector in terms of innovative technology – let's say, for

the mussel sector. That's the range right now.

MR. K. PARSONS:

I'll let you go to Ms.

Michael.

CHAIR:

Ms. Michael.

MS. MICHAEL:

Thank you.

Could

we just continue getting a bit more information there with regard to the

investments into newer technologies? Will there be any feedback from those

who've applied for money for these new technologies – any feedback to the fund

about what they're finding?

MR. BYRNE:

Yes, that's a good question.

In a

many respects, these are pilot projects to a certain degree. A big role that our

own fisheries field staff play is, in an analysis phase, to have reports or

information received as to whether or not the – for example, with automatic

jigger technology, whether or not it was appropriate for particular areas and

how it performed. What was the learning curve in adapting to these kinds of

technologies? How did it improve performance? How did it improve efficiency? How

did it improve value and quality? These are all things that are quite critical.

Obviously we can't fund every fisherman and every enterprise throughout

Newfoundland and Labrador, so these are representative samples of the type of

technology that's available to be shared with the information to be shared by

everyone.

MS. MICHAEL:

What would the department

hope to do then, Minister, with that information?

MR. BYRNE:

With that information, if it gets determined that the economics of an individual

enterprise are improved by adoption of that particular technology – then from an

individual enterprises decision as to whether or not they might adopt not only

that technology, but many pieces of that same technology – that's the kind of

information that's really, really critically important.

Also,

from a marketing point of view, when you go to longline technology, especially

with some of these automated jiggers, it's really, really important to get

market feedback as to what the consequence of this kind of technology is on our

ability to extract the highest possible price from the marketplace, and whether

or not the marketplace is accepting it and actually branding Newfoundland and

Labrador as a premium seafood source point.

MS. MICHAEL:

Right. Thank you.

That's

really helpful. I listen to the broadcast all the time. There have been some

broadcasts that have been really good on this point actually.

I'm

finished that section. We had a question about the Salaries but we're going to

see in the briefing book where that $300,000 is going.

MR. BYRNE:

Sure.

MS. MICHAEL:

Okay. Thank you.

I can

continue? Okay.

2.1.04;

this, too, is a new head, isn't it, Sustainable Fisheries Resources and Oceans

Policy? What has come into this or what was this called previously? What's under

here?

MR. BYRNE:

This particular division provides input into fisheries resource assessment and

ocean management; as we know, the marine protected areas, for example, being a

focus of the Department of Fisheries and Oceans. It really provides some inputs

into the NAFO process, for example, and other things. It also provides support

for our federal-provincial-territorial ministers' conferences.

Wanda

Wiseman, would you be able to provide some further information as to the purpose

of this particular division and some of the work they do?

MS. WISEMAN:

Last year this would have been a division that existed as well, it was just in

another branch. It was over in policy and resource services, so it's just moved

under Fisheries and Aquaculture.

The

activity provides funding for sustainable fisheries and oceans policy-related

activities. The division provides input, of course, into the fisheries resource

assessment and ocean management process of the department and, also, the

international bodies responsible for the fisheries assessment and management for

stock adjacent to the province.

The

division also supports fisheries scientific research activities under the

Fisheries Research Grant Program. The division is also taking the provincial

lead in integrated coastal and ocean management activities.

MS. MICHAEL:

Right.

Minister, there's quite a bit more money in the salary line; $237,200 more in

Salaries this year. Is that because other things were moved in under this

heading?

MR. BYRNE:

Yes, it's jumped to $617,000

MS. MICHAEL:

Right.

MR. BYRNE: –

from, historically, just a

little under $400,000. So there were two positions that were re-profiled from

Aquaculture Development: a policy and planning analyst and a program policy

development specialist. There was also another position that was re-profiled

from Policy and Planning, which was an economist. So those three positions were

brought from other divisions, other sections, into this new division.

MS. MICHAEL:

Okay.

With

regard to the Grants and Subsidies, there seems to be a bit of a fixed sum. The

budget and the revision last year were the same and this year is the same as

well. So does this just go one particular area, this $100,000?

MR. BYRNE:

This is for science and for

the cod recovery initiatives.

MS. MICHAEL:

Okay.

So it's

more than one agency that gets the $100,000?

MR. BYRNE:

I believe so. Wanda, is it

MS. WISEMAN:

So there is a list in the binder of what projects were funded last year. It

included projects with the FFAW. There was a joint partnership on Northern cod,

among others: MI, MUN and some World Oceans Day activities as well.

MS. MICHAEL:

Okay. Thank you very much. That's helpful.

Minister, what's happening with regard to the shrimp levels? We know we have

shrimp.

MR. BYRNE:

Yes.

MS. MICHAEL:

Bans have been talked about. People are really concerned. Where are the

discussions at this point in time?

MR. BYRNE:

Well, science, as we know,

has come in very negatively for two years. Well, for more than two years in a

row, but, again, we took another hard hit. This time it also impacted in the

Gulf of St. Lawrence.

MS. MICHAEL:

Yes.

MR. BYRNE:

So we're seeing a little bit

of a phenomenon that's occurring that's somewhat of a perfect storm. Reductions

in crab at 17 per cent, some areas as high as 40 per cent now, further

reductions in shrimp.

Our

shellfish sector is – we're very concerned about employment levels, especially

within plants, but, obviously, the impact in enterprises as well. So our joint

efforts on the LIFO initiative to ensure that LIFO was broken apart was

absolutely critical because, of course, the impact we would now be experiencing

would be far greater if it weren't for the decision not to carry on with the

LIFO policy or initiative.

MS. MICHAEL:

Yes.

MR. BYRNE:

I'll just use this as a little bit of a platform, if I may. I want to say, I was

one of the ones who actually was around in 1997 when the first Northern shrimp

quota was given to the inshore. The notion that LIFO was a part of the original

management plan is an absolute misrepresentation, it's a fraud.

MS. MICHAEL:

Yes, I'm aware.

MR. BYRNE:

There was only one

protection to the offshore fleet, to the existing 17 licence holders, that the

minister of the day, Minister Rear Admiral Fred Mifflin retired, did actually

pronounce, and that was that anything over and above the threshold of 36,700

tons would be subject to sharing and there were no provisions, but anything less

than 36,700 tons – I'm pretty sure I'm not getting my numbers, it's not 37,600,

it's 36,700 – but anything over that would be the exclusive domain of the

offshore fleet. Gardner Pinfold did a study on it.

So I

really want to say that when it comes to the shrimp resource, people are

inventing things that occurred back in 1997. LIFO was never, ever, ever part of

the original management decision on shrimp. Minister Mifflin, at the time, put

in one protection and one protection only, which was that the offshore would be

protected to their existing quota level of pre-1997 levels, which were 36,700,

and anything and everything above that would be subject to sharing.

anyone who says to you – and I remember because I was actually around in those

days – anyone who suggests that LIFO was a fundamental element of the management

plan that dates back to the original allocation to the inshore in 1997, they're

either lying or they don't know what they're talking about.

MS. MICHAEL:

Yeah, I think I remember

Earle McCurdy making these points very strongly when we were doing the all-party

committee as well. You're being very polite and I think you're feeling exactly

what he was feeling.

With

regard to the offshore, are they still fishing during the spawning season of

shrimp?

MR. BYRNE:

Well, that's the interesting

thing about Area 6.

MS. MICHAEL:

Yeah.

MR. BYRNE:

Biologically, there's one contiguous stock of Northern shrimp and it goes from

Area 0 from Baffin Island from the north, right to the nose and the tail of the

Grand Banks.

MS. MICHAEL:

Right.

MR. BYRNE:

It is one discrete,

large stock. So when it gets divided up into various sectors, like Area 0, Area

2, Area 3, 4, 5, 6 and 7, it's actually a management process, and fishing effort

does impact the overall abundance of the spawning biomass within areas of the

stock.

always find it particularly peculiar that in Area 5, which is north of Rigolet,

there is no 12-month fishery there because of ice conditions. The only place

where there is a 12-month fishery is Area 6, and formerly Area 7. Area 5 where

there is no 12-month fishery is still a relatively healthy and stable stock.

Area 6, just to the immediate south of it, where there is a 12-month fishery, it

is in dramatic decline.

MS. MICHAEL:

Do you think we should be

looking for a ban?

MR. BYRNE:

Oh, absolutely, there should

be – Area 6 should be reserved for the inshore.

MS. MICHAEL:

Yes, great, thank you.

CHAIR:

Ms. Michael, I just have to

remind you that your speaking time is expired as well.

MS. MICHAEL:

Thank you.

CHAIR:

With leave from the

Committee, I'd like to include Mr. Lane on every second time that we go back and

forth, that we'd include Mr. Lane, as we've done in previous Committees, and

it's been requested here.

Do I

have leave from the Committee?

MS. MICHAEL:

Definitely.

CHAIR:

Mr. Lane, you have 10

minutes.

MR. LANE:

Thank you.

appreciate that. I actually don't have any questions on this

section beyond

what's already been asked, to be honest with you.

I guess

the only general question I would have around the fishery, whether it be the

shrimp, the surf clam issue or whatever other issues that – and there are many –

to the minister, is the sense of: Is there any appetite to entertain some sort

of a, whether it be an all-party committee or some similar type of a process to

try to deal with some of these bigger issues?

I know

you have the Fisheries Advisory committee. I have written you about that before,

and you indicated you're taking advice from them, but whether it be this

particular issue with the surf clam, whether it be the issue of adjacency, which

is primarily the biggest issue, I would suggest, and concerns we've had ongoing,

historically, whether it be seals, the issue of persons having to chop their

boats up into pieces and going out in dangerous conditions to meet some

ridiculous rules around boat size and so on.

There

are so many issues, and I'd just like your thoughts on at what point in time we

decide to work together beyond just agreeing in a committee like this, but where

we would have some sort of a sustainable plan and ongoing campaign, if I could

call it that, involving all Members of the House of Assembly, all parties, to

try to advocate for some much-needed changes in our fishery.

I know

that's a big question, but –

MR. BYRNE:

No, it's a good question,

though. I appreciate you asking it, and I'm pleased to answer it to the best of

my – from my own perspectives, from my own, somewhat from my own experiences,

not necessarily reflecting the – as a government, we haven't sort of devised or

created a policy around all-party committees, but it's a notion, it's a creation

of parliamentarians.

My own

thoughts, my own personal reflections on it is that it has greatest input and

value when it's a discrete issue, when it's basically timed to a sunset.

Otherwise you have standing – you could have standing committees or you could

have issue-based committees, and my own perspectives of it from an all-party

committee is that it has greatest value when you have a discrete issue which has

a well articulated objective.

The

other thing about an all-party committee is that its greatest value is when you

would have perceived differences of opinion that don't exist, that need to be

communicated. The differences don't exist.

When we

go, for example, to Ottawa – just as an example – to express a point of view to

the federal minister, the assumption might be that there are a diversity of

opinions around a particular issue that are very difficult to reconcile.

Conventional wisdom or intuitive reasoning, intuitive expectation, would be that

there's not a consensus, or especially not a unanimous position around a

particular issue. When an all-party gets together it's to actually give voice

and to communicate that there is a unanimous position on an issue to which

otherwise would be contentious.

When it

comes to, for example, on shrimp science or reductions, my instinct would be

that's not a – I think most reasonable people, especially even in Ottawa, would

recognize that this is a universally held position. That there's not a conflict

among parliamentarians, legislators. So whether or not an all-party committee –

what would be the function of the all-party committee in terms of a

communications tool which does not already exist with us acting within our own

party context or as individual representatives from our consistency.

I am

always open to all-party efforts but to be most effective, to actually gain the

best – I guess to a certain degree we are an all-party committee right here

today, right now at this moment. It's when we need to communicate a strong

consensus, if not a unanimous position, on an issue which otherwise would be

perceived to be not unanimous or divisive, that's when an all-party committee

has its greatest impact and value.

MR. LANE:

Thank you, Minister, I

appreciate the response.

I guess

what I'm saying, Minister – and I don't want to just confine it necessarily to

an all-party committee. I did use that term and that would be part of it

certainly. I understand there are all kinds of differences between inshore,

offshore. We have conflict now between the union and people who want to

represent inshore harvesters, as an example.

understand there are issues that are divisive, but I'm just wondering, when it

comes to issues that we would all agree on – let's take the principle of

adjacency, I would assume that's something that, regardless of whether you are

represented by the FFAW or you want to be represented by FISH-NL, or whether

you're a processor or you're a fisher, I would think we would all agree on the

issue of adjacency.

What I

hear from people sometimes is a sense that yes, an all-party committee could be

part of it to advocate, but to simply say we agree with adjacency and for a

delegation to go to Ottawa, as an example, one time and say we believe in

adjacency. That in itself is not taking it far enough, because it's not a

sustained effort.

The

point would be things such as doing that, but also things such as perhaps

initiating a provincial – I just throw this out here, letter writing campaign,

email campaign to the Minister of Fisheries, to the Prime Minister. Engage

everyone in the province to do it. Get one of our federal MPs to present a

petition to sponsor it in Ottawa and encourage every Newfoundlander to sign it.

Have a scattered rally and have the minister – you as minister – be at that

rally speaking up, as well as the Leader of the Opposition by your side and the

Third Party and so on.

So more

of a sustained ongoing effort to fight for the fishery, because the concern I

hear from some people is they feel we're not fighting hard enough. That's not to

suggest you're not doing your thing in your meetings and so on, I'm sure you

are, why wouldn't you be, but to simply go up and have a meeting and say we

brought the concerns to Ottawa and then walk away, they wouldn't listen, end of

story.

I think

people feel we need to be a little stronger, more united and a sustained effort.

That does not have to include drastic actions like taking down flags and all

that kind of stuff. You can do it in a respectful but forceful manner, I guess

is the point.

MR. BYRNE:

I wouldn't disagree with

anything you had to say. We all recognize that fisheries issues, no issue – we

do not command the airwaves as representatives. These are editorial decisions

and production decisions that journalists make.

Yeah,

I'd like for everyone to be able to be talking about the fisheries issues every

day, day after day, day after day. Of courses, it's keeping fisheries issues in

front and centre, in the hearts and minds of Newfoundlanders and Labradorians

and making sure that the information we provide is always relevant.

I think

the case is always there to be made that the fishery is the heartbeat of not

only just rural Newfoundland and Labrador but for the economy, the economic

well-being of all of Newfoundland and Labrador. Those outside in the fishery

actually gain a significant volume and level of their incomes, their employment

and their business incomes from fishery direct and indirect activity.

One of

the things during the course of the LIFO debate, for example, former Mayor

Claude Elliott from Gander rising up and giving the inland communities – the

Town of Gander was one of the most effective voices in talking about the impact

that the fishery has on his town. It was one of the strongest and most

compelling cases or voices in advocating for our fishery.

Why? In

some measure because he didn't have a dog in that fight, or it wasn't perceived

that this was a front and centre issue for the Town of Gander. He set the record

straight that the volume of business that comes into Gander from Gander Bay,

from Green Bay, from even Bonavista Bay, it's significant. His voice added to

this was very, very compelling and very effective.

MR. LANE:

Thank you, Minister.

CHAIR:

Thank you, Mr. Lane.

I just

want to make a remark. In no way do I want to limit questions or answers or

stifle conversation, but I think we need to be cognizant of the fact that we

have three hours set aside for our Committee meeting tonight, so I ask everybody

again to be cognizant of that. We'll continue on.

Mr.

Parsons.

MR. K. PARSONS:

Good questions that I'm really concerned with. I just want to go back to Ms.

Michael when she talked about the shrimp. I'd like to know how much shrimp was

actually caught in Area 6 last year.

I know

we brought in a buddying-up system. When I spoke to harvesters, especially out

of St. John's in 3L – I guess down in your area and also, Twillingate and that

area – it wasn't feasible for them to even go process the Northern shrimp. Yet,

we have the offshore draggers in Area 6 that didn't catch their quota in Area 5

and 4.

Are we

doing anything to the federal government to lobby that we move? What we tried to

do as a committee was to make sure they had the opportunity to catch – I know

sometimes conditions, ice and everything else, plays a factor in those areas. Is

there anything that we're doing so that there will be a bigger quota? A

buddying-up system, Minister, is two. Maybe four would make it feasible for

fishermen even just to harvest it.

MR. BYRNE:

That's a very good question.

One of

the better stories that came out of last year was that there was more

utilization of industrial shrimp. That's offshore shrimp that was caught by

offshore factory-freezer trawlers that was brought ashore to Newfoundland and

would normally go into the industrial market, which would go to Europe

unprocessed in most respects.

Now,

because of CETA, OCI, for example, was able to extend a significant volume of

employment in Port au Choix because they were actually processing more

industrial shrimp. That's a positive consequence of the tariff removal; as well,

the fact that you had plants with that capacity to be able to do that.

Wanda,

you may be armed with the information of exactly what the harvest levels – the

quota versus harvesting levels, landed levels – were in Area 6. If you are, then

speak up but, if not, we can certainly get you that information.

MR. K. PARSONS:

Yeah.

MR. BYRNE:

I think that better utilization of what's otherwise termed as industrial shrimp,

which is frozen at sea, could be very effective for our inshore processing

sector.

MR. K. PARSONS:

Okay, I just want to go back to the Fisheries Fund. I know you said that we'd

find the grants that were received under the Fisheries Fund. What

section is

that in your binder?

MR. BYRNE:

It's in the very back of the binder that I was able to give and it's under

grants listing.

OFFICIAL:

We missed it here. We have a

copy.

MR. BYRNE:

Did we miss –?

OFFICIAL:

That's the only one that we

would (inaudible).

MR. BYRNE:

Okay, so it was not in your

binder and it is right here. That was an error.

MR. K. PARSONS:

Okay, no problem.

MR. BYRNE:

We can get that copied.

MR. K. PARSONS:

That's okay; I can get it

from you from –

MS. MICHAEL:

(Inaudible.)

MR. BYRNE:

Sure.

MR. K. PARSONS:

On the Fisheries Fund alone,

I know there are positions there that are shown in your binder. There are three

positions under the Salaries. I'm just wondering have they been hired yet.

MR. BYRNE:

Which tab is this again?

MR. K. PARSONS:

We're looking at

section

2.1.03, Atlantic Fisheries Fund. You're showing new Salaries of $301,700. I'm

just wondering, you said there are three positions?

MR. BYRNE:

Yes. No, those positions

were brought in. They were originally with Coordination and Support Services,

but with the specific directorate or secretary on the Atlantic Fisheries Fund,

those three positions are in place. They were basically re-profiled from the

Coordination and Support Services division.

MR. K. PARSONS:

They're working now with the

Department of Fisheries over in your building? That's where they're to?

MR. BYRNE:

Yes.

MR. K. PARSONS:

Okay.

When

you look at Estimates, last year, when this fund was new, we looked at a $10

million fund – $7 million and $3 million was from the province. When you look at

this year's budget and looked at the revised budget from last year, it shows

that we spent $1.5 million, but it shows that there's nothing that came from the

federal government. If you look at this year's revised, it doesn't look like

we're expecting anything from the federal government also.

MR. BYRNE:

I'll get Wanda to dig into

this one. For every dollar that gets spent on any project, 70 per cent does come

from the federal government and 30 per cent from the province.

Wanda,

if you could just jump in there to just sort of give a perspective on how much

has actually been spent in 2017-18, what's the total value of projects – of the

projects that have been funded, what's the total value and, then, what would be

the contribution from the feds and the province on that.

MS. WISEMAN:

First, the way the program is structured is there's a secretariat set up by DFO.

Our funds will flow into that fund which is why last year you would have seen it

as revenue, which we wouldn't have known at the time. The $7 million would have

been revenue. This year it wouldn't be there because we would flow our funds to

them.

On the

total amount that we would have spent, we actually committed $1.5 million to

projects in 2017-18 fiscal, which is our 30 per cent, which is about $5 million

that we would have spent altogether – the feds with the other offsetting amount.

MR. BYRNE:

But I think the question is: What were the actuals as opposed to –

MR. K. PARSONS:

Yeah.

MR. BYRNE:

We had allocated or budgeted $1.5 million of provincial funds in 2017-18 but, of

course, the fund itself was late starting. We were the first province to sign an

agreement with the feds. That wasn't until late in 2017, so there was some

re-profiling as a result of that.

Wanda,

do you have the actual numbers of what was actually spent in the first fiscal

year?

MS. WISEMAN:

Wanda Wiseman.

Minister, the $1.5 million is the amount that we contributed this year to the

program for projects that we would have –I think it was about 30 altogether.

MR. K. PARSONS:

Okay.

The

total amount for the whole project is $5 million from the feds –

MS. WISEMAN:

Well, $5 million in total –

MR. K. PARSONS:

In total.

MS. WISEMAN:

– of which $1.5 million would have come from us and the other 70 per cent from

the federal government. That's our contribution.

MR. K. PARSONS:

Okay. Thank you.

MR. BYRNE:

I want to make sure the record is correct here on this so I'll ask Lori.

MS. COMPANION:

Our projected revised was $1.5 million that we had anticipated to be able to

spend. What we spent was what you'll have on this list. Any money that we didn't

spend that we had projected would be carried forward to future years.

The

reason that it looks different from what we had last year was traditionally

federal-provincial programs had been – the federal government would transfer the

revenue to us and we would spend the money. The Atlantic Fisheries Fund is

different and it was set up differently by the federal government.

Instead

of the federal government transferring their money to us, we transferred our

portion into this fund and the feds keep their money. You wouldn't see the

federal government revenue as revenue for us.

MR. K. PARSONS:

Okay.

MS. COMPANION:

Does that help?

MR. K. PARSONS:

It does but it would be nice to know – so it's automatic that it's 70-30?

MR. BYRNE:

Yes.

MR. K. PARSONS:

Because last year we were told that's what they assumed it was going to be and

that's why it was put in at $7 million; they weren't really sure. So it's 70-30

on the fund?

MR. BYRNE:

The agreement that was signed is a 70-30 agreement, yeah.

MR. K. PARSONS:

When was that signed?

MR. BYRNE:

The date of that was –

MS. COMPANION:

It was August.

MR. BYRNE:

– August.

MR. K. PARSONS:

August?

MS. COMPANION:

It was August of 2017.

MR. K. PARSONS:

Okay.

I'm

going to move on now to

section 2.1; it's Support Services and it's for a

transition. I guess this is a very important

section in our fishery today

because of what is happening with our shell fishery. I understand that there are

approximately 25 crab plants in the province and eight shrimp plants. We've

talked a little bit about the shrimp and what is happening with that.

Last

year, we had $500,000 that was budgeted and we actually spent $706,000 in Grants

and Subsidies there. I'm getting ahead of myself a little bit there now too.

First, I want to know about the Salaries. It is showing no Salaries this year,

so has the position been eliminated?

MR. BYRNE:

Which tab specifically?

MR. K. PARSONS:

We're looking at

section

2.1.05.

MR. BYRNE:

Sorry, okay.

MS. COMPANION:

(Inaudible.)

MR. BYRNE:

Lori Anne just reminded me,

those are the three positions that we referred to that are with the Atlantic

Fisheries Fund. Remember just a minute ago that I talked about how three

positions were re-profiled from Coordination and Support Services to the

Atlantic Fisheries Fund. Those salaries were transferred to the Atlantic

Fisheries Fund itself.

MR. K. PARSONS:

Is there a position this

year that someone is going to administrate this fund?

MR. BYRNE:

It's now the Atlantic Fisheries Fund. The Grants and Subsidies that you are

referring to, that's the Fish Plant Worker program – that's a joint initiative

between Municipal Affairs and ourselves in terms of delivery. I think the

question is: What is the particular function area of Coordination and Support

Services – with no salary dollars attached, the question I think is being asked:

Is there now no one to perform that particular job?

MR. K. PARSONS:

Who is going to administrate

the fund?

MS. COMPANION:

The same people will administer that fund. They're working on the Atlantic

Fisheries Fund; they will also administer the Fish Plant Worker Employment

Support Program.

MR. BYRNE:

As you can appreciate, that particular job is not a 12-month experience or

exercise. It has an intensive workload for a short period of time so it can be

done with those bodies, with the Atlantic Fisheries Fund, but doing this job as

required.

CHAIR:

Ms. Michael, are you okay

with Mr. Parsons finishing this?

MR. K. PARSONS:

Can I just ask one more

question?

MS. MICHAEL:

(Inaudible) my questions.

MR. K. PARSONS:

Yeah, okay.

CHAIR:

Thank you.

MR. K. PARSONS:

I'm just wondering the fund

itself last year, so you're saying that it's going to be administrated by the

same people that are doing the Fisheries Fund. But this fund last year, where

was it spent to? We spent $706,000.

MR. BYRNE:

The program for fish plant

support for permanently closed plants, it was St. Mary's – Wanda, it was St.

Mary's and Twillingate?

MS. WISEMAN:

So last year there would have been supports provided to various plants

throughout the province, including Placentia - St Mary's, Ferryland, Lewisporte,

Twillingate, St. Barbe, Baie Verte, also in Bonavista, Lewisporte, Exploits,

Town of St. Lawrence, Carbonear and Placentia.

There's

a list that should be in your binder as well and other information.

MR. K. PARSONS:

Okay.

Under

this fund, normally it had the theme that they were permanently going to be

closed. So are these plants permanently closed?

MR. BYRNE:

So Wanda (inaudible) plants

that are permanently closed, I think what Wanda is referring to is where the

employees came from, is that …?

MS. WISEMAN:

There were no plants deemed permanently closed in 2017-18. These were plants

that were assisted because of shortages in raw material due to lower quotas and

ice conditions.

MR. BYRNE:

There was a modification to the program because of the ice conditions which we

reported on earlier.

MR. K. PARSONS:

Okay because this program was set up for plants that were deemed to be closed

and not opened anymore, so you changed –

MR. BYRNE:

For permanent, yeah.

MR. K. PARSONS:

Okay.

MR. BYRNE:

There was a decision that was taken, a Cabinet decision, to actually modify the

program to allow for those plants that still had some employment, had a

threshold of some employment but still had problems meeting their employment

thresholds to be able to support those plants.

MR. K. PARSONS:

Minister, my concern would be that this year – and I know the initial catches on

crab are way down. I know of a group down my way this past weekend went out and

had their first catches and were really, really low. And there's a major concern

in the industry.

talked about what's happening in the shrimp industry a little earlier. So

$500,000 was allocated last year on these grants and we spent $706,000. My fear

is that there is going to be a whole lot more money needed for this program if

that's the way it's going to be to help out with plants that are not going to be

closed but are struggling to survive.

MR. BYRNE:

I have that caution as well. Last year, there was a significant amount of money

that was budgeted to assist fish plant workers, which peculiarly, in some

respects, the fund was not spent. I was very confident that there was going to

be a significant shortfall in employment last fall which did not actually

materialize to the extent that I thought it was going to materialize.

It's

never, ever good news to be talking about that, but the good news around this –

and this is where the revenue, the $500,000 is actually sourced from the federal

government. So here's the backstory to this. It's the Labour Market Development

Agreement, which is now the new Labour Market Development Agreement – which has

been signed – has the capacity to be able to support EI-eligible individuals, or

EI-attached individuals with short-term employment. So this money is being drawn

down from the Labour Market Development Agreement.

The

other point of good news is that because the Labour Market Development Agreement

is larger than it was in the past, if there are additional issues that are

identified as the season goes on, as we get closer into the fall of 2018 we can

take a decision, we have the capacity to be able to create greater supports than

the $500,000 would allow at this point in time. So there is a potential source

of funds, should the problem become more significant in the future.

MR. K. PARSONS:

Just a last question on this

section: Any idea how many crab plants and shrimp plants will actually be open

this year?

MR. BYRNE:

I'll ask Wanda to do that,

but until an operator actually – we haven't been given notice of any specific

closures, per se, but I'll ask Wanda to – just Twillingate, as you are all aware

of.

MR. K. PARSONS:

Twillingate, okay.

We can

go on to the next section.

CHAIR:

Ms. Michael.

MS. MICHAEL:

Thank you very much, Mr.

Chair.

Section

2.1.06, Seal Product Inventory Financing.

MR. BYRNE:

Okay.

MS. MICHAEL:

Basically one question: Does

this have to do with the loan that went to Carino?

OFFICIAL:

(Inaudible.)

MS. MICHAEL:

It doesn't.

So what

was the loan in 2014-15? Is this still repaying the $1 million loan from

2014-15?

MR. BYRNE:

I'll ask Wanda, if you

wouldn't mind, just to dig into that?

MS. WISEMAN:

So this was an inventory financing loan, I believe 2015, that was provided to

PhocaLux.

MS. MICHAEL:

PhocaLux, okay.

And

does the $430,000 under revision mean that that has been paid down this year –

$430,000 was paid down?

MS. WISEMAN:

So this is the amount that we were anticipating getting paid back by the end of

March of 2018.

MS. MICHAEL:

Right.

And did

you get it back?

MS. WISEMAN:

I would have to check.

MS. MICHAEL:

Okay. It would be good to know. And then you're anticipating another $150,000

for '18-'19.

Okay,

thank you very much.

I can

keep going Mr. Chair, or do you want to vote on …?

CHAIR:

Absolutely.

MS. MICHAEL:

Okay, thank you.

we're into Aquaculture Development, 2.2.01, Aquaculture Development and

Management. My first question has to do with the Salaries. The revision was

$43,700 more than what was estimated last year, but this year the Salaries have

actually come down to $761,600.

could we have an explanation, Minister, please?

MR. BYRNE:

Certainly. So originally the budget of 2017-18 was $851,000. That did increase

in terms of the actuals to $895,000 which was due to standard severance and

leave payouts during the year. The reduction to $761,000, there were several

positions that were re-profiled into sustainable fisheries and oceans research

from this section. The positions re-profiled: one was a policy and planning

analyst and the other was a program policy development specialist.

So they

were taken out of this particular

section and moved into the sustainable

fisheries and oceans research which we spoke of earlier.

MS. MICHAEL:

Okay, thank you very much.

Under

Professional Services, $8,000 was budgeted and nothing was spent, and you're

anticipating $4,000 this year in the estimates.

What

normally are the professional services in that area?

MR. BYRNE:

Wanda, I'll ask you to jump in as to what the …?

MS. WISEMAN:

So this would help pay for any data collection and analysis, infrastructure

development and industry development issues that the development group would do.

MS. MICHAEL:

Okay, thank you. And nothing was required last year – got it.

Section

2.2.02, which is the Aquaculture Capital Equity Investment – anticipated:

$2,838,200 in Loans, Advances and Investments; revised down to $1,364,100; and

this year just $1 million. What are the changes that are happening then with

regard to the aquaculture investments?

MR. BYRNE:

The Aquaculture Capital

Equity investment program, decisions are taken to allow companies to be able to

drawn down on that, but it is up to them to draw down on it within their

established envelope. Last year there was a budget of $2.8 million-plus, to

which Northern Harvest was participating in the program but they only drew down

$1,364,000. They could have drawn down more but under their development

schedule, they did not. So this year, we have a million dollars earmarked for

ACEP but that remains to be seen as to what exactly they drawn down on.

Wanda,

I'll just ask you quickly to jump in. Is there anything else in particular that

should be stated in this?

MS. WISEMAN:

(Inaudible) provisional

amount. This amount is usually a provisional amount that's put in the Estimates

based on what we think will get drawn down. There's some outstanding amount for

Northern Harvest.

MS. MICHAEL:

Thank you.

The

Minister of Finance actually said publicly some weeks ago that government would

be funding Grieg. Was that a statement that was made in conjunction with the

Minister of Fisheries and Land Resources?

MR. BYRNE:

There was an agreement that

was made with Grieg, and the terms are yet to be finalized. It's based on when

Grieg decides to invest and to expend funds, but that's yet to be finalized.

MS. MICHAEL:

So Grieg could possibly be

the one that might benefit from the $1 million that's here?

MR. BYRNE:

It could very well be, yes.

MS. MICHAEL:

Thank you.

I know

that we don't have a lot of time here tonight, but I would like to get some

sense from you, Minister, with regard to the whole issue of ISA and the problems

that it is bringing up. I know the department is looking at the potential of

sustainable aquaculture growth, but with the ISA outbreaks, to me, present a bit

of a major obstacle to sustainability. Where are you on that?

MR. BYRNE:

Well, ISA is a reportable

disease and it's something that is managed by the Canada Food Inspection Agency

as a reportable disease. It is endemic throughout the Eastern Seaboard,

throughout Atlantic Canada. Basically, under our protocols it's fair to say –

and this is, I think, something we should be relatively proud of. We always want

to avoid an ISA breakout, a pathogenic ISA breakout. The most significant

breakout was in 2014, I believe.

MS. MICHAEL:

Yes.

MR. BYRNE:

We've have relatively few

instances.

It is

very disturbing to me when things are stated as fact that are not fact. To

suggest that the only way to have sustainable aquaculture is to have exclusively

and totally land-based systems, there are two things that I think I really need

to state upfront and clearly on this: One is that we have seen incidents where

we have had ISA infection in land-based system. To suggest that there's absolute

biosecurity – one of the greatest pushbacks that I felt, because I spoke openly

about this, I said this is pretty good evidence that not all land-based systems

produce absolute biosecurity in the production facilities because land-based

systems have been touted as being the absolute perfect alternative, when clearly

they're not necessarily.

Every

company looks to establish greater grow out in land-based systems, where

feasible, where possible. Some of our companies here in Southern Newfoundland

are going from trying to improve the economics and technology to be able to grow

fingerlings from 100 grams – before they are placed in the water to maritime

cages – to 300 and 400 grams, and even larger. The reason why is you increase

survivability, the larger, more robust the fish are. So it's important to state

that every fish that is grown in the world aquaculture, every salmonid, every

salmon that is produced for the global salmonid aquaculture industry comes from

a land-based system at some point in time.

The

objective of having it totally enclosed, all 100 per cent completely land-based

system, we are hearing voices that are saying this is the wave of the future,

this is way that Norway is going and this is the way that all progressive

industries are going. That is categorically untrue. 1.9 million metric tons of

Atlantic salmon are produced through aquaculture in Newfoundland and Labrador

globally – 1.9 million tons. In Newfoundland and Labrador we produce just

breaking around 20,000 metric tons. We are not a big, big player in the world

aquaculture industry. Norway is the biggest player or was one of the biggest, as

is Chile and as is the Faroe Islands. There are several jurisdictions that are

much, much larger than Canada.

Here's

what needs to be said: I've heard voices say that Norway is moving exclusively

to land-based systems. Norway just released several hundred hectares of new

Maritime-based cage-culture sites. I'll be able to provide you with the specific

citation, but a leading economic consulting firm has provided evidence that by

2050 global aquaculture production, salmonid production, will probably go to 3.5

million metric tons, to which upwards of 3.5 million of which will still remain

in Maritime cage-culture systems by 2050.

With us

here in Newfoundland and Labrador – one of the things you'll hear about is in

Miami, for example, there's an experimental project; blue Sapphire is looking to

produce a total container land-based system. They're very, very close to the

marketplace which makes a big, big difference. The price differential in a

land-based system, when you're very, very close to the marketplace, can make a

difference in the economics, the survivability of an operation. Also, it's fair

to say that the parent company of blue Sapphire actually had a horrific

technical failure in their home base in Norway in a land-based system which cost

them very, very dearly.

No one

is saying that we should not be moving more and more to a land-based system. Our

own companies here in Newfoundland and Labrador are using technology, are

exploring ways to create a greater percentage or greater durations where the

fish are raised in a land-based system. It makes good economic sense and it

makes even better technical sense.

Right

now, the economics and the technology are not such that land-based systems are

feasible economically at the moment, nor are they perfect biosecurity

mechanisms. They still can experience disease. With that said when you hear

voices that say the world is moving to land-based systems, the evidence does not

support that.

MS. MICHAEL:

Thank you.

There's

still a lot of discussion to be had, I think.

CHAIR:

Mr. Parsons.

MR. K. PARSONS:

I know we're running out of

time that you'd like to allocate for this, but I just have a couple of questions

here on our aquaculture industry.

Minister, can you provide any details on how you plan to double the production

and capacity in aquaculture and compared to what numbers?

MR. BYRNE:

In the salmonid industry or

in the shellfish industry?

MR. K. PARSONS:

No, in your salmon and what

you're planning on doing with aquaculture.

MR. BYRNE:

Yeah, in salmon.

MR. K. PARSONS:

Yeah.

MR. BYRNE:

Well, attracting investment

is the biggest, is the best, most effective strategy to being able to double

production. We're already seeing – and you're no stranger to this – Grieg has

expressed great interest in the South Coast, Placentia Bay area of Newfoundland.

One of the things that attract investment is a solid, very stable and very

reliable regulatory regime.

As the

world places greater scrutiny on aquaculture activity, it makes good sense.

Companies identify with investing in areas that have robust regulatory regimes.

It's one of the reasons why not only has Grieg been attracted here, but it is

public knowledge that Marine Harvest has a purchase agreement for Northern

Harvest. That deal is worth $310 million.

Northern Harvest is not just located in Newfoundland and Labrador, but the bulk

of the assets and the bulk of that acquisition would be a Newfoundland and

Labrador-based acquisition. That deal is worth $310 million. We do know that

Marine Harvest is looking at other sites as well. Cooke Aquaculture, Cold Ocean,

has a fantastic facility on the South Coast. They're looking at certain

expansion plans.

To be

honest with you, the move to doubling salmonid aquaculture production, given the

level of investment, given the level of interest that has been expressed already

by companies that are world leaders in this industry, I do not think that will

be a tough measure to meet.

MR. K. PARSONS:

Okay.

Last

year in the House one time you mentioned there was an MOU between Canada and

Newfoundland on aquaculture. Where are you on that now?

MR. BYRNE:

Yeah, that MOU was actually

signed in 1988, if I understand correctly. We're in discussions now with

updating that MOU. One of the things that we've identified is – there are all

sorts of federal government departments that play a key role in advancing our

aquaculture development; for example, Environment Canada. We're asking

Environment Canada to look at weather stations, increased weather reporting

stations.

Rainfall is a major contributor or it can be a factor in the success of a

shellfish aquaculture operation. As we know, when rainfall occurs, significant

amounts of groundwater go into the bay area where a shellfish mussel operation

is located. If the rainfall exceeds a certain level, that site is automatically

deemed to be shut down because of the potential contamination by surface-based,

land-based E. coli contaminating the water column of where the blue mussel

aquaculture site would be.

One of

the issues we've identified is that Environment Canada does not have enough

weather stations to be able to monitor discrete areas effectively. In other

words, if they only have one – I'll just use by way of example or just to

illustrate – weather station that measures rainfall and that weather station

shows that the rainfall exceeds what is required and requires a harvesting

shutdown while the site is deemed safe and secure from E. coli, if that weather

station is used to measure the surface runoff for a very, very large area of

coastline, that entire area of coastline shuts down even if the rainfall didn't

occur there.

Having

more Environment Canada weather stations located in strategic areas on the

Northeast Coast where aquaculture is conducted can actually prevent unnecessary

shutdowns of harvesting. I'll just use that as one example of many. The Canadian

Shellfish Sanitation Program really is – the federal government can play a big

role in that regard, also different standards and different protocols on

regulations for shellfish and salmonids. These are the kinds of things that we'd

like to include in a new expanded and updated MOU.

MR. K. PARSONS:

When are you planning on

seeing this new MOU?

MR. BYRNE:

We're in discussions with

that now; in fact, individual elements of that are already moving forward. But I

don't have a timeline to report to the House and to the Committee.

MR. K. PARSONS:

I'm just going to go to the

last

section now to Aquatic Animal Health. I have a bunch of questions but for

the convenience of time I just want to ask one question: Where is it in the

budget here that you're going to cover what's happening with ISA?

MR. BYRNE:

With ISA – the federal

government, normally, if it's a reportable disease and it's not considered

endemic, the Canadian Food Inspection Agency would have a program to be able to

compensate for infection. Because the Canadian Food Inspection Agency determined

that ISA was endemic in Atlantic Canada they no longer cover those costs. For

example, last fall we had an infection which resulted in fish removals. That was

not a compensable event.

MR. K. PARSONS:

Okay.

I just

want to go back to a couple of questions and then I'll be clued up, okay. I want

to question on the Fisheries Advisory Council. Besides adjacency, what else has

been done with the Fisheries Advisory Council?

MR. BYRNE:

Some of the questions we were asking the Fisheries Advisory Council to ponder

are issues around professionalization, issues of new, young entrants into the

fishery, what are some of the barriers that might be impacting new entrants from

entering the fishery.

I've

heard it over and over again, and I think you have to, there are many enterprise

owners that have enterprises that are of an age, they'd like to retire. They'd

like to be able to sell their enterprise. In order to be able to do so they have

to transfer it to someone, to probably, more than likely, a new entrant.

What

are the barriers to that occurring both in policy and financially? That's one

question I've asked the Fisheries Advisory Council to ponder and give me advice

and recommendations on. Another issue I've asked the Fisheries Advisory Council

to look at is marketing and logistics.

As we

move to a fresh seafood market, having the logistical supply chain, being able

to ship fresh product as opposed to frozen becomes very, very important – as

does frozen, but being able to better ship fresh product. It would come as no

surprise to anybody in this place that I've asked them to take a look at Marine

Atlantic in particular as how it impacts on our seafood industry, whether or not

Marine Atlantic is a barrier to being able to ship fresh product to the

marketplace, but also logistics in terms of being able to get more product into

the European Union.

These

are the kinds of projects I've asked the Fisheries Advisory Council to ponder.

They've also got some of their own initiatives that they would like to explore

based on their own membership coming forward. So there's a variety of different

research reports that will be derived.

MR. K. PARSONS:

What is the total budget you

have for the Fisheries Advisory Council this year?

MR. BYRNE:

It is $100,000 and that includes the logistical support, but we also have

additional supports for professional services.

MR. K. PARSONS:

Are they still working on the strategic action plan for cod revitalization?

MR. BYRNE:

All of this is part of the

strategic action plan. They're also providing advice on themes and projects

under the Atlantic Fisheries Fund.

Again,

if the expectation is that there will be one discreet plan or document for

Northern cod revitalization, remember – and I think we had a very, very stark

reminder of this this past year with the quota recommendations or the science

advice on Northern cod this year – we are in a rebuilding program or pattern for

Northern cod. It's not going to occur in one year, it's not going to occur in

three years.

We have

to make every effort right now to ensure that fish we harvest, that we get the

maximum value today, and we start working on increasing value today. Because

while quotas may or may not rise as quickly as we would like, what we can rise

is the value of that product.

MR. K. PARSONS:

Yeah.

MR. BYRNE:

There are two ways an

enterprise can make money: volume or price. Hopefully, we can get both volume

and high price. In the absence of high volumes, higher price for fishermen and

for enterprises can make a big difference, and that's one of the reasons why

we're putting so much energy on trying to extract greater value from the

resource.

MR. K. PARSONS:

The fear, Minister, the fear this year is that there may be a reduction in

quota.

MR. BYRNE:

Pardon?

MR. K. PARSONS:

There may be a reduction, and I think a lot of harvesters –

MR. BYRNE:

Yes, that's –

MR. K. PARSONS:

– are believing that there will be –

MR. BYRNE:

– that's the stark news that

I referred to.

MR. K. PARSONS:

– a reduction in quota this year, you know.

I want

to go back to one little

section then I'll be cluing up. There are a lot of

questions that I obviously could ask.

I want

to see what your perspective is, and the department's perspective is, basically

on seals.

MR. BYRNE:

Seals, it's time that we all

– those who we need to support us on seals stop shrugging their shoulders and

just simply say it's a problem we just can't, or don't have the guts to deal

with.

The

harp seal population is a huge problem in fish stock recovery. It is a

scientific fact. The evidence backs this up. I don't think there's any point in

suggesting it is circumstantial or unclear evidence. The scientific evidence

clearly states that the harp seal population at its current expanse is consuming

a significant volume of capelin, shrimp, cod and most other species. So we have

to deal with this.

We're

encouraging, we're asking the federal government to renew their efforts in China

for seal markets. There was a great fanfare some five, six years ago about China

being the new marketplace for seals. That got quietly dropped five years ago.

I've already been in discussions with the federal minister and other departments

to get the China market back in motion.

I'll

also share with you this, is we have a marketplace in Canada. I had a discussion

with the Quebec minister. There are two jurisdictions – well, three

jurisdictions but one of our partners in the harp seal harvest is Quebec.

Quebec

came to me and asked if we would like to participate in a preliminary discussion

in marketing seal products to various ethnic communities throughout Canada.

That's a marketplace where there are no barriers for us to sell our products to.

There is a belief that there is a very, very large marketplace, an untapped

marketplace, with cultures and ethnicities that would appreciate seal meat and

other seal products as part of their staple diets, part of their staple

pharmaceutical regimes and other things.

we're now working with the Quebec minister of the department of fisheries to

look at developing a greater Canadian market for seal product.

MR. K. PARSONS:

Okay, that's good. That was

my second question on markets. Anyway, you answered all of that.

The

last question I'm going to ask you is about carbon tax. Has there been any

assessment done on what effects it will have on harvesters and processors? Are

there any business models you're looking at that – how's this going to affect

our harvesters and stuff like that when it comes to carbon tax?

MR. BYRNE:

I wouldn't be able to report

to the Committee at this point in time as to whether or not there's been a

specific study on the carbon tax to the marine sector, because that would

include obviously fisheries, but I can get back to you.

I will

say this, we are investigating as to whether or not climate change effect and

action on climate change could produce a more positive event or effect on our

fisheries related to adjacency. When you consider where the argument is going,

there are many factors that influence seafood certification. Sustainable yields

of seafood affect – for example, the Marine Stewardship Council looks at

harvesting technology, harvesting practices, whether or not it's sustainable as

to determining whether or not a particular fishery will be certified under the

Marine Stewardship's logo.

Well,

where the puck is going on all of this, and I anticipate this will come sooner

rather than later, is the overall climate change or carbon footprint of

harvesting will be incorporated into future certification regimes. Those

harvesters and those fishers that actually have a lower carbon footprint will be

subject to benefit under certification programs.

I don't

see that as a threat at all. I see that as a real bonus to our argument of

adjacency, because when you consider – and this is an issue which is not going

away. We have foreign fishing that comes to the Grand Banks. We have it today,

we had it yesterday and we had it four years ago. We will have it again. We will

continue to have foreign fishing efforts in the NAFO zone in the years to come.

If part

of that whole certification process is the amount of carbon they consume, the

amount of fuel, carbon fuels they consume in getting to the fishing grounds,

well our fleets which are adjacent may actually have a competitive advantage in

the certification process. We are looking at that now.

I've

asked researchers to look at how carbon footprints – what is the performance of

small boat fishers, of local fisheries that are fishing in waters adjacent to

their home ports, what's the impact on that to a carbon footprint versus those

deep sea or distant water fishing fleets and their carbon footprints? Because I

don't hear a huge amount of talk about it but I would like you and I to raise

this as an issue, to support that local boats fishing in adjacent waters to

their home ports produce a very positive impact on carbon emission reductions

compared to distant water boats which clearly would have a larger carbon

footprint.

CHAIR:

Okay. It's been suggested

that we probably take a five to 10 minute washroom break. So we will gather back

at 8:10.

everybody okay with that? All right.

Recess

CHAIR:

Ms. Michael, you have the

floor.

MS. MICHAEL:

Okay.

Thank

you, Mr. Chair.

We're

into forests, I think. I hope we don't get lost in the forest for the trees.

Forest

Management, 3.1.01, and I'm looking at the salary line. There's probably a

logical explanation for this, it's probably part of the restructuring, but we've

gone from just over $4 million in Salaries with a slight rise of $500,000 in the

revision last year, but now down to $2.6 million.

Minister, I'm sure you have a good explanation for that.

MR. BYRNE:

We've got an explanation; whether or not it's a good explanation, we'll let you

decide that.

Forestry was where we probably had some of most significant movement in terms of

salaries and positions. We were able to identify a lot of savings in those

particular areas. We had a lot of unfunded positions, which were removed through

attrition, just normal management, but also in the salary

section for

Administration and Program Planning, you are right, it went from a 2017-18

budget of just over $4 million to actuals of just over $4.5.

Whenever you have that kind of movement, you do have severance and leave pay out

costs associated with former employees, so that jump in that one fiscal year –

that $500,000 jump – was around those severances and payouts.

terms of the Estimates for 2018-19, there were 10 positions that were

re-profiled. From within that salary envelope there were 10 positions that were

brought into Policy and Planning that were otherwise formally related to GIS and

mapping.

If you

recall in my earlier statements, GIS and mapping was a big component of what

created the synergies of the new department. There were 10 positions that were

re-profiled that were formally in Policy and Planning – and you'll see that

reflected accordingly – that related to GIS and mapping, that were moved out of

Administration and Program and moved into the Policy and Planning division.

There were two positions re-profiled to Fire Suppression. Attrition management

measures for 2018-19 will also be included in this particular number.

MS. MICHAEL:

Okay.

Thank

you very much.

That's

a clear explanation.

Under

Transportation and Communications, again, here we have an increase of $245,700

over last year's budget line. Can you explain that for us?

MR. BYRNE:

Yes, there was some

additional helicopter time. When you do forest inventory, whenever possible,

whenever there's access to a road network, to ground-truthing, some of the

forest inventory measurements, you use that, but sometimes you just have to use

helicopter time. So the variance last year, there was $217,000, we went up to

$235,000. This year the big expense of $462,000 is related to increased use of

forest inventory.

I'm

going to introduce Steve Balsom again; Steve is our ADM of Forestry.

MS. MICHAEL:

I love his surname.

MR. BYRNE:

It's a big hit when we go to

FPT conferences, put it this way.

Anyway,

Steve, would you be able to explain a little bit further on the Transportation

side?

MR. BALSOM:

Yes, thank you.

Yes, as

the Minister was explaining, this past year we concentrated on an area on the

Northern Peninsula that had excellent access from roads, which reduced the

number of helicopter hours that we required. The inventory program is scheduled

to do all the forest management districts once every 10 years, so next year we

have scheduled areas that are out in Central and the Avalon portion of the

province, which are more remote, requiring more helicopter time.

So we

try to balance our operating costs in any given year looking at areas, as an

example, doing some plots around Corner Brook that have access by vehicle to

keep costs down, but in certain specific years, we do have an increase when the

inventory requires significant helicopter in remote sites.

during our zero-based budget that's what we have identified this year as a

requirement.

MS. MICHAEL:

Okay. So you should get good

information from that then, especially, I would imagine.

MR. BALSOM:

Yes, the forest inventory is generally the basis for the wood supply that we

generate every five years, but it's also the base information used for, not just

strategic level, but operational level planning; when we do road layout, when

we're going to access harvest blocks for various sawmills or for the forest

operators. So the inventory and the ground-truthing is what gives the

information for that level of planning and development.

MS. MICHAEL:

Thank you very much, that's

helpful.

Under

Purchased Services, right here, it says that the budget last year was $153,300,

the estimate, and it was down then to $88,700, and this year only $9,400.

What's

happening there?

MR. BYRNE:

So if I remember correctly,

a big component of this is aerial photography that has been compiled, that's

been collected. Again, I'll go back to Stephen, if you wouldn't mind, Stephen,

just to be able to give some further explanation as to why $153,000 was

originally budgeted but only $88,000 expended and now with only $9,400 expected

for this particular year.

I do

believe a big component of that was aerial photography, if I remember correctly.

MR. BALSOM:

Yes, the minister is correct.

This

past year with the integration of Crown Lands, which also flies aerial

photography, we've now found the spec on the Crown Lands aerial photography and

the forest inventory photography has lined up so that we can utilize the same

photos. We're trying to synchronize the flying of those districts, which

resulted in some savings.

The

major reduction, partially from a zero-based budgeting exercise, movement of

some funds to the GIS that had – those funds had moved to the GIS section, they

also had Purchased Services. There was also a component of the Centre for Forest

Science and Innovation of the former Forestry and Agrifoods Agency that

conducted some of the research work, that moved over into the wildlife research

section because some of the projects we had there were overlaps and habitat

related, so we moved some funding there.

Again,

another significant portion here is related to having air photos in the bank,

more or less, that we don't need to purchase air photos again this year. We have

enough to do our air photo

interpretation work.

MS. MICHAEL.

Right.

MR. BALSOM:

So through zero-based budgeting we just decided we could skip a season of

purchasing air photos.

MS. MICHAEL.

Thank you very much.

Minister, to my right here I have a researcher who loves drilling down, and he

drills into the briefing books. He loves the briefing books. I've asked this

question other years in certain areas but I'm curious in this one.

In this

line item, the estimate in the briefing book says $215,000, which is above what

is listed here, the $153,300. Now, I understand that differences like that can

happen, that during the process of the fiscal year different things can happen

and so you do get a re-profiling of the line item in the briefing book, though

it doesn't show up here, when it comes to us here.

What

would have caused the $153,300 to become $215,000 in the briefing book?

MR. BYRNE:

Thank you for that.

We're

going to have to quickly do some cross-referencing but maybe, Lori Anne, would

you be able to speak to that? I think there were some leasing issues associated

with that.

MS. COMPANION:

The Estimates book in 2017-18 under Purchased Services had $429,900. This year,

it's reflected to be $153,300 instead of the $429,900. That's because leases,

the vehicles and the maintenance for vehicles are moved to TW. They restated the

budget amount; they took it out so we would be comparing apples to apples. That

money was moved to TW.

MS. MICHAEL:

Okay. Thank you very much.

I think

we have a full explanation of that now. Under Grants and Subsidies in this area

we have a $386,600 cut, I think, from last year's budget line. What are the

implications of that, wherever this money used to go?

MR. BYRNE:

Under the grants and contributions there was actually $300,000 which was

re-profiled back into the Wildlife directorate for research there.

MS. MICHAEL:

Right.

MR. BYRNE:

There was, however, a

$90,000 reduction but it was not to the extent – under zero-based budgeting

there was a $90,000 reduction in those Grants and Subsidies, but $300,000 of

which was actually re-profiled. It still exists; it was re-profiled to the

Wildlife branch.

MS. MICHAEL:

Okay. Thank you very much.

I think

my time is up.

CHAIR:

Thank you, Ms. Michael.

Mr.

Lester.

MR. LESTER:

The following questions are

some general questions. If you can't provide the answers now, we'd appreciate a

provision of a

schedule at a later time.

Number

one, can you please provide the amount of severance, as well as all other

benefits paid out last year from your department? Could you also provide the

following information as it pertains to your department: How many retirements

versus how many layoffs and terminations; how many actual new hires; how many

short-term workers, 13-weekers, that type of affair; was there much contractual

work performed; and your current list of vacancies.

MR. BYRNE:

Okay. I'm going to anticipate that we may not be able to supply that information

at this particular sitting, but I'm going to ask you to restate the question, if

you could, so we could make sure that we have it, we capture it.

MR. LESTER:

Sure. The first part of the

question was in reference to the amount of severance as well as other benefits

paid out last year from your department. The secondary part was in reference to

positions within the department, how many retirements were there. How many

layoffs/terminations? How many new hires did we have? How many short-term

workers being 13-weekers? How many employees were actually on a contractual

basis and the current level of vacancies in positions within the department?

MR. BYRNE:

Okay, I think we are going to have to commit to getting that to you on a later

date.

MR. LESTER:

Yeah.

Has

there been any analysis of how the incoming carbon tax will impact your

department in its operations?

MR. BYRNE:

The carbon tax itself is under Natural Resources and Finance. Lori Anne, from

your deputy's network would you be able to provide some context to that?

MS. COMPANION:

Yes, we did assess the implications of a carbon tax program from a forestry and

agriculture perspective and fed into the analysis that Municipal Affairs and

Environment would be completing in new climate change.

MR. LESTER:

Okay, so they would be included in your budgetary figures and estimates.

MS. COMPANION:

Yes.

MR. LESTER:

All right, I would like to proceed to

section 3.1.02, Forest Management,

Operations and Implementation.

Again,

I'll ask these questions but your answers may be a little bit repetitive because

I can more or less forecast the answer. In reference to Salaries, last year

there was a substantial increase over what was budgeted. This year, of course,

we're going down by $1 million. Would that have to do with the restructuring and

the severance paid out?

MR. BYRNE:

You know what I said before? Cut and paste it.

MR. LESTER:

Gotcha.

Transportation and Communications is down by about $70,000. What would be the

reason for that, just an amount of reduction in staff?

MR. BYRNE:

In the transportation side, one of the interesting components of this is that

the variance, the higher expenditure from last year – budgeted at $436,000 and

actually went up to $524,000 – a lot of that was due to polar bears. We had an

increased number of operations related to polar bear visits.

That

was a bit of an unusual year. Helicopter time around polar bear operations

actually drove the expenditures up. Now with transportation at $366,000, that's

a figure that we feel basically meets the norms of the department's operations.

If there are additional costs by, again, additional polar bear frequency visits,

we'll adjust accordingly if required.

MR. LESTER:

The helicopter time, is that

provided by government itself or is that an outside contractual provider?

MR. BYRNE:

It's an outside contractual

provider. There's actually been a lot of work done to allow those contracts to

be made more efficient, to be more effective, more cost effective, but the

Government of Newfoundland and Labrador does not have any helicopters within its

own inventory.

MR. LESTER:

The provider of the service,

are they maintained on a retainer basis whether they fly or not, or is it just

by services provided?

MR. BYRNE:

Lori Anne, would you mind

fielding that.

MS. COMPANION:

The helicopter contract is

base plus hours. We pay a base fee which enables us to have – and it's for

government and it's a contract with TW. TW provides that contract for all the

government departments. It's a base fee we pay to have access to those

helicopters when we need them for fire, for all kinds of services and for

helicopters –

MR. BYRNE:

Ferries down.

MS. COMPANION: –

ferries down, all those

things. Then we pay per hour as we utilize. All the departments will pay their

own portion of the base fee; we all pay a proportionate share. We pay per hour

as we use it.

MR. LESTER:

Thank you.

Again,

just some general questions in reference to the resource. Regarding the Abitibi

stand, is there any portion of the 285,000 cubic metres of wood fibre once

belonging to Abitibi currently being harvested?

MR. BYRNE:

I'll ask Stephen. That's a

specific question in terms of the former Abitibi limits. Basically, there are a

lot of exchanges that do occur so I'll ask Stephen if he wouldn't mind fielding

that question.

MR. BALSOM:

The traditional operators

that formerly relied on a log supply from Abitibi, Cottle's Island and Sexton

Lumber in particular, at one point had arrangements with Abitibi to purchase

logs straight from their yard in Grand Falls. With the closure of Abitibi,

contractors that formerly worked for Abitibi and also Cottle's Island and Sexton

have been awarded permits in those areas so that they can continue to harvest

the logs to keep their operations going since the closure of the mill.

MR. LESTER:

Would Burton's Cove or

Kruger also have access to this timber stand?

MR. BALSOM:

The pulpwood portion of it

would – there are definitely arrangements, business to business. There would be

pulpwood sales for some of it.

believe there has been a very robust firewood industry that has developed over

the last number of years. I know Cottle's Island has increased its business in

regard to getting into firewood processing and supplying firewood in a more of a

manufactured-type setting as opposed to the older traditional firewood

operators.

I guess

the question is yes, there is a – I can't speak to Burton's Cove, I believe they

rely mostly on business-to-business with Corner Brook Pulp and Paper on the West

Coast.

MR. LESTER:

Okay.

Is the

government still committed to using that timber stand to develop for the people

and the benefit of the industry in Central, particularly Grand Falls-Windsor and

Botwood?

MR. BYRNE:

Absolutely.

One of

the things we've identified, to be able to make sure that the forest industry

not only survives but thrives, is – we know there are many products that come

from a forest lot, from a forest area. There are large sawlogs, there are

regular stud mill sawlogs that would be appropriate for a stud mill. There are

sawlogs that would be appropriate for siding. There's pulpwood and then there's

also debris, there are otherwise unusable materials.

When a

particular operator harvests a block of wood, a block of timber, they get all

four. They get a component of all four, even though they may be only an actual

user of one.

One of

the issues that have been identified is to create greater synergies, to create

greater partnerships and relationships so there is greater exchange. Those who

need larger sawlogs can get access to sawlogs which they don't necessarily cut,

and they exchange. The model here is the Corner Brook Pulp and Paper sawmill

industry exchange, that's the model.

Right

now, a lot of operators will exchange pulpwood. When they saw on their timber

limits they'll take pulpwood that they – they'll cut their sawlogs, which may be

anywhere from 35 to 50 per cent of the actual forest inventory in that

particular allocation, and they'll exchange that. They'll also exchange their

pulpwood for sawlogs that are cut on the Corner Brook Pulp and Paper limits, and

their relationship really works well.

We need

to see more of that interaction between sawmillers, especially in Central

Newfoundland. Getting that exchange so that those who have access to large

sawlogs but only actually need more conventional sawlogs that they exchange it

appropriately with those that do. That's one of the objectives of the newly

formed Newfoundland and Labrador Forestry Association is to create those

partnerships within the sawmilling industry.

MR. LESTER:

It's more of a vertically

integrated industry.

MR. BYRNE:

Exactly.

CHAIR:

Mr. Lester, I have to remind you that you're speaking time or your question time

has expired.

MR. LESTER:

Sorry.

CHAIR:

Ms. Michael.

MS. MICHAEL:

Thank you very much, Mr. Chair.

3.1.03,

Silviculture Development. The salary line here of course shows quite a variation

as well. The reasons could be the same or they may be different than other

salary lines that we've talked about.

MR. BYRNE:

In actual fact, this is not a complete cut and paste. There are 60 positions – a

lot of the variation here between last year and this year, a total of 60

positions have been re-profiled to the newly formed agricultural production and

research facility at Wooddale. That actually amounts to $1.4 million.

As you

may recall, the Wooddale facility, which was always a tree nursery for planting

MS. MICHAEL:

Yes.

MR. BYRNE:

– has now been re-profiled to have a stronger role in agricultural activity. So

while they're still producing tree seedlings at Wooddale, they're also heavily

involved in agriculture. There were 60 positions that were taken from this and

re-profiled into the Agriculture Production and Research division, which you'll

see in another section.

MS. MICHAEL:

Okay, I'll wait then until we get to that to have that described.

Thank

you very much. That does take care of the whole amount – just about the

one-point-something million that you said.

Under

Purchased Services, we're going from slightly over $2 million up to $2.5

million. Why the jump there? There was a jump in the revised figure for last

year. We seem to be maintaining that, but the little bit more added.

MR. BYRNE:

I'll ask Stephen to jump in here, but it's related to an increased requirement

for silviculture activity.

Stephen, if you wouldn't mind explaining just why there's a $500,000 jump.

MR. BALSOM:

The minister is correct; we have been maintaining a level of planting, disc

trenching, scarification, some herbicide work and some pre-commercial thinning.

For a number of years our forest industry has been declining. It reached a

certain point where it had levelled off. We are starting to see some gradual

gains in the forest industry.

The

growth of the firewood industry, we do have some increases year over year in

lumber production from the sawmills. It's slowly increasing the requirement for

Silviculture. We are maintaining a program level of roughly about $2.5 million.

The majority is made up of contracts for planting, but we also do site

preparation. We also do some stand maintenance, pre-commercial thinning and that

type of thing. So that makes up our $2.5 million program.

MS. MICHAEL:

Thank you very much.

Minister, a couple of general questions, I guess. They're both getting at the

same thing.

We all

keep hoping for new industries within the overall forestry sector, new

businesses, especially anything that's going to bring production of some kind

into the province. We had disappointments like the proposed woodchip facility

for Botwood, and then also the collapse of the biofuel – the plant in Botwood,

not collapse of the plant but this deal not going ahead.

Do you

have explanations for this, and can you tell us what other plans may be around

to try to increase growth in the industries?

MR. BYRNE:

I think the good news story of it all is that there is interest.

Traditionally, we view our forest industry as either a sawmill industry or a

pulpwood industry. That's always sustained us and been our base. New technology

does allow for new opportunities, and the new technology, the new opportunities

that allow for a more diversified market for fibre include thermal energy,

chip-fired thermal plants.

remember years ago when I lived in the Roddickton area as a researcher, I

remember the chip-fired energy station that was located in Roddickton which

unfortunately failed. But it failed because the furnace technology, the

catalytic converter, the actual kilns themselves, were not really appropriate,

were not the greatest technology. But also, as I understand it, we were burning

green wood which really just did not work. That can kind of lead you to the

position or view that bio-thermal energy is suspect.

Well,

Stephen and I have done a lot of research. The Northwest Territories now has 10

public buildings that are heated almost exclusively by wood chips. PEI has

facilities now that are heated by wood chips.

So we

can actually create a – many of these projects were for overseas markets. And

again, transportation becomes a bit of an issue when you look at overseas

markets. There is a real possibility, a real opportunity I believe, in

developing a domestic market for chips, for bio-thermal energy. One of the great

things about that is it's a way to utilize our small wood. And pardon the pun,

we have a lot of small wood in Newfoundland and some would argue maybe too much

small wood, but there you go.

Our

entire pulp and paper industry was built on the premise that we didn't have a

huge number of sawlogs. What we did have was three- to five-inch pulp sticks and

that was the basis of our pulp and paper industry. Well, we still have a lot of

small wood and if we can find a source, a revenue stream to be able to sell some

of that smaller wood through chips, that would be a great advantage.

The

other thing that's coming on stream, and it's not a fantasy, is biodiesel. Using

different kinds of technology to extract diesel fuels from wood chips, from

fibre and that I think has strong potential. For example, there's been a lot of

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