April 19, 2005 GOVERNMENT SERVICES

COMMITTEE

The Committee met at 7:00 p.m. in the House of Assembly.

Pursuant to Standing Order 68, Anna Thistle, MHA for Grand Falls-Buchans,

replaces Wally Andersen, MHA for Torngat Mountains.

CHAIR (Manning): Order, please!

Good evening, everybody. We will get the meeting underway. First of all, I

will ask everybody to introduce themselves. I would like to remind everybody,

when you are asking a question or answering a question, you have to wait until

your mike is turned on in front of you and then you identify yourselves so that

the people recording this for history will be able to keep track of who said

what, when.

We are going to do the Public Service Commission first, followed by the

Department of Finance following that.

I am going to ask everybody to introduce themselves, or the minister can

introduce his staff. We will start up here for the purpose of recording.

My name is Fabian Manning, MHA for Placentia & St. Mary's, Chair of the

Committee.

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

MR. LANGDON: Oliver Langdon, MHA for Fortune Bay-Cape la Hune.

MS THISTLE: Anna Thistle, MHA for Grand Falls-Buchans.

MR. ORAM: Paul Oram, MHA for Terra Nova.

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

MR. SKINNER: Shawn Skinner, MHA for St. John's Centre.

MR. SULLIVAN: Loyola Sullivan, Minister of Finance and President of

Treasury Board, and also the Minister Responsible for the Public Service

Commission.

MR. PADDON: Terry Paddon, Deputy Minister of Finance.

MR. SAUNDERS: Earl Saunders, Director of Debt Management, Department of

Finance.

MS DEVINE: Sheila Devine, Chair of the Public Service Commission.

MS KEOUGH: Diane Keough, Director of Communications, Department of

Finance and Treasury Board Secretariat.

CHAIR: Thank you.

If the minister has some opening comments, then we will open the floor for

questions.

We will call the heads of the Public Service Commission.

CLERK: Subhead 1.1.01.

CHAIR: Subhead 1.1.01.

That is it. Is that it?

CLERK: Yes, they just debate under that.

CHAIR: Under that heading, yes.

Minister, the floor is yours.

MR. SULLIVAN: Thank you, Mr. Chair.

I am going to keep it down to no words in the Public Service Commission other

than to say the Public Service Commission is operated arm's-length from me,

and I have allowed it to do just that.

I am going to have Ms Devine then handle anything in that specific area

there. If there is a question you want to direct to me, I will certainly take

that, too, unless there are any opening comments you would like to make.

CHAIR: Are you finished, Mr. Minister?

MR. SULLIVAN: Yes, Mr. Chair.

CHAIR: We will let Ms Thistle have the first questions, and we will do

that for fifteen minutes or whatever you want, and then we are going to pass

back and forth for ten and ten. If anybody does not have a question, we will

just go back and continue on that way, okay?

The floor is yours, Ms Thistle.

MS THISTLE: Thank you, Mr. Manning.

I would just like to go over some of the lines in the Public Service

Commission first. Then I have a couple of questions for you, Ms Devine.

I know that you have budgeted roughly $2 million for salaries and there was

only $1.7 million used up. Can you explain what happened there?

MS DEVINE: Nine hundred thousand dollars of our salary budget is

allocated for what used to be called the Graduate Recruitment Program, and it is

now the Internship Program. For the past year, not all of that money was

expended. There was a hiring freeze in place. The Graduate Recruitment Program

is being restructured to be more in line with human resource planning in

departments. Subsequently, there were very few hirings in the Internship Program

during the year.

CHAIR: Just a reminder, for recording, before you answer you should

identify yourself.

MS DEVINE: (Inaudible).

CHAIR: No problem. We won't throw you out or anything for it.

MS DEVINE: Thank you.

OFFICIAL: The mike is not turned up very well.

MS DEVINE: Okay.

OFFICIAL: You might have to move in. That mike is weak anyway.

MS THISTLE: Now we are in business.

CHAIR: Are you wired up?

MS THISTLE: Wired up and ready to go.

MS DEVINE: Would you like me to comment again?

CHAIR: Would you like her to repeat her answer?

MS THISTLE: Yes, that would be good. I really only heard part of it.

MS DEVINE: Okay.

A substantial portion of the Public Service Commission salary budget is the

$900,000 that is dedicated to what used to be the Graduate Recruitment Program

and it is now being transformed into the Internship Program.

Due to a hiring freeze during the past year, and the restructuring of the

program, not very much of that money was expended. Some of the money was

expended, of course, to support some of the graduate recruits who are still

remaining on the program, but there was not very much hiring done at all within

the Internship Program.

MS THISTLE: What is the Internship Program?

MS DEVINE: It is an initiative to bring young professional people into

the Public Service to fill what would be some of the hard-to-fill positions

within the Public Service.

MS THISTLE: In other words it is the same as the Graduate Recruitment

Program by another name, is it?

MS DEVINE: The Graduate Recruitment Program is intended to bring in

generalists, highly educated generalists who could move around from department

to department, agency to agency, and move up through the organization, I guess,

diagonally. The refocused program will look more at the gaps that are going to

come within our public service over the next two to five years and attempt to

hire people specifically to fill those hard-to-fill positions.

MS THISTLE: Are you saying that there were no graduates hired in last

year's budget for this program?

MS DEVINE: No.

MS THISTLE: Were there any hired the year before?

MS DEVINE: Yes, there was one.

MS THISTLE: Was that a government policy, not to hire any last year?

MS DEVINE: There was a hiring freeze in place which impacted the program;

however, the majority of the reason was due to a restructuring. As well, what we

were waiting for was departments who are in the process of doing human resource

plans. We wanted to make sure that, because the focus of the program is on hard

to fill, that we were very specifically targeting positions that departments had

identified as hard to fill.

In addition, departments were going through program renewal; so, in some

cases, identifying hard-to-fill positions was difficult for them. So, while we

had lists of hard-to-fill positions, there was a lot of negotiation with

departments as to what they really wanted to fill, and when.

MS THISTLE: When the program was first introduced it was called the

Graduate Recruitment Program. I know it very well. I was the minister who

introduced that program.

MS DEVINE: Yes.

MS THISTLE: We started off with five per year, and it went up to fifteen

per year.

MS DEVINE: Yes.

MS THISTLE: How many are you hiring this year?

MS DEVINE: This year the funding has remained intact. The $900,000 is

there. Depending what we get from departments, we even envisage probably hiring

ten to fifteen people. Now, again, that is dependent on confirmation from

departments as to what they consider to be hard-to-fill positions.

Our experience with the Graduate Recruitment Program has led us to believe

that really the program needs to focus on the gaps in the system so that as

people are hired there are definite positions that they can be allocated to.

MS THISTLE: So, out of the original people who were hired into that

program, how many are remaining today?

MS DEVINE: We still have twelve who are funded from the Graduate

Recruitment Program, from the old program. These are very competent, highly

educated, professional people who have done very well in the various positions

and work they have done in the public service but they have not been successful

in securing a permanent position within the public service. That has been the

lesson, I guess, for the Commission in terms of trying to restructure the

program so that people at the end of the day get jobs.

MS THISTLE: What is the problem? They are well qualified. Is it that

government does not have jobs for them?

MS DEVINE: There certainly are not as many jobs as we would have hoped

for when the program first began. As well, it is highly competitive within our

public service at this point in time. Every position draws numerous applications

for people, so it is highly competitive. These are young people with not a lot

of seniority. They are not in the bargaining unit, so they do not accrue

seniority. It has been very difficult for many of them to secure permanent

positions.

MS THISTLE: When the funding was not allocated for that program last

year, did the public service or government decide to let go the ones who were in

the program?

MS DEVINE: No, the twelve people who still remain in the program have

been retained, but certainly our discussions particularly with the Treasury

Board Secretariat and departments have said to us we really need to make a very

concerted effort to try and help these young people obtain permanent positions.

MS THISTLE: From the knowledge that I have -

MR. SULLIVAN: Maybe if I could just add a point of supplement - but I am

certainly content to let Ms Devine carry on - I think a point I should probably

mention of pertinence is that in 1999 to 2001, during that two year period,

there were thirty-four people hired into the program, and the goal is to move

all of these and hopefully land jobs in the public service and use these people

with skills to fit in there; but, out of those who were hired between 1999 and

2001, four years later, twelve out of the original thirty-four still have not

landed in those positions since 2001. Some of them came in 1999, some in

2000-2001, in that two year period, or three if it overlaps. I think it is a two

year period. Out of the thirty-four, over a third since then, in the last five

or six years, have not gone into the public service. So, putting people into a

program to put you into the public service, we still have twelve that we have

not put in there, so do you put another five or six on top of that and you have

not...? That is the goal of the program, to enable you to take a job and become

a member with certain skills and get in there. It depends on, I guess, the

competition for those jobs, and if those people have the skills equivalent to

someone else who may apply for that position.

That is something that has being going on, I say to the Member for Grand

Falls-Buchans, since 2001. We have not been able to put these in there. Even

though they might have been new coming in, the funding was still there, and

still for four years now there are still a dozen who have not gotten in as a

result of that. I think it was pertinent to give a perspective on it.*

MS THISTLE: From what I know of the program there were thirty-four

originally hired and, as of January of this year, there were twenty-five

remaining in the program. You are telling me today that there are twelve? What

happened to the others?

MS DEVINE: Most of them would have secured alternate employment within

the public service.

MS THISTLE: From January to today?

MS DEVINE: The number that we have been funding, that we are carrying to

this budget, is twelve.

MS THISTLE: Twelve?

MS DEVINE: Yes.

MS THISTLE: My sources tell me that there were twenty-five in January of

this year. Were any of these let go before the end of March?

MS DEVINE: No. Certainly, there were people who did not remain in the

public service, but that was probably two or three people who exited the program

to take alternate employment.

MS THISTLE: Would you be able to furnish me with accurate numbers as of

January, and as of today, and would you be able to tell me how many departed

from that service?

MS DEVINE: Yes, I can give you the breakdown of what happened to the

thirty-four people.

MS THISTLE: My understanding is that in 2003 there was one person hired.

MS DEVINE: Yes.

MS THISTLE: I would appreciate those numbers.

That program is under another name now. It is still on the radar screen as

being called the Graduate Internship Program.

MS DEVINE: The Internship Program is the name now. In actual fact, I

would suspect when the review of the program is completed it may even have

another name. Certainly, the original people hired under the Graduate

Recruitment Program, the funding is still there for those people and they

continue to be funded.

MS THISTLE: How do people apply for this program now?

MS DEVINE: What the Commission will be doing is, as hard-to-fill

positions are identified, we will be working with the departments, we will be

working with the Treasury Board Secretariat, to identify what the vacancy would

be, what the requirement would be, and how best to go about attracting someone

to that position.

The revised program, I would expect, will not only include people outside the

public service but be available to people internally within the public service.

That was one of the criticisms - strong criticisms - of the earlier program.

MS THISTLE: So, what you are telling me, this is not to entice new

graduates. You are not opening it up so that all new graduates can apply for

this program. You are saying that you are going to identify a need in a

particular department where there may be an opportunity for this type of an

internship program to work and then you are going to advertise it within the

public service?

MS DEVINE: It will be advertised within the public service but also be

open to people outside because we expect many of these - the definition: hard to

fill, generally means to a department that there is nobody they can identify,

either within their own department or probably within the whole public service,

likely to go into that kind of position. We are generally talking about fairly

specialized positions where the department can anticipate, either through

training or through other means, it is going to be very difficult to have

someone within the public service go to that position. The position might be,

for example, a veterinarian.

MS THISTLE: I guess your requirements have changed because the idea

behind it, initially, was to take bright, young people -

MS DEVINE: Yes.

MS THISTLE: - graduating from our universities and colleges and groom

them for public service opportunities, careers; not necessarily those having

experience, the ones that had a good resume and filled all the requirements of

being the ideal candidate, or some of the people who are sitting there in your

front row, like yourself, tonight. Now you are going to let that opportunity be

available to anyone in the public service. They could be in their forties or

fifties, instead of taking that young person right out of college or university

and grooming them for a career and giving them opportunity as a government. Is

that what you are telling me?

MS DEVINE: The internship program will work hand-in-hand with the human

resource plans that are happening in departments, whereby departments are trying

to anticipate their future human resource needs and work with their own staff to

develop them, mentor them and bring them forward within the public service. The

internship program is intended to augment that and, I would anticipate, would

very likely attract primarily people graduating from university, young

professionals who might not otherwise have a chance to get into the public

service.

We were very concerned however with the other program, that we did restrict

the competition. There were a number of very bright, young professionals within

the public service who were very interested in moving outside their own

department, participating in an internship program and advancing in that way

within the public service.

MS THISTLE: Well, I guess what it amounts to is a shift in policy. That

is what it amounts to. There is not the same thrust on getting young people

right out of college or university to begin a career within the public service.

You are opening it inside and outside, your advertising. I wanted to know that

because it appears that there is a shift in policy.

What I would like to have from you, Ms Devine, is a list of how many people

were in the program; how many people actually secured jobs, and in which

departments they secured jobs; how many were there in January, 2005, and how

many are there today?

MS DEVINE: Yes, no problem.

MS THISTLE: Okay. Good. Thank you.

Can you also tell me, Ms Devine, have there been any cuts to the Public

Service Commission with your regular staff complement over the past year?

MS DEVINE: There have not been cuts. The Public Service Commission does

carry a number of vacancies within its own staff, but these are vacancies that

the Commission has carried for the past couple of years.

MS THISTLE: Was there a freeze on transportation last year for public

service employees in training or whatever, because I notice that the

Transportation and Communications budget was not used?

MS DEVINE: The fact that the full budget was not expended was the fact

that the Commission made a very conscious effort to be prudent itself in terms -

as it always does, but we made a very special effort last year - of looking at

our transportation budget.

As well, I would note that some of the committees that are normally in place

at the Commission, namely the Classification Appeal Board, did not operate for a

number of months and, of course, there were savings there when that accrued.

MS THISTLE: I have to say that, Ms Devine, we are getting complaints from

workers and different groups saying that many of their appeals have not been

heard and they have been delayed. Are you going to shift that focus for this

coming year and clean up on those delays?

MS DEVINE: In actual fact, the Classification Appeal Board, since it was

reconstituted has made significant progress. The number of appeals at this

point, as of the end of March, is down to 775. That is still a very significant

number of outstanding classification appeals. However, it has significantly

improved from the year previous.

MS THISTLE: I would also like -

CHAIR: Excuse me, Ms Thistle. Your time is up for now. I may be back to

you in a second.

Any questions? Mr. Langdon?

MR. LANGDON: (Inaudible).

CHAIR: Okay.

Back to you, Ms Thistle.

MS THISTLE: Thank you, Mr. Manning.

I would like to ask you, what professional services were undertaken under .05

last year to increase your budget by $70,000?

MS DEVINE: The Employee Assistance Program, which draws from that

particular budget, expended about $140,000, which is in excess of what is

normally spent from that program. The remainder of that budget was spent on

consulting services to staff senior executive positions that the Commission was

asked to complete by government. There were approximately twenty-four senior

positions that the Commission was asked to chair and complete competitions. For

some of those senior positions the Commission used a recruitment firm, an

outside consulting recruitment firm.

MS THISTLE: Ms Devine, the take up in Employee Assistance plan, $140,000,

how does that compare to the previous year?

MS DEVINE: It would have been up, generally, by about $10,000.

MS THISTLE: What do you account for that difference?

MS DEVINE: The EAP program is making very strong efforts to promote

throughout the regions. It has been doing that for the past couple of years, but

more and more it is doing that. So, certainly that has been a very significant

factor. Every year, for the past five years, the take up on the Employee

Assistance Program has been going up. I would put that down as one of the main

reasons why the expenditures would be higher.

MS THISTLE: Would you attribute any of those increases to the recent NAPE

strike last year and employees having more difficulties?

MS DEVINE: Certainly any time there is stress or turmoil within the

Public Service the take up on EAP services increases.

MS THISTLE: Would you also elaborate on what executive positions the

Public Service Commission was involved in for hiring? Would that have been for

the - well, you tell me.

MS DEVINE: The positions were Deputy Minister, Natural Resources; ADM,

Communications; Chief Information Officer, Executive Director, Labrador West;

Deputy Minister of Labrador and Aboriginal Affairs; four CEOs, Department of

Health; four executive directors, CEO, school boards; ten assistant Executive

Directors, school boards.

MS THISTLE: Okay. Will you be able to give me a list of those?

MS DEVINE: Yes.

MS THISTLE: Thank you very much.

I am finished my questioning now with the Public Service Commission, Mr.

Manning.

CHAIR: Okay.

MS THISTLE: Thank you, Ms Devine.

MR. SULLIVAN: Mr. Chair, just to finish one of the questions that was

asked before we move from the Member for Grand Falls-Buchans - just a point to

supplement there.

There are certain areas where, I guess - and in the past it happened in one

case that we mentioned. The Public Service Commission may go outside to get a

level of expertise for high level positions and they get an independent company

to go out and do that.

Just one other bit of information - I will just respond - is that under the

appeals division we have moved significantly this past year to clear up a lot of

backlogs. There were over 1,100-and-some appeals a year ago and it is down to

775 now, even though there are many new appeals coming on. So we have made

significant strides, and an effort is made now over the next while to move in

and try to get these down to a very short period of time.

A lot of these appeals too, in getting them dealt with, it is not only upon

the Public Service Commission or upon government, there is also a willingness to

move them forward by the people who make the appeals, and sometimes they are not

ready and delay that process. We have made significant progress this year and

reduced the numbers between 300 and 400, and that is, I think, fairly

significant. Maybe, Ms Devine - how that would normally compare to other years

from her experience, who has been a long-term member, if you want further

comment, but I will leave it at that unless you want further detail.

MS THISTLE: One final question I would ask, since the Finance Minister

mentioned about appeals. Has there been any change in the staff complement for

dealing with appeals?

MR. SULLIVAN: Well, we went through a process now to set up and -

MS THISTLE: Well, whoever.

MR. SULLIVAN: Okay. We went through a process to set up - one of the

things I know I want it to do by reporting to me, and I have indicated: get the

process up, get sufficient numbers of boards up, get them done, get the numbers

down and move forward. I think if Ms Devine wants to comment on how that has

happened. I was real eager that those high numbers, inordinate - people should

not have to wait so long, and we wanted to get something done with it. I must

say, I was proactive in moving that to get that done and get them set up.

Maybe Ms Devine could comment on its effectiveness or the result of that,

where she would know directly from dealing with it.

MS DEVINE: Any credit for moving the appeals forward - certainly, once

the board was appointed significant progress was made - is due entirely to the

efforts of the appeal board members; who are generally managers who work in the

system, who have other positions within the provincial public service or the

health care sector and who give of their time to go to appeal hearings and to

attempt to address the significant backlog which is still outstanding.

MR. SULLIVAN: Mr. Chair, this is in addition to the regular workloads

that they carry on in here. They put in an inordinate amount of time and effort

and did a very effective job. I think it is appropriate to be recognized for

that effort.

CHAIR: Okay.

Thank you, Ms Thistle.

Mr. Oram, do you have any questions?

MR. ORAM: No.

CHAIR: Mr. Langdon.

MR. LANGDON: Yes, I just have one question. Who is the new Chair of the

Public Service Commission?

MS DEVINE: Sheila Devine, Chair of the Public Service Commission.

MR. LANGDON: Okay. It is you?

MR. SULLIVAN: Yes, she was introduced in the beginning as the Chair. Ms

Devine was appointed the Chair, I guess, seven months back. Ms Devine?

MS DEVINE: (Inaudible).

MR. LANGDON: Yes, okay. I did not have my hearing aid in and I have

problems hearing.

CHAIR: Alive and in person.

Are there any more questions on the Public Service Commission? Okay.

Could the Clerk call the heads, please?

CLERK: 1.1.01.

CHAIR: Shall 1.1.01 carry?

OFFICIAL: Yes.

CHAIR: Okay.

On motion, subhead 1.1.01 carried.

CHAIR: Shall the total carry?

Carried.

Shall I report 1.1.01 of the Public Service Commission carried without

amendment?

OFFICIAL: (Inaudible).

CHAIR: Carried.

On motion, Department of the Public Service Commission, total heads, carried.

CHAIR: You can be excused now.

OFFICIAL: Thank you.

CHAIR: The Department of Finance.

Do you want to call the -

CLERK: 1.1.01.

CHAIR: Minister, do you want to give some opening remarks on the

department?

MR. SULLIVAN: No. I am prepared to just move in and get into any

particular questions and that, that they want to take their time. I don't see

to waste time on an opening comment.

CHAIR: Okay. We will do the same thing again on this department. We will

let Ms Thistle go for fifteen minutes or so and then I will interrupt and see if

anybody else has any questions. Is that fine with everybody?

OFFICIAL: Okay.

CHAIR: Ms Thistle.

MS THISTLE: Thank you, Mr. Manning.

Before we start, I guess, some of the line Estimates, I want to ask the

Finance Minister if he would turn to page 251 of the Estimates book. Can he

explain to this House the total increase in salaries cost by department of some

$20 million?

MR. SULLIVAN: Page 251?

MS THISTLE: Yes.

MR. SULLIVAN: The question is pertaining to what?

MS THISTLE: I notice that on salary department totals there is an

increase roughly of $20 million. Can you explain that?

MR. SULLIVAN: Why the total salary amount?

MS THISTLE: Yes.

The total salary amount last year was $312 million there.

MR. SULLIVAN: The $310,484,300.

MS THISTLE: Now it is $332,988,000.

MR. SULLIVAN: Why has it increased?

MS THISTLE: Yes.

MR. SULLIVAN: Well, the overall increase would be that there was a change

in it due to the strike, obviously. There was a period in April where only

certain costs were expended in that period.

MS THISTLE: Okay, I just wanted to hear you say that.

Thank you.

MR. SULLIVAN: I would not take it that the total amount would necessarily

be contributed to that, because there are different numbers in employment levels

and so on within the year that can vary, too.

MS THISTLE: Absolutely.

MR. SULLIVAN: That would be one of the contributors to that.

MS THISTLE: One of the contributing factors.

MR. SULLIVAN: A lot of the strike amounts, too, for instance, last year

there was $10 million given to the boards to meet with their budget that was

taken out of strike savings. Only a certain portion of that would have been in

salary, too. Plus, some other costs may have been varied in addition to salaries

as a result of that also.

MS THISTLE: Okay.

I will start on page 29 for Finance, Executive and Support, and that would be

1.1.01.01, Salaries. I wonder, why is there no listing of employees benefits in

this heading at all?

MR. SULLIVAN: In the Minister's Office?

MS THISTLE: Yes.

MR. SULLIVAN: I guess there were no benefits incurred.

MS THISTLE: That would be unusual, wouldn't it?

MR. SULLIVAN: Why would it? Enrollment in conference groups, or things of

that nature? The only people in the office are myself, an EA, a constituent

assistant and departmental secretary. None of these have participated or paid

any fees or any amount for any conferences or anything of that nature. There

were just no expenses incurred.

MS THISTLE: In Executive Support, I notice that in Salaries, 1.2.01.01.,

you are budgeted for $618,000 and there was $639,000 in Salaries. Were there any

new hirings in Executive Support?

MR. SULLIVAN: To increase that?

MS THISTLE: Yes.

MR. SULLIVAN: No, the amount there was attributed to one of the ADMs, a

long-standing ADM with thirty-seven years in government, retired. He had some

leave that was due him. Like anybody who is entitled to severance, he received

that.

MS THISTLE: Was that a normal retirement?

MR. SULLIVAN: Well, he retired voluntarily. He did not get any

redundancy. He got his severance; plus, he got any leave that he had

accumulated, nothing beyond that. That was the ADM, Mr. Bennett.

MS THISTLE: John, was it, John Bennett?

MR. SULLIVAN: Yes.

MS THISTLE: I am just looking at Administrative Support. There are

employee benefits of $9,000. Is that another case of someone leaving? What

happened there?

MR. SULLIVAN: No, they were employees in the department who were paid to

- like CPR, first aid courses, workers' compensation, professional membership

fees, conference registration. Employees in administration do attend

conferences, pay fees, take first aid courses. None of my other people in my

office, out of the core staff, were involved in any of that. That is why there

are no expenses there. This is normal employee benefit expense in government.

I think the extraordinary one overall was workers' compensation costs.

There was one individual, a significant amount had to paid out in a compensation

cost case. That is why it was up higher than normal.

MS THISTLE: Isn't it unusual in a year of restraint that there were a

lot of training courses going on?

MR. SULLIVAN: No, the main cost there was for workers' comp due to

increased costs. The normal amount was $1,400. The reason it went above that was

because of the workers' compensation cost in one individual case, to my

knowledge, just one individual case. I am not sure if it is appropriate to

mention the name of an individual, but my deputy might want to comment on that.

MR. PADDON: I will make one comment.

We had one individual who was injured while on the job and we have to

supplement or pay the Workers' Compensation Board for the costs incurred to

maintain her on workers' comp. The increase in the cost is reflective of that.

MR. SULLIVAN: That is a normal action that government takes for people

when they are on workers' compensation.

MS THISTLE: In your capital for Administrative Support, what purchases

were made to amount to $62,000?

MR. SULLIVAN: What number there?

MS THISTLE: That is 1.2.03.07.

MR. SULLIVAN: Administrative Support?

MS THISTLE: Yes.

MR. SULLIVAN: Are you talking about under Property, Furnishings and

Equipment?

MS THISTLE: Yes.

MR. SULLIVAN: Okay.

In 07. there was a budget of $90,000. We decided that we were going to hire

gasoline inspectors because a lot of people were using marked gasoline there and

we were losing a lot of money in taxes. We had budgeted to hire three trucks at

four by fours - that is what was in the budget - but we looked at it, and I

guess maybe Treasury Board prevailed, and we decided we will go with trucks that

were just two by fours. Three trucks we got for $21,000 each, three new trucks:

one for Corner Brook, the West Coast, one for Central Newfoundland, and one for

the East Coast, to go out and do those checks on gasoline for people who may be

using marked fuel and avoiding paying the taxes. That was the cost of that.

There was nothing budgeted this year in that amount. That was just an effort

we made to increase our taxes and to be able to cut down on abuse in the system.

We received a tremendous number of complaints on that from people, and we

decided to do something about it.

MS THISTLE: Under General Government, 1.3.01.01. Salaries, can you tell

me, what is that $2.8 million?

MR. SULLIVAN: I will just put it in perspective.

Normally, there are amounts being budgeted under Government Personnel Costs

within Finance to cover various other departments. I will just relate it, if I

could, for example, on the $2,886,000.

The 2004-2005 budget, for example, while it might be only showing there, that

was budgeted and $1,886,200. Usually it gets budgeted in the Finance Department

and, as the requirement comes up in other areas during the year, it gets

restated in those departments.

For example, last year there was $1.886 million budgeted and that went to

three areas. There was one for $726,300 to hire - the salary increases for the

RCMP officers, when we put money into the RCMP officer budget with new officers,

and there were two other areas for an occupational study that was done in the

Department of Health. These amounts were $700,700 and $459,200. So there are

events which occur in areas where there is occupational study, personnel cost

that government incurs if traditionally budgeted in the Finance Department for

these. Last year it was $1.8 million. This year there was a budget of $2.8

million.

Next year, if they are allocated to Health for an occupational study, or

whether it is - I think the RCMP (inaudible) is probably Labrador; I am not 100

per cent - Labrador, where they figure there is an emergency situation where

they need extra officers, I do think that is the expenditure for that and we had

to put money in. So, that got allocated there and went out to the Department of

Justice and it got reflected in the Department of Justice budget at their year

end. That is why it is not stated at the year end here, but it is budgeted and

approval is to move it through those departments and reflect it in the

appropriate budget where it ends up at the end of the year.

MS THISTLE: So, for this current year, 2005-2006, what is the designation

for that money?

MR. SULLIVAN: Well, we did not know in advance. It is not budgeted. If we

knew the designation for it, it would have been budgeted in the department that

we knew, and that would show up in their Estimates.

If we knew last March we were going to hire RCMP officers for Labrador, that

would be in the Department of Justice budget. If we knew there was going to be

an occupational study in health, it would be in the Department of Health budget.

It is traditional, you budget the money in Finance because you can move it to

the appropriate department. You have approval for it, but it must reflect in

those final accounts of that department and be accounted for. That is what was

done last year and that is what will be done this year.

If, in three months' time, we are told that there is an emergency

situation, they need to do hiring in a specific area, or there was a forest

fire, whatever the case may be, an extreme case that might have to be utilized,

there is money to do that and you would do that and utilize it rather than go to

a special warrant. There is money utilized. It is not uncommon. It has been done

in the past. Last year, there was $1.8 million. As it arises that will be done

and information will be so noted on that.

MS THISTLE: So, you have pulled this out of thin air, this amount, $2.8

million. You are saying that if an emergency comes up, or if there is a need, it

will be addressed through the Finance Department?

MR. SULLIVAN: I am indicating that they are government personnel costs.

They are personnel costs. If an occasion arises where that is there, yes, it

would be allocated to the department where that need would arise.

MS THISTLE: How much of this money will be used to pay out in severance

pay to employees who are no longer with us? Like, for instance, Ms Deborah Fry.

MR. SULLIVAN: To my knowledge, in this specific area - maybe my deputy

might want to comment - I am not aware. Last year there was none, to my

knowledge. It went for three areas last year: occupational studies for two in

the Department of Health - I mentioned that - $700,700, that is $459,200, and,

for RCMP salaries, $726,300. Last year there was $1,886,200. This year we

budgeted that.

There is nothing that is known or identified in any way at this point in

time. That is why it is there without an intended use. If we knew where it was

going to go, and we knew there was a need, we could not reflect it there. We

would have to put it in the department. It would be a part of that department's

budget for that purpose.

MS THISTLE: Is any of this $2.8 million set aside to look after the cuts

that are going to come from program review, and it will be used as severance pay

and paid out to employees who are now going to leave departments of government?

MR. SULLIVAN: I am not aware of any particular one. There has been very

little change in this year's budget. There has been very little change in the

number of people in government whatsoever because of any program renewal. In

fact, this year we have hired significant numbers of people with some of the

announcements. We are hiring eight inspectors now on tax collection. We are

looking at a central collection in government of another $125,000 for that. We

have looked at adding salaries for people in health care to operate machinery

and so on. We have had a significant capital increase, and extra people are

going to be needed in areas. None of that is for that. They are all

appropriately budgeted in their respective departments. None has been

identified. If they were, we could not put a chunk of money in here when you

know an intended use and not reflect it. We would reflect in the Estimates of

that department where it could be appropriately debated in that specific

department.

MS THISTLE: I will move to 2.1.01., Pensions Administration. I notice

that in 01., Salaries, you budgeted for $1.6 million and you used $1.4 million.

Were any jobs cut in the Pensions Division?

MR. SULLIVAN: No. There was an unfilled vacancy during the year there,

and there was certainly a small amount in all cases. There are certain savings

in certain areas due to a strike, but there was an unfilled vacancy for a

portion of that year also. As you can see, the number is back to where it was.

This is a normal expenditure for that area.

I will add that any expenditures under Pensions Administration here, for your

information generally, we get a recovery from - the pension fund covers Pensions

Administration. That is reimbursed. While we may spend $2 million, if $2 million

is covered in the pension fund to administer and look after that pension - if we

spend $1 million, we get a recovery of $1 million, or whatever the direct costs

associated with it are.

MS THISTLE: I would like to ask you about 05., Professional Services.

What did you undertake to spend an extra $35,000 in Professional Services?

MR. SULLIVAN: Well, this year we had the consulting services of William

M. Mercer, who is the one who government deals with on the administration of the

pension plan, actuarial reports and special assignments like indexing and so on

with specific areas. They did work on that, so that was over and above the

normal $150,000 that would normally be budgeted for that area.

MS THISTLE: Were they the only consulting company that you used?

MR. SULLIVAN: In pensions?

MS THISTLE: Yes.

MR. SULLIVAN: There is no other company, to my knowledge, on pensions. I

think they are the (inaudible) that we deal with. I will refer to the deputy, if

he is aware of any. I am certainly not.

MS THISTLE: Okay.

MR. PADDON: Not that I am aware of. William Mercer is the only one we

have used.

MS THISTLE: In 2.1.02., Debt Management, there is a reduction in Salaries

there. Were there any employees lost in that area?

MR. SULLIVAN: There was a debt analyst position that was vacant. That

position would be one of the major aspects there. There is a position that is

still vacant, I think - Earl Saunders in Debt Management - that position is

still vacant.

MR. PADDON: There was one position that was eliminated in Debt Management

last year as well.

MS THISTLE: In Financial Assistance that would be 2.1.03., Grants and

Subsidies for Crown Agencies. I notice that budget was reduced last year, but it

is up again for this current budget. Can you give me an explanation on that?

MR. SULLIVAN: Okay. Well, last year we had $3.2 million - 2004-2005 there

is $1.2 million in that budget to the Department of Innovation, Trade and Rural

Development to assist in putting broadband services in rural Newfoundland. We

also, out of that money last year, reached an agreement whereby when a plant in

Arnold's Cove was due to close and we did not want to get into guarantees or

subsidizing that plant, we came up with a greater solution where the quotas that

were held by National Sea, we would purchase those quotas and lease them to

Icewater Fisheries. Those quotas cost $3.5 million. We had appraisals and so on,

on values of these that are significantly above - we can easily do - but we

wanted to ensure that these quotas did not go out to other companies and they

stayed in our Province. For purchase of those quotas that are now owned,

technically, by the Government of Newfoundland and Labrador, we agreed to put

$3.5 million, and had the appraised outside values on these, and we got them

below that price. We paid $1.75 million last year, and we are going to pay $1.75

million the remaining - well, in this fiscal year now, has been paid to deal

with that.

Annually, also, there is always - Pippy Park Commission receives a grant from

government because Pippy Park probably does government lawns and various things

all around. They have been receiving a grant of $400,000 in the past. This year

we have reduced that grant, for this fiscal year, down to $350,000. We also

budgeted in that area this year for the Centre of Excellence in Corner Brook,

$500,000 is also budgeted this year in that specific area.

MS THISTLE: In Special Assistance - that would 2.1.04 - that was for the

oil tank replacement program. Has there been less of a take up over the past

year for that program?

MR. SULLIVAN: Yes.

MS THISTLE: Because I notice that there was only $240,000 spent.

MR. SULLIVAN: That is correct. Less than anticipated on the take up on

the program.

MS THISTLE: Why do you think there is less of a take up? Isn't there a

time limit when homeowners must respond to this situation?

MR. SULLIVAN: No, it is budgeted again this year. There is allowance

assistance on it. To my knowledge, it is an ongoing program that people can take

up at any time. Would that be essentially correct? If there is a carryover, we

do not know how many people are going to apply in advance. So, we budgeted an

amount for it and it came short. As for this year, there is $370,000 in the

program. I am not aware what other intended use last year in that program there

was. Maybe the deputy might have more specifics.

MR. PADDON: Yes, the only use for this allocation is for the fuel tank

replacement program. It was difficult to estimate how much take up with it there

was going to be.

You are right, Ms Thistle, that this is a time limited program. One would

think that the closer we get to the end of the program the greater the take up,

as more people try to get in under the wire. It is probably not unreasonable to

think that we are going to get a little extra take up this year over last year

but, at this point, it is really just an estimate, so we will wait and see.

MS THISTLE: To the Finance Minister, are there any plans now to make

people more aware that they are approaching a deadline on this matter so they

will be able to use government's program to replace their oil tanks?

MR. SULLIVAN: Well, I am not aware of any specific public relations

aspect we have done, other than what is normally ongoing. I do not know if my

deputy has any specific initiatives. Other than that, when people - the program

has been out there. It has been announced. We have been processing people who

are aware that it is there.

As to any particular initiative there, not that I am aware of, in terms of

advertising or anything of that nature. We are always - you know, we normally

advertise a program and we release it and put it out, or if it is a program by a

former government we continue. We do not normally budget allocations to go out

and spend money on advertising on programs. We prefer to have it there to use

for the purpose rather than use it for the purpose of advertising, other than

the initial startup of a program.

MS THISTLE: My only concern was that probably - you know, that was hot

news about three years ago when there were a lot of issues facing it, around

that, but maybe people are not aware of it at this point because there has not

been as many issues. You know, you do not have to spend a great deal of money

but it might be an idea for putting in seniors' news, or whatever, from time

to time.

MR. SULLIVAN: Yes, but I think also on that too, Ms Thistle. On that

also, companies that are filling these tanks, too, if they feel they are not in

a condition - I know companies will not fill them and there is an obligation not

to do it. I think people are made aware, too, sometimes through the companies

that are operating on those tanks.

I do not know from practical experience whether my deputy is aware of any

further particular details here, but I do know that numerous people I have

spoken to on it have indicated that the companies told them that they cannot

fill the tank unless it is brought up to a certain standard and it is

appropriately done, because it has to be a certain standard. They are not going

to do one that is, probably, on wood and not properly put in position. So, I do

know that the impetus from this is also coming from people who are suppling

them, to make sure that they are putting it into a tank, and I would assume

there could be a certain liability on the company. I cannot speak from that

legal perspective. To my knowledge there is, that if they fill a tank that they

know is improperly safe and does not meet standards there, there is a certain

responsibility they have. So, I think the impetus is certainly coming there.

MS THISTLE: Thank you.

CHAIR: Okay, Ms Thistle.

Mr. Oram?

Mr. Langdon.

MR. LANGDON: Going back to the dollars that you paid out for the quotas

for National Sea.

MR. SULLIVAN: Yes.

MR. LANGDON: Many people have said that it should never have happened,

that it is a peoples resource; that government gave National Sea $3.5 million to

put in their pockets and walk away with our resource. Again, I do not have a

definitive answer. I have not gone out and gotten a lawyers perspective on it. I

am sure that you did, as a government, when you did it. What do you say to those

people?

MR. SULLIVAN: One of the concerns that we had there, Mr. Langdon, is that

before we came into office, the year before that company had sold quotas to John

Risley at Clearwater and they are getting processed in Nova Scotia. I am aware,

and at the time when we discussed this issue, that these quotas could be sold

and processed in Nova Scotia.

We did not want to see an opportunity where hundreds of people in Arnold's

Cove were going to be put out of work when someone had a proposal to come

forward and we were going to allow quotas, as happened in the past, go to Nova

Scotia and processed in Nova Scotia at the expense of Newfoundlanders and

Labradorians. We were not prepared to subsidize the company but we were prepared

to take that, and the federal government permitted us to put it into our Crown

corporation in IDC, allow us to put them in there and held by them as a

corporation that we are the owners of that and get a fee. We own that and we can

sell it if a company in the future does not want to operate or decides it cannot

operate, or for any reason wants to get out of it. We own it. We can sell it to

another company on the condition, or lease it, that it could be used in

Newfoundland and Labrador for the benefit of Newfoundlanders and Labradorians.

That was our concern, to see more quotas going outside our Province, and we

wanted to stop that.

MR. LANGDON: Yes, anybody in their right mind would want that to happen.

Regardless of what government or what stripe you are, I mean that makes sense to

(inaudible) the quota.

My question is - it has not been answered to my satisfaction - is the fact

that: Did you really have to pay National Sea that money in order to maintain

those quotas? Could you or the federal government have brought to bear on them

and said: You can go but these quotas remain in Newfoundland, or were they

transferable and you had a legal opinion which said that you had to do it? That

is my point, not questioning whether you should or not.

MR. SULLIVAN: I will answer that. We have no control over the quotas,

none whatsoever. It is the federal government that establish quotas.

MR. LANGDON: I understand that.

MR. SULLIVAN: It is the provincial government's responsibility for

processing. We have no guarantee. In fact, we know some have been sold off to

Nova Scotia. We knew things were in the works to move on it. We felt we were

either going to do something about it and buy them or they were going to get

sold off elsewhere. If the place was shut down we could go there. So we thought

it was a fairly creative solution to keep it here. We had absolutely no control.

The only one who could tell where the quotas were was the federal government.

When quotas are out there, it could be in 3PS or out on grounds adjacent to any

areas. A harvester can catch - you cannot dictate to them where they are going

to land or where they are going to sell.

MR. LANGDON: I understand that.

MR. SULLIVAN: They can go to Nova Scotia with it, but by having these

quotas in our hands now we are saying they will only be leased to a company that

is going to ensure that that product is processed here for the benefit of the

people here.

MR. LANGDON: I understand that. I am not questioning that. Did you have

any contact with the federal government to see if they would give the Province

the quotas or have them without taking $5 million out of the taxpayers dollars

to pay for it?

MR. SULLIVAN: To my knowledge on it, the quotas were assigned to National

Sea. They were entitled to have it. They could not be revoked by the federal

government. If they pay a fee for it, it is their quota and their right. To my

understanding on it, the federal government does not pull quotas back on someone

who lives up to the terms of paying their fees and operating, and we did not

have a recourse.

MR. LANGDON: Do you have that in writing?

MR. SULLIVAN: Pardon?

MR. LANGDON: Do you have that in writing?

MR. SULLIVAN: I cannot tell you on that issue, but it is the (inaudible)

findings.

MR. LANGDON: Could you check for me and see? The thing for me is, I am

not questioning what you did because, like I said, it was the right thing to do

so that Newfoundland would have the quotas to employ Newfoundlanders and keep it

here. If the company went bankrupt these would still be our quotas. I have no

qualms with that, none whatsoever. You are employing our own people. My question

to you is - probably it can happen, I do not know. I am asking the question, not

to be prerogative or to be confrontational. That is where I am not coming from

at all. I am just asking: Did you make representation to the feds to see if

these quotas could be given to the Province without you having to pay $5 million

to the company? That is all, no more, no less.

MR. SULLIVAN: My deputy informs me, the way it was done legally was that

we use that value to get preference shares in Icewater but we get the rights on

the quotas. That is my understanding. I think, Earl, you were involved in this,

the Director of Debt Management.

MR. LANGDON: So, actually then - am I hearing correctly?

MR. SULLIVAN: We had the dibs on the quotas but not the quotas.

MR. LANGDON: I understand. Was there a cash transfer between us and

National Sea?

MR. SULLIVAN: Yes.

MR. LANGDON: Or did we take the first (inaudible).

MR. SULLIVAN: Not National Sea, no. To Icewater ours would be.

Terry, will give you the details.

MR. PADDON: The $1.75 that was invested last year and the next

(inaudible) of the $1.75 invested in 2005-2006 went to Icewater Seafoods and it

was an investment in preference shares by the Province of Newfoundland in

Icewater Seafoods. As a result of the whole transaction, the Province did get

the quotas from the federal government but there was no payment by the Province

to National Sea as part of this transaction.

MR. LANGDON: There wasn't any money?

MR. PADDON: No. No payment from the Province to National Sea.

MR. LANGDON: I will not carry it any further now, but it was my

understanding - I will have to go back and check, and probably I am wrong - that

the Minister of Fisheries probably told the House that there was money involved.

Like I said, I am not being confrontational -

MR. SULLIVAN: There was money involved but it went to Icewater.

MR. LANGDON: Actually, money did go to Icewater did it?

MR. SULLIVAN: Yes, not to National Sea.

MR. LANGDON: Okay, my mistake in the company but money did go.

MR. SULLIVAN: To the company that is operating now, I think its owner -

Bruce Wareham, I think, is the owner-

MR. LANGDON: I understand.

MR. SULLIVAN: That money went to the company, that is right, in

preference shares. I would (inaudible) because we get it with -

MR. LANGDON: It went from National Sea to Icewater?

MR. SULLIVAN: Pardon?

MR. LANGDON: It went from National Sea to Icewater?

MR. SULLIVAN: The company went from National Sea to Icewater, yes. They

agreed to sell or to allow them to take the company and had some dealings with

him. Whatever that personally is, I guess is another matter. But the new

company, Icewater, that's under the ownership of Mr. Wareham, was the one that

we dealt with, that company, by paying $1.75 in the last fiscal year and $1.75

this fiscal year in preference shares, but we got the dibs on the quotas. The

federal government did not get money for that nor did National Sea get money

from us. Would that be correct?

MR. LANGDON: I understand, but the money was transacted. I had National

Sea but it was Icewater. I got the names confused in a sense but I mean the

principles were the same.

MR. PADDON: Icewater is the new company that was formed out in Arnold's

Cove.

MR. LANGDON: Yes, I understand that.

MR. PADDON: The use of the Province's money, there was an acquisition

of a new deboning machine that was to increase productivity and those sorts of

things, plus used for working capital and those uses. But to my knowledge, it

did not go on to National Sea.

MR. LANGDON: Not a problem.

On the Debt Management, going back to that one -

MR. SULLIVAN: What number?

MR. LANGDON: 2.1.02.

MR. SULLIVAN: Okay.

MR. LANGDON: I think, as you said in the House, that you wound up

Newfoundland Municipal Financing Corporation and you did not want three sets of

books, you just wanted one - I think if I can paraphrase or pr cis

what you said in the House here. What is the process now - like, for example, I

am not thinking about Gander or Grand Falls who comes to government and you can

go to any bank and you can get your loan to do it, but Aquaforte or Leading

Tickles or Sunnyside. Now that the Municipal Financing Corporation is out of

business, how does that happen now?

MR. SULLIVAN: It does not mean it is out of business. (Inaudible) out

with the Municipal Financing Corporation, that debt is there and it will move

forward.

MR. LANGDON: I understand that. New stuff -

MR. SULLIVAN: Any new debt now is budgeted directly within the Estimates

in Municipal and Provincial Affairs, right within their budget now, and any

other entity that is out there - we have indicated we are going to wrap up the

entities because there is debt still in the Municipal Financing Corporation.

Obviously, we cannot wrap that up. So any borrowing goes directly on the sheet

of that department then for borrowing directly from that department. The same as

we would borrow for capital, whether it is in Transportation and Works or in

health care. Okay, does that answer it?

MR. LANGDON: Yes. The other thing is that over the last number of years

of course, as a result of the cod moratorium in the 1990s, and even up to now,

many of the smaller municipalities - many of the debts were restructured,

regardless of where they were in the Province; most of the smaller ones. I think

the last year that I was in Municipal Affairs we had a few more to do, and I

think that the present minister - I will ask him probably in Estimates if they

have taken care of them. Are there any more smaller municipalities that need to

have debt reconstructed through the government Municipal Financing Corporation,

or is that not possible anymore now?

MR. SULLIVAN: What we did last year - we budgeted $9 million last year to

try to wrap up the rest of the communities and look at them. That was the amount

identified that should, hopefully, take care of the rest of these. That is a

piece of work that I know is in progress. It is not closed in all communities

but it is moved, and some of the ones are done and some are in the process, to

my knowledge. Whether that is enough to do it all, it was determined it would

be, but I guess Municipal Affairs would be the appropriate place to find out

where they are in that progress.

MR. LANGDON: Yes, I understand.

MR. SULLIVAN: I know, just from my information overall, that - I am aware

of what is happening. There are some in the works that are not completed yet, I

know that, and I know others have been progressed at different levels, but we

anticipated that that would complete the piece. Now, whether it does, I am sure

the department would get the specifics.

MR. LANGDON: Yes. I guess like in any fiscal year, government having so

many responsibilities to do, there were a number of smaller municipalities that

were not tied in directly to the Municipal Financing Corporation. They were tied

in - I will mention, I think the name is correct. I will have to probably go

back and check. Like, for example, Cow Head. Some of the municipalities on the

Northern Peninsula that went and borrowed with the bank, their debt

restructuring. They were some of the first ones - whoever the bank is, I cannot

remember right now. But when a large number of these people moved out, the towns

then had difficulty being able to meet all the debt obligations that they had.

They were at the bank, and obviously, we did not touch them. We never had time

to do it in the last couple of years that I was there; only two years in

Municipal Affairs. We looked after the other ones through the Municipal

Financing Corporation. Are there any of these that you are considering in

2005-2006 to be able to deal with, or would that have to be taken up with the

Minister of Municipal Affairs?

MR. SULLIVAN: Yes, I will just comment on it. Yes, the answer to that

should come from the Minister of Municipal and Provincial Affairs, but I will

tell you that last Wednesday, I think, MHAs in the region were invited to a

forum in Mount Pearl for all the municipalities on the Avalon Peninsula and that

was an issue raised there. The minister did indicate at the time - and you will

get the details from the minister, but I will indicate that those who went

through the route with banks and not through areas, some of these might be put

in a more difficult situation now because they did not come under the Municipal

Financing Corporation. Therefore, the minister acknowledged that and he dealt

with it, and he said it is something to be looked at. I cannot tell you exactly

where the department is going to move on that or what is there, but I am sure

the minister can. It is something he is very cognizant of and that was an issue

that was discussed even recently there. I am sure he will give you more

specifics on where they are moving with it.

CHAIR: Mr. Ridgley?

MR. RIDGLEY: (Inaudible).

CHAIR: Mr. Sweeney?

MR. SWEENEY: Yes, just to get away from some of the line questions there.

Minister, school tax, how much money is outstanding in school tax?

MR. SULLIVAN: Outstanding now in school tax there is $40 million.

MR. SWEENEY: Does that include the interest?

MR. SULLIVAN: Yes, it does. It is just slightly over $40 million. My

deputy tells me $41 million. So that is close enough. Yes, there is $41 million

on it. Out of these, there are 28,000 accounts. There were 116, I think, at that

time - yes, 157,000. In fact, I just did an interview with one of the radio

stations on this today and indicated that at the time when it was taken over

here in 1992 from the tax authorities, there were 157,000 accounts. It is down

to about 28,000 now and there is about $40 million left, including interest.

MR. SWEENEY: How much without interest?

MR. SULLIVAN: Without interest the amount is $10 million, and $30 million

in interest; $10.6 million and $30.4 million.

MR. SWEENEY: What are your plans? Are you going to continue to collect

that?

MR. SULLIVAN: Our plans on that is, we felt it has been on the go from

1992 and it is time to put a plan in place. We figured, let's get this over

and done with and get it out of there. It is thirteen years ago since it landed

on government's lap.

What plan we came up with this year, we budgeted in our budget to hire eight

new people. The jobs were advertised. It closed on April 13. There were 200

applications for positions. It was advertised publicly. There is a screening

process now ongoing. Eight of these people are going to go to work and they are

going to work on these accounts. We are going to follow up on these accounts. We

are going to make an effort to look at every one of these accounts. The

resources were never put there over the past number of years to do that, a

person working (inaudible) within the regular structures. So we have dedicated

eight people now who are going to go there and look at those accounts. Someone

we have in contact might be deceased, they might be a senior who is eighty years

of age or seventy-five with a limited income. They might be low income. They

might be people outside the Province who might be making $120,000 a year and owe

money on their accounts. We are going to follow up on each of these accounts,

deal with these where you can get settlements. You might have to get write-offs.

We will make every effort to collect. We are going to go on that for a two-year

period and close the books on it, is our intent, and say it is over and done

with now, we have it dealt with.

On this issue, we look at people who want to come forward and agree to make

payments, or if they have the financial ability but not to pay it all at the one

time, we could work out a payment plan, and they do that in-line with the

department. If people are just not co-operative and have the means to do it and

they could be making significant amounts of money, as a last resort what we do

is we can put it to a set-off program under our federal taxes, but that is after

we have gone through - we are going to go through the channels to deal with

these, but that option is there. That comes once a year under income tax

refunds. Some people do not get a refund, some do. There are avenues, but we are

making a concerted effort over two years to get it done, close the books on it

and move on.

MR. SWEENEY: Okay. So these are temporary positions?

MR. SULLIVAN: That is correct. Eight people were hired for two years on a

basis to deal with this. At the end of that, if there are openings they could

apply for in government, or the mainland there - they may be out the door, we do

not know; the same as anybody who comes in and have the skills and apply for a

position. They are temporary, yes. Two-year positions is the duration. That was

advertised. That was in the ad, a two-year temporary position.

MR. SWEENEY: I know there was a major problem with trying to get some

people dealing with some problem situations. I know from my end, people with low

income, and no income in some cases and that sort of thing. I know there was a

large backlog over there starting to accumulate.

MR. SULLIVAN: What we have done with that and the people there, we have

tried to apply consistency in dealing with those problems. Any cases that come

to me, I forward them on. I ask that they be dealt with in a fair manner, that

the same rules apply to all. In a similar income, when you have a similar

situation, that is what happens. If you have the means, make the decision, deal

with it, but be consistent and be fair to everybody on whatever route we take.

That is all I have asked of my officials on this issue and that is where it is

to.

MR. SWEENEY: How much money does the department have in outstanding

fishery loans now?

MR. SULLIVAN: Outstanding fishery loans, there is - well, it is not my

department. It is the Department of Innovation, Trade and Rural Development

through the portfolio management area in fisheries. The amount of fishery loans,

I think, is about $40 million.

That is correct. Earl informs me that is correct.

MR. SWEENEY: Is a breakdown of that between interest and principal?

MR. SULLIVAN: No, that $40 million that is due in loans is in principal.

That is the principal amount, yes. A lot of these loans that are out there are

guaranteed. Some of them are guaranteed up to 20 per cent of that specific loan,

to a maximum of $1.3 million in any one loan. They are done under a blanket

guarantee that we provide. If somebody wanted to get a loan at a bank, they go

to the bank, they might get $600,000 for an enterprise. They would go to the

bank and we would give a guarantee to the bank up to 20 per cent of that

particular amount with any ones that are settled or called on would be deducted

from that total from profit, generally speaking, applied proportionately on

these ones.

MR. SWEENEY: These are loans for boats, enterprises and that type of

thing. What about plants, plant owners?

MR. SULLIVAN: To my knowledge, nobody has gotten a loan for a fish plant,

that I am aware of. If there are any outstanding, there are limited guarantees

with some plants. We have not added any new guarantees. We have been trying to

move out of that. There are only two major ones now that are guaranteed. There

are no loans to plants, to my knowledge. I will ask my Director of Debt

Management. I know there is money that went into plants before and there are

some in the position. We just moved on one that has been in the public forum

there. There are two others that have significant guarantees from government

that have been there for some time. Hopefully, the time will come when that will

not be there. But, giving a loan to a fish plant out there, I am not aware of

it.

Director Earl, if you wanted to add specifically. I do know one instance

where a company operating now that we had to move - could not meet their debts

and we had to move to get it operating for this year. Are there any others?

MR. SAUNDERS: No. There are two major loans out there for working capital

for fishing companies. Then there are, probably, two or three very, very small

amounts. These are all loan guarantees that were used to provide working

capital.

MR. SULLIVAN: And they are out there. I will just give you the specifics.

They are public information when we give a guarantee. Torngat Co-op has a $2.1

million guarantee on its working capital. In the summer or the time of the year

when they have large volumes and so on, and there are a lot of receivables

coming in, they may go up to $2.1 million. That is a working capital guarantee

that they have.

Fogo Island Co-op has a $2 million guarantee on their working capital from us

here in government also. They are the two big ones. There is one with only about

$1,000, I think I saw on the books. They are published in our Public Accounts.

The other ones are just minuscule. There was one - I think it is gone now, I am

not sure - P. Janes and somebody. Is that still there in the small form? Or

maybe it is gone. They are very minimal. If they are, they are the only ones

that are left and they are the only significant. The other ones are just really

insignificant and they have been there for some time. I am not even sure if we

have ever drawn down on these, but the other two main companies, yes, draw down

on them. They drew on them significantly to their maximum, generally, at peak

times during the year. That is Torngat and Fogo Island Co-op.

MR. SWEENEY: No. The reason I raised that was I was told today, actually,

that the plant which was foreclosed upon on the Northern Peninsula - I think

that is the one you are referring to - that was given to a company that had

already defaulted on a loan to the government?

MR. SULLIVAN: No, not to my knowledge.

MR. SWEENEY: Or a principal who was?

MR. SULLIVAN: No, (inaudible). I think we had a release that went out

today, didn't we, on that issue? Well, I will give you the details anyway. The

company was owned by James Doyle (Sr.) & Sons and operated by Cliff Doyle in

New Ferolle. That company had a loan with Enterprise Newfoundland and Labrador

one time, about $1.2 million that they defaulted on, and they also had $770,000

and change that they owed to government. He never made any payment on that since

- I do not know, ever probably. I am not sure if they ever did come on all

these, never. We came here and they had that, and there were significant

creditors out there ready to move on it. In the meantime, they had leased it to

a company called - the name of the company, Earl?

MR. SAUNDERS: Ice Cap.

MR. SULLIVAN: Ice Cap, a company called Ice Cap. They had leased it to

them. They had signed a lease agreement to operate that plant. So, they came in

and they operated this past year or two years; two years, I think. One year

before we came they were operating. They operated again last year. They operated

on a lease from James Doyle (Sr.) & Sons. They operated that and did their

own business. I think they employed some of these people and they dealt with

people on that.

This year we indicated that there had been no payment; that we wanted some

reasonable settlement on that and to make some payments. We had not received one

penny and they never moved on it. We had significant (inaudible). So we moved

and foreclosed, basically, on it and that company went into receivership. We did

have some problems trying to deal with it, to move in there and to get it

operating for this year. Just recently now, we moved on it. We were - and the

creditor has that. So what we permitted to do for this year to allow the company

that was leasing it from James Doyle (Sr.) & Sons to continue their

operation to lease it this year until a decision is made as to what will happen

to that in the future. I think that is the gist of what is happening there. If

there are any other details on that, that is basically where it is. We have not

sold it. We have not leased it. We have permitted the lease to continue to them

because we are now technically the owners of that, or at least to the value of

our investment in that. The $1.2 million is gone, and history. We cannot collect

on that, to my knowledge, Earl, on the $1.2 million, but the seven hundred and

seventy-some is one that we can. If there is anything to add on that - Earl just

confirmed that.

CHAIR: Mr. Sweeney, your time is up.

Mr. Skinner?

Mr. Langdon?

MR. LANGDON: I want to follow up on a couple of things. First of all, I

want to follow up on the aquaculture industry in Bay d'Espoir. The industry

has been struggling for some time, and over the years there has been a lot of

money put into it. I guess the industry is out of its - or we thought it was

probably out of its - embryonic stage and ready to move ahead and move forward,

but it is still in dire straights. One of the companies, as you are no doubt

aware, is into receivership as we speak, and the other two can go into

receivership any day. I do not have to tell you something that you know. You are

more aware of it than I, as I have been out of it for two years.

The thing that kind of puzzles me in a sense is the fact that the minister

said last fall that they put a feed program in place similar to that of New

Brunswick, and that these companies would be able to access that feed money and

be able to put themselves above the breathing mark and should be able to move

ahead and probably expand. Up until only a couple of days ago, neither one of

the companies were able to qualify. Someone says there has been one over the

last couple of days again. I am not sure on that; you can probably verify that

for me.

The problem that I have been told about is that the companies have to come up

with about 20 per cent of the amount of money that is needed to be able to put

them back on a sound footing. Obviously, they do not have that money to do it.

Some of them are smaller operations in Bay d'Espoir, from local people. To

them, unless something happens, these particular companies can never raise the

20 per cent. As a result of that, there is a lot of uncertainty in the area. All

of us would like to see it expand. I think it has a potential to expand from an

ice-free area, free of pollution and all of that stuff. I know there are a lot

of new sites being readied, and all that type of stuff, but I just want to find

out what is the department's take on the feed program? It is probably

fisheries more than anything.

MR. SULLIVAN: Mr. Langdon, I do not feel like I should speak on behalf of

the Minister of Fisheries and Aquaculture on this issue, but I will say

generally -

MR. LANGDON: That is all I want.

MR. SULLIVAN: I am fairly familiar with the details -

MR. LANGDON: I have talked to the minister a number of times.

MR. SULLIVAN: - but I do not think it is appropriate for me to go into

detail on it.

MR. LANGDON: I don't want detail.

MR. SULLIVAN: I will say we looked at putting in a program, not a

guarantee to any individual companies to operate, but a guarantee to an industry

to allow an industry to move forward.

MR. LANGDON: Right.

MR. SULLIVAN: New Brunswick had set certain criteria to qualify to get

feed subsidy under a guaranteed program. We know, from the time you start until

you can sell that, you have a number of years, a considerable up front

investment before you get a return. We wanted to be able to allow our Province

to compete with New Brunswick, and we initiated a program that would allow the

same level, the same criteria, that they could operate in New Brunswick under.

We did not want to have it less generous. You might companies who are more

stringent. The rules vary. We took a standard on that. The details - not that we

are refusing to answer, but I do not think it is appropriate that I should go

into the details of another minister's area.

MR. LANGDON: I know, but overall it is a situation that is really

worrisome when you bring in a program and nobody qualifies for it. You are not

going to save the industry that way. That was my point.

MR. SULLIVAN: I understand. Other provinces have a similar program.

MR. LANGDON: The thing is, right now - I watched the papers on the

weekend - you could buy salmon here, local Atlantic salmon, for $2.77 a pound.

With that amount of money they cannot even break even in the market. That is

some of the problem that they are having there, but we will leave that for

another day.

MR. SULLIVAN: Okay.

I understand where you are coming from.

MR. LANGDON: The other question I would like to ask is, again, on the

Harbour Breton situation. The feds, as of now, have not come through with any

money to help in the short term. We were there last week. The feds look upon it

as a provincial problem. They look and say: We did not close the fish plant. We

did not cut any quotas from FPI. They got just as much to operate this year as

they did last. It was a company's decision to pull out of Harbour Breton, just

as you would have any company doing across Canada any day of the week and losing

200 or 300 jobs. My question is - because I have talked to the Premier about it

and we have had a good relationship with the Minister of Fisheries and so on,

but here is a situation that you might be able to help me get in general terms.

Let's suppose that the feds do not come through with any money - and the time

is getting short. May 1, by the way, you are going to have a large number of

people without any income at all in Harbour Breton. None. The provincial

government has said, and up to now have come through with some dollars from the

Department of Municipal and Provincial Affairs. People are being paid $6.24 an

hour. Up to the time that they ran out of benefits they were $12 and $13, a man

and spouse, with mortgages and cars and everything. Then, all of a sudden, you

are put into this situation; the bottom falls out of it. I do not have to go

into it any further than that for you to get the picture. My question is: If the

federal government - because the provincial government has said that $1.25

million of the provincial money is contingent upon the money from the feds

coming through. Has your department given any thought to the fact that you would

probably still go in with a $1.25 million if the feds did not come through with

the $4 million, or is that a question I should not ask you either?

MR. SULLIVAN: Mr. Langdon, it is not an issue raised by my department. If

government is going to move on a general government policy, it would be

initiated within a specific department and then brought to the table of

government for a decision generally. I, as a member of Cabinet, would sit around

and participate in that decision making. The Minister of Fisheries has been on

the file. The Minister of Municipal and Provincial Affairs has been active in

dealing with it.

MR. LANGDON: Yes, I understand.

MR. SULLIVAN: I have not been on a committee dealing with it, and I do

not think it is appropriate. The question has been asked in the House also. The

appropriate minister should answer that.

MR. LANGDON: I do not think that has ever been asked - not by me.

MR. SULLIVAN: I think the Leader of the Opposition probably asked the

Premier or somebody. I do recall, to my knowledge, that question was asked: What

happens if -

MR. LANGDON: It might have; but, again, I am not asking it for the sake

to try to be at odds with you if you answered it before, or anything of that

nature.

MR. SULLIVAN: I am not dealing with the file, but if something comes up -

like anybody who sits in Cabinet, as you are well aware - we will deal with the

issue, but it has to get brought forth from the department. It is not my

department that is involved in bringing it forth.

MR. LANGDON: The whole idea for me to raise it here is such that the

deputy minister and whoever else will be aware of it. It is a major problem, and

one that will be coming very shortly.

MR. SULLIVAN: Okay.

Thank you.

MS THISTLE: Thank you.

I would like to follow up on a couple of more questions regarding school tax.

It appears, from what the minister has stated, that anyone who is now

financially capable of paying school tax will have to pay school tax - who has

an outstanding bill. Is that correct?

MR. SULLIVAN: You are essentially correct. Debt owed to government, we

have seen it and the Auditor General has said on numerous occasions that

government does not do a good job of collecting its money, money owed to

government. We think we have an obligation to the taxpayers of the Province to

collect monies owed to government if people have the ability to pay.

MS THISTLE: I know in some situations that are now coming across my desk,

and they are from all around the Province, a lot of people say to me that they

were never notified or they would have been granted an exemption at the time

their school tax bill was actually issued in 1992. Since then, of course, they

have gotten on with their careers and they are better able to deal with it at

this point, but they still feel they should not have to pay all of the

outstanding interest. Is government providing any flexibility in those

situations?

MR. SULLIVAN: Well, I said earlier that numerous financial situations for

people would dictate their ability to pay. That is one aspect. If someone had

the ability to pay, we expect to get paid. There may be certain costs involved

with collection. If someone owed us $2,000 and they wanted to deal with my

people in collections, whatever process applied to them, they contact the

manager or director, the manager in collections, to deal with them, and if they

have a proposal that they want to put forth and settle something, deal directly

with them. I do not get involved in that process.

Sometimes there are costs involved in collection and there might be some

latitude if there is a collection cost involved, and those things. They are

things that I leave to the people dealing with that. I do not look at cases on

these, and examine them or make any recommendations or suggestions. I want

consistency applied, and fairness. There are periods where somebody has known,

there are periods where they have not, where they may not have or they could not

locate somebody; they might have gone out of the Province. There are probably

1,000 or 2,000 or 10,000 different scenarios, almost, out of 28,000, but

officials will try to make a fair decision based on each of these cases and deal

with them. I think a lot of cases might have variances and there might be

different solutions to different cases based on financial ability, based on

periods of notification, knowing you were notified and did not respond, and all

these type of things.

There are numerous scenarios. I think it would be fair to say that there will

not be one rule applied to every case but there would be consistency with people

in similar situations. I think that would be fair to say.

MS THISTLE: I guess the rule of thumb is that the Department of Finance

will expect people to pay those bills, principal and interest, unless there are

unusual circumstances. Is that correct?

MR. SULLIVAN: I would not necessarily go to that extent. It depends on

how you define unusual circumstances. I think there is a degree of subjectivity

in somebody who may have left the Province, gone out for three years, could not

track them down, and they are back in the Province and working for the past four

or five years and might have received a bill since they came back. They might

have somebody who left for eight years and never got notified. There might be

all scenarios. I do not think I can prejudge and establish a particular

scenario. I think there would be a consistency applied and I think different

situations and circumstances and financial situations warrant different

solutions. I am not going to be the one to judge them, I can assure you, at all.

That will be done by staff and officials who deal with these and know what those

consistencies are.

I think it would be advisable, I would suggest, that anybody who does owe it

and are trying to deal with it, to contact the department and put forth their

case to them to get dealt with. We do know there are significant numbers of

people there - a lot of telephone calls - thirty, forty and fifty-some people a

day, trying to deal with and process these, and also deal with tremendous calls.

It will take some time to deal with them all, but please contact them if someone

has an interest in getting it settled, and deal with the appropriate official on

that, I would suggest.

MS THISTLE: I just have a few line questions before I get into general

questioning. I would like to go to 2.2.01.06, Tax Policy. What are you

undertaking this year to be $1.6 million?

MR. SULLIVAN: Could you just repeat that number, please?

MS THISTLE: Under 2.2.01., page 34, line 06., Purchased Services, $1.6

million.

MR. SULLIVAN: Yes.

What has happened in the past, the Canada Revenue Agency, there is a fee that

we pay for any change in their forms, like tax on income and so on. What we have

been doing every year - I will just use an example. If we were going to get $672

million in personal income tax, for example, and it cost $1 million for those

services, we would get $671 million.

What we are doing now - we are saying that is a cost they are charging us -

we are putting that in as a cost and we are reflecting the higher revenue as

revenue. The Auditor General has indicated on numerous cases that any credits we

are getting, or breaks that we give the people, like direct equity tax credit or

certain exemptions under programs, do not show reduction of revenue for those

things; show all your revenue and show them as an expense. That is why for the

first time we have added, even in cases right over in the last page, I think, is

it, in our Estimates book? I am not sure if it is - yes, it is 258 in the

Estimates book. That does not just apply to this one, but that is an example of

the process we followed.

MS THISTLE: I noticed it.

MR. SULLIVAN: We have included this for the first time, shown in your

Personal Income Tax, the money we got. How much is because of a Child Benefit,

$8.5 million; Direct Equity Tax Credit, $100,000; HST, $5.6 million.

What we are doing here is that the monies we are paying the federal

government, we are showing them as an expense rather than having it as less

income to get for that. Have I made myself clear or do you want me to have

another go at it?

MS THISTLE: I guess it is a new method of reporting, what it amounts to.

MR. SULLIVAN: Exactly.

MR. PADDON: If I could just make a comment?

MR. SULLIVAN: Yes.

MR. PADDON: Included in the $1.6 million, too, there was a one-time

charge of almost $1.1 million which is an implementation fee that the federal

government intends to, or is contemplating charging us for moving to the tax on

income system a number of years ago. There has been, I guess, a process of

negotiation going back and forth with the federal government now as to the

amount of the fee. It is probably about two or three years old now. We expect

that if they are going to charge us the fee, it will come this year. It is a

one-time fee and would not reoccur; but, you are right, this is really just a

different way of reporting. Traditionally, it has been shown as a reduction of

revenue so it really did not get the visibility it should have. Now we are just

showing it as a departmental expense and estimating what the fees are going to

be.

MR. SULLIVAN: Mr. Chair, also, just one thing to add.

Once that initial cost - and that has been, I guess, a two or three year

negotiation thing, as the deputy indicated. The annual cost, then, to administer

and pay for these programs is about $550,000 a year. That would be the annual

then, so we are showing it as a cost but we are getting more revenues now, and

if we did not get the revenues it would be deducted from the revenues. It is

another way of showing it, that we could break out the cost and you know exactly

it is a cost as opposed to less tax. It is a more transparent way of reporting

it, actually, and that is -

MS THISTLE: I do recall when we negotiated that particular agreement with

the feds, but I guess this is the first time I saw it reported that way.

Thank you.

MR. SULLIVAN: We are doing a lot of things more transparent, if that is

what you mean.

MS THISTLE: That is not what I mean.

MR. SULLIVAN: Oh.

MS THISTLE: I feel we were very transparent in the past.

Under

section 2.2.04., Tax Administration, line 01.

MR. SULLIVAN: I just have to catch up to you there.

MS THISTLE:

Section 2.2.04., Tax Administration.

MR. SULLIVAN: Yes.

MS THISTLE: There is quite an increase there in Salaries coming up this

year. What are you attributing that to?

MR. SULLIVAN: Well, we are attributing $264,000 of that to the eight

temporary tax collectors we just talked about, and we are attributing another

$250,000 -

MS THISTLE: How much was that?

MR. SULLIVAN: We budgeted $263,900, and we budgeted $250,000 for a

central collection pilot project. We are looking at hiring more people also to

come in, generally students or work-term people or whatever, to look at another

$250,000 we budgeted to hire more people to try to get some central control of

collections.

Right now, as you are probably aware, HRLE will do their collections, and

Justice will do their collections, and various other areas. We are trying to get

some central collection system on a more organized basis to deal with this. The

Auditor General, if you remember, in his report this past year has referenced

this, wondering where it was. We have been moving and working on this and we

have been able to budget $250,000. When you add these two together, that is

$517,200 extra just for those two initiatives.

MS THISTLE: Under the same heading in Transportation and Communications,

I noted that you did not use your budget last year; only half of it, really,

$100,000. What do you expect to be doing this year, that you are going to be

able to use $185,000?

MR. SULLIVAN: Well, there was employee turnover that caused that last

year, and the non-filling of vacant positions. Of course, with extra people,

too, that we reference and so on, and extra costs there, we anticipated that it

is going to be up to that level. We just referenced more people hired in the

department.

MS THISTLE: What are you going to be doing with Professional Services,

the increase of almost doubling your budget there, under 2.2.04.05.?

MR. SULLIVAN: Do you mean for this year, why is it up higher?

MS THISTLE: Yes.

MR. SULLIVAN: Well, Professional Services, we estimated that the extra

tax collectors is going to cost about $22,000 extra, $21,800 - about $22,000 -

by having these extra people there. The central collection pilot project, we do

not anticipate costs associated with that, but with tax collectors we anticipate

about $21,800 would be extra in this area.

MR. PADDON: If I could just add a comment.

The lion's share of that cost relates to chemical analysis for gas tax

samples, so we have hired an additional number of gas tax inspectors. We will

have a full year of them on stream this year, so we would expect to see a fair

bit more analytical work on the samples, and that is done at the university so

they charge us for that.

MS THISTLE: Thank you.

Section 2.3.01., Economics and Statistics, there is a sharp increase in

Salaries there. Can you tell me what is going on there?

MR. SULLIVAN: Salaries, that is Economics and Statistics. I will just say

at the onset, too, in this specific area, that Economics and Statistics is an

area, if you look at it there at the bottom, where we get considerable revenues

coming in from other sources. That area, we get a big recovery on contracts we

do, whether for departments, outside agencies, wherever it is, and we get

revenues associated with that. Even though there is more there, the breakdown,

we are going to have an extra - the temporary assistance for special projects,

for example, we have a census project that is going to cost $241,800. We have

production accounts another $86,600. The LMDA, $100,000 for that. We have a

National Crime Prevention Strategy, $100,000. Miscellaneous surveys, projects

like forecast contracts within Economics and Statistics, about $357,500. Those

special projects funding alone is almost $900,000, just on these alone.

Now, one of the good things about that, when you look at the bottom line

there, under Total, you can see, underneath them, look where it has been

overall. There has been a consistency in the bottom because sometimes we might

get a lot of outside contracts. We have done projects for things as far as, I

think, the First Nations people, outside provinces. When you do work it goes up

and we get a recovery, some 100 per cent recovery on a lot of initiatives, so

you can see the bottom line has been very consistent all along. They will go up

and down with the contracts and the work we get and the number we employ, and

the associated cost with them.

MS THISTLE: Minister, how much did you say your census project was going

to cost?

MR. SULLIVAN: The census project, about $241,800 we projected.

OFFICIAL: Just the salary.

MR. SULLIVAN: Just the salary component, now.

MS THISTLE: Just the salary component?

MR. SULLIVAN: Yes, I am talking about salary, strictly salary.

MS THISTLE: But the actual project itself.

MR. SULLIVAN: Oh, the census project itself, I think we have a total - I

will just give you an example. Under transportation - under the census - and

communications, $7,000. For instance, under supplies, I do have a total here,

too, of

summary. Do you want the total or the breakdown?

MS THISTLE: The total.

MR. SULLIVAN: Two hundred and eighty thousand three hundred of that would

be on census.

MS THISTLE: When will this project be undertaken?

MR. SULLIVAN: I will refer to my deputy.

MR. PADDON: This project started last year and it will continue this year

and move in, I think, the next two years. It is a four year project. It is in

conjunction with seven universities across Canada, with Statistics Canada and

with our own university here, so it is a fairly in-depth project and it is the

second year right now.

MR. SULLIVAN: Just to add to that, Mr. Chair, we are doing the work here

for seven universities. There is IBM, there is Stats Canada, the Newfoundland

and Labrador Statistics Agency. This initiative is one that we are doing - an

example of using our people to do significant work for other areas outside, to

use our people, employees, and get funded proportionately back on this money,

back into the coffers, that is really employing people on - that area has a

certain level of expertise. They do a lot of work for different departments

also. We are fortunate that we can do some work outside and employ our people

who have skills in providing that information and employing people here and

getting funded from other groups outside our Province.

MS THISTLE: What advantage will this information be to government at the

end of the four year project?

MR. SULLIVAN: In terms of the specific census? It is an array of

statistics in various things drawn for a variety of things, I would think. I do

not know if there are any specific -

MR PADDON: This is not necessarily a project that is going to benefit the

Province per se. It is a contract that we have been given by, essentially,

Statistics Canada, that is funnelled through some other universities, but it a

project that they are looking for some benefit from. It really benefits them.

Specifically, I guess, there will be some ancillary benefits for us later on

down the road, but it is not something that the government is undertaking per

se. It is just a contract that we are filling for somebody else.

MR. SULLIVAN: It is my understanding on that one, Mr. Chair, on projects

that we do like this outside, that we get 100 per cent return on the project

cost. That is my understanding on these projects.

MS THISTLE: Very good.

Thank you.

CHAIR: Mr. Sweeney?

MR. SWEENEY: Back to the fishery loans, I had one more question there on

that. Any loans written off in the fisheries?

MR. SULLIVAN: Overall, any ones written off are published and get done

annually, and they are published in our Public Accounts. If you go to our latest

Public Accounts, go to the back and you will see every single thing that is

written off in every year.

The only one I can recall - not in companies - I recall one that was two

fishermen, I think, one of whom was deceased just recently, went through, and

the other person, I do not remember specifics. I would not want to comment on

that. I just recall, in the last number of months, I think there were two

fishermen. One is deceased, I am not sure, and one made a payment or a

settlement, I think, I am not sure, who is retired or working. I do not know the

details. It is not uncommon from year to year that there are certain ones that

get written off. The only one I recall, and I stand to be corrected, is, I

think, for two fishermen. I am not sure if there are any others that have gone

through recently, but they will be published. These things are published. If you

go to our Public Accounts that come out in the fall, every single one of these

will be listed, and the amounts written off, and who they were. There are none

that jump out at me.

MR. SWEENEY: Mr. Saunders, you were going to say something?

MR. SAUNDERS: There have been no significant write-offs in recent years.

Typically, the way write-offs have occurred, we probably make significant

submissions to Treasury Board for write-off approvals every five or six years or

so. There have been no significant write-offs in very recent years. All of the

write-offs have been reported by the Auditor General in his annual report. He

has included in his report the collection of accounts. He has included a long

list of write-offs over the years, but there have been no significant write-offs

in recent years.

The minister referred to a couple of individuals, and those related to

payouts under the Fisheries Loan Guarantee Program, where fishermen have gotten

a guaranteed loan from the Province for a vessel. Then, due to a circumstance,

if they defaulted on the loan, the bank realized on its security and then came

to the Province for the deficiency. We set that up, then, as an account and we

try to collect. A lot of those accounts are very old, and there have been a

couple recently where we have settled and written off the balance. Then there

were two recently where we reviewed the circumstances. One individual had passed

away, and the other person had a very small income, so that balance was written

off. There are still a handful of these accounts that we are trying to resolve.

MR. SWEENEY: Okay.

Just a couple of questions away from the lines. Minister, can you explain

which lines in the budget are used for advertisements in the newspapers, radio,

TV, and that sort of thing?

MR. SULLIVAN: In our budget here?

MR. SWEENEY: Yes.

MR. SULLIVAN: I don't think we did much advertising. I will just have a

look at each one.

MR. SWEENEY: Various times throughout - I picked up the paper today, I

think it was the Northeast Avalon, and I noticed there were five or six

ministers with ads in there.

MR. SULLIVAN: I cannot speak for other ministers. To me, I do not think I

have ever advertised as a minister. I have never advertised, to my knowledge.

The ministers will have to speak for their departments, but, to my knowledge,

there is nothing that we advertise. If there is a program you are putting an ad

out on, like Communications Director might - if you are bringing in a program or

you are doing something you are announcing whether it is - like the fuel rebate

program now. We had something in the newspaper on that program and information,

but we have never, to my knowledge - and (inaudible) will tell you. I have never

taken out an ad in any magazine, to my knowledge, or anything as a minister and

paid for by the department. None, to my knowledge. None.

MR. SWEENEY: Okay. Now, I must say, you are not as bad as the Minister of

Environment. He is -

MR. SULLIVAN: Well -

MR. SWEENEY: He seems to be on the back of every toilet paper roll or

whatever it is he is advertising on.

MR. SULLIVAN: I speak for myself. I can only answer my department's

Estimates.

MR. PADDON: If I could add just one comment there, one follow up. The

only thing we really do advertise are pre-Budget consultations. We do some

advertising for that. Plus, as the minister suggested, the fuel tax rebate

program, we do some advertising for that as well. We put the application form in

the paper and those sorts of things.

OFFICIAL: (Inaudible).

MR. SWEENEY: We do that every night. That is nothing new.

What polling is -

MR. SULLIVAN: Not that I was opposed but I had a meeting set up in my

other responsibility as Health. There are only so many hours in a day.

MR. LANGDON: Do you know what? Loyola, they do not believe you. So, I

mean, you say it, right.

MR. SWEENEY: I would rather believe that the minister wouldn't take you

folks out because he did not invite us as well.

MR. SULLIVAN: I can tell you, the former Minister of Finance, in all the

while I was critic I never did get a meal. I never did.

MR. SWEENEY: Did the department do any polling in the past year?

MR. SULLIVAN: My department?

MR. SWEENEY: For any particular reason. Like, from time to time -

MR. SULLIVAN: Not that I am aware of.

MR. SWEENEY: - sometimes some of these polls are done, that there is a

question added on and paid for by various departments.

MR. SULLIVAN: Nothing, that I am aware of. I will refer that to my deputy

or Communications Director. Nothing they said. Nothing. I think hard of spending

money. Absolutely nothing.

MR. SWEENEY: How many meetings did you and/or your officials have with

our provincial representative in Ottawa, Mr. Bill Rowe, in the past?

MR. SULLIVAN: Meetings?

MR. SWEENEY: Yes.

MR. SULLIVAN: Like, specifically to go up for a meeting with him? Well, I

have met with Bill Rowe on several occasions. Bill Rowe participated in and was

there during discussions on the Atlantic Accord. I attended the First Ministers'

Meeting on September 13, 14 and 15 dealing with health care and equalization. He

was there. I attended meetings on October 26, 27, I believe are the dates, the

First Ministers' Meeting - or we tried to attend, almost attended. That was

the instance where we did not get the deal on the Accord. Mr. Rowe was there at

that, and when I went to Ottawa on discussions on January 28, he was there all

day during those meetings. At several meetings Mr. Rowe was available and

participated and had discussions. I will talk from my experience. I will speak

from my experience there. I cannot speak for other areas.

MR. SWEENEY: What about your officials?

MR. SULLIVAN: He was engaged and around, and a participant in numerous

meetings that I attended in Ottawa.

MR. SWEENEY: Okay. What about officials? Did he meet with any of your

officials outside of meeting with you?

MR. SULLIVAN: My Finance Department officials?

MR. SWEENEY: Yes.

MR. SULLIVAN: I will certainly - they are free to answer if they met him

independently. I doubt if they met him independently without me being aware of

it, unless it was an intended purpose. I will certainly let our deputy answer

that.

MR. PADDON: No, the only time I met with Mr. Rowe was in conjunction with

the same meetings the minister referred to.

MR. SWEENEY: Okay. How many layoffs were in the department last year?

MR. SULLIVAN: Last year the department - we announced in the Budget last

year, and just before the Budget I called in Mr. Puddister and Mr. Lucas and

indicated to them that there could be 700 people laid off in the public service

as a result of the Budget I announced last year. As of March 31 of this year,

2005, out of those 700 we had anticipated, there were 196 people laid off - did

not end up going out the door, out of that 700 I announced. Out of these 196,

they include management, they include unionized, they include bargaining

unionized people and also non-bargaining people who may not be in management,

too. That is including within any ones decision that were made within health

education boards directly in government. Anything across the public service -

out of about 40,000 people in the public service, we ended up with 196 less

bodies that went out the door. We had some funded vacancies that we removed and

did not use and pulled out of the system and so on but there was only 196,

including unionized and non, and management less in the last twelve months from

my Budget up to the end of March of this year.

MR. SWEENEY: Okay, but what about in your department specifically?

MR. SULLIVAN: My department -

MR. SWEENEY: I will leave Mr. Puddister to argue with you on the numbers.

MR. SULLIVAN: Actually, they are on the payrolls of that and we know who

they are. They are identified. They will raise the issue. I will make reference

to that, even though it is another aspect of - not Finance - Treasury Board that

I am responsible for, which I certainly can deal with in the House. The numbers

that are included -

MR. SWEENEY: But the Department of Finance?

MR. SULLIVAN: In the Department of Finance, in the past year. I am sure

our deputy - we did have some people - you mean laid off or retired?

MR. SWEENEY: Laid off.

MR. SULLIVAN: Okay, I will let our deputy do that. He is probably more

specific.

MR. PADDON: In the Department of Finance, last year we laid off five in

total. In Corner Brook we had a staff complement of five and we took a decision

to close the office. We maintained two people who were intended to work from

their home - basically, audit and gas tax, inspector staff, who would be on the

road most of the time anyway. The three people who received layoff notices, all

three found jobs in other areas of government, through bumping or whatever.

In St. John's, we laid off two individuals. One found a job elsewhere and a

non-bargaining employee is working out his notice and is still employed. The

notice period should be up within the next couple of months. So, five in total.

MR. SWEENEY: Any plans for any more going this year?

MR. SULLIVAN: In this year's Budget, overall, in terms of work there,

we have eight hired in those two-year positions. We have $250,000 in central

collection. I guess that will involve another half-a-dozen people or more - more

than that, probably six or eight or ten more people coming in as a result of

that. In people going out - well, we have some positions now that are funded and

not feel we are going to be filling. We are aware of that, and some even at a

senior level. I am operating with - in this department since my deputy went with

(inaudible), we have not filled the ADM position there. We have another ADM who

went out, as we referred to earlier, a gentleman - that has not been filled yet,

and we have numerous directors reporting to the deputy here. He has had a very

hectic time with some vacancies there.

If there are any other targeted, he could - I think we will have more

employees possibly, unless there are other ones in the plans that I am not aware

of.

MR. PADDON: There are no plans to eliminate any other staff. In fact, as

the minister suggests, we will be augmenting the staff and with any luck,

filling some of the vacant positions we have there.

MR. SULLIVAN: In all of government this year, overall, basically it is

awash between people coming and going, and there are no plans in the layoff

system in government. There are areas where there are going to be increased

complements of people in government this year over last year. Some areas will be

down. In any normal day, in any operation of government with 40,000 people

working across government, in any day in an independent budget, there are people

who would be - in any given day they could be coming and going across

government.

For instance, the CEO of Eastern Health Care might decide that there is a

certain task completed, or he needs three less in an area, or dietary, or more

in housekeeping, or in another area. These decisions go on everyday in

government, since government began; independent operational decisions that we

would not necessarily know about or what is happening, but within government

itself, directly in there, we would know. We would not know what is happening

out in other areas. They are administered and run by authorities. We do not know

the day-to-day decisions on these. I am sure in any given day across the

Province, or any given week, there are in the dozens, if not hundreds, who might

be coming or going out of 40,000 people. That is the normal course of

operations, if you scale up operations or down, based on the need for work,

whether it is winter or summer demands within that specific area, whether it is

- hospital beds in the summer usually scale down. They might rev up at other

times of the year. There could be workloads which shift accordingly, if people

are in temporary or on call and they might get more work. These numbers

fluctuate. We cannot control that, but we do know that in this year's

operation, over the course of government departments here, there is no

significant change. Last year there were196 net, at the end of the year.

CHAIR: Okay. One more question.

MR. SWEENEY: Since the minister spoke through my fifteen minutes there

that time, I would like to have one -

MR. SULLIVAN: I have no problem in waiting to address any questions you

have.

MR. SWEENEY: The danger in asking the minister a short question is that

you are not getting -

CHAIR: Maybe I should be timing the answers.

MR. SWEENEY: Yes, instead of timing the questioner.

MR. LANGDON: And he thinks we want to hear him.

MR. SULLIVAN: Sorry, George. You get lots of time.

MR. SWEENEY: Minister, where would I find in the Budget, in the

Department of Finance, the extra funding for special projects or projects that

were not listed in departmental budgets?

MR. SULLIVAN: Like what, for example?

MR. SWEENEY: Let's say the cancer clinic in Grand Falls-Windsor today.

The Department of Health said it was not there. There was no money there for it,

and today you made an announcement which - and do not get me wrong, I am very

happy that Central Newfoundland did get a new cancer clinic.

MR. SULLIVAN: I will explain that one. The Department of Health received

an allocation for capital expenditure for the 2005-2006 year. When I came to the

portfolio, I, and the former minister, almost made it to tour the site. The

deputy minister came back with a report. When we looked at the report there was

an initial plan, I think - as the Member for Grand Falls-Buchans would know - to

look at an involvement of the whole site to deal with other areas, like pharmacy

and all these areas, and that was about a four-point-some million. By the time

it is fully completed, the whole site would be about $9 million to $10 million,

was the total projected cost.

We looked at: How do we deal with the cancer need? What can we do to deal

with that in terms of the funding? So, we asked them to go back and look. When

they came back and put their report in, they indicated that we have significant

cash money in the budget this year approved. We said: Is there money needed?

What would be the cost of doing it? They came back - and how much money is

needed? They determined that we would need $1.2 million to build on, because

there are no options in the Grand Falls-Windsor facility to accommodate inside.

To build on is going to be $1.2 million. Gander would be (inaudible) so that is

$1.55 million needed. They said: Well, we have other capital projects and

numerous things indicated for that year. Some are up and some might be slower

getting started and moving. They said: We feel, with the cash flows we have, we

could, by the time we get out now and get it moving - it cannot all get done

this year anyway, even though that is the cost - there is sufficient cash flow

to move it and advance it without delays, that could get done within the amount

that is budgeted and allowed already before the fiscal year, which means,

though, that some of these costs are going to carry into the 2006-2007 fiscal

year. For some of the ones we approved this year, it is not uncommon to carry

capital costs in facilities. It is all a cash flow basis, I think, as you are

probably familiar with, and may get carried in the next year.

In any event, because we have just added $1.55 million on, to do the project

we announced, if they are accurate, we are going to have to allow in next year's

budget $1.55 million. Whether $600,000 of that goes to those projects and

$950,000 goes to these other projects, we are still going to have to add that

into the pot next year, budget for it, and bring that estimate there for capital

expenditure. You might budget $15 million. Last year, on roads - I will use this

as an example - on roads last year we budgeted $30 million of provincial money.

When the end of the year came and it was getting late - I think this example

will spell it out - at the end of the year there was about $3.6 million,

roughly, or $3.5 million we will call it, did not get done, so we had a cash

flow we will carry forward this year of $3.5 million. Normally what happens is,

that dies and is gone, and it goes into your bottom line.

What we did this year, for example, the road issue, there was $3.5 million

that we did not use. On any capital project you could get a carry through, so we

figured, and we have been told by the department who spoke with those boards out

there who have the cash, the capital projects allocated, that they were going to

get a cash flow that could cover this and we will not need any new money. Beyond

March of next year, somewhere along the line, by the time these projects are

finished, this one and the one we announced, we need $1.5 million. That is

basically how the cash flow works on the system.

MR. SWEENEY: I guess the short answer to my question was that there is no

special line there, no special allocation for special projects.

MR. SULLIVAN: In the Department of Finance?

MR. SWEENEY: Yes.

MR. SULLIVAN: No, it is in the Department of Health.

CHAIR: I do not know what part of that you would not understand.

OFFICIAL: (Inaudible).

MR. SULLIVAN: Well, there is no new budgeting for it.

MR. SWEENEY: I am delighted they got it. As a matter of fact, the answer

took almost as long as it did to get the clinic.

MR. SULLIVAN: Well, I wanted to explain the cash flow. I was not sure on

the -

MR. SWEENEY: No, we know -

MR. SULLIVAN: I will add one thing on roads and what we did. Not only did

we let that $3.6 million and $1.5 million collapse on roads; we put another $30

million on top of that $3.5 million again this year.

MR. SWEENEY: Mr. Chairman -

CHAIR: In my position as Chairman, I am going to have to ask the minister

to shorten up his answers because we have business to get done.

Ms Thistle, the floor is yours.

MS THISTLE: Thank you, Mr. Chair.

I wanted to ask the minister a couple of questions on the Department of

Business.

MR. SULLIVAN: There are Estimates under the Department of Business, and I

am not the minister.

CHAIR: Tomorrow morning.

MS THISTLE: But you are the guru who handles all the -

MR. SULLIVAN: No, I am not the Minister Responsible for the Department of

Business. That would be answered, I think, in the absence of the Premier, by the

Minister of Innovation, Trade and Rural Development. These are Finance Estimates

and I am not going to take on another minister's department when there is an

appropriate time given for that.

MS THISTLE: Okay.

Well, I will ask you a couple on which you would make a decision.

MR. SULLIVAN: I am prepared to answer anything under Finance Estimates,

or pertaining to it, in this period, or under my -

MS THISTLE: Okay.

Can you tell me what costs were associated with the dismissal of the former

CEO, the President of the Liquor Corporation, Gerry Glavine?

MR. SULLIVAN: What costs?

MS THISTLE: Yes.

MR. SULLIVAN: His contract was up and his time was up. His contract was

fulfilled and he went out. There were no other extra costs that I am aware of,

on that. I don't know if my deputy - his contract was fulfilled as of August,

2004, and it was just ended on that date.

MR. PADDON: (Inaudible) normal severance.

MR. SULLIVAN: Well, anybody who retires from government and entitled to

severance will get normal severance, I am assuming, that is a given, or if he

had any - I am not sure if he had any vacation left or not. I do not deal

intimately with details. That would be prepared through the Newfoundland and

Labrador Liquor Corporation, but there were no special additional payments other

than the normal payments that anybody would receive if they left the public

service.

MS THISTLE: Has money been allotted in this year's budget to take care

of the severance package for Ms Deborah Fry?

MR. SULLIVAN: In this year's budget in the Finance Department?

MS THISTLE: Yes.

MR. SULLIVAN: None, to my knowledge, whatsoever.

MS THISTLE: Has she been paid any monies to date?

MR. SULLIVAN: I would not be able to tell you the answer to that. It is

certainly not through my department. I am not going to venture to guess on other

people's departments.

MS THISTLE: Would that matter be taken care of under the Department of

Health?

MR. SULLIVAN: It could be. I am prepared to answer that when the

Department of Health Estimates come up, but it is not under my department here.

MS THISTLE: Can you tell me, how was the figure of $14.7 million arrived

at for the White Paper study?

MR. SULLIVAN: For the White Paper study, that is a question that should

be asked of the Minister of Education, who was asked that question, I think, in

Estimates already. I am not going to answer a question on somebody else's

department either.

MS THISTLE: I am sure that this question belongs in your department. How

do you think the decrease in VLTs will happen over the next five year period?

Will there be any compensation paid to those people who have VLTs on their

premises, or will they be given notice, written notice from your department,

that they must remove them in a certain period?

MR. SULLIVAN: We will deal with that, as a government. We announced it,

and that exercise would have to be carried out through the Atlantic Lottery

Corporation. We give a direction. We are one of the owners, basically, of the

Atlantic Lottery Corporation and, along with the other Atlantic Provinces, we

carry out a policy directive of government. They would have to fulfill that

policy, fulfill that directive, in line with our policy.

MS THISTLE: What you are saying is that the policy has not been

established yet for that particular -

MR. SULLIVAN: We have announced that it would start next year. The reason

it did not start on April 1, lots of people just spent money, and it probably

cost, and they have a one year grace period before you have to start decreasing

the numbers. Then the numbers will decrease by 15 per cent over the next five

years. If people have a certain number in there, they will have to decrease that

proportionately over the next five years to get it down to the number of five

maximum.

MS THISTLE: Have you had any early indications on how the Sunday shopping

has been with the Newfoundland Liquor Corporation? What are the early figures on

that?

MR. SULLIVAN: Well, it was only approved before Christmas and did not get

passed until the end of January, so we only had February and March. What money

we budgeted to get from the Liquor Corporation last year we got, but they only

had two months in the last fiscal year, o