May 28, 1996

RESOURCE ESTIMATES COMMITTEE

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

Assembly.

CHAIR (Mr. Canning): Order, please!

Ladies and gentlemen, welcome to the Resource

Estimates Committee meeting. We have with us this morning the Hon. Minister,

Judy Foote, with her new and exciting department, the Department of Development

and Rural Renewal.

Before we get into introductions, we will just go

over how this procedure will unfold. We will have a fifteen-minute opening

statement from the minister. The co-chair, Paul Shelley, will then have fifteen

minutes, or thereabouts, to respond, and then ten minutes for questions and

answers throughout the procedure.

I would ask the minister to introduce her

delegation of bureaucrats to the committee.

MS FOOTE: Good morning.

Fifteen minutes to talk about my department does

not seem like a lot with what we are trying to accomplish as a new department. I

am sure, throughout the morning, I will get lots of questions and I am glad I

brought officials along with me who may have more answers than I do at this

point in time.

To my immediate right is John Scott. John is the

deputy minister for the department. To my immediate left is Gerry Crocker and

Gerry is the budget manager for the Department of Environment and Labour. Being

a new department, of course, we had to call on the expertise in other

departments to pull together the budget for our department. Behind me, to my

left here, is Sam Kean. Sam is the assistant deputy minister for employment and

regional economic development. Directly behind me is Bruce Saunders who is the

assistant deputy minister of Avalon Enterprise Services, and behind me to the

right is Gordon Kane, executive director of the Fisheries and Farm Development

Loan Inc.

As all of you know, the Department of Development

and Rural Renewal is a new creature, one that I am really excited about because

of the potential there in terms of trying to revitalize, not only rural

Newfoundland but other areas as well. When I refer to some communities as rural

Newfoundland it is often said to me: Well, I don't consider Grand Falls -

Windsor, Grand Bank or places like that to be rural. I say, I consider anything

outside the overpass, maybe with the exception of Corner Brook, to be rural

Newfoundland.

What we have tried to do as a department, or what

the mandate has been in fact, is to bring together a number of enterprises that

existed before to consolidate the functions and services of what was Enterprise

Newfoundland and Labrador and its subsidiaries; Fisheries and Farm Loan

Development Board, the Economic Recovery Commission, Enterprise Network Inc., a

crafts division of the Department of Tourism, Culture and Recreation and the

employment branch of what was the Department of Employment and Labour Relations.

So you can see that the focus has been to bring

together those parts of what existed in terms of offering a small loan or loan

portfolios with the management expertise for small business, as well as bring

together employment programs in the department so that we could marry all the

types of services that we can offer to anyone out there in an attempt to try and

generate some employment activity.

The department's three core lines of business are

regional economic development, which focuses on the nineteen economic zones.

Most of you will recall that I spoke to that in my first speech in the House, in

terms of where we were with those zones and what the desire was in terms of

getting them up and running. Part of the difficulty I had coming into the

department was the fact that things seemed to be moving at a snail's pace with

respect to the creation of those economic zones. I think my officials certainly

will concur that things have moved along quite speedily from what it was two

months ago, in terms of the creation of the provisional boards, the performance

contracts and now the establishment of permanent boards. In fact, of the

nineteen economic boards we now have ten permanent boards in place; the

objective being to have all nineteen in place by the end of June. I am assured

that that will happen and I am very excited about what I see as I go around the

Province.

In fact, we had a public announcement for two of

those boards in Labrador and it was exciting to see the enthusiasm there that

has been generated as a result of giving people ownership of these boards and

the economic activity that can take place in those regions. They actually have a

say in what is going to happen. So I think the exciting thing there is that it

is not government any more saying: People, this is how it should be. It is going

to the people and saying: You tell us how it should be. You know what your

strengths and your opportunities are, you know what your weaknesses are and we

think that you have something to offer here. The feedback for saying that is: I

thank you for giving us a chance to fail. Governments have had the tendency to

be the ones to have all the say, and they see this now as an opportunity for

them to take ownership of what happens in their areas. I think that's an

important step forward, for government as a whole, but for Newfoundland and

Labrador as well.

We have, as you know, a lending program within the

department which used to be operated by Enterprise Newfoundland and Labrador. I

guess there were a number of approaches to this and there were a lot of

businesses that would require sums up to, I guess, $1 million and more. I have

difficulty with governments being in the position where they would be approving

loans of that magnitude. I really felt that if we are going with the Department

of Development and Rural Renewal, we should focus on saving developmental money

and look at small or medium-sized business, and be able to provide them with

funding where maybe they will be able to leverage money from other lending

agencies, from banks or ACOA or the FBDBs. I think that approach is one with

which I am certainly comfortable, and from all discussions that we have had, I

think it is going to be a positive, new approach for us to take. I think we have

to be really responsible when we are talking about taxpayers' dollars and I

think we have to be very conscious of what we are doing with the money and

making sure that we are handling it in a responsible manner as well. So we still

have a small business lending program there and again, I say it will be focused

on saving developmental money.

In addition to that, I think the key for us as a

department is to try and generate interest in small business, to be there as a

department to offer expertise and development assistance for anyone looking to

start up a business. I think that is part of our primary role, as well, to be

there for people who want to set up business, to take them through the process

and make sure that any road blocks that they find along the way, we are there to

take them through those. I have heard enough horror stories in terms of people

trying to get something up and running, having to deal with the government

bureaucracy. We have made it a goal to make sure that we are there to take them

through that, to get them through those hurdles, and where we can, to do away

with those hurdles from the overall as well.

We also have a number of employment programs, as

all of you are aware. I had packages delivered to all of the MHAs which focused

on all of the employment programs available through my department. Obviously, as

you can see, some of them are geared to student employment, there are others

geared specifically to women and then there are those geared to the

underemployed and the unemployed. Again, the idea behind the employment

programs, from my perspective, is to try and marry those where we can with the

start-up of new business. It is difficult enough when you are trying to start up

a new business, and it would be nice if we could marry the employment programs

with a business to try and help them get on their feet and, at the same time,

help in the creation of employment for our people which is so desperately

needed.

The other thing that has happened with the

Fisheries and Farm Loan Board, I guess back a year-and-a-half ago, was in fact

supposed to have been joined with Enterprise Newfoundland and Labrador. It

happened but not to the extent that had been the intention, to the best of my

understanding. In fact, I think the intent was to integrate it so that there

would be some cost efficiencies in terms of administration. My understanding is

that that didn't happen. Even though it was taken into Enterprise Newfoundland

and Labrador, it remained with its own administrative arm. What we have done is

integrated it to realize those cost efficiencies. So nothing has changed from

the client's prospective, all that has changed, in fact, is that we will be now

much more efficient in terms of administering all lending programs. We will be

treating everyone the same, whether you are a fisherman or a farmer or whether

you are some other small business out there looking for assistance. In those

cases where we find, because of the difficulty that fishermen are having, in

terms of what has happened with the collapse of the cod fishery, any difficulty

they may have in terms of repaying loans, we will certainly look at on a case by

case basis, as we would do with any of our lending programs.

Now the Crafts division, of course, which again is

a growing industry in this Province, is one that I really want us to focus on. I

think those of us who have had the opportunity to travel throughout Newfoundland

and Labrador know full well that there is a great deal of talent out there. This

is something that we want to encourage and we want to try and make that industry

a going concern in this Province, and one that we want to lend as much support

to as we possibly can, again to get yet another industry up and going in the

Province.

I think right now, those of you that have seen the

Crafts Catalogue that has been produced by Tourism, Culture and Recreation, are

probably well aware of the wonderful products that are available in the

Province. The problem being, that they are available in such a limited capacity

that we really want to look more deeply into production lines and see what kind

of assistance we can provide to craft developers to try and help them get off

the ground.

So that is the department in terms of where we are

coming from and our mandate. I am really excited about it. I think the potential

is enormous. Of course, when I say we have employment programs I guess, in some

respects, we do create employment. I think our larger focus is, in fact, to

create an environment where we can see employment being generated through the

private sector. I think that is where our focus has to be, certainly on small

and medium-size business that we can encourage to set up business in the

Province, whether they come into the Province or whether they are here already,

and thereby create the much needed employment in this Province that is long

overdue.

Thank you, Mr. Chairman.

CHAIR: Thank you, Madam Minister.

If I might just take a couple of moments now: We

should introduce the Committee starting with Humber Valley.

MR. WOODFORD: Rick Woodford, Humber Valley.

MS THISTLE: Anna Thistle, Grand Falls -

Buchans.

MR. MERCER: Bob Mercer, Humber East.

MR. SHELLEY: Paul Shelley, Baie Verte.

MR. FITZGERALD: Roger Fitzgerald, Bonavista

South.

MR. OSBORNE: Tom Osborne, St. John's South.

CHAIR: My name is Perry Canning from Labrador

West.

So, Mr. Shelley, if you want to respond to the

Minister.

MR. SHELLEY: Thank you, Sir. Good morning

everyone. I guess the first thing is to congratulate the minister on her

portfolio, and it is a new and exciting portfolio, as she mentioned, of course,

in her first remarks in the House.

I guess, a couple of general statements to start

with before we get into some numbers and questions and so on; and there will be

lots of questions as the minister knows. I am sure she has a lot of questions to

ask herself. Of course, I will save the best ones for the House of Assembly.

There are lots of information questions to be asked because it is a new, a

challenging and a developing portfolio that everybody in this Province will be

watching. I certainly believe, and I have said it for the two or three years

that I have been here, that rural Newfoundland goes as St. John's goes, because

I agree with the Minister that there is St. John's and everything else is rural

Newfoundland. St. John's goes as rural Newfoundland goes. I believe that the way

out of this problem in our Province is through rural Newfoundland.

Newfoundland and Labrador has to be developed with

the thought that it starts at the grassroots and it builds back into the system.

I believe that is the way it has to go, and I think that is the intent of this

department, to give people in rural Newfoundland a chance to have input and a

real say. I mean we have heard it so many times, and people will say and

complain that: You know, they say they are going to let us be involved, but we

never are. So I think this is going to be the real test, to see once and for all

if we are going to actually let people have a real input and not just pay lip

service to people who have some good ideas.

I would also like for the Minister, and I am sure

every member here - I am really discouraged when I get a young person come in to

meet with me, or phone me, who has a great idea and wants to live in the

Province, as all of us did, we stayed here, and they find that when they start

to develop that idea it falls on deaf ears and they run into brickwalls and the

idea dies; like so many great inventors of our day, I guess, if we do not pursue

the idea. We cannot blame them. I say to them, keep on going and persevere and

hopefully it will develop.

We all know, and the minister made remarks with

regard to it, that lots of times we get caught up in the red tape. I hope that

of all of the things this department can do, that we can take away that red

tape, and when a young person or an older person - but I am talking about young

people specifically now - has an idea, that we give them every opportunity to

develop that idea and they do not get turned away at the door and let that idea

die. We all know what happens next: They move on to greener pastures on the

Mainland sort of thing, although they wanted to stay home.

So I really hope that it is a major goal of this

department. That is for young people, but also for small business. I am also a

believer in that it is not the big Voisey's Bays or the Hibernias that are going

to make this Province. I think it is a lot of small, good things instead of the

big saviours all of the time. I always believed that. Even Hibernia - I can

still remember the first talks of Hibernia to the Peckford Government that: Oh,

if we get the oil everything in Newfoundland is going to be wonderful. I am

hearing it now to an extent with Voisey's Bay. Yes, I am the first one to say,

as the mining critic, that Voisey's Bay certainly should be a big payoff for

Newfoundland if it is handled properly.

Those two questions, first of all, that we have to

answer. If it is handled properly is going to be questionable, and this is a

mammoth project. Second of all, even if it is developed to its full potential I

still don't think it is the full answer to Newfoundland's recovery. I still

believe that the young person who has the idea, who is going to have a solid

business and employ three people for the rest of his life, is much better than a

mammoth project that employs thousands of people for a few years. That is just a

philosophy that I have, and from what I can understand, it is what this

department is all about; that these little businesses and the small people get a

chance to be sustainable for a longer period of time and not just a quick fix

any more. We have seen too much of it in our days. I'm really encouraged to hear

the minister say that they are going to develop small business and focus on that

especially.

Of course, rural development associations: I have

to say that I've worked closely with them in my three years here. They are a

phone call away, they have people at the grass roots willing to do the work, and

what amazes me is that these are all volunteer people who don't get anything,

just the satisfaction of saying: I got a project for a community, or I put ten

kids to work. That was what drove these people, those volunteers, and I thought

it was wonderful. That is why every time I hear about how we are developing with

the zones, it is people who are involved with rural development associations who

are involved with those zonal boards. Apparently, from what I can understand,

Minister, quite a few of them are, which is good, because they are the real

grass roots of the movement in Newfoundland, I think. Never before have we

needed help in rural Newfoundland like we need today.

I'm hoping that this department - and as I say, I

congratulate the minister on it and hope that it turns in the right direction. I

can tell the minister, as the critic for that portfolio - and I've said it to

her already and I've said it to the media in my area and so on - that I'm all

for this department if it continues on with its mandate and goes in the

direction that it is supposed to go, and doesn't get caught up itself in the

bureaucratic red tape and so on.

As far as rural Newfoundland goes, hopefully it can

help it, and hopefully it will break down those walls so that people can fend

for themselves. I tell you, people in my district, and I'm sure all the members

here can say the same, want to live where they are. We talk about resettlement

and forced resettlement and so on, but those little people in places like the

Ming's Bight and Seal Coves of the world, they think they have a nice home. They

want to raise their kids there. They think they can make a decent living and so

on. These are people, by the way, who have travelled to Toronto and Fort

McMurray and so on and say: No, I've been there and I want to make it here.

There is a song by Buddy Wasisname and The Other

Fellers, "Salt Water Joys," that talks about that whole idea. By the way, he

wrote that song because of that. He left and went away to the mainland a few

times and came back and said: I'm going to try it here or I'm not going to make

it anywhere. That is what that song was all about.

Anyway, as far as rural Newfoundland goes, I think

they deserve to live there. I think that this department can help them stay and

live there and survive in rural Newfoundland.

There are a lot of specifics with this and, of

course, it is a new department, so it might get repetitive as far as my asking,

but I need to ask with the numbers, because I know there are things transferred

from the Economic Recovery Commission, the ENL and everywhere. Sometimes you

look at numbers and you see increases or decreases and I realize a lot of times

you will say, or your officials will tell me, that was transferred. So we are

just asking for information more than anything.

First question though I want to ask the minister:

What parts of the Economic Recovery Commission are now transferred into your

department? Could you tell me that?

MS FOOTE: You are right, you will find as you

go through the estimates that there are things in here that would have related

to what was instead of what is. We had quite an exercise to do within, I guess,

four weeks really of trying to restructure a department for the Budget exercise.

We made a lot of decisions, probably not having the benefit of having time to

make them. What you see in front of you, as well, is part of the restructuring

that has taken place to date, but by July 1 our intent is to have all of the

restructuring done within the department. So a lot of what you see now won't

even be the same come July 1. What we are trying to do is have some efficiencies

here.

The Economic Recovery Commission, we kept eight of

the employees, John, is it?

MR. SCOTT: Eight out of twenty.

MS FOOTE: Some of the programs that were under

way in the Economic Recovery Commission that we thought had some merit, rather

than just throwing the baby out with the bath water, we thought we would retain

those and see what their value would be. But a lot of it has gone by the wayside

and we took only eight of twenty employees into our department.

MR. SHELLEY: Can you be more specific as to

what parts came from the Economic Recovery Commission? What came with it?

MS FOOTE: Okay, I will let the Deputy speak to

that. (Inaudible) boards would have been one of them.

MR. SCOTT: There were four functional areas, in

effect, that came forward from the Economic Recovery Commission. The Economic

Recovery Commission was taking the lead in respect of the Regional Economic

Development Board process, and the administration of the Canada-Newfoundland

Strategic Diversification Agreement. That has now been brought into the

department.

The other significant element that has been brought

under the wing of the department is Enterprise Networking, which is the Value

Added Network in support of the boards and in support of rural Newfoundland

requirements and needs.

Another element of the Economic Recovery Commission

that has been retained and is probably very familiar to you all is, the Getting

the Message Out Program and the Ambassador Network. That has been retained and

we are now talking with Industry, Trade and Technology to see how we marry this

in terms of the marketing of the Province and developing that entrepreneurial

climate and enterprising spirit within the Province.

The fourth area that has been retained, in part, is

the responsibility for identifying new business opportunities on the strategic

front, and developing strategies to take advantage of those. For example: The

Dimension Stone Industry was led, in part, in terms of the creation and the

strategy from a provincial point of view, by the ERC. That is now coming into

the department and those types of endeavours will be the responsibility of the

department to co-ordinate.

So those are the four main functional areas that

were viewed as having merit and retained within the department, primarily. There

are dribs and drabs in some other quarters but those are the main elements.

MR. SHELLEY: Thank you. The next quick question

- numbers again specifically - is to do with employment, especially for this

summer. I mean, we need something immediately. I think the minister would agree

with that. What is going to happen very quickly, I guess, as far as programs go,

that could go into effect for June when students and everybody else start to

look for work and so on; besides the student employment program - you can make

comments on that - but employment in general in rural Newfoundland?

MS FOOTE: Yes. I guess, there are about ten

programs altogether and these are available now. Anyone can apply, because once

we went through the Budget process, we knew that we had retained a budget for

these programs. We have an employment generation program which is meant to

create new long-term employment opportunities for unemployed and/or

underemployed individuals. There is over $1 million in that program, and

anticipated new jobs will be about 300 for that. It is done with the private

sector; 50 per cent of the hourly wage rate to a maximum of four dollars per

hour during the initial and final twenty weeks, and the non-profit sector can

also participate in that for $5.68 per hour during the initial and final twenty

weeks. So it is open to both the private and non-profit sector.

We have the seasonal employment program -

WITNESS: With the non-profit sector, by the

way, there is no capital involved, is has all to do with wages and no help with

capital?

MS FOOTE: Yes.

The seasonal employment program: Seasonal employers

create employment during the seasonal periods of operation. Again, that is

targeted to the unemployed and underemployed, and that is 50 per cent of the

hourly wage to a maximum of three dollars per hour that we will put in there.

There is $300,000 in that so that would create employment for about 200 people.

The student employment program, to assist

individuals who plan to attend or return to a post-secondary institution: This

one is the one where we pay two dollars an hour wage subsidy and a tuition

credit in the amount of fifty dollars per week; that is for paid employment. For

community service, there is the tuition voucher up to $1,200 and fifty dollars

per week as stipend. This would be available to 1,280 students and there is $1.5

million in that program.

MR. SHELLEY: Those are the three main ones, I

assume?

MS FOOTE: Yes, we have the SEOP, Strategic

Employment Opportunities Program, as well. That is to create long-term

employment opportunities by directing wage subsidies to industrial sectors.

Again, this is for the unemployed and/or underemployed individuals. Again, from

the private sector it is 50 per cent of the hourly wage rate to a maximum of

five dollars per hour or $10,000 over one year, and it is also available to the

non-profit sector where, in fact, they will get 100 per cent of the wages paid

to a maximum of $10,000 per year. That would anticipate 220 new jobs and there

is over $3 million in that program.

Of course, on top of that we have the conservation

corp which is out there, particularly at this time of the year.

MR. SHELLEY: Okay. You said there are about

twelve, I think, so the rest of them are minor?

MS FOOTE: Well, you have the WISE, Women

Interested in Successful Employment; you have the Linkages Program; and you have

the small Enterprise Co-operative Placement. I put out a press release on this a

couple of weeks ago, that you should have gotten copies of.

MR. SHELLEY: I know about those, but I was just

trying to see what the more immediate ones were, the major ones were.

MS FOOTE: It is a total of $10.8 million in

employment programs.

MR. SHELLEY: A total of $10.8 million, okay.

I have used fifteen minutes. I have more questions

but I will yield to somebody else and come back to them again.

CHAIR: Mr. Woodford.

MR. WOODFORD: Thank you, Mr. Chairman.

On the Loans Program under ENL, the Farm Loan Board

and Fisheries still come under that.

WITNESS: They are all into one.

MR. WOODFORD: They are all into one. I asked

the minister last night the percentages of repayment to the Farm Loan Board and

he did not have it then. I did not realize at the time but - it was because we

were talking about the Agriculture Budget that I mentioned it - you probably

would have some specifics on that this morning. Is it 85 or 90 per cent

repayment schedule, or what, with regards to the Farm Loan Board?

MR. GORDEN KANE: I am Gordon Kane, the

Executive Director of Fish and Farm Loans. With regards to the farm loans, there

are approximately 800 loans outstanding in that portfolio worth $11 million.

There are approximately 290 loans with some form of arrears and the arrears

total $3.2 million. The problems with some of the commodities; there are some

commodities that are experiencing problems with repayments such as the fur

farmers. That is one, for example. For the most part, the majority of the

accounts are active.

MR. WOODFORD: Now I have been told before -

CHAIR: Just as a procedural matter, we are

going to have the Clerk call the first heading.

MADAM CLERK: 1.1.01.

CHAIR: So you can continue with your question.

I am sorry.

MR. WOODFORD: That is okay. I have been told

before by different committees and different ministers that the farm loan part

of all departments, the Farm Loan Board, has one of the highest percentages of

repayment schedules. I mean they are not (inaudible).

MR. KANE: You are correct.

MR. WOODFORD: Pardon, me?

MR. KANE: That is correct.

MR. WOODFORD: Could you give me a figure as to

what total went out last year, the total of the loans last year that went

through the Farm Loan Board?

MR. KANE: The number of loans that were

approved in the 1995-1996 year were approximately sixty loans with a value of $2

million.

MR. WOODFORD: A value of $2 million?

MR. KANE: Yes. That is loan approvals.

MR. WOODFORD: What percentage above prime was

that? What was the interest charge there?

MR. KANE: The interest charged for last year -

as you know, when the farm and fish loan boards integrated with ENL we

harmonized both boards' policies with ENL policies. At that time we started

charging prime plus 2 per cent to be consistent with the rest of ENL loans.

MR. WOODFORD: Prime plus 2 per cent.

MR. KANE: Yes.

MR. WOODFORD: What would be the spending limits

now, for argument's sake, for a regional office? What could they approve locally

without having to go through, say, the St. John's Office? Is it $100,000 or

$150,000?

MS FOOTE: Up to $100,000.

MR. WOODFORD: Up to $100,000. Say, for

argument's sake, in the Corner Brook office, that can be looked after there

without having to go through the provincial committee?

MS FOOTE: Yes. Part of what we are trying to do

with the department is to decentralize and to put more decision-making authority

out in the field, which I think is where it should be. So in terms of rolling

our employment programs out into the field, we are also going to make sure that

they have the authority out in the field to recommend approval of the loans.

MR. WOODFORD: Are they dealing with any retail

at all now, or is it just primarily manufacturing and processing? Is there any

cut with what was there before with regards to lending? Is the retail sector

involved at all?

MS FOOTE: Mr. Scott?

MR. SCOTT: There is no set policy in terms of

excluding any particular sector. The approach taken is to deal with applications

on their own merit. There is, however, an overriding policy imperative in terms

of a competitive factor. If an application comes forward from any sector and the

support of that, in terms of taxpayers' dollars, would offer it an unfair

competitive advantage over an existing business in the same marketplace, then

that would have to be considered in the assessment of the application. That

pertains primarily to the retail and wholesale sector, but we don't have a

policy of exclusion as a matter of course.

MR. WOODFORD: So there is flexibility there

with regards to an applicant, when they do come in, except for the competitive

factor? That has always been there really -

MR. SCOTT: That is right.

MR. WOODFORD: - to a certain extent, although

it has not always been adhered to. So there is flexibility with regard to the

application. They will look at that on its merits and look at the different

areas. I have been told here lately, that certain applications that have already

gone in, that the department had changed its mind with regard to retail sector

and so on. So that is an interesting answer that I got this morning. In fact, it

was only yesterday that I had a constituent call and he was turned down. The

application was only in for a couple of days really. It had something to do with

the retail sector.

MR. SCOTT: I will look into that in terms of

the specifics of where in the Province. There is not a policy in terms of the

exclusion of the retail sector. Given the reduced amount of funding available

and the refocusing on SEED capital and developmental opportunities, then what we

would call maintenance activity in an existing industry or what not,

particularly if it is in the retail sector in a competitive vein, would probably

not be acceptable in terms of that particular area of the Province. Recognizing

that, we have to target our resources to those areas of priority and where the

biggest bang for the dollar can be achieved.

So, the changes that are taking place now, may have

manifested themselves in a perception that there was an exclusion on a retail

basis. Certainly, if any of our staff are giving that impression to you, I would

certainly like to be aware of that, as there is not a policy of exclusion as a

matter of course in that regard. So, sincerely, if any of you are getting that

message from constituents, I would like to know, and I am sure the minister

would like to know. We have been trying to communicate as effectively as we can,

throughout all our regional and (inaudible) offices, what the new approach is,

particularly since the Budget has come down. If there is any confusion out

there, I want to be the first to know.

MR. WOODFORD: Your Sawmill Assistance Program:

Does that still go through your department?

MR. SCOTT: That was administered by Enterprise

Newfoundland and Labrador formerly. In terms of where we go from here, again, in

terms of limited dollars, looking at the priority of being SEED and development

of capital, there is a question as to whether or not it is an appropriate role

for government to provide working capital on a maintenance basis to sawmill

operators or any other type of operator in the Province. What we are

endeavouring to do is, to draw the banks in closer, draw ACOA in closer and the

BDCs in closer to meet some of those maintenance working capital needs. Again,

in terms of targeting to SEED and developmental opportunities, we are, on a

conscious basis, moving away from the pure maintenance type of activities.

MR. WOODFORD: It is one thing to draw the banks

in closer, and ACOA and so on, but it is another thing to have the same

understanding from the banks. Despite what they say publicly and privately, that

they are helping small businesses, as far as I am concerned they are not. They

have not got the same feeling at all for an individual who is - and the

understanding, especially in rural Newfoundland today is that this program, and

I have been associated with it fairly closely, really is the lifeblood of a lot

of rural communities in Newfoundland today during the downturn. To explain that:

In the wintertime a lot of those small sawmill operators, and the bigger

operators today, are not operating in the wintertime; they have a few months

down time. The logger can operate. He can bring in his logs and put them in his

yard, but he has to take it out of his working capital.

It is okay if you are in business and you are

established, you have your lines of credit and you are well known to the banks.

No problem, you can phone down and get a $30,000 or a $50,000 line of credit.

They will say: Okay, we will take your inventory and so on. But some haven't,

and that is where they run into problems, with the banks. By doing that, they

cannot buy. I ran into it this winter. The minister knows full well what I am

talking about, with regards to one. I must say it was rectified, but it meant

shutting down thirty-six to forty-five loggers in my area, because he could not

buy. That was settled and so on, but it is happening all around the Province.

You have other areas in the Province now with the same thing.

I would just, as a word of caution on that: If it

is not going to be continued at least I think there should be something in place

to make sure that we do not have anybody suffering because of that. I know

communities, and I can name them, that only for that they would be history. It

is bad enough now. So just a word of caution on that particular program.

On the economic zones, Minister: You said earlier

in your opening statement that you have worked on those and there are a couple

now in Labrador read to go. How close are some of the other ones to becoming

reality? Because my understanding is that the funding for those development

associations, the administration part of it, from here on in will come out of

the projects that they put in. Is there any truth to that? If not, how will they

survive otherwise?

MS FOOTE: I expect to have all of the permanent

boards in place by the end of June. So it is very much a reality in every area

of the Province. The one area where we are experiencing a little bit of

difficulty, that I hope we will have resolved this week, of course, is down in

Zone 18 where they want to split the zone. Again we are going to listen to the

people and we are going to see how we can accommodate them.

Yes, the rural development associations: As you

know, a decision made under the previous administration was to terminate any

Core Funding. What we have down is the same for Community Futures. They were

both funded to the tune of $5.4 million annually. The problem we were having was

that in addition to RDAs and in addition to Community Futures you also had

Tourism Associations. You had any number of agencies out there coming to the pot

for money and there was only so much money to go around. There were despair

groups and everybody was going in in different directions and there was no

consistency of approach.

What we are hoping to accomplish with the boards,

and my experience to date has been that it has been very positive, is that we

will bring together all of these groups where they will determine what their

priorities are instead of having the RDAs do one and tourism associations do

another. We are trying to get them talking to each other so that there is a

focus in each of the regions.

Yes, there will be funding for the RDAs through the

boards. Again they will have to submit projects to the boards and the boards

will decide, on a priority basis, whether or not it is a feasible project, and

then make their recommendation to the SRDA Management Committee who, in fact,

will ferret out the funding to them. But there is nothing to stop RDAs from,

even now, submitting projects under SRDA. One of the things that I have said is

that I do not want to see economic development stifled in this Province while we

putting the boards in place. Obviously the boards will be coming out with a

five- year strategic economic plan for each of the regions, but that is not to

say that things can't happen in the interim. So all of the RDAs, even when I

spoke in Gander to the Development Council, want to send that very message that:

Look, you can get more than what you were normally getting in terms of your

$36,000 a year Core Funding if you come out with a project that is going to

create employment, hopefully long-term sustainable employment, that can be

funded under SRDA.

They have not been getting the Core funding, as

such, but they certainty can avail of funding under SRDA. I have been

encouraging them to do so, and I recognize a very significant contribution that

the RDAs have made and will continue to make which is why I am really pleased to

see that, I guess, on the make up of the permanent boards, I think it is about

13 per cent of the make up in fact that represents the development associations.

MR. WOODFORD: In 3.1.06, page 99, Older Worker

Programs, have any changes been made in the criteria that one would have to meet

in order to come under that program? If I am not mistaken, you have to have

three layoffs or five layoffs or something like that in a company in order to be

able to -

MS FOOTE: I am sorry, what was that?

MR. WOODFORD: The heading is 3.1.06, page 99.

MS FOOTE: Yes.

MR. WOODFORD: Does that come under - yes, it

does: ... address major permanent layoffs, and so on. What was the criteria? My

understanding was that it was three or five employers, or something like that,

in the company, before you would be eligible for that. Is that not right? When

it came out last year, I had people approach me who said that there were two

people laid off from a company. I remember when Baie Verte was hit with regards

to mining, there were people waiting for it for a long time. I had two and three

- has that changed and what was the criteria?

MR. SCOTT: The program to which you are

referring, outside of the TAGS and NCERP, would be POWA. That is a federally

administered program in which we dovetail with the federal government on a

financial basis. To the best of my knowledge, and we will check this out, the

criteria has not changed in the last year. There are certain thresholds, you are

right, Sir, that have to be met in order for a particular firm or a particular

area of the Province to qualify. I am not certain whether it is three or five

but to the best of my knowledge -

WITNESS: Five.

MR. SCOTT: My ADM has indicated to me five.

That has not changed in the immediate past.

MS FOOTE: Was it M. A. Powell qualified under

this?

MR. SCOTT: Yes.

MS FOOTE: So a company like M.A. Powell would

have qualified?

MR. SCOTT: Yes. As you may know, companies need

to make an application formally to the federal government to qualify and to be

certified under this program, then there is a joint decision taken

federally-provincially and then we make a financial contribution to that. It is

a national program.

MR. WOODFORD: Yes. I have always found that, to

me, a permanent layoff is a permanent layoff, and if a company had one employee

or had twenty-one, he or she was laid off, period. I have had examples of that,

in the area, brought to my attention over the last while, and it is too bad as

far as I am concerned.

Under that same heading, 3.1.06.10, Grants and

Subsidies: It is obvious from the budgeted and the revised, although the revised

is the same, but this year there is a substantial increase in that. There must

have been a substantial increase in applications through this particular

program? Page 99, Minister?

MS FOOTE: Okay, that would be the TAGS Program.

The TAGS Program is about two-thirds complete. Over 1,100 older workers are

being considered for assistance.

MR. WOODFORD: I see, so they would come off

that?

MS FOOTE: Approximately 900 may qualify for

assistance under the older workers program.

MR. WOODFORD: They may qualify under that

particular program.

MS FOOTE: Yes.

WITNESS: (Inaudible).

MS FOOTE: This is 3.1.06, page 99, in the

Estimates.

MR. WOODFORD: 3.1.06.10, Grants and Subsidies.

The bottom line with this is that there is no

change to the criteria and you do not foresee any change to the criteria with

regards to the minimum entry?

MS FOOTE: Part of the problem we have with

these federal-provincial programs of course, is that we are always dickering

with the feds in terms of the criteria. This is one of the things that we are

making some inroads in in terms of our own discussions on all of the

federal-provincial programs, to say: Let's look at this criteria. I mean, it has

to be applicable and sometimes it is black and white when there are greys? We

are saying: We have to be more flexible here. We have struck a committee, in

fact, with our federal counterparts to sit down and look at all the

federal-provincial programs and look at the criteria.

MR. WOODFORD: Yes, because you are in on it

with them but at the same time you have very little - if you want to change

something there is always someone there to -

MS FOOTE: Yes, that's right, that is always a

problem.

MR. WOODFORD: That is okay for now. Let some

other member speak.

Thank you, Mr. Chairman.

CHAIR: Mr. Fitzgerald.

MR. FITZGERALD: Thank you, Mr. Chairman.

Madam Minister, I too would like to congratulate

you on your ministry, I guess, if you would. It is certainly a very challenging

portfolio. As we see the need out there in rural Newfoundland today, and we see

want has happened to our fishery and the lack of hope and despair on the faces

of the residents in all of our communities, I am sure a lot of people are

looking to your department for some hope in allowing them to survive and live in

the place where they have chosen to raise and educate their families.

Having said that, just to follow along on the same

line of questioning as the Member for Humber Valley, who is very knowledgeable

about all of this, in that he was a business person himself; he was a farmer. I

only know of one bad decision he made, but the rest of them I can learn a lot

from, Madam Minister. He talked about the older workers adjustment program

there, PWAP is it, Plant Workers Adjustment Program. Was that the one, where

people could retire? Would there be that many more people now coming off the

TAGs Program and going on to early retirement? You said that was for TAGs, and

we are looking at just about double the amount of money that was put forth from

the revised of 1995-1996, considering that program. When was it they had to make

up their minds? Was it May 15 last year that was the time frame for those people

making up their minds as to what it was that they wanted to do?

MS FOOTE: It is my understanding that was

extended a year.

MR. FITZGERALD: No, that was the extension.

MS FOOTE: That was the extension, okay.

MR. FITZGERALD: That was, guaranteed.

MR. SCOTT: The numbers that you are seeing move

up are the natural growth interims of cash payouts as opposed to a reflection

necessarily of more people being accepted into the retirement program, because

it operates on an annuity basis and you will see these numbers fluctuate from

year to year. Over the next couple of years you will see them grow probably even

further. In fact, this represents the Province's 30 per cent contribution to the

program of which the 17 per cent that the federal government contributes is not

shown in the Estimates.

So as the annuities start to get drawn down and the

cash starts to flow, you are going to see those numbers rise over the years. It

is not a reflection of the program criteria changing or the extension of the

deadline; it is just the natural growth and cash payouts associated with the

decisions that have already been taken.

MS FOOTE: (Inaudible).

MR. SCOTT: That is correct, yes.

MR. FITZGERALD: Going up to heading 2.2.01 on

page 97, Administration - Enterprise Loan Services, 01, Salaries: I see that

reduced to approximately half of what it was last year. Then you move down to

Grants and Subsidies: I can see $600,000 approximately taken out of that

particular heading. Does that tell me that you people are looking at getting out

of the Farm Loan Board and The Fisheries Loan Board. You are cutting back on

your salaries and your grants and subsidies which I would imagine is money put

forth for administration purposes for that particular heading?

MS FOOTE: We are certainly not getting out of

it. It is a reflection of what is happening in terms of the amount of money

available to us under our lending program, and integrating all of it together

there. So it is no particular focus on getting out of farm or fisheries. It is

just the recognition of the amount of money available to us.

MR. FITZGERALD: The Farm Loan Board, you

mentioned I think, was provided now at two percentage points above prime.

MS FOOTE: Above prime.

MR. FITZGERALD: I think that is what Mr. Kane

had indicated.

MS FOOTE: It is the same for all of our

lending.

MR. FITZGERALD: The same thing with the

Fisheries Loan Board?

MS FOOTE: Yes, prime plus two.

MR. FITZGERALD: It is the same thing, okay.

What method of collection are you getting? In light of many of the fishermen out

there today that owe thousands and thousands of dollars to the Fisheries Loan

Board, what are you people doing today to collect money from those people? Are

you going out and taking any material things from them or auctioning it off or

putting the heavy hand on them to collect? Are they going to be allowed to be

given enough time where they can reasonably make payments knowing full well that

you will probably never, ever collect at the end because of the age that they

find themselves, and the situation they find themselves in, as it relates to the

fishery?

MS FOOTE: Part of the problem we have, of

course, is when we are involved with the banks who decide. When the banks have

some money into this and they want to call in a loan, then we have no choice.

When we are involved with them we look at them on a case by case basis, and we

try and work out a payment

schedule that is acceptable to them. When the banks

are involved - John, you can correct me on this - when they call a loan, they

call a loan.

In fact, I looked at one the other day that I

questioned because it was clear that these people were having difficulty because

of what is happening in the fishery. I questioned the fact that we were going to

the bank and recommending that the loan be called in, and went back only to find

out that this particular individual has had a history of not making the

payments, so it was more than just what transpired with the collapse of the

fishery. So we do look at the individual cases, but where the banks are involved

we have very little choice.

MR. FITZGERALD: Some of those loans, and

correct me if I am wrong, have been strictly an agreement between an individual,

a fisherman and government, but in later years the bank became involved. The

fishermen did loans between the three parties, the fishermen, the banks and the

government. Those are the only loans that bank would have access to it, would it

not?

MR. KANE: Perhaps I could answer that one.

MS FOOTE: Yes, Gordon, please.

MR. KANE: There are two loan portfolios with

the former Fisheries Loan Board. There is a direct loan portfolio where

government provides the monies directly. There are approximately 4,000 clients

with $44 million outstanding. There is also a Loan Guarantee Program which

consists of approximately 200 clients with about $40 million also, that the

chartered banks provide the money for and government provides a partial

guarantee. The direct loans are smaller loans, less than $50,000. The Loan

Guarantee Program is a loan program for larger vessels, for loans between

$50,000 and $1.3 million. Just to give you a breakdown on the different

portfolios.

MR. FITZGERALD: Madam Minister, are you looking

at doing away with some of the lending agencies of government? I know that you

have done that in the formulation of this particular department. I have always

had a great problem with people starting up, and I know you believe in small

business. When someone first goes to look for financial help, the first thing

they have to be is unemployed in order to have the time to go and pursue a

business opportunity. When you look at the Business Development Bank, you look

at ENL, you look at ACOA, you look at Community Futures and you look at any

number of agencies there, shouldn't there be one-stop shopping? Does it take

five people to tell you that you qualify for a government loan or a government

guaranteed loan? Shouldn't I be able to go in to one place and somebody be able

to tell me, in a reasonable period of time, that, yes, I qualify or, no, I

don't?

It has always, in my experience with it, and the

phone calls that I get - I mean, Jesus, it is forever. Somebody is going to

Clarenville to see one group of people, then they are in here to St. John's the

next day and back out in Grand Falls another day. It is ridiculous. Are you

looking at doing away with that?

MS FOOTE: I am sure the fact that the member

swore is a reflection of his frustration, and I certainly appreciate that. You

must have sat in on some of our meetings because we had that very discussion

when I first came into the department and with a new deputy, in terms of looking

at what has transpired out there in the past and the history of anyone trying to

access funding in terms of small business or medium sized business loans. Yes,

we are looking at that. Community Futures no longer exist, they are gone.

What we have to try and do is try and bring the

Federal Government on side here as well, because, as you know, ACOA and FEDB,

these are Federal programs. We have had initial discussions with them and found

them to be very receptive, in fact, in terms of sitting down with us and trying

to have not only the one-stop shopping concept, as you described, but to also

look at the criteria that exists to try to make it more palpable for people who

want to come in, and make it more client friendly, you know, versus having to

jump hurdles to try and get from A to Z.

So, yes, I concur with your comments. There can't

be anything more frustrating in terms of trying to start a small business. As

Mr. Shelley said earlier, this whole idea of trying to get people interested in

small business in this Province, we have been doing everything to try and

discourage them, from my perspective, in terms of helping, because we certainly

have not been very helpful.

MR. FITZGERALD: One of the main complaints that

I have had with the EDGE legislation, and I think other people have echoed it as

well - it is a good piece of legislation and it means well, but I think it could

be expanded to include our own people, if you would. When we talk about new

industry coming to our Province here and it creates x number of jobs and spends

x number of dollars, what is so wrong with giving the local business down the

street a $2,000 break from government for each job that it creates, or giving it

some tax breaks if it expands on their business?

MS FOOTE: Are they not eligible if they expand?

MR. FITZGERALD: Not now. No.

MR. SHELLEY: They have to invest $500,000.

MR. FITZGERALD: They have to invest $500,000,

plus they have to have -

MS FOOTE: Okay, with the other criteria as

well.

MR. FITZGERALD: - had so many employees. One

job is very important, and I think if we expanded that piece of legislation to

include those people it would be much more meaningful. Every job is very

important.

MS FOOTE: Yes.

CHAIR: For the Chair's clarification, could I

just ask you a question on that?

MR. FITZGERALD: Yes.

CHAIR: Are you saying that investors within the

Province, if they invest within the criteria that is pointed out in the EDGE

legislation, that they cannot come under that program?

MR. SHELLEY: No, they can't.

MR. FITZGERALD: No. Well, I shouldn't say, no,

they can't.

MS FOOTE: No they can't, no.

WITNESS: (Inaudible).

MR. FITZGERALD: I think they have to spend

exorbitant amounts of money in order to qualify.

CHAIR: Yes, but my point is they aren't

discriminated against on the basis of where they live in this Province.

MR. FITZGERALD: No, no.

MS FOOTE: No, no. That is right. They still

have to meet the criteria.

MR. FITZGERALD: If you create one job or two

jobs then why shouldn't - if I'm down the street with a bakery and I have ten

employees, and next year I create two extra jobs and hire two more people, why

can't I qualify to get a $2,000 rebate from government for each job that I

create, and some of the other benefits that are there now in the EDGE

legislation?

MS FOOTE: One of the areas, of course, that

businesses can avail of, and probably realize the same benefit, are any of our

employment programs that are available to the private sector, in terms of wage

subsidies. Maybe we need to do a bit more in terms of promoting that aspect to

the private sector out there, because they could certainly avail of that.

MR. FITZGERALD: Minister, it was brought up

here last night in the Department of Forest Resources and Agrifoods, and it was

an excellent thought. We talked about vegetables coming in from Prince Edward

Island and coming in at a time when our own vegetables are on the market, and

having them dumped into our Province here. Then when our own vegetables are

completely consumed, up go the prices of the P.E.I. vegetables. Is the Farm Loan

Board considering a plan like it had at one time for the loggers in the lumber

industry, where it would provide funding to stockpile, at that time it was

lumber over the winter months. I think if the same thing that was brought up is

vegetables, carry them over to a season where they could get higher prices. Did

they ever consider that? If not, then I think it is something worth considering.

MS FOOTE: It is a suggestion. We will certainly

look into that, yes. It certainly isn't something that I thought of but

(inaudible).

MR. FITZGERALD: Some kind of an interest-free

loan that would allow them to carry their vegetables over and market them at a

time when they could retrieve much higher prices for them than they do at the

time when they have to compete with those other vegetables.

I have only one other question and I may as well

ask it now. Speaking of small business, there is this one business person from

my district who has made numerous numbers of trips. I think he has ended up now

with so much frustration that he is probably going to throw his hands up and

walk away. He is looking at expanding on a mill operation, a mill operation, I

might say, that the family has been into for sixty-five years and have been

doing very, very well with it. He has this excellent proposal put forward where

he will purchase no more material than he is purchasing now, but he will be able

to extract lumber, if you would, building lumber, from much smaller sticks,

which is pretty well the only thing he can buy on the Bonavista Peninsula

anyway. Instead of using the concept of saws, it is the concept of cutters that

have -

MS FOOTE: Oh yes, okay. Take the rind off.

MR. FITZGERALD: What do you call it?

WITNESS: (Inaudible).

MR. FITZGERALD: No, it is a chipper. It is

knives instead of saws, and the proper name for it is a chipper decanter. Right?

That is the proper name for this particular mill. In addition to what he already

has here, he is putting in something like $140,000 of his own money, and the

banks have been willing to give him $200,000-some, and he is looking for

something like a little over $100,000 from ACOA. He has a proven track record.

The poor fellow has been driven to tearing out his hair. He is after reducing

the size of his business. He is at the point now where he is about to say: There

is no help there for me, I will not be able to employ the twelve people whom

I've put forward here; and he can. His markets are already found. The people who

are involved in buying his product are willing to invest in his proposal as

well. The only thing holding him back is ACOA or ENL. The name of the fellow is

Kevin Sexton, operating as Bloomfield Lumber Company. I'm wondering if you would

be kind enough to intercede on his behalf or to look up the particular file.

MS FOOTE: Sure.

MR. FITZGERALD: Anything you could do to help

him would certainly be appreciated.

MS FOOTE: Yes.

MR. FITZGERALD: Forest Resources has given us

its blessing. It is saying that it is the way that the forest industry should

go. There is absolutely no wastage whatsoever, no bark left behind, no slab, no

sawdust; everything is sold. It is a wonderful concept. It will be the only type

in Newfoundland.

MS FOOTE: Do you know if he accessed funding

before through the department or through ENL?

MR. FITZGERALD: Yes. I think he has, yes.

MS FOOTE: Alright. We will certainly look into

that. Thank you for bringing it to our attention.

MR. FITZGERALD: If you would. Thank you.

CHAIR: Thank you, Mr. Fitzgerald.

Ms Thistle.

MS THISTLE: Ms Minister - I guess that is the

politically correct way to address you.

MS FOOTE: As long as it isn't `Madam Minister.'

MS THISTLE: That's right.

MS FOOTE: It sounds like you run a house of ill

repute.

MS THISTLE: That's right.

Ms Minister, all eyes around the Province are on

you. I believe you have one of the toughest, if not the toughest, portfolios in

this government today.

MS FOOTE: Thank you for putting me at ease,

Anna.

MS THISTLE: From the moment it was announced,

you know I congratulated you, and I said: Everyone around the Province is

putting so much hope in your portfolio, your department, to revive rural

Newfoundland. It is such a tough problem.

I know that a big step forward is the set-up of

those provisional boards and it is going to be a step in the right direction. I

believe those boards are going to exercise a great deal of responsibility and

power in years to come. I don't know. I think that is why there has been so much

of an interest generated in actually finding people to fill those positions on

the board. I know that in most areas now - I think there were about fifty-nine

rural development associations prior to the set-up of the provisional boards. Do

you see a role for existing development associations, independently of the

provisional boards?

MS FOOTE: I certainly do, and that was the

message that I took to them when I spoke to them in Gander. Volunteers of every

stripe and of any organization have a great deal to offer in this Province, and

I don't know where we would be without volunteers, speaking as a volunteer

myself for the past twenty years. They do have a great deal to offer and I've

said this to the rural development associations.

Our difficulty, as a province, is the limited

financial resources available to us to do everything we would like to do. We

have to try and find the best way possible to do the best we can with the scarce

resources that we have. So yes, the rural development associations will continue

to exist. In fact, the ones I've talked to that will continue to exist have made

significant contributions over the years. In fact, a lot of them have investment

potential themselves, in terms of having buildings that they operate so they

have income from rentals in those buildings. You find that those who have made a

significant contribution are in fact doing just fine. They know too that the

boards will be the key in the regions in terms of what happens in the regions,

but they will play a very important role. The proposals they come forward with

will obviously have to go before the boards.

As I said earlier, in fact, I think it is over 13

per cent of the membership of all the boards that are in fact representatives of

the Rural Development Associations. The only other larger representation on

those boards would be the business community. I think it is something like 17

per cent representation. The municipalities, I think, it is 16 per cent.

I think the key here is to have those boards

operating as a business in terms of looking at creating an environment or the

mechanism for creating long-term sustainable employment. So in addition to the

RDAs, in addition to municipalities, and in addition to business, you have youth

represented on the board and you have educational institutions represented on

the boards. So we brought all of the stakeholders together - and you are right,

Anna, when you talk about the enthusiasm that has been generated out there,

because, I think, as we mentioned earlier when Mr. Shelley said that the whole

idea here is that we are letting people decide their future and it is not

government telling them what to do. I think they have stood by for so long and

seen government try and not be able to do anything with it, that they are

saying: We now have an opportunity to do that. So, I am really excited by it.

The fact that you will find in a lot of the areas, people actually vying for

seats on the board, clearly tells me that they are taking this very seriously.

I think what we are doing as a government, too, in

both levels of government, is turning it back to the people and saying: You know

what is best for your area, you know your weaknesses and your strengths; you let

us know.

MS THISTLE: A lot of these development

associations, as you mentioned, are now housed in buildings that they own

themselves but they own them because of government's interjection where they had

administered programs in the past and so on. I know the private sector out there

would probably say it would be unfair competition if provisional boards were to

rent or even buy these existing structures, but in my opinion, where government

originally bought and paid for these buildings, it seems like a sensible and a

logical solution to be able to rent from these associations. What is your

feeling on this?

MS FOOTE: That is a difficult one, as you can

appreciate, because we are always trying to encourage the private sector. We

have had some complaints, in fact, from the private sector out there saying

that, you know, here you have buildings that were constructed with government

dollars and we put up our own buildings. I am sure a lot of even the private

sector buildings were, in fact, built with government dollars at some point in

time. We have been getting complaints that the permanent boards, in terms of

looking to rent space, are getting a preferred deal from the RDAs, where the

RDAs hold buildings.

It is a concern that has been expressed and what we

have said is: You know, we are not at a point where we want to be interfering

here. This is a process, we have turned it back to you, work it out. You know,

if we start intercepting here then everything that comes up, they will be going

to government and saying: Well, what do you think? Can you interject here? So

what we have said to them is: Work it out.

MS THISTLE: Do you see yourselves eventually

being an umbrella where all players can be located, like tourism, your lending

agencies and the Chamber of Commerce? In other words, totally regional business

development centre.

MS FOOTE: You mean the department?

MS THISTLE: Yes. Under this same umbrella, in

other words under the same physical structure, if a person were to come in for,

you know, to make application for a business loan, having all these - I know it

is there is one-stop shopping but -

MS FOOTE: I know where you are coming from now.

In fact, I have had a fair bit of discussion with the Minister of Government

Services and Lands. I have also talked to the Minister of Works, Services and

Transportation. I find that it goes back again to the right hand not knowing

what the left hand is doing. I think we have to sit down and look at the

services that we provide as a government, and instead of having - you know,

whether I would have what was an ENL office out in the field, there is nothing

to stop the employees in that office from handing out electrical inspection

certificates without having the Department of Government Services and Lands put

someone out there to do that. I think there are a great deal of cost

efficiencies that we can recognize here.

I think we can also look at where we are renting

space out around the Province and try and bring it under the one roof. I give

you an example of down in Labrador City - is it Labrador City or Wabush? - where

we have a provincial government building down there that I went into and it is a

dead building. It is the most uninviting building probably that exists. The

potential is there to bring together my employees who work down there. Wildlife,

I think, moved out of there into a house which they should never have done. You

have Mines and Energy down there and you have Government Services and Lands, the

Motor Registration and you have Social Services. I mean we should be able to

bring all of those services together so that people will know that they can go

to the one place and not have to go to five different buildings in a community.

So the potential is there.

I think where we are a new government and we have

these ideas, we are kind of anxious to get moving on them, particularly where

you have new ministers involved. I guess, we have to try and bring this together

and tread softly, in some respects, because all of a sudden you have all of

these great ideas and you do not want to send a message that it has not been

working right; but there are other ways of doing it. Your point is well taken,

we have to become much more client friendly.

MS THISTLE: Regarding small and medium size

businesses in this Province: I know the frustration that the Member for

Bonavista -South just mentioned, coming from a business background. Many times

in my dealings at the Newfoundland and Labrador Credit Union, when people would

come to me for business loans, I often referred them to different lending

agencies of government. It has been pointed out that many times in the past,

through different advisory boards and so on, that the most effective way to

handle a new business client would be actually to take that application and slot

that particular application in as certain type of funding. Then once it is

approved, take that application and do everything that is needed to make sure

that that business is up and running.

Is your department looking at providing some sort

of a champion to do this when applications are received?

MS FOOTE: Yes. In fact, I would say that the

department under the former ENL operation, I suppose, did not do enough of that.

We are certainly refocusing and looking at being there in a consultant capacity

to, in fact, get out into the field and work with people to do just that. I

think we have to stop sitting in our offices and waiting for people to come to

us, for one thing. I think we need to be out there encouraging people,

motivating them and working with them to generate ideas, and then working with

them to take them through the process. So, yes, that is very much an important

part of our focus.

MS THISTLE: Are you looking at probably putting

that type of individual in each of your economic zones?

MS FOOTE: Well, we have sixteen offices around

the Province, and that service will be provided out of those offices; but people

will also move out of those offices out into the areas.

MS THISTLE: I think also, Ms Minister, we

should say that if an application hits the desk that within thirty to sixty days

maximum everything is done.

MS FOOTE: Yes.

MS THISTLE: Because I am dealing with several

constituents now who are experiencing those frustrations.

MS FOOTE: Oh, yes.

MS THISTLE: We need to address them because, as

it was stated earlier by minister - I just called you minister, Mr. Shelley.

MR. SHELLEY: Go right ahead. Keep it up.

MS FOOTE: Next thing he will want my

department.

MS THISTLE: This is one of the most crucial

things to developing long-term jobs in this Province, actually letting people

know that we are in the business of looking for business. So I think that is one

of the most important things that your department should be addressing.

MS FOOTE: Your point is well taken.

MS THISTLE: Thank you.

CHAIR: I think we will break for fifteen

minutes, and have a coffee, if the coffee is ready. The coffee is ready, so why

don't we just take fifteen minutes and come back.

Then, Mr. Osborne, you can begin your questioning.

Recess

CHAIR: Order!

I believe Mr. Osborne is up next with a few questions

for the department and the minister.

Tom.

MR. OSBORNE: One of the questions I have, I guess,

to start with: Under 3.1.09, you make mention of "at risk" individuals. What

exactly are "at risk" individuals?

MS FOOTE: Is that youth?

MR. SCOTT: Underemployed and unemployed.

MS FOOTE: Underemployed. Why don't you speak to

it, John?

MR. SCOTT: This terminology evolves from a federal

policy paper. The Strategic Initiatives is a 50-50 cost-sharing arrangement with

the federal government. This terminology "at risk" is common in the federal

vocabulary. Effectively it means youth who are at risk, have trouble transiting,

if you will, in the vernacular again, from school to work, work to school, those

people who are having trouble adjusting, whether they be youth or otherwise.

Traditionally the unemployed and the underemployed in the federal vernacular are

at risk.

MR. OSBORNE: Thank you.

Also under 3.1.01, Employment Services, you have a

$160,500 reduction in Salaries. I'm just wondering why the reduction in salaries

there.

MR. SCOTT: This reflects an approach whereby we

are going to decentralize our employment services programs to the regions and

our satellite offices. Prior to the department's creation this was an activity

administered by Employment and Labour Relations, which had a centralized

administrative operation entirely. Everything was based in St. John's.

Applications came into St. John's, they got assessed in St. John's, they got

decided upon in St. John's, and cheques were cut from St. John's. We are moving

away to decentralizing all of our employment programs to the extent that we can,

and moving staff and resources to the field.

This drop in salary dollars represents a reduction of

eight people who are currently based on St. John's. Those duties and functions

are going to be absorbed and assumed by our regional staff who you would have

known in their former life as ENL. We feel that there is enough flexibility and

refocusing and re-engineering in the department that we have the flexibility to

administer those programs out where the people are, where the businesses are,

and where the unemployed, the at risk individuals, need assistance. This

reflects a conscious decision to move on a decentralized basis and achieve some

internal efficiencies.

MR. OSBORNE: Thank you.

Under 3.1.02: Would this be the same explanation for

the reduction from $203,500 to $94,100?

MR. SCOTT: Yes, in a sense of internal

efficiencies. But the labour market services group is a policy group that looks

at, for example, new approaches to adapting to labour market changes, whether it

be UI reform or TAGS related issues. We are going to consolidate our policy

development functions in this department in one shot. We now have them spread

over three or four areas. To that extent, it reflects an efficiency by bringing

all our policy people together - and our target date is July 1 - in St. John's

as opposed to a decentralized basis, because it serves a corporate policy

research function.

Again, this is a bit, if you will, of a plug number in

terms of this account. It shouldn't be viewed as a diminution of our commitment

to looking at labour market services functions, but just the way that we are

going to roll it out.

MR. OSBORNE: Thank you.

I guess the only under question I have is under

Strategic Initiatives. There is a reduction from $7,050,000 to $6,750,000 under

Grants and Subsidies.

WITNESS: What page, what number?

MR. OSBORNE: I'm sorry, 3.1.09 again.

MR SCOTT: The Strategic Initiatives program, just

in terms of background, is a three-year $20 million, 50-50 cost-shared program

with the federal government. This year represents the last year of the three

years. From year to year there are some fluctuations in cash flow. This apparent

decline relates to a carry over situation from last year.

From year to year you will have, for example, student

vouchers being carried over from fiscal year to fiscal year. From some years you

have anomalous situations that give rise in the estimates format to an apparent

reduction,

whereas in fact it is just normal cash flow fluctuations from time to

time. The same level of activity in terms of rolling out new employment

initiatives under this has being maintained as against last year.

MR. OSBORNE: Okay. Thank you very much.

CHAIR: Thank you, Mr. Osborne.

Mr. Mercer.

MR. MERCER: Just a couple of questions. As has

been stated before, I congratulate the minister on her new Department of

Development and Rural Renewal, D2R2 as I have heard it affectionately referred

to.

Having been involved in community economic development

for quite some time in my region, we would hope that the new department would

bring to us an ability to allow small businesses to flourish and provide a forum

whereby that can occur.

Just a couple of questions: The first one, I guess, is

kind of a mundane one and it comes from my background in the Public Service.

Looking in the Estimates under Salary Details, I note that in your department

there are five assistant deputy ministers for such a small department. Could you

explain to me where those five are and what their functions might be?

MS FOOTE: This reflects our regional approach, so

that we would have four of those ADMs, in fact, who will be out in the regions.

MR. MERCER: These are the current regional or ADMs

in ENL?

MS FOOTE: That is what was ENL. That is right.

MR. MERCER: They will retain their ADM status in

the new Department of Development and Rural Renewal?

MS FOOTE: Yes, I guess there is one ADM position

with the creation of the department, there is one ADM position that was normally

there.

MR. MERCER: The normal ADM within the department,

okay.

MS FOOTE: My deputy tells me the old department

had eight and we have gone down to four.

MR. MERCER: With respect to the former Enterprise

Newfoundland and Labrador, I was reading recently that some 60 per cent of its

dollar allocations has gone to approximately 12 per cent of its clients in the

form of projects valued in excess of $100,000, which of course leads me to

believe that 88 per cent of the clients which ENL deal with deal with dollar

values less than $100,000.

MS FOOTE: That is right.

MR. MERCER: From my experience in the community,

when you get down to small dollar value projects, ENL has been somewhat - I am

not quite sure of the word. Anyway the small dollar value dollar projects don't

seem to get the same degree of attention as some of the high dollar projects.

Has your department considered allowing other community-based agencies to

perhaps act as an agent of ENL or act as an agent of your department in dealing

with these lower dollar value projects, maybe projects less than $20,000 or less

than $15,000? Have you given that any thought?

MS FOOTE: Can you clarify what you mean?

MR. MERCER: The point that has been brought back

to me many times is that if you go to ENL with a small project looking for

assistance, in the order of $10,000, $15,000, $20,000, while I would suggest

that they should be given the same degree of consideration and due diligence as

say $100,000 or $200,000 projects, the word that comes back to me, and has come

back to me over time, is that these are kind of, not nuisance loans but they are

down in that lower level. There has been some suggestion being made that perhaps

ENL or now your department might give some consideration to having other

community-based agencies, maybe the RED boards, the Regional Economic

Development boards, look at loans in that order of magnitude.

MS FOOTE: Certainly it is not the intention of

this department to have any requests for support, no matter how small the loan

request, treated any differently than any loan request. So I would hope that the

new approach being taken by this department would be different, and that

whatever has happened in the past will not happen in the future. Anyone who is

looking for a loan will be treated with the same level of respect and attention,

no matter what the amount.

Whether or not we would agree to another

community-based agency taking the lead, there are criteria that have to be

applied and certainly we have not given it any thought. In terms of the board's

involvement, I do not know if the board would be in a position to administer

programs. Again, that is something that we would have to discuss with them.

In terms of treatment, I mean, everybody will be

treated the same. So it will be a new approach. If you are telling me what has

gone on in the past is as you presented it, that won't be the case in the

future.

MR. MERCER: Again, pursuing the line of

questioning with ENL, it is also my information that a large number of the

people who actually go to ENL really don't go to look for money, they look for

information. In your new restructured department, how are you emphasizing or how

are you organizing to account for that type of information?

MS FOOTE: That is one of the priorities of the

department, to make sure that we are there to serve clients from an information

perspective. That is, to make sure that we are there or that we get out in the

field to provide the kinds of services they need to enable them to access the

research that has been done as a department, to make sure that they have access

to whatever information they require. We are really focusing on our business

mentoring aspects of the department. In fact, we would like to involve, out in

the field and in St. John's, businessmen with good track experience so that we

can make them available. Even if we have them serving on a board, or however we

want to do this, or in fact serving as council to the REDs, to in fact be there

to help out in cases where people are looking to people with track records and

people who can speak to any problems that they may have encountered.

MR. MERCER: Again, there are centres, like the

Cormack Centre in Stephenville and the Venture Centre in Pasadena, that

specialize in providing that level of knowledge to first time entrepreneurs.

Would your department have any intent, perhaps, of more broadly basing that

information by involving these other groups in that process?

MS FOOTE: The whole idea - and I think that goes

back to the business mentoring concept that we have in mind - is involving

whomever is out there who may have a service to offer in carrying out the

mandate of the department.

MR. MERCER: One last question dealing with the

SRDA. I'm not sure; Strategic Regional -

MS FOOTE: Regional Diversification Agreement.

MR. MERCER: Right on. We have the RED boards, the

regional economic development boards, and we have your department. How do you

see all three interacting in the process of giving approval through the SRDA?

MS FOOTE: The boards are funded, at this point,

solely through the SRDA. There is a management committee comprised of officials

from my department and from the federal government where the approvals are. This

is where you get approval for any project that comes through or any one looking

for funding under the SRDA. Certainly we are working hand in hand. We have

responsibility for administering, along with the federal government, the funding

under SRDA. We also have responsibility for working very closely with the REDs.

So, in terms of consistency of approach and working hand in hand, that is the

philosophy behind the whole concept of the boards.

MR. MERCER: So the RED boards will be funded

through the SRDA. How is funding through that agreement accessed? Who makes

applications to the group, the SRDA, for the funding?

MS FOOTE: When the permanent boards are in place

anyone can, in fact, identify a project they think would be feasible or good for

that particular zone. The boards would look at the submissions to determine

priority in terms of what the board would consider to be a priority for a

region, and then those projects would come forward to SRDA. I can't see any case

where SRDA management committee would say no to a project that had the

endorsement of the REDs.

MR. MERCER: So the SRDA will fund the RED boards,

and the RED boards will in turn recommend projects back to the SRDA.

MS FOOTE: That is right. Have I left anything out?

MR. SCOTT: The intent here is to involve the RED

boards in the assessment of all proposals coming forward to SRDA as a Strategic

Regional Diversification federal-provincial group, whether it come from an RDA,

an individual community, the private sector or whatnot, to ensure that the

initiatives fit the plan of the region and fit the priorities as established by

the RED boards. As the minister said, then it comes forward to the

federal-provincial management committee to endorse. Subject to the resources

available and inter-regional priorities, we can't imagine situations where, if

the homework is done and we have partnered effectively at the early stages of

the game, the initiatives don't come forward. It is a seamless approach to

formulation assessment and approval.

The SRDA, though, must be recognized as a

federal-provincial instrument. The federal government - here we go again, you

know - as a national instrument is not prepared to delegate to third parties in

terms of decision-making authority. What we are endeavouring to do, though, with

the federal government is, rather than all applications come in to ACOA, which

is currently the case because of the federal requirement, is to get our regional

offices and our departments taking the lead in assessing and interacting with

the RED boards such that, the local flavour, the regional perspective, are

achieved in that regard. Then, when it comes forward from an assessment

committee that is based in the field, there is a greater degree of sensitivity

to those needs. We are working with our federal counterparts to try and achieve

that.

MR. MERCER: So presumably, therefore, if a

proposal were to come forward from whichever source and it did not fit within

the Regional, Economic Development strategy for that zone, it might not be

recommended to the SRDA for approval?

MS FOOTE: Don't forget now, the board is comprised

of representatives from just about every stakeholder. So if it is coming from an

RDA, I mean, the RDA on the board would know that that is coming forward and

would have had preliminary discussions with the RDA in the area in terms of what

the chances are of a particular project getting approved by the board. So, you

will have all the stakeholders working with the various organizations before a

project comes to the board.

One of the things we are hoping will happen, of

course, is that the boards in the various zones will work very closely with all

of the other zones, or some of the other zones, so that we don't end up with a

lot of duplicate enterprises coming forward for funding. We don't want to see, I

wouldn't think, that we could possibly envisage, aquaculture projects in every

zone in this Province.

Tourism obviously is a natural. We expect you probably

have, you know, every RED coming forward with tourism projects for approval. We

are hoping that they are going to work very much hand in hand. For instance,

even in the dimension stone that we talked about, you may see that taking place

in one zone and benefiting another. I mean, we have to work hand in hand, with

all the zones working together.

MR. MERCER: Thank you.

CHAIR: Thank you, Mr. Mercer.

Are there any other questions? Mr. Shelley.

MR. SHELLEY: I have a few specific ones, I guess,

and I will try to go through them as quickly as possible.

I just have a few questions and they are mostly for

information purposes, I guess, just on numbers. Probably most of them will be

answered quickly. Some of them I know but I will ask just for the record, or I

think I know anyway.

We will start with 1.2.01, Executive Support,

Salaries. There is approximately a $28,000 reduction there. Is that just a

position that was lost in the Executive Support?

MS FOOTE: (Inaudible).

MR. SHELLEY: Yes, but that would not be $28,000,

would it?

MR. SCOTT: The Executive Support was a difficult

activity to create because we had effectively eight ADMs in the constituent

components of the organization before they were merged. We are down now to five

ADMs. One ADM is being held vacant at the present time and there are some

variations above and beyond that, so that the net effect comes out to be about

$28,000.

MR. SHELLEY: So that was not just one specific job

there, that was a combination of numbers?

MR. SCOTT: No. It is a result of bringing three or

four different disparate groups together in one place and reconciling the

numbers.

MR. SHELLEY: Okay. In 1.2.03.10, Grants and

Subsidies: There was $80,000 there and nothing there now. The question is: What

was that $80,000 used for with the Grants and Subsidies before, that is not

going to be used now?

MR. SCOTT: That was an amount that has been moved

to business clients services. It was erroneously included in here in the context

of Interim Supply. Without making excuses, but to give you a context of how this

was prepared, within forty-eight hours of the minister and I being appointed to

the Department, Interim Supply had it be prepared. As a restructuring

department, some decisions had to be taken very quickly as to where to place

numbers and what not. This was one of the errors made in that forty-eight hour

period and has since been corrected. That $80,000 appears in the Grants and

Subsidies for 1996-1997 under Business -

MR. SHELLEY: So it is there now?

MR. SCOTT: It is under Business Client Services.

It has been moved from this activity, which was not a proper fit, to where it

properly resides, in Business Client Services. I can explain what is in Business

Client Services and Grants and Subsidies for you if you like, when we come to

that.

MR. SHELLEY: Yes, okay. So, it is moved basically.

MR. SCOTT: Yes, there has been a lot of shifting

of numbers throughout this process as we have brought the department together,

and will continue to be over the next period of time. I think once you see the

Estimates for next year there are going to be some very significant changes to

reflect our restructuring.

MR. SHELLEY: So, you really have not had time to

put the puzzle all in place here yet.

MR. SCOTT: Not all in place to reflect the time

lines that had to be respected in terms of the Budget exercise.

MR. SHELLEY: On the next page, with the Business

and Economic Zone Development - I will ask the question anyway, but I assume,

especially in 2.1.02, that that is a major increase, of course, over $5 million.

Was that all to do with the set up of these boards and so on? Could you just

explain it to me? Was that administrative costs? Is that how much that costs?

MR. SCOTT: This reflects a wrapping up of the

regional economic development boards. We are now at the stage where we have our

permanent boards in place, for the most part, right now. All of them, as the

minister said, should be in place by the end of June. They receive, through the

SRDA, operating grants to prepare their five-year strategic plan. We are also

wrapping up on economic initiatives through SRDA.

MR. SHELLEY: Every zone gets the same amount?

MR. SCOTT: No, it is negotiating and paid by need.

It is averaging, in the first year, in the order of approximately $175,000 per

board. Then that serves as the basis of preparing a Strategic Economic Plan in

allowing for them to operate as a board of directors.

MR. SHELLEY: Okay. So the plan that they put

together is going to be related to how much money these boards get?

MR. SCOTT: The plan that they are going to

prepare, in terms of a Strategic Economic Plan, will identify the priorities and

actions for the next five-year period, and that will serve as a basis for

negotiating a phase two contract with them which will be reflected in next years

Estimates in terms of the first year of that five-year implementation plan

period.

MR. SHELLEY: So what I am getting at - I guess, I

just want to get it down to a practical sense. So a board that has a good plan

and has use for certain amounts of money, they would get up to the maximum of,

how much did you say, $175,000?

MR. SCOTT: One hundred and seventy-five thousand

to $200,000. That is just the first year. What we have done is looked at every

single board in the Province. For example, around the coast of Labrador their

travel needs are quite different. They have to charter air craft, or the means

of access to get to a board meeting is different, so they might be in the order

of $220,000 in terms of operating needs. The St. John's board - whose name

escapes me because all the boards have numbers and names now - their needs on a

travel basis would be less, so their budget would have been negotiated in the

order of maybe $150,000 or $160,000. We are really trying to, again, take an

approach that one size does not fit all, that we look at individual needs on

their basis and match up the needs with the resources available.

MR. SHELLEY: Okay. I am just trying to see where

the flow of money is going and how it goes there.

MR. SCOTT: Sure. That is one element of the money.

The other element: There is administrative money for doing the Strategic

Economic Plan and operating the boards that is funded through this, and that

accounts for the numbers ramping up.

The other aspect of this is that under SRDA we have

money for economic initiatives, actually getting projects off the ground out in

the field, whether they be tourism, aquaculture or what not. We are now ramping

up that program and actually getting developmental efforts occurring.

MR. SHELLEY: So what department did you say that's

in?

MR. SCOTT: That is part of the SRDA agreement.

MR. SHELLEY: Yes.

MS FOOTE: It is Grants and Subsidies.

MR. SCOTT: Under Grants and Subsidies. So that

would deal with both the administrative and planning needs of the boards, of

getting the boards operational, up and running, and actually getting

developmental activity underway in each of those zones through SRDA.

MR. SHELLEY: So when they come up with the

projects then they apply, such as a tourism project or whatever; then they go in

through that?

MR. SCOTT: Correct.

MS FOOTE: That funding that the boards would get

will have nothing to do with economic initiatives. It is to develop their

five-year Strategic Economic Plan and enable the board to meet on a regular

basis.

MR. SHELLEY: Okay. Go back up then to 2.1.02.

Maybe you can elaborate then, John, on what you were talking about. In 2.1.01

again, Grants and Subsidies went from $321,000 last year to $635,000. So is that

what we talked about earlier, about the transfer?

MR. SCOTT: Yes. Let me just give you an outline of

what's in there. Let me find the right spot first. In Grants and Subsidies we

have, in the combined councils' annual meeting for Labrador, $35,000. We have

$100,000 which flows in the form of a grant and subsidy to two incubator malls

in the Province, one in Port Aux Basques and one in Pasadena. That level of

activity and subsidy has been in place for a number of years and allows them to

provide continuing service, although the Port Aux Basques mall is currently

closed.

In addition, we have $500,000 in the Grants and

Subsidies in this activity under a cost-shared agreement with the federal

government to support craft development. The federal government contributes

$350,000 and the Province contributes $150,000. That is for a variety of

purposes in terms of marketing, preparing their annual catalogue of material for

sale, for looking at new markets, for development of services, for testing new

ideas, and the like. That is administered federally and provincially.

MS FOOTE: That would have been part of Tourism,

Culture and Recreation's budget last year?

MR. SCOTT: That is correct. So that would account

for the large rise and the apparent increase in the budget again from the whole

restructuring exercise. That is what comprises that $635,000.

MR. SHELLEY: The next one in 2.1.04, Business

Development Initiatives. That is all under Professional Services. It is almost

cut in half, basically, from what we budgeted last year. So could you just -

MR. SCOTT: Yes. In the Economic Recovery

Commission there was a business development group who had responsibility for

looking at new opportunities in the economy, whether it be dimension stone or

otherwise, and they used to retain external assistance and hire people on

contract to work through that with them. They also had, under this program - and

I must acknowledge to you, it is a matter of how they have identified the

initiatives. The Getting the Message Out Program and the Ambassador Program were

budgeted under this heading. The drop in monies here reflects the fact that the

ERC is now dissolved. We have brought a lot of activities into the mainstream of

the department with existing resources. We are still continuing with the GMO and

the Ambassador Program, and we are finishing up some work of the ERC initiative,

so it is just not tossed to the wind, where we thought it had merit. That

accounts for the drop.

MS FOOTE: Two hundred thousand of that is the GMO

and Ambassador Program.

MR. SCOTT: Yes, approximately $200,000 is devoted

to that effort.

MR. SHELLEY: In 2.2.01, Administration -

Enterprise Loan Services, Grants and Subsidies again, a $500,000 decrease.

MR. SCOTT: You really need to look at the

1995-1996 original budget at $2.7 million, because one of the programs that was

terminated as a result of the expenditure reduction exercise last December, and

carried forward this year, was the $1.3 million Interest Forgiveness Program for

the Fisheries Loan Board. Again with some ups and downs on that number, when the

decision was taken last September, it reconciles with the original budget of

$2.7 million.

As well, this Grants and Subsidies, what you see

remaining in 1996-1997, is an interest subsidy on what I would call old loans

under the Fisheries Loan Board.

MR. SHELLEY: Yes.

MR. SCOTT: There was a program in years gone by

where there was an interest subsidy of prime less two or three points. We

entered into contracts with fishermen at that time for that level of support. So

that level of subsidy continues for the term of the loan. The cost is basically

$1.073 million this year. The cost varies from year to year to the Province

because of interest rate fluctuation. It is not a fixed term lending rate.

MR. SHELLEY: Of course, 2.2.02 - I have to ask

that question, when you see that much of an increase. Just for the record again:

Loans, Advances and Investments, going from $2.5 million up to $8.1 million.

That is in 2.2.02.

MS FOOTE: Is that $14 million down to $8.1

million?

MR. SHELLEY: Oh, I am sorry, $12 million down to

$8 million.

MR. SCOTT: That again reflects the refocusing of

moving away from the larger forms of business support, the $1 million deals, to

the focus on small and medium size business in terms of Seed and developmental

funding again, rather than maintenance activity.

MR. SHELLEY: Employment Programs: I got that one.

In the Youth Employment Strategy, there is a decrease in Information Technology.

Why is that and what is it? It started at $68,000, went to $43,000 and now to

$15,000. What specifically are you talking about; Information Technology with

Youth Employment Strategy?

MR. SCOTT: Information Technology is the internal

maintenance of computers and computer networks. This program has matured to a

point where we can integrate it with other activities of the department and

achieve some efficiencies. There is no diminution again of program activity or

access in terms of the five offices that function under this program; it is just

a matter of achieving more efficiencies over a period of time. The program, I

think, is in its third year now and there has been a learning curve and a

relatively higher developmental cost to get it up and running, than a normal,

ongoing maintenance requirement. So it simply reflects that type of evolution.

MR. SHELLEY: Okay. The Older Workers Program,

POWA, worked very well in my area, but I will make a comment on that, by the

way. The miners, although they are straightened away, I guess, by now, but there

were a lot of problems with that, especially communicating with the federal

government on that. They were tied up for a long time. People out of work - I

will give the example of the man who worked for thirty years in that mine and

finally had to turn to social assistance for the first time in his life, you

know, waiting for this POWA program to come through. So I think we should really

look into the problems with that as far as expediting the process so that people

don't have to turn to welfare if they were working for thirty years, waiting for

a program like this to come on stream. It is okay now, and I must say that

people are pleased with it.

Okay. I have a couple more specifics but, I guess, I

will say a couple of things to the minister. First of all, I wouldn't be able to

leave this meeting without saying this, and this has to do with Copper Creek

Mountain in Baie Verte. Of course, I have been mostly on the provincial scene

here, but I don't mind if you take it as a plug; it is a plug.

The Copper Creek Mountain - and I will get back to it

as an example for the Province because I was a big part of the community, not as

a politician, some five years that started that. We actually went over and cut

the trees ourselves. Of course, we had a co-operative formed where a

seventy-five-year-old woman across the street was the first one to put in her

$200 and say: I will do anything to help out. That is the attitude, I think,

that needs to come through rural development. Of course, its first year was

fantastic.

I mean, this is not a mega project, it was $1 million

project and we had 13,000 visitors to that little mountain out there in the

first year and it was fantastic for the community. Of course, this year there

were plans for more and I know we would have broken that record with a small

amount of money, in particular to development. What it did for Marble Mountain,

and you can ask the people at Marble Mountain - I think we had something like

600 children who had never skied before who tried it at Copper Creek and then

went on to Marble Mountain. It enhances those projects.

So with that small amount of money - they now have a

small loan with ENL but I think they are going to need some help. I talked to

the best expert on weather that I could talk to and what happened in Baie Verte

this winter you won't see it for another sixty years. It was my mother who told

me that. She hasn't seen it in sixty years out there. We are the snow belt and

that is why I have always pushed for a ski mountain in Baie Verte to be honest

with you. We get more snow than Corner Brook usually. I don't think you will

ever see that happen again.

So I am going to ask the minister here, on the record

today, to looks at that particular loan with Copper Creek Mountain. I think what

we have saw this year, and everybody would agree, is weather that we won't see

again for a long time. That project is not just for the Baie Verte area but is

an example for anywhere in the Province of a community getting involved in

pushing, not a mega project, but a small project that gave some good benefits to

a lot of people, including Marble Mountain and so on. It enhances tourism in the

Province. So I would ask the minister to look at the loan situation with Copper

Creek and make sure that we get off the ground next year, and that this winter,

the strange winter as it was, won't be a deterrent to that. They are a great

group of people out there, I can tell you. They are volunteers and have done a

lot of good work out that way.

I want to put that in and then I want to finish off by

saying that I look forward to this department unfolding, Development, yes, but

Rural Renewal is the one in which I am really interested, because I am a firm

believer in rural Newfoundland and living there. I will be constructive in my

criticisms to the minister, and I have told her that, and I will co-operate when

I need to co-operate, but I will also raise concerns and hold the minister and

her department accountable. I think that is only fair to say. I am excited and

interested in seeing how it will unfold. I tell you, we need it and, as the

Member for Grand Falls - Buchans said earlier, we need it now, more than we have

ever needed it.

Voisey's Bay, as I said earlier, and those type of

things are fine, and I will be there, hopefully, to ask the right questions on

those, but I really believe it is in the small towns of Newfoundland with small

businesses and small people, who build a strong Province. I will be watching for

that to happen. So good luck to your department.

MS FOOTE: I appreciate your comments, and I would

not expect you to be anything other than constructive in your criticism. Thank

you.

CHAIR: Thank you. Are there any other questions?

On hearing that, I would say that Mr. Shelley is

always articulate and determined and a great supporter of Rural Newfoundland and

Labrador, in particular, Rural Renewal as it applies to your ministry.

I have noted that it is 1.8 per cent of the budget. It

is the largest ministry of the resource sector. When Paul quoted the song, I

thought about Anne Murray's Song, `Give Me A Little Good News Today', and

perhaps that is what he may be in the business of doing. Now as was expressed by

committee members, there is a fairly high expectation of this ministry. I have

also heard that you have to be active with the federal agreements, and I know

you to be a very active person in Ottawa.

So we have here a great new department, a bright and

competent new minister, and a bright and competent deputy minister with equally

competent officials.

So I will ask the Clerk now to call the Headings.

MADAM CLERK: Subheads 1.1.01 to 4.2.02

inclusively.

On motion, subheads 1.1.01 through to 4.2.02, carried.

On motion, Department of Development and Rural

Renewal, total heads, carried.

CHAIR: We will reconvene in the Committee Room

this evening at 7:00 p.m. for the Department of Fisheries and Aquaculture.

On motion, Committee adjourned.