Resource Committee — Department of Fisheries and Land Resources — 19 June 2019

2019-06-19

Newfoundland and Labrador — Committees

PROVINCE OF NEWFOUNDLAND AND LABRADOR HOUSE OF ASSEMBLY First Session Forty-Ninth General Assembly Proceedings of the Standing Committee on Resources June 19, 2019 - Issue 3 Department of Fisheries and Land Resources Published under the authority of the Speaker of the House of Assembly Honourable Perry Trimper, MHA

RESOURCE COMMITTEE Department of Fisheries and Land Resources Chair: Scott Reid, MHA Members: Derrick Bragg, MHA Alison Coffin, MHA Elvis Loveless, MHA Lloyd Parrott, MHA Kevin Parsons, MHA Pam Parsons, MHA Sarah Stoodley, MHA Clerk of the Committee: Sandra Barnes Appearing: Department of Fisheries and Land Resources Hon.

Gerry Byrne, MHA, Minister Lori Anne Companion, Deputy Minister Stephen Balsom, Assistant Deputy Minister, Forestry and Wildlife Keith Deering, Assistant Deputy Minister, Agriculture and Lands Tony Grace, Assistant Deputy Minister, Enforcement and Resource Services Philip Ivimey, Departmental Controller Gordon MacGowan, Executive Assistant John Tompkins, Director of Communications Rosalind Walsh, Assistant Deputy Minister, Fisheries and Aquaculture Also Present James Dinn, MHA Pleaman Forsey, MHA Hon. Carol Anne Haley, MHA, Minister Responsible for Status of Women Hon.

Brian Warr, MHA, Minister of Education and Early Childhood Development Paul Lane, MHA Malcolm Coady, Researcher, Official Opposition Office Laurie Bonia, Research Analyst, Official Opposition Office Ivan Morgan, Researcher, Third Party Office

June 19, 2019 RESOURCE COMMITTEE 108 Pursuant to Standing Order 68, James Dinn, MHA for St. John’s Centre, substitutes for Alison Coffin, MHA for St. John’s East - Quidi Vidi. Pursuant to Standing Order 68, Pleaman Forsey, MHA for Exploits, substitutes for Lloyd Parrott, MHA for Terra Nova. Pursuant to Standing Order 68, Carol Anne Haley, MHA for Burin - Grand Bank, substitutes for Derrick Bragg, MHA for Fogo Island - Cape Freels. Pursuant to Standing Order 68, Brian Warr, MHA for Baie Verte - Green Bay, substitutes for Scott Reid, MHA for St. George’s - Humber.

The Committee met at 5:35 p.m. in the Assembly Chamber. CHAIR (Stoodley): Is everyone ready? Okay. It’s very exciting, everybody, it’s Wednesday night for Fisheries and Land Resources Estimates. I’m very excited. I hope you are as well. I’m Sarah, your new Chair for tonight. Should we do some introductions first? We’ve been doing that every Estimates. I guess we can start with the minister, and then we’ll go around. MR.

BYRNE: Madam Chair, congratulations, and recognizing that, while you’re a rookie Member, you are now the Chair of Resource Committee dealing with Estimates on Fisheries and Land Resources, so congratulations to you. It’s quite an accomplishment at such a fast pace. I am Gerry Byrne. I am the Minister of Fisheries and Land Resources and the MHA for Corner Brook. Joined with me are staff from the Department of Fisheries and Land Resources, my executive team, who I will ask to move through the table so that everyone can hear the sound of their voices and recognize them as we speak. MS.

COMPANION: Lori Anne Companion, Deputy Minister. MR. IVIMEY: Philip Ivimey, Departmental Controller. MR. DEERING: Keith Deering, Assistant Deputy Minister, Agriculture and Lands. MR. BALSOM: Steve Balsom, Assistant Deputy Minister, Forestry and Wildlife. MS. WALSH: Rosalind Walsh, Assistant Deputy Minister, Fisheries and Aquaculture. MR. GRACE: Tony Grace, Assistant Deputy Minister, Enforcement and Resource Services. MR. TOMPKINS: John Tompkins, Director of Communications. MR. MACGOWAN: Gordon MacGowan, Minister’s Executive Assistant. CHAIR: Okay, thank you. The other side, we can start here. MR. K.

PARSONS: Kevin Parsons, MHA from the beautiful District of Cape St. Francis. MS. BONIA: Laurie Bonia, Researcher, Official Opposition Office. MR. FORSEY: Pleaman Forsey, MHA for Exploits. MR. J. DINN: Jim Dinn, MHA for St. John’s Centre. MR. MORGAN: Ivan Morgan, Researcher, NDP Caucus. MS. HALEY: Carol Anne Haley, MHA, Burin - Grand Bank and I’m filling in for MHA Derrick Bragg. MR. LOVELESS: Elvis Loveless, MHA for Fortune Bay - Cape La Hune, the best district in the province. MR. WARR: I’ll argue that. Brian Warr, MHA, Baie Verte - Green Bay. CHAIR: Thank you, everyone.

Now, I pass this to the minister to give opening –

June 19, 2019 RESOURCE COMMITTEE 109 CLERK (Barnes): (Inaudible.) CHAIR: Okay. So, we are going to start Fisheries and Land Resources, 1.1.01. CLERK: 1.1.01 through 1.2.02 inclusive. CHAIR: Shall 1.1.01 to 1.2.02 carry? MR. BYRNE: Madam Chair, as is custom in this place, if I could begin with some opening remarks, I will not be long, as the good Member asked me to keep availability for questions, but I cannot help myself, there has been such fantastic progress on some of our key natural resource files, our key issues, our key opportunities, that it bears a pause and a taking of note.

While it has often been said that provincial governments have been fascinated and preoccupied to the point of exclusion of all else in our oil and gas sector, we often fail to meet the needs and expectations and opportunities of our renewable natural resources. What I am so delighted, Madam Chair and colleagues, to provide details on is how our government has taken on that challenge and really navigated a path to success in invigorating our renewable natural resources. The criticism might be laid, but it should not be valid.

In February 2017, the Department of Fisheries and Land Resources was created, and the purpose of that was to unite all aspects and support for renewable resource industries for a better economic outcome and to support better economic development and growth. My department – our department includes: fisheries, aquaculture, in-land fish and wildlife, agriculture, forestry, conservation and protection of our natural areas, including wildlife and wildlife habitat as well as wilderness and ecological reserves. We have the key role in providing efficient and timely administration of our provincial Crown Lands resources.

Also complementing all of these services, our role in regulation, compliance and enforcement activities include: animal welfare, aquaculture regulation, agriculture regulation, fish processing, in-land fish and wildlife and forestry from a regulatory, compliance and enforcement perspective. Newfoundland and Labrador – and I do not hesitate to shout this at the highest pinnacle – we are experiencing historic return to traditional sectors that continue to drive and sustain economic growth and development.

This is a true renaissance in our renewable natural resource industries as they reclaim their rightful roles in sustainable, diverse and the long-term economy. Madam Chair and colleagues, guided by ambitious work plans in each of these sectors, we are seeing substantive dividends from our commitment to these sectors. As of March 31, 2019, the department has a complement of people who have really put their shoulder to this work to see it and make it happen.

We have 701 employees; 270 of which are female, which represents 38 per cent of the department’s staff and 432 which are male; just 12 per cent of our staff are management. Our departmental budget for this year is $85 million to be able to effectively manage and grow all those sectors. In agriculture, we committed to increasing food self-sufficiency from 10 per cent to 20 per cent by 2022, doubling our food self-sufficiency in a very short period of time. Achieving this target will generate an additional 500 person-years of employment.

So, I want to just point to what we’re doing to make that happen and provide you with some metrics to our ongoing success. We already have established 46 new first-year farmers, which have been supported by the Canadian Agricultural Partnership and/or the Provincial Agrifoods Assistance Program. We continue to support existing farmers through our programs; we are making more land available for farming. To date, we’ve been able to make 278.5 acres of land ready and fresh for production, which is the approximate or equivalent of 211 football fields for food production.

This is new land that has been prepared for fruit or vegetable production.

June 19, 2019 RESOURCE COMMITTEE 110 It’s estimated – and this is the key metric – this growth, this new land is estimated for a potential to yield 5 million pounds of food for the people of Newfoundland and Labrador over and above what we had previously. This is an 18 per cent increase in land to be developed for vegetables, as well as other food such as berries, and one- fifth of the way to meeting our target of doubling food self-sufficiency from 10 to 20 per cent.

I would highlight the fact that doing that in the early years of the commitment, this is the toughest; this is where the toughest work begins, in the early years. What we’ll see is an exponential growth to our pathway, to our achievements, to our targets in the latter part of our performance. In addition, we have launched two large-scale land development pilots for agricultural production on the West Coast, in Reidville and Cormack.

We have – and this is really, really important because, in other parts of North America and other parts of the Western Hemisphere we’re seeing agricultural land degraded, we are seeing agricultural land taken out of the land base to use for urban sprawl, for industrial developments and other things. We have identified and protected 62,000 hectares of agricultural land in Newfoundland and Labrador, pre-identified as agricultural land and allocated and designated as agricultural land in what we call 59 agricultural areas of interest.

We have received already 28 applications within 18 of these agricultural areas of interest, which represents 1,487 hectares of land which has been applied for in a very short period of time. We’ve already approved 18 applications for 540 hectares. To assist in all of this, to getting our food production higher, we are conducting research to support innovation, improve production and increase diversity. We’ve transformed the Wooddale Tree Nursery, which was the centrepiece of our silviculture program.

It still is maintained as the centrepiece of our silviculture program, but we’ve created now the Centre for Agriculture and Forestry Development. At this facility, we are growing vegetable transplants; we introduced a Vegetable Transplant Program to be able to provide literally hundreds of thousands of transplants of vegetables, of various crops to farmers to advance their season and to make them more profitable. In 2018 the Vegetable Transplant Program had 25 farmers participating. We had 255,000 transplants, which were sent out which created $361,000 of approximate combined value for participating farmers.

In 2019, one year later, the Vegetable Transplant Program now does not have 25 farmers participating, it has 54 farmers participating. We have not 255,000 transplants dispersed; we have 1.5 million transplants, which have grown with a projected farm gate value of not $361,000, but $1.6 million for participating producers. In addition to that, we’ve established a two-year co-operative agriculture technician program at the College of the North Atlantic. Enrollment starts in September of 2019, this year. There will be 16 new students in our first year – or sorry, eight new students in our first year.

Is it eight or 16 in our first year? It is 16, isn’t it, in year one? Sixteen students, not eight. In year two, when there’s a year-two enrollment in the program, we’ll have a total of 32 students in any one particular year in the two-year program. I can report to you the program is already fully subscribed. We’ve had so many applicants for so much interest in this we now have a full enrollment for the charter year. Community gardens; you might’ve heard a little bit about this and well you should because this is an exciting project. We established a Community Gardens Support Program.

This program offered up to $500 for community gardens throughout Newfoundland and Labrador to increase food self-sufficiency, increase access to fresh foods and increase awareness of consumption, the value of consumption of fresh fruits and vegetables. We’ve had 97 community gardens throughout Newfoundland and Labrador apply. Applicants applied for a total of $49,386 to support various community garden projects throughout the entire province. Another key element of how we support our farmers: limestone.

Limestone applications, support for liming of agricultural land in Newfoundland and Labrador, is very important. We have an acidic soil nutrient balance. What that means is that we have a very low pH; it’s

June 19, 2019 RESOURCE COMMITTEE 111 somewhat similar to Nova Scotia. In order to be able to bring that pH so that the nutrient complex can be absorbed by plants, you have to raise that pH up a little bit. Limestone does that. We’ve had 30 applications received, 27 of which are from food farmers; we’ve had three from sod farmers. The 26 farms that applied so far, 23 have received limestone and three applications are still being processed. The anomaly here, if you’re counting this up, one farm actually applied twice.

Now, how this limestone program works is that we do a chemistry test; the soil composition has to be tested. What is the nutrient complex? What is the soil pH? Once the soil is tested, then we can determine what exactly the quantity of limestone which would be required over the acreage, the square area, which would be applied for. In addition to that, what I can report to you, the total tonnage of limestone approved as of this year is 2,112 tonnes: 1,984 tonnes have already been delivered and 128 tonnes are in the process of being delivered.

Here’s another element that increases food self- sufficiency and increases community awareness and participation in farming: Community pastures. We have 27 active community pastures across the province and they are eligible for CAP assistance. Food self-sufficiency – this is key. We have a number of different initiatives. This is what it’s all about. We can get into that if you decide, colleagues. This is an area that you really, really want to dig into. I would certainly appreciate it if you would because it’s a fantastic story to be told. Here’s where the rubber hits the road.

On job creation – this is so key because we are supplying jobs in rural areas of our province largely through our agriculture. In 2018-’19, based on projections, numbers provided by the farmers, the applicants, the following jobs were created for land development, facility construction and for farm expansion. According to the information we received from our farmers, we have created 60 full-time positions through support through our Provincial Agrifoods Assistance Program and 140 full-time positions through the Canadian Agricultural Partnership.

Our strategy has already produced 200 full-time jobs in our province. Under forestry – this is the next sector which deserves attention – it’s one of these things, it’s one of these industries that slowly beats in the veins of our entire province but is often not necessarily recognized, but it is a mighty force. It produces $380 million each year through their GDP and is responsible for employing 5,000 Newfoundlanders and Labradorians both directly and indirectly; 5,000 people get their livelihood from forestry.

With that said, we committed to increasing timber allocations and harvest levels by 20 per cent over the previous five year period by 2020. We introduced a cutting permit allocation policy. We introduced timber sale agreements. We’ve advertised for those timber sale agreements. We’ve had great success. We’ve offered new ways of issuing cutting permits, including a five-year commercial cutting permit. We’ve already had four such commercial cutting permits approved so far. Since setting our targets in 2016, I am very pleased to report the forest industry has already grown by 13 per cent in this province.

We continue to support forest ecosystem health and management through reforestation, but what we really see is that not only are we creating an environment for future success, the success is happening right here and now. In 2019, we harvested approximately 60 per cent of our annual allowable cut, which means that 40 per cent of the annual allowable cut was not harvested. That’s where we’re doing our work. We expect to prepare 1,200 hectares for restoration and plant 6 million to 7 million tree seedlings this year.

When we meet our 20 per cent increase commitment, we will need to plant 8 million seedlings per year. We are prepared for that. Where does this all hit the road? It’s in sawmill production. In 2014, we had 66-million board feet produced. Well, in 2018, we produced 94- million board feet. In aquaculture, growing the aquaculture industry and stimulating private sector employment is a key component of our strategy. For salmon, we

June 19, 2019 RESOURCE COMMITTEE 112 are intending to grow the production to 50,000 metric tons, annually; 30,000 tons alone will be contributed to Grieg. CHAIR: Minister – MR. BYRNE: You want me to be quiet but I don’t want to be quiet. I want to keep going. CHAIR: I know, but your 10 minutes is up. It’s been an excellent 10 minutes. MR. BYRNE: Thank you very much, Madam Chair. I will take the time to make sure that everyone hears this great news story as we proceed with our individual Estimates. MR. K.

PARSONS: It was really great listening to you, Minister, I have to say, but you only spoke about two minutes on the actual fishery that’s part of your portfolio that I’m really interested in. MR. BYRNE: I hear unanimous consent to allow me to continue on then, Madam Chair, I’ll talk about the fishery. MR. K. PARSONS: No, it’s not a consent at all, we’ll get you talking about the fishery. First of all, just some general questions. I’m hoping that we’re going to get a copy of your briefing binders. MR. BYRNE: We could do that right now, if there’s consent, Madam Chair. MR. K. PARSONS: We will? MR. BYRNE: Yeah.

CHAIR: I think so. MR. K. PARSONS: Okay, perfect. Did you make any errors? MR. BYRNE: A few, but I corrected them. MR. K. PARSONS: Okay. MR. BYRNE: Sorry about that, I would’ve given that to you sooner. MR. K. PARSONS: Okay. Are you still applying zero-based budgeting? MR. BYRNE: We always apply zero-based budgeting. It’s a critical function that makes successful and efficient programs. MR. K. PARSONS: Okay, that’s good. What were the attrition savings last year in terms of dollars and positions? MR. BYRNE: Now, those kind of level of details are always just best put to those who are experts in that field.

Madam Deputy. MS. COMPANION: Our attrition numbers, over a two-year period, we had to save $377,000. In the first year, in 2018-19, we saved $209,900 and this year in ’19-’20 we’re saving $167,100. That was comprised of four in ’18-’19 and three in ’19-’20. MR. K. PARSONS: So you have four this year? MS. COMPANION: We had four in ’18-’19 for the $209,900. MR. K. PARSONS: Okay. MS. COMPANION: And then three in ’19-’20 for $167,100. MR. K. PARSONS: Okay. I know the minister mentioned in his

preamble there that there were 701 employees, but just to note, according to the salary details, there was 561, and that was down from 599 from last year. So where did the difference come from there? MS. COMPANION: That would have been permanent employees. We have 701 employees. We have 460 permanent. We have 175 seasonal. We have 59 temporary and we have seven contractual employees.

June 19, 2019 RESOURCE COMMITTEE 113 MR. BYRNE: Man, you know your stuff, but I’m going to get you – because you know your stuff so well – when you answer questions (inaudible). MS. COMPANION: Sorry, and say my name. Right. MR. K. PARSONS: How many retirements were in the department last year? MS. COMPANION: There were 30 retirements. MR. K. PARSONS: Thirty retirements. Okay. And new hires last year? MS. COMPANION: We didn’t create any new positions last year, but we actually had, I think it was 90 competitions that we competed for. MR. K. PARSONS: How many vacancies were not filled in the department? MS.

COMPANION: Right now, we 101 vacancies and 76 of those are in active recruitment. MR. K. PARSONS: Seventy-six (inaudible). MS. COMPANION: Yeah. MR. K. PARSONS: Has there been any positions eliminated and why? MS. COMPANION: The only positions that would have been eliminated would have been those that were vacant and unfunded for more than 24 months. MR. K. PARSONS: Okay. I’m going to go now to the line items. The Minister’s Office looks pretty consistent with what it was in last year’s; very little changes. MR. BYRNE: I’m anything but consistent. MR. K. PARSONS: You are that, I guarantee you that.

I don’t know if that’s a good thing or not. Anyway, we go to the General Administration, Salaries, an additional $66,300 was spent over last year’s budget. Can you explain the variance there? This year’s budget is $72,800 less. MR. BYRNE: That’s in the overall salary envelope, is it? MR. K. PARSONS: Yeah. MR. BYRNE: Yes, we had an assistant deputy minister who retired from the civil service and that left us with a potential to save some salary over the a period of time. MR. K. PARSONS: Okay. Next, we’ll turn to

section 1.2.02. Last year, we talked in Estimates about the purchase of a boat for aquaculture activities on the bay management area. Can you give us an update on the information? We spoke to that last year. MR. BYRNE: I sure can. What you’re seeing here is a placeholder to be able to fulfill that expectation. We are growing aquaculture on the South Coast. It requires a significant body of activity, body of work, to be able to do the necessary bathymetric and oceanographic work, to be able to create the bay management areas. So when you grow the area, you grow the need, the requirements.

What I can report to you is we are looking at innovative ways to be able to fulfill that function. While we have not yet decided exactly what platform for the boat to take, we are looking at cheaper options, which may actually be more effective, which could potentially include leasing. There may be redundant or capacity at the Marine Institute or other government departments that may be able to meet that need, so we’re keeping our options open here. We want to experience and want to understand exactly what the levels of demand will be, but I can tell you, we anticipate that we will definitely be needing a boat.

We’re just trying to figure out the best way to do it at the cheapest cost.

June 19, 2019 RESOURCE COMMITTEE 114 MR. K. PARSONS: Are we going to

section 2? No? CHAIR: No. MR. K. PARSONS: Okay, so that’s all I have on that section. CHAIR: Mr. Dinn, do you have any questions on that section? MR. J. DINN: I don’t think we have any questions here. CHAIR: Okay. MR. J. DINN: No, we’re good. CHAIR: Shall 1.1.01 to 1.2.01 carry? All those in favour? SOME HON. MEMBERS: Aye. CHAIR: Okay. On motion, subheads 1.1.01 to 1.2.01 carried. CLERK: Fisheries and Aquaculture, 2.1.01 through 2.3.01 inclusive. CHAIR: Shall 2.1.01 to 2.3.01 carry? Mr. Parsons. MR. K. PARSONS: Thank you kindly.

In this particular section, the title and the description has changed since last year. Can you explain the changes to these divisions? MR. BYRNE: Is this the consolidation? Un moment, s’il vous plaît. Madam Deputy, would you be able to reply to that question? MS. COMPANION: It was just a change in the title. It used to be called Seafood Marketing and Development and now it’s Marketing and Development. It includes agriculture, as well. Our marketing people do a lot of fisheries and we have some agriculture stuff we need to market as well. MR. K. PARSONS: Okay, so it’s all done in this division here now.

There were separate divisions last time. MS. COMPANION: The agriculture marketing person was over in agriculture, but we put our marketing expertise together. MR. K. PARSONS: Okay. Can you explain the variance here in the Salaries? MR. BYRNE: That was a simple product of some vacancies during the year that led to a relatively minor adjustment. MR. K. PARSONS: Given that agriculture analysis is added to this, have there been any positions added? MR. BYRNE: The one position was moved within the Agriculture – that was one function.

That was one person, one position that was in Agriculture that’s now found within the marketing component. There’s been no reduction in services whatsoever. I think one of the points I’d like to make here is that there are some great synergies that get created by being able to market both our terrestrial, our land base and our crops, with our fish products. Many of the shows, many of the functions, many of the buyers are interested in both seafood, fish and vegetables as well.

We have a historic partnership, which we’re developing with Sobeys and other major retail outlets, to make sure that Newfoundland and Labrador products are put into national chains. This is one of the examples of the synergies of the creation of the Department of Fisheries and Land Resources. This simply makes sense and it’s been productive and successful. MR. K. PARSONS: You say there was one added to the salary listed? MR. BYRNE: No, it was one position that was with Agriculture that was separate. Is that correct, Madam Deputy?

June 19, 2019 RESOURCE COMMITTEE 115 MS. COMPANION: The salary was in the budget last year. The person was in marketing, we just needed our subheads and our budget to indicate that it was Agriculture, too, in order for it to be appropriate. The salary was there last year. MR. K. PARSONS: Okay. Under Transportation and Communications, does this include travel to conferences and seafood shows as well? MR. BYRNE: Yes, it would. MR. K. PARSONS: Under Supplies, can you explain why there’s an additional $11,300 that was spent last year? MR. BYRNE: Yeah, Deputy, why? MS.

COMPANION: Under Supplies they were just higher than anticipated, and for the sea shows and for the agricultural work that we were doing as well. When we transferred in the person who was in Agriculture, we transferred in salary several years ago, but there wasn’t any additional transfer for supplies. So some of that is for agriculture, some of that is for seafood and we adjusted the budget accordingly during the year. MR. K. PARSONS: Okay. Under Professional Services what’s included?

What explains the $70,000 less being spent last year and an additional $20,000 being spent over the revised amount that’s been budgeted this year? You’ve spent $70,000 less than what you had budgeted and you’re going to move it up by $20,000 more this year. MS. COMPANION: That includes the money for the Fisheries Advisory Council and that money that was there for the fisheries marketing council, which the Advisory Council is still considering and providing advice to the minister on that issue.

When there is a decision made by the council or advice provided to the minister, then we’ll be able to put that funding there again. MR. K. PARSONS: Okay. Purchased Services: What’s included and what explains the $50,000 decrease since last year? MR. BYRNE: Purchase Services; that would also include our participation in trade shows in terms of some of the associated costs, some of the printing and graphic materials for attendance at the shows. That’s some of the key elements there. MR. K. PARSONS: Grants and Subsidies; there were changes last year related to the Seafood Innovation and Transition Program.

Do you have any explanation around where the funding is in this section? Where’s the funding in this

section for the fish? MR. BYRNE: We still have $200,000 for a seafood development program, but as you’re aware we also have the Atlantic Fisheries Fund. If I could ask my colleague: What specifically is your question again? MR. K. PARSONS: Related to the Seafood Innovation and Transition Program, where’s that funding in this section? MR. BYRNE: Go ahead, Madam Deputy. MS. COMPANION: The funding is not there. That’s where the Seafood Innovation and Transition Program, the $2 million fund, ended last year. So there was no fund in ’18-’19. MR.

BYRNE: The decision was taken to use the Atlantic Fisheries Fund and the benefits therein at an estimated value to Newfoundland and Labrador at $100 million. That’s instead of applying more provincial funds; we partnered federal-provincial funds to be able to accomplish those objectives. MR. K. PARSONS: Okay, so what is the $200,000 for now? MR. BYRNE: The $200,000 now is for a seafood development program. There are still additional projects that may be smaller in scope, but may not necessarily meet the criteria within the Atlantic Fisheries Fund. We still maintain $200,000 to be able to provide that.

June 19, 2019 RESOURCE COMMITTEE 116 Some hon. Members may ask is this available for wharves or for infrastructure? It is not. It is for technology, for the acquisition of new technology, for marketing assistants. Because one thing about the Atlantic Fisheries Fund, while we have the Canadian seafood marketing fund, marketing initiatives per se under AFF is more directed towards the company itself. Largely, this is for the marketing of seafood in many respects. MR. K. PARSONS: Okay. In

section 2.1.02, the description is changed a little. Can you explain what changes were made in this division? MR. BYRNE: (Inaudible) for it, Madam Deputy? MS. COMPANION: There was no real change in this division. It was just to update and more accurately reflect what the division was actually doing for Licensing and Quality Assurance. MR. K. PARSONS: Okay. Under Salaries, I see quite a change here. There’s a fair amount of variance with an additional $251,300 being spent last year and $375,000 less than the revised amount in this year’s budget. Can you explain it? MR.

BYRNE: The variance is due to severance and leave costs associated with former employees. We did have, I think it was three retirements – MS. COMPANION: Six in (inaudible). MR. BYRNE: Six retirements in that particular division and that’s what it’s attributed to. MR. K. PARSONS: Okay. Under Transportation and Communications, $10,100 less is budgeted this year. What does that include and can you explain the variance? MR. BYRNE: Under Transportation and Communications, there were lower travel costs and staff meetings were held often by video conference, which is becoming the new normal.

That’s why it’s maintained at $87,000 for the 2019-20 Estimates. MR. K. PARSONS: Okay. Professional Services, what’s included here? MR. BYRNE: Professional Services would include everything from printing services, recycling, shredding services and other things. That’s mainly what’s happening there. MR. K. PARSONS: Okay. Under Purchased Services, what’s included? How can you explain the $11,900 increase in the revised, inclusive to $19,000 in this year’s budget? MR. BYRNE: Madam Deputy? MS. COMPANION: These were increased costs for printing services, for recycling and for shredding.

We had a big information management issue that we had to deal with in the department for digitization; lots of paper and lots of things happening. You’ll see throughout the Estimates that for lots of our Purchased Services it was for shredding, we got rid of a lot of paper and it cost a bit of money for disposal. CHAIR: We’re out of time. Mr. Dinn. MR. J. DINN: Just a few questions under 2.1.01 – and thank you minister for a copy of your briefing notes as well; that was prompt.

I just want to go back to Supplies and the difference, I think the count was made that it was higher than anticipated, but I noticed then it’s dropped back down. I’m just trying to figure out why it was higher than anticipated? MR. BYRNE: I’m going to have to ask you to backup. Which subhead? MR. J. DINN: Sorry. Fisheries Programs, 2.1.01, under 01, Salaries, and then it has Supplies. It went from $24,000 in budget 2018-

June 19, 2019 RESOURCE COMMITTEE 117 2019, up to $35,000 and now it’s back down to $24,100. I’m just wondering, the comment was made in the previous question to explain the variance, that the costs were higher than anticipated. I guess I’m trying to look at what costs were higher than anticipated? MR. BYRNE: Madam Deputy, would you like to field that one? MS. COMPANION: In addition to some higher than anticipated costs, some of the subscriptions that the marketing division access used to be charged under Purchased Services and then through accounting processes it got moved to Supplies this year.

That’s why you see some increased numbers there and some decreased numbers then in our Purchased Services. It was just whatever account it was charged to. MR. J. DINN: If I may, then I guess when I see costs that are higher than anticipated, are you confident in the fact that it will not be higher than anticipated this year or have you worked out all variations? MS. COMPANION: Yes, we are confident. MR. J. DINN: Okay. MS. COMPANION: We’ve done zero-based budget so we’re confident that our operational budget for each division is sufficient to take care of their responsibilities. MR. J.

DINN: I just want to go back to Professional Services, again there’s a variation of $70,000 in the difference. Would you just review that again for me, please? It went from, in one year, $189,000 and dropped by $70,000, but it’s now at $139,000. I’m just trying to figure out, certainly with zero-based budgeting, how you arrived at these numbers, but why the variance as well, again. MS. COMPANION: It’s sometimes based on the information that is required in this subhead.

It’s where we contract various marketing advisors and depending on what the stocks are, what the fisheries panel needs in terms of information and what they request. So, we only needed $119,000 this year and we anticipate, based on our forecasts, that we will need $139,000 next year. MR. J. DINN: Is it possible to get a list of the marketing advisors that are used? MS. COMPANION: Yes. MR. J. DINN: The Purchased Services, again, if you would. The variance there, again, I know it actually dropped, which is, I guess from a certain point of view good, but what services would they be again? MR.

BYRNE: On that same subhead, Purchased Services? MR. J. DINN: Sorry, 2.1.01. MS. COMPANION: Yeah, $355,000 to $310,000. MR. J. DINN: Yeah. MS. COMPANION: Under Purchased Services. MR. J. DINN: Yeah. MS. COMPANION: Our Purchased Services covers various things. It covers our international trade shows and our local trade shows. The variance would simply be from attendance at those, what the promotional materials costs, what it costs us to get there, how much information we need, the freight costs for the seafood samples and the promotional literature and the exhibits. It’s a variance and it varies from year to year.

It depends on the timing and the costs and the amount of material and the amount of food. MR. J. DINN: Is it possible to get a breakdown of those costs, please? MS. COMPANION: Yes. MR. J. DINN: I’m also assuming then, if I may follow up on that, if I’m reading it correctly, it seems to have rightsized itself. You’ve moved from $355,000 in that one year, to $310,000 and you seemed to have set the amount of the budget this year at $305,000. Are you confident in that figure that we won’t be going back up?

June 19, 2019 RESOURCE COMMITTEE 118 MS. COMPANION: We’re confident. MR. J. DINN: Okay. MS. COMPANION: We’re confident based on the information we know today. When we did our zero-based budget, on what information and what trade shows we’ll be attending, what promotional material we’ll need, that our budget will be sufficient. MR. J. DINN: Okay. MR. BYRNE: Because we’re awesome. MR. J. DINN: 2.1.02, Purchased Services, I think that you said that this was to do with the shredding, if I remember correctly, from the previous question. MS. COMPANION: Yes, it’s for a lot of things.

It’s for recycling, it’s for printing and it’s for shredding, just regular office services. The big increase for some of our Purchased Services this year was because of our big digitization approach that we did in the department to try and get less paper and more … MR. J. DINN: That was, if I may, a one-time cost more or less? MS. COMPANION: Yes, for the shredding. MR. J. DINN: Yeah. So, if I may ask, if it was a one-time cost, why wouldn’t the budget then go back down to around $8,000, if it’s a one-time cost for the shredding and the transferring over to digitization? MS.

COMPANION: Well, the shredding is a one-time cost when you do the shredding. We have a big department and licensing has a lot of paper, so they’re not finished doing their shredding. I mean, they have a big project going on and a big cleanup so we anticipate that they’ll be continuing this year. MR. J. DINN: If I may follow up – and I appreciate your answers, by the way – do you anticipate the amount budgeted this year to eventually drop to $8,000, or how long would you anticipate this process to carry on? MS. COMPANION: I would hope that we’ll be getting to the end of our digitization process this year.

We have it going on throughout the entire department. MR. J. DINN: Excellent. On 2.1.03, Grants and Subsidies, Atlantic Fisheries Fund has a significant drop in the 2018-2019 year, but I notice that it’s moved back up to its – you have another $9 million, almost a $10-million budget for that. I’m just curious as to why did it drop by $3.6 million but, more importantly, why have you budgeted then for the – put it back up to where it was? I’m sure there might’ve been unanticipated drops, but why would it move back up to that amount? Why would you budget that amount again if you only used $3.6 million last year? MR.

BYRNE: I can deal with that. The Atlantic Fisheries Fund, of course, is a seven-year program. We were anxious to get this money out the door, but we also had our obligations to our federal partners in terms of we have formal signing of the agreements, getting the money and getting the programming stood up and ready to go. It did take our federal partners a little bit of time. We had, in our fiscal forecast, adjusted for; we had established what a cash flow regime would be. In the early years, while we were anxious to get the money out the door, we did had some stopgaps there that we had to account for.

So what we did is we pushed the money forward into future years and now we’re back online and on target to get those expenditures up. As a side note to this, I can report to you that while all four Atlantic provinces participate in some way, shape or form in this particular initiative, Newfoundland and Labrador has a much, much greater number of applications and approvals than any other province. In fact, Newfoundland and Labrador has 329 total applications, which represents, when compared to all of Atlantic Canada, just about 50 per cent of all applications for this program come from our province.

We’re pretty proud of that because it’s a big uptake to the program.

June 19, 2019 RESOURCE COMMITTEE 119 MR. J. DINN: Thank you, Minister. One quick question: Is it possible to get a breakdown? I noticed here it’s in support of the fishing industry transition to groundfish, and the support of growth in the aquaculture sector. Is it possible to get the breakdown of the amounts that are allocated to each? MR. BYRNE: To each applicant? MR. J.

DINN: No, if I am reading this correctly, it has to do with, “Appropriations provide for the support of the fishing industry transition to groundfish, and support of growth in the aquaculture sector through innovative programming ….” I’m looking here in that it seems to be two basic areas. I’m just wondering of that $9,698,000, how much of that will go to the support of growth in the aquaculture sector and how much towards the industry transition to groundfish? That’s what I’m looking overall, a global number. MR. BYRNE: It depends on who applies, but I see absolutely no problem.

We can get a list of the actual approved applications, the applicants. MR. J. DINN: Appreciate it. Thank you, Minister. CHAIR: Thank you. Mr. Parsons. MR. K. PARSONS: I’d also like any of the additional information that you send to him or you send to me, can you send it to both of us? I suppose, Jim, it would be a good thing. Okay, thank you kindly. MR. BYRNE: Only if you’re nice to us. MR. K. PARSONS: I have a question to ask you. I’ve been in a couple of Estimates now. Digitalization – has that been done in all departments or is it just done in the Department of Fisheries and Lands?

You talked about a lot of shredding and stuff like that and digitalization and …? MS. COMPANION: A big part of why we undertook trying to – Crown Lands, we needed to get all of the files over there digitized because they were being used all the time. It’s for the protection of the information. The same thing with licensing in Fisheries, we need the information to be accessible and digitized. In Corner Brook, where we just moved to our new building, we didn’t really have space all kinds of filing cabinets, and the whole plan for the last year was to digitize our information so that we have it accessible.

It’s an internal department process, but there’s a broader digitization process for government and it’s called – Digital by Design is what is being led for a big government process. MR. K. PARSONS: Okay. In this

section here, I have a couple of general questions I’d like to ask basically on the Fisheries Advisory Council. Can you give us an update on what the Fisheries Advisory Council has done so far? MR. BYRNE: Sure can. The Fisheries Advisory Council is chaired by Bill Wells. It has a diverse membership, representing interests from both processors and harvesters, innovative harvesters. We have one member, for example, that has led the initiative for cod ranching; we have a number of different sectors included.

The membership of the council itself is not meant to or expected to be representative of their particular areas or fields of expertise. What we ask for is that they look holistically at the entire industry and I think they’ve performed that job very, very well. The Fisheries Advisory Council I asked to do a number of different projects, many of which are underway right now. One of the projects, which I released publicly their results, was the council’s view on adjacency. This was really important because the federal Fisheries Act was before Parliament and was being debated.

In addition to my own thoughts – and I know the hon. Member did contribute his own perspectives to that particular debate and put

June 19, 2019 RESOURCE COMMITTEE 120 forward his views to Ottawa. In addition to this Legislature – and legislators provided those opinions – the Fisheries Advisory Council moved forward and put forward a position endorsing the concept of adjacency within the Fisheries Act. What’s important about that is that’s a statement not from elected officials; it comes from the industry and that was forwarded by the council to the federal government.

A number of other initiatives, such as making sure that an examination occurs of getting in more young people, transition, succession planning in the fishery, I could list off several others. One thing I will note, and it is unfortunate, during the course of this past year our chairman’s spouse passed away, which did lead to a period of a couple of months where the council did not meet. I would stand up and say that would be totally understandable. MR. K. PARSONS: How much has been spent on it to date in the Fisheries Advisory Council? MR.

BYRNE: We maintain an annual budget to support the Fisheries Advisory Council of just $100,000 a year. I don’t know, Madam Deputy, if we’ve actually ever spent the $100,000 per year? MS. COMPANION: Only a small amount of money has been spent for some of the members to attend the meetings. The meetings happen fairly regularly and we assist members to participate. If we need to engage an outside consultant, then the funding would be used for that.

At this point, the Fisheries Advisory Council has been doing their analysis internally and with the Marine Institute, who’s a member and also participates on the Committee. MR. K. PARSONS: When you say fairly regular, how often a year do they meet? MR. BYRNE: This is up to the call of the chair, obviously. They are masters of their own house, but we do ask them to meet once a month. MR. K. PARSONS: Can you give us an update on the strategy action plan for cod revitalization? MR. BYRNE: The hon. Member and I have talked about this relatively often on the floor of the House.

There will be no one individual tombstone plan for the revitalization of cod when it comes to the Fisheries Advisory Council. What they will do, and we encourage this to occur, is they will put forward a series and subset of analyses of recommendations of opinions on a variety of different subjects. There will be no waiting for the seminal document where a final draft of a final cod recovery plan comes in place and I think everyone would reflect on the wisdom of that.

There is no certainty as to exactly how much cod will be here available to us to harvest on the Northeast Coast in five years, just as there’s not necessarily great certainty as to what there will be this year. The Department of Fisheries and Oceans has yet to unveil their 2J3KL, their northern cod management plan, for 2019. It’s important here and I think this is a good – reports that are finite, final and time specific end up sitting on a shelf. Projects and workload, which is consistent with what the needs of the industry are at the time, really do get action and that’s what we’re working on more. MR. K.

PARSONS: All due respect, Minister, the Fisheries Advisory Council and I have asked a lot of questions on it. One of the mandates was for the strategic action plan about the cod revitalization since day one. As we know with the industry right now they’re very concerned about actually cuts last year in the actual quotas in some areas. I just think that this was there since day one and it doesn’t seem like there’s any action being taken. MR. BYRNE: The hon. Member is free and clear to have those opinions. I don’t agree with those opinions to say that there was no action being taken.

If you can tell me, Sir, what exactly the cod quota will be this year, I would be loving to hear it because right now the Department of Fisheries and Oceans has not announced that. If you can tell me what the cod quota will be in five years, I would be very receptive to having that information so that we can plan accordingly. What we do need to do is we need to prepare for cod recovery for a time and a period when cod becomes a significant contributor to

June 19, 2019 RESOURCE COMMITTEE 121 communities and to fish harvesters throughout the entire province. One of the reasons why we’re investing, through the Atlantic Fisheries Fund as an example, in infrastructure projects in preparation for that to occur – for example, the investments made in Icewater in Arnold’s Cove are going to make a huge difference in our quality that we bring to market. While volumes of Newfoundland and Labrador fisheries resources – volumes, weight – is actually on the decline, value is on the upswing. I attribute that directly to increased emphasis on quality.

Quality, quality, quality is the key to our future. You can harvest less but get more value to it. That’s the trick. When we invest in these projects – whether its cod jiggers, it’s slurry systems on vessels, whether it’s in new technology in the plant – improving that quality means that we’re better buffered for the vagaries of what the future quotas may be because we extract maximum value. That’s where we need to be and the Atlantic Fisheries Fund is a part of that and the Fisheries Advisory Council is also part of that. MR. K.

PARSONS: I say to the minister a lot of harvesters in this province were hoping that the Advisory Council would be set up in order to probably give DFO some advice, because it doesn’t seem like they have a lot of advice themselves on what’s actually happening to the cod fishery. Harvesters in this province agree with you that the quality is very important. They play a huge emphasis on making sure that their cod quality is a lot better than it was in years gone by. I see it on the wharves myself.

Again, it’s the hope of the Advisory Council that it will come up with some solutions to see why our cod fishery isn’t coming back. Whether it’s other predators, whether it’s the water temperature or anything else, it doesn’t seem like anybody is doing anything for the harvesters to address these problems. Quality is a great thing and our prices are going up, but the only thing that isn’t going up is the actual catch of our cod and the increase of cod on our shores. MR. BYRNE: Thank you for that intervention.

What I can report to you, which I’m sure you’ll be excited to hear, is that the Department of Fisheries and Oceans sits as an ex officio member of the Fisheries Advisory Council. They’re not a voting member, nor should they be, but they sit in on the meetings, they hear the discussion where appropriate and they provide advice on a regular basis.

This is very, very important because they do hear, but I will caution not just you but everyone that when you criticize the actions of the Fisheries Advisory Council, what you are effectively doing – and we all need to consent to this – you’re criticizing the Newfoundland and Labrador fishing industry. The Fisheries Advisory Council is made up of the Association of Seafood Producers executive director, it’s made up of the president of the Fish Food and Allied Workers Union and it’s made up of a representative of the Marine Institute of Newfoundland and Labrador and of Memorial University of Newfoundland.

This is a committee, this an Advisory Council which is made up of the fishing industry of our province. It’s not made up of government officials. I would just simply point that out. I am very proud – I am very proud – of our fishing industry in our province and I would not suggest to anyone that those who sit on the Fisheries Advisory Council, who are representative of the industry that we so proudly support, should be degraded or mocked in any way, shape or form. MR. K. PARSONS: Definitely not degraded. CHAIR: Thank you, Mr. Parsons and Minister. Mr. Dinn. MR. J. DINN: I’d like to follow up if I may.

In the spirit of free and open discussion, I don’t think anyone here is criticizing people. I think we have the right, though, to question decisions and to ask those questions. I do want to go back to 2.1.03, just carry on with that and I’ll move into 2.1.04. I’m curious, I asked in the last set of questions about the breakdown as to how much of the money of the $9.6 million would be going to the support of growth in aquaculture and transition to groundfish?

June 19, 2019 RESOURCE COMMITTEE 122 I’m curious also not only as to what the nature of support means in terms of exactly what is the money – when we talk about support, what does that support look like and who gets support for what issues? For example, is it for mitigation? If we look at aquaculture, is there money that’s allocated then, because I look here and it’s for science, marketing, infrastructure and research and development. Is there money that’s set aside there in terms of mitigation measures for escapement, ISA, sea lice in aquaculture pens?

I would like a breakdown, I guess is what I’m looking at here, as to what that support entails. It’s great to have a list of who gets what, but I’d be interested in exactly what that money is being used for then. MR. BYRNE: Thank you for the intervention. The program itself is applicant-driven. We do not have specific targets or thresholds that we expect to be fulfilled in any one particular sector. What we do emphasize are the core pillars within the program itself. I can indeed provide you with a list of projects.

What you’ll find, when you examine that list, the vast majority of funding right now at this point in time has gone towards harvesters, wild commercial fish harvesters, through such initiatives as automated jigging machines, quality control mechanisms in the vessel itself, improvements there to create better quality. If your question is what will you spend your $9,698,300 on in the future, I can’t tell you that because it will be applicant-driven. What I can tell you is just in terms of what money has already been spent; this comes from a press release I issued a few months ago.

In the harvesting sector we’ve had 63 approvals for automated longline systems at a value $4,636,000. We’ve had automatic jiggers, 24 approvals for a value of $516,000. We’ve approved four slurry systems – that’s onboard slush systems to be able to keep fish chilled – at a value of $398,000. Onboard handling improvements for fish; we’ve approved three of those at a value of $558,000. We’ve approved 18 trawl-monitoring systems for a total value of $1,000,658. Trawl- monitoring systems are for larger vessels, the otter trawl fleet in particular, and larger.

That’s to make sure they’re operating efficiently and effectively. Cod pots – this is really cool – three projects at a value of $74,000 where we actually purchased the cod pots and other things in a pilot project; a modified trawl for redfish to be able to prevent bycatch and to improve efficiency. There’s been an experiment, a pilot project, for a modified trawl for redfish at a value of just under $80,000. We’ve purchased a large set of insulated tubs and automatic jiggers of four major – blanket or umbrella approvals for a value of $1.7 million.

In processing, you’ve asked the question and I’m delighted to inform you that we’ve had nine projects approved for groundfish processing improvements, valued at $6.5 million. For lobster grading, we’ve improved lobster grading under one project for just under $100,000 and a multi-species live holding facility; one project approved at $450,000. In research and innovation – this is really, really, I think, important to the industry – we have supported the Canadian Centre for Fisheries Innovation for fishing industry innovation initiatives at a value of $4.5 million.

The Centre for Ecosystem Research at Marine Institute, fisheries science, we’ve put a contribution agreement before them for $4.3 million. We’re conducting an experimental redfish fishery under research and innovation on the West Coast for $700,000. That’s in partnership with the FFAW and fishers there. In cod quality research innovation, we have one project approved there for $270,000; an experimental scallop fishery in one area of the province, we have one project approved there for $150,000. In by-product and bioprocessing research we have two projects approved there for a total value of $94,000.

In aquaculture, we have two projects approved for mussel aquaculture development at $164,000; oyster aquaculture in Placentia Bay, one project there at $65,000. A project came forward from a consortium of the Marine Institute and some salmon aquaculturists. We have two projects approved for cleaner fish research and innovation at a value of almost $1.4 million.

June 19, 2019 RESOURCE COMMITTEE 123 I’d be happy to present this list to the Members if that’s convenient for you. MR. J. DINN: Thank you very much, Minister. Would any of this money then be available to – it’s quite a list, quite an innovative list as well, but would any of this money be available to an organization to set up totally contained land- based aquaculture. Is that possible under this money as well if anyone so wished? MR. BYRNE: It would be applicant-driven and it would be based on the merits of the application.

All of these projects endure a significant vetting – a challenge process – to ensure that they can be sustainable and they meet the requirements, both technologically and economically. Any applicant can come forward. It’s applicant-driven and we’ll assess an application on its merits. MR. J. DINN: Thank you very much, Minister. Just a few other questions on that and we’ll see how far I get with it. I understand that as part of the Atlantic Fisheries Fund there consists a separate fund of $30 million for seafood marketing that can be leveraged.

How much of that money have we been able to access to date and what are our plans for that money? MR. BYRNE: This is a pan-Canadian initiative that the federal government provided to provinces that did sign on. We are anxiously awaiting the federal government to put the final approvals to the availability of those funds. We have a number of different projects waiting in the wings, but at this point in time there has been no money disbursed under that particular initiative, that pan-Canadian initiative, anywhere in Canada. MR. J. DINN: Thank you.

Can we have an update on the Canadian Fish and Seafood Opportunities Fund? It’s been promoted as the marketing pillar of the Atlantic Fisheries Fund, which is supposed to advance marketing initiatives and sharpen the industry’s ability to target new markets and leverage benefits emerging from free trade. How much money has this fund leveraged or is that part of the fund I just asked you about? MR. BYRNE: Yes, the two are one in the same. The first, in your former question, there was a different title attached to it. MR. J. DINN: Yeah, it’s the same fund. MR.

BYRNE: It’s the two; it’s a pan-Canadian initiative and does require participation from more than one sector from one province in order to be eligible. MR. J. DINN: Thank you very much, Minister. Is it possible to have an update on the Seafood Innovation and Transition Program? MR. BYRNE: Again, that’s a program that’s no longer within our funding scope. We have the seafood development initiative program at $200,000, but we can certainly provide you with a list of past programs that were under that particular initiative. MR. J. DINN: Thank you very much, Minister.

I think you’ve answered this question; it’s a very comprehensive question now about automatic jiggers. Has there been any feedback on those investments? MR. BYRNE: That’s an excellent question because, of course, this is one of the first seasons. When we provided that funding it was in preparation for the normal harvest season, so we are in the field now getting assessments, asking those that had them employed to receive their feedback. We’ll be able to report back that in a future date. MR. J. DINN: Thank you very much. CHAIR: Thank you. Mr. Parsons. MR. K. PARSONS: I want to go back to

section 2.1.03. Just looking at the title, it has changed description again from the last title we had. Can you confirm that the use of this fund now is also for aquaculture? MR. BYRNE: Yes, oh, absolutely.

June 19, 2019 RESOURCE COMMITTEE 124 MR. K. PARSONS: Okay, because it wasn’t in the fund last year. Salaries have decreased by $25,000 in the revised. Can you explain what happened there? MR. BYRNE: Yeah, Deputy, can you explain what happened there? MS. COMPANION: I can. There was a vacancy in our AFF last year, but we’re fully staffed now and we’ll be fully expending our budget. MR. K. PARSONS: Okay. Again, looking at the Grants and Subsidies

section right here, it’s a little bit different from what it was last year. Six million dollars was spent out of the almost $9.7 million. Is that accurate? Is that what was spent out of that $9.7 million? MR. BYRNE: Yeah, that’s correct. MR. K. PARSONS: Okay. It all appears to be provincial money, is that correct? It’s all provincial money? MR. BYRNE: Yes, it is. MR. K. PARSONS: Okay. MR. BYRNE: For example, just to help clarify that, I gave you just general, broad parameters of 143 different projects in four sectors: harvesting, processing, aquaculture, research and innovation.

The total value of those projects – and this is the total value that’s gone into the economy, rural, coastal community of Newfoundland and Labrador – is $28,373,000. When you look at the federal-provincial cost sharing of this, this is a record of that spending from provincial funding. As a result of this federal-provincial partnership, we’ve already put out $28.3 million through the Atlantic Fisheries Fund. MR. K. PARSONS: Okay, I’ll have a question on that in a little bit. Why where there was so much less spent last year than was budgeted? Was that based on applications, new applications? MR.

BYRNE: No, we were anxious and ready to get that money out the door, but it was largely based on some delays with our federal partners, is that fair to say, Madam Deputy? MS. COMPANION: Yes. So we have lots of applications and there are lots of applications in the queue that are going through. There’s a significant review process and these are the applications that came forward. It’s the value; sometimes some projects are higher amounts than others.

We could have approved the same number of projects and it could have used up the $10 million, but the $6 million was the projects that were approved and we have other projects that are currently under assessment. MR. K. PARSONS: Do you have a breakdown of what federal money has been spent in the Fisheries Fund? MR. BYRNE: It’s a simple formula; it’s a 70- 30 formula. Whatever money we’ve spent on a particular project you can just multiply that by the appropriate integer. MR. K. PARSONS: How much money has been spent in the province so far since the program commenced, this Fisheries Fund?

Not the Fisheries Fund – MR. BYRNE: $20.3 million. MR. K. PARSONS: $20.3 million. Okay. We have lots of applications in for these because, again, it just looks like there was only $6 million out of the $9.7 million. Was that just to the red tape of going through the process? Is that the issue here? MR. BYRNE: I think there is rigour to the assessment process. Nobody who applies should expect that their application will necessarily be approved. There is rigour to the assessment. We want to make sure that all initiatives that are funded are appropriate, are technologically sound and eligible, that they meet the

June 19, 2019 RESOURCE COMMITTEE 125 requirements of the program itself but, as well, they’re economically sound and technically sound. There is a review process, but with that said, I am happy to report while four Atlantic provinces participate in this fund, Newfoundland and Labrador has – 50 per cent of all approvals that have been done are from one jurisdiction, our province. MR. K. PARSONS: Okay.

Section 2.1.04, I’m going to go the Salaries. A salary decrease of $189,800 in the revised and $180,000 is back this year in the budget. Can you explain that? MR. BYRNE: This is an area where we did have some vacancies. There was some staffing that was undertaken and we’re back up to scratch for this fiscal. MR. K. PARSONS: Under Grants and Subsidies, last year you told us that this money was for science and cod recovery initiatives. What projects were included in the past year? MR. BYRNE: In terms of a list itself, I may have to call upon – our assistant deputy minister is providing a list.

In terms of projects that were funded in 2018- 2019, the Marine Institute’s Centre for Fisheries Ecosystems Research conducted a satellite tagging experiment with Atlantic halibut. We contributed $20,000 to that particular initiative. Each year we provide a worthy MUN student the Dr. Wilfred Templeman Scholarship valued at $5,000 – a student that’s engaged in oceanographic or fisheries science. The Eastern Newfoundland Science Fairs Council; we provided a $250 grant, for example, to send a student to a particular fair. The Canadian Parks and Wilderness association; we provided $2,500 for World Oceans Day.

As well, the FFAW did receive the benefit of a post-season snow crab survey, a lobster science logbook and at-sea sampling initiative valued at $70,000. Now, I’m really happy to talk about this particular initiative, this fund, because I, too, want to see that money spent in areas that are of key critical importance to the province. One of the things that I concede is choices may have to be made. I think the hon. Member will agree with me that information has to be extracted about seals, sealing and about seal predation, seal predatory consumption.

These are areas that I would like to pursue in the future to see if we can get some good scientific work done in that particular area. I think the hon. Member would support me by making sure that if we have money available, we do it in key areas of importance to our industry. One of the core questions that seems to never be answered by the federal government, by DFO – that I think we have a strategic importance to answer ourselves, since they don’t seem as enthusiastic about that – is examining what is it that seals eat and how does it affect our cod stock recovery?

It’s not just whether or not they prey on cod; it’s whether or not they prey on the ecosystem, the food pyramid of cod, including capelin, squid and other things and to be able to get that information so that we all know it. I think the hon. Member would agree with me, I do not – I do not – accept the linear or limited nature of scope of what DFO has done in terms of investigating that particular reality. MR. K. PARSONS: I agree with you 100 per cent. A former colleague of yours said they don’t eat Kentucky Fried Chicken. MR. BYRNE: Exactly, more terms. MR. K.

PARSONS: Anyway, on that line also, why wasn’t the entire amount spent? I know it’s only $3,000, but why didn’t you spend the whole amount on the Grants and Subsidies? MR. BYRNE: I’m sorry, what was that question? MR. K. PARSONS: On the line there, Grants and Subsidies – MR. BYRNE: Right. MR. K. PARSONS: – why wasn’t the whole amount spent and given out grants? I know it’s $3,000.

June 19, 2019 RESOURCE COMMITTEE 126 MR. BYRNE: It’s applicant-driven, request- driven, so if we didn’t necessarily get a request on that particular day or that particular year, then it is what it is. MR. K. PARSONS: Okay, no problem.

Section 2.1.05, again, the description has changed. Have changes been made to the program? MR. BYRNE: This is for Coordination and Support Services, correct? MR. K. PARSONS: Yeah. MR. BYRNE: Madam Deputy? MS. COMPANION: The subheads, as they changed throughout, is that we really tried to clean them up and make them relevant to the actual expenditures that were happening. This is for the Fish Plant Worker Employment Support Program. It is $500,000; it’s for when plants are permanently closed. There hasn’t been any change to that program except that we’ve made it permanent; it’s in there all the time. MR.

BYRNE: Yeah, it was an annual item that was debated each and every year. We’ve built it into the fiscal, into the overall base. Just to anticipate a question, I’ll give you some additional information. There’s another program to support fish plant workers. This is the program for permanently closed fish plants to be able to support fish plant workers in their transition. There is another program, a $2.5-million program, to support fish plant workers whose plants are not necessarily permanently closed. That money is not captured within.

This $500,000 support for permanently closed plants is contained within our Estimates. There’s another program, a $2.5-million program, but the funding source is through the Canada - Newfoundland and Labrador Labour Market Development Agreement and that’s captured within AESL’s main Estimates. CHAIR: Thank you very much. Mr. Dinn, do you have any questions? MR. J. DINN: Thank you, Chair. I’ll start with a few questions that may not have to do with budget lines and may not be within your jurisdiction, but questions we’d certainly appreciate your point of view on as well.

We continue to see decline of the SFA, shrimp fishery area 6. Harvesters are worried as many have a lot of money invested in this fishery. Are offshore trawlers still fishing shrimp in April during the spawning season that you know of? MR. BYRNE: I would be reluctant to give you a definitive answer on that. The amount of activity in shrimp fishing area 6 is not necessarily – the quota level would not necessarily dictate that there would be permanent or continuous harvesting activity there.

I could get back to you with that answer because I would not want to speak ill or speak inappropriately or give you the wrong answer. What I can say to you is that the overall harvesting levels there are brought to the point where it may not necessarily occur in those particular months in the spring. We may see greater see activity in the North. What we find is that in the winter months you’re seeing greater offshore trawler activity then, because area 4 and area 5 are icebound. In the spring of the year those fleets may be moving further north as conditions will allow. MR. J. DINN: Thank you, Minister.

As part of that information, I would be interested also if there’s been any discussion about implementing a ban in that as well. Any information on that would be greatly appreciated. With regard to 2.1.05 – and you’ve sort of answered the question, but I do want to follow up on it – it has to do with funding. I think you indicated that the money that’s under that is for assisting plant workers in the fishing sector for permanently closed plants. You indicated there is another pot of money, $2.5 million, for plants that are temporarily closed. I reckon that’s with AESL?

June 19, 2019 RESOURCE COMMITTEE 127 MR. BYRNE: Correct. This is funds for when a particular plant faces a resource shortage or faces a disaster. For example, the tragic situation of Black Duck Cove. We will be assisting those workers through a program not from the permanently closed plant program, which is the $500,000 that is embedded in our main Estimates, but we will be assisting, as appropriate, those workers through the $2.5 million with Advanced Education, Skills and Labour’s funding, which is delivered through the Department of Municipal Affairs and Environment. MR. J. DINN: Thank you.

As a follow-up then, the question I had here is: Where is the money in the budget – for example, in aquaculture, with an ISA breakout – for the people who are laid off as a result of the disruption of the processing aspect of it? There have been a few breakouts of ISA in 2012, 2014, 2016 and 2018 that have caused disruptions. I think most recently there have been 11 outbreaks in the last production cycle that has resulted in, basically, fish being sent to be rendered and plants have been closed. Would that funding then be available to them?

If you do have the amounts, how much would have been available for them or would it be better to ask that of AESL? MR. BYRNE: We can certainly facilitate the transmission of that information. One thing I’ll point out is that there are three fish plants on the South Coast that are primarily engaged in the processing and production of aquaculture’s finfish products: Hermitage, Harbour Breton and St. Alban’s. You will find it in your binder. Why don’t I just pass that over to you, Deputy, or, Phil, to answer because that information is just – I anticipated your question, so we put it right in your binder. MS.

COMPANION: The list of plants and towns that needed to access the Fish Plant Worker Employment Support Program is in the binder under what tab, Phil? MR. IVIMEY: Additional information. MS. COMPANION: Under additional information. It identifies that they were for temporary closure, who the sponsor was, the approval date and the approved funding that was received. MR. J. DINN: Thank you very much. If we may, we’ll go on. Under 2.1.06, Seal Product Inventory Financing, is this still the repaying of the 2014-’15 $1 million Carino loan? If so, what’s the balance?

It appears they’ve paid more than you estimated they would last year, is that correct? I’m just wondering what that money would be? MS. COMPANION: This is the Phocalux loan. We are currently working with finance and the company to determine their repayment schedule. They are currently paying the interest on their loan and we are working with them with regard to their other payments and their principle, and hopefully working out a plan where they can really be viable and successful. MR. J. DINN: Thank you. If I may, would you be able to repeat the company name? MS. COMPANION: It’s Phocalux.

I just need to check and make sure it’s the right one. MR. BYRNE: That’s the (inaudible). MR. J. DINN: It sounds like the French version. MS. WALSH: It is the correct name, Phocalux. MR. J. DINN: Would you be able to spell that? Is it the French version for seal? MR. BYRNE: (Inaudible.) MR. J. DINN: A luxury. MS. WALSH: It is P-H-O – MR. J. DINN: P-H-O – MS. WALSH: – L-U-X. MR. J. DINN: Thank you very much.

June 19, 2019 RESOURCE COMMITTEE 128 MR. BYRNE: (Inaudible.) MS. WALSH: Thank you. MR. BYRNE: (Inaudible) pronunciation of seals. It didn’t work. Nobody believed me. MR. J. DINN: I know. It’s good to have that though. In 2.2.02, in the Aquaculture Capital Equity Investment – make sure I’m on the right page, too –is this still related to this Northern Harvest project? We were told this is for an automated feed system. Is this money for that or for something else? MR. BYRNE: No, this is in anticipation of Grieg. I can tell you that Northern Harvest has fully repaid.

See the revenue item there, you’ll see in brackets a minus of $9,249,200. What I think Members will be very anxious, eager and enthusiastic to hear is that Northern Harvest has fully repaid all of their ACEP commitments. Often you hear about loans being offered to companies and it just sits and it doesn’t seem to ever be repaid; it sits as a receivable and a lot of anxiety around them. Those Aquaculture Capital Equity Investments that are now in the hands of Mowi or Marine Harvest – formerly Northern Harvest – have been fully repaid and I think that’s something to celebrate. MR. J. DINN: Thank you, Minister.

You mentioned about the monies in anticipation of Grieg. Can you tell us about the government’s funding of the Grieg aquaculture project? I guess I’m curious as to when you used the word “anticipation” of Grieg. I’m looking at the amounts. MR. BYRNE: I use the word “anticipation” very deliberately because we structured a funding arrangement with them that was performance-driven, milestone-driven. The company has the first responsibility to perform certain milestones, certain investments and to be able to have those investments audited. Once those milestones are reached, then we can disburse and will disburse.

Not until then will we disburse funds to that company. What I’m also very pleased to note was that previously there was a commitment in principle for a $45-million contribution under the Aquaculture Capital Equity investments with Grieg. We went back to the company and we engaged in discussion with them as to whether or not they would require that amount of money. Our government has committed in principle not a $45-million contribution but a $30-million contribution once milestones are reached, and that was different than the previous commitment.

Before, it was a contribution that would be made without necessarily reaching any milestones, without having the investments made in advance. We’ve done two things: Milestone targets must be reached first, and we’ve lowered the commitment by 33 per cent. What I can also say to you is that Grieg Newfoundland and Labrador – while we’re investing $30 million, ACOA is investing $10 million and Grieg is investing $210 million themselves. CHAIR: Thank you. Mr. Parsons. MR. K. PARSONS: Just going back to

section 2.1.05, I’m just interested in what’s happening with some of our plants. $275,000 is the total amount that was spent on the program last year. What closures were involved in the $275,000? MR. BYRNE: If memory serves me and my deputy correctly, it was Twillingate and the plant in Clarenville. We’ll double-check that, but for now (inaudible). MR. K. PARSONS: Are they deemed closed? MR. BYRNE: They are. They’re deemed permanently closed. MR. K. PARSONS: They are deemed permanently closed? Okay. MR. BYRNE: In order to deem a plant permanently closed, the town council itself has to consent. There’s a process that is undertaken

June 19, 2019 RESOURCE COMMITTEE 129 to ensure that it’s not done under a hostile environment, it’s not done without knowledge or without consultation. The union is consulted, the town council is consulted, obviously, the owners of the plant must indicate that they do not intend to reopen. We don’t do that and throw away a lifeline to the community. In Twillingate and Clarenville, there’s an extensive consultation process where people, organizations and governments put it in writing that they accept and deem the plant permanently closed.

Only then can funds flow from the permanently closed plant worker assistance program MR. K. PARSONS: Okay. How many crab plants are operating in the province and how many shrimp plants are right now in the province? MR. BYRNE: I will ask my assistant deputy minister, Roz Walsh. Do you have that data? MS. WALSH: Yes, Minister. Firstly, with respect to the inshore shrimp processing facilities, we currently have between seven and eight inshore plants that are operational. With respect to crab, I will have to double-check on that number, but we have not seen, to my knowledge, a closure of a crab plant in a while. MR.

K. PARSONS: Just going back to my question just before then – and you gave a good explanation of deemed closed – are there any other plants that are in the process of being closed by the communities in any areas in the province? MR. BYRNE: St. Mary’s is the only plant that comes to mind. What’s the name? I just call them St. Mary’s, but the operations in St. Mary’s will probably be on our list of this year as permanently closed. We’re very anxious; we’re open to any suggestion. The Black Duck Cove plant has burnt down and I am hopeful the owners themselves – which is a partnership between Quinlan and Quin-Sea.

We’ll see what they decide, but we will hold out hope that maybe that plant might open and might be rebuilt. Again, we’re not in the position nor do we have any regulatory authorities that could impose upon that operation any specific outcome in that regard. MR. K. PARSONS: Okay. All right, let’s go to

section 2.2.01. I want to go to Salaries. $102,700 less was spent in the revised, and then there was $23,300 less in this year’s budget when compared to Budget 2018. Can you explain the variances here in Salaries? MR. BYRNE: That’s where we had some – as the deputy just pointed out to me – vacancies, but we also had some maternity leaves. That’s why it’s back up to scratch. MR. K. PARSONS: Under Transportation and Communications, what accounts for the $27,300 decrease in the revised last year and the additional $17,500 over the revised for this year? MR. BYRNE: Deputy, would you like to jump in on that one? MS.

COMPANION: The director was vacant for the first few months of the year. Then the manager got the director’s job, and then we had the manager vacant for a few months until we recruited. There was less travel and the new director was very diligent in her running of her budget, and she spent what she needed; therefore, we reduced it a small amount this year. Now that she’ll have a full year of having a full staff complement, she’ll likely need a bit more. MR. K. PARSONS: Okay. MR.

BYRNE: The other reason, too – I’m jumping in here – the director is located in the region in Central, and so that’s one of the reasons why travel costs are more efficient. We’re very proud of the fact that the director is in Central serving both mussel operations on the Northeast Coast and our finfish operations on the South Coast of the Burin Peninsula. There are efficiencies that are achieved through that as well. MR. K. PARSONS: Okay.

June 19, 2019 RESOURCE COMMITTEE 130 Under Purchased Services, what’s included here? Can you explain the $13,000 increase? MR. BYRNE: Yeah, can you? MS. COMPANION: I can. The most significant increase was some work that they had to do on the wharves and with the snow clearing, but the wharves were the most significant thing. There was some work that had to be done. MR. BYRNE: Yeah, so the department owns two, Deputy, is it – MS. COMPANION: Four. MR. BYRNE: – four wharves in total. I think they were acquired back in 2011, 2012? Maybe you want, if your memory serves you correctly, people to address that? MS.

COMPANION: There was I think it’s four wharves that were built between 2011 and 2014 and we maintain these wharves. They’re important from a biosecurity perspective in aquaculture. There’s a lot of work in maintaining them and making sure that they are definitely in good condition. That was a part of what happened, for them to spend a bit of extra money. We think that there’s probably going to need to be a $50,000 investment continued into the wharves to make sure that it’s protected by security measures. MR. BYRNE: I have no hesitation throwing out that these are often single-user wharves.

For biosecurity reasons you could make the point that multiple users could use them but, generally speaking, they’re single-user wharves. I’d like to hear the point of view of hon. Members from both sides of the House as to whether or not we should be encouraged to look at potential divestiture to the single-user. That would seem to me to be appropriate.

One of the reasons why Fisheries and Land Resources own them is to ensure that they become a common property, a common use, but because of biosecurity and biosecurity issues, often these wharves are single-user wharves, and it may be more appropriate for that single user to take over ownership of the wharf. At any point in time, I’d love to hear the viewpoint of hon. Members about that particular issue. MR. K. PARSONS: Okay. Have the terms of agreement been finalized with the Grieg aquaculture project? MR. BYRNE: Yes, it has. MR. K. PARSONS: It has? Okay. Will you get us a table of the final agreement on that?

MR. BYRNE: We can supply what information we can within the context of commercial confidentialities, but generally speaking, it is broadly known what the terms are. Deputy? MS. COMPANION: Right. The final agreement has – I think all the legal work has been done now and the agreement is ready for final review. When that’s signed, we’ll be able to – MR. K. PARSONS: It is signed, though, is it? MS. COMPANION: Pardon? MR. K. PARSONS: All the terms have – MS. COMPANION: The letter was signed back when we did the announcement, and this is just the – MR. BYRNE: The contract itself. MS.

COMPANION: – contract itself that’s being finalized. MR. BYRNE: The contract reflects the MOU. MS. COMPANION: Yes. MR. K. PARSONS: Okay. Just going back to that section, again, under Property, Furnishings and Equipment, what’s included here? Why was there $19,900 less last year and an additional $14,300 included in this budget over the revised amount?

June 19, 2019 RESOURCE COMMITTEE 131 MR. BYRNE: Okay, so this is Property, Furnishings and Equipment; it’s $49,900 last year but only $30,000 spent. Is that what you’re referring to? MR. K. PARSONS: Yeah. MR. BYRNE: Again, there was a variance there because we had to replace equipment and there was equipment that was repaired instead of being replaced, so we were able to lower some costs there. CHAIR: Thank you. Mr. Dinn. MR. J. DINN: Thank you, Madam Chair. If I may, go on to 2.3.01. MR. BYRNE: What’s that, sorry? MR. J. DINN: Sorry, 2.3.01. That’s in order. MR. BYRNE: Yes, Aquatic Animal Health. MR. J.

DINN: Just a few comments on the budget lines themselves, some questions. Under Transportation and Communications, again, the amount of $114,400 increased to $145,000 in revised budget Estimates for 2018-2019. I really would like to know what the amount is there and what that variation is for. Also, it’s dropped not back down to $114,000 but somewhere in the middle there with regard to $120,000. Please explain the differences in the amounts there, please. MR. BYRNE: Certainly. As you pointed out, there were some incidents, some ISA events on the South Coast.

We have a responsibility and we take that responsibility very seriously. We are relentless. We are responsible for monitoring, for sample collection, for diagnostics and for ensuring biosecurity and providing audits. As a result of the fact that there were those ISA events, the people of Newfoundland and Labrador and this House, our Members of this House, can be assured that we take those responsibilities seriously.

Because there were additional travel costs with the sampling and the audits and making sure that all necessary procedures were put in place, we spend the money and when required we will continue to spend the money. Next year, while we forecasted, we can’t predict what may happen. We may spend less money than that but we want to have that money in place. MR. J. DINN: Thank you.

I certainly agree with regard to spending the money to protect the environment, but I’m just wondering then, are there any plans to seek reimbursement from the companies themselves for that extra money that we’ve spent monitoring and making sure that their sites are safe? MR. BYRNE: The companies themselves are responsible. They’re the front line and they do have both regulatory requirements, requirements under various codes that they follow. But like any regulatory body there is oversight, whether it be protecting the environment, whether it be making sure that water quality is for human consumption.

That’s a public good and we want to make sure that that public good is always available. The companies themselves do the lion’s share of the front-line services, but whenever there is a concern that’s detected, that’s where the public purse, the public good, the public responsibility kicks in and we’re ready there to act. MR. J. DINN: Thank you, Minister. Just as a follow-up to that, I understand that we can contract out the services to companies; they would bill us for the services they provide.

I would like to think, in this case – being fiscally prudent, zero-based budgeting and everything else and we’re looking for efficiencies – that this will be a good opportunity to bill the companies for the services that we provide in making sure that their sites are biosecure. That will be my thought on that because it looks like, in effect, that in addition to the $30 million for Grieg, really there’s more money going into this than just the $30 million. The taxpayer is on

June 19, 2019 RESOURCE COMMITTEE 132 the hook, and I agree with regard to this that we need to protect our own environment, but I think in some ways it’s the companies that should be reimbursing the taxpayers of this province for that extra money that we’re forced to spend. Did you want to respond, sorry? MR. BYRNE: No, I appreciate the intervention. Right now our fish farmers do have veterinarians on staff and on site. We do provide an oversight function. We have veterinarians ourselves within our Aquatic Animal Health branch.

Quite frankly, I’m very pleased to hear you say that maybe more of these services should be less vested in the public and more of them should be vested in the private, so I take your consultation quite seriously – the wealth of it. MR. J. DINN: Understand what I’m saying is that they should reimburse us for the services. I think we should have control but they pay us back for them. I’m not advocating a P3 model, but I am advocating that for the services we render to a private company that they reimburse us.

I notice with Professional Services a significant drop, and then Purchased Services, and maybe they’re linked, but I notice that in the line with regard to Professional Services there was a budgeted amount in 2018-2019 for $97,000. The amount spent was considerably less, yet we’ve got a budget estimate for this year of $97,200. Also with Purchased Services I notice again, though, it went the other way in that we had a budgeted amount of $316,600. It jumped significantly to $447,100, and it’s now budgeted the much lower amount of $301,600.

I’m curious as to the explanation for that and if it was related to the ISA events as well. MR. BYRNE: They are basically linked in that our Purchased Services took a little bit of a bump here because we did have additional costs because of the ISA events. With our Professional Services, we were fixated on our response. A lot of the work, a lot of the attention of our veterinarians was kept in-house and they were responsible for a lot of those, so our Professional Services was down accordingly. MR. J. DINN: Just to be clear then, the $447,000 was related to the ISA outbreaks. MR. BYRNE: Largely so, yes. MR. J.

DINN: Okay. I notice that the budgeted amount you have this year is significantly about $15,000 less than the amount budgeted in 2018-2019. In light of the ISA events, have you built in that contingency fund for that? MR. BYRNE: Well again, like last year, whenever there’s an event that causes us to reallocate resources appropriately and effectively to meet a particular challenge, we do that. So while we can’t necessarily forecast with any accuracy what may or may not happen, there were literally years and years and years and years past where there were no ISA events in Newfoundland and Labrador.

If you were to build a budget based on that factor, you wouldn’t put any money in the budget whatsoever. So you anticipate to the best of your ability and you forecast to the best of your ability. What I can say to you is that if there are no ISA events whatsoever, you’ll probably see some of that budget unspent. But if there are and there is a requirement to fulfill the public responsibility for the public good, we will find the money and we will spend what needs to be spent. MR. J. DINN: Thank you, Minister.

If my math is correct then, and I would always get people to check that – I’m an English teacher after all – that last year the ISA event basically cost taxpayers or the citizens of this province almost $131,000 to deal with that. MR. BYRNE: No, I don’t think you can draw that specific a conclusion as that every dollar spent was directly related to ISA. I answered the question by saying that in a general point of view there were increased expenditures in part because of ISA. Madam Deputy, I don’t know if we can break down the figures any further than that.

June 19, 2019 RESOURCE COMMITTEE 133 MR. J. DINN: That would’ve been my next question. Thank you for that. MS. COMPANION: Yes, we will break down those figures, Minister, and provide. MR. J. DINN: Thank you. I still have a minute left. I’m learning quickly that you should always occupy as much of your time as possible – start talking, so there we go. I think that’s it. Those are all the questions – I do have one question and I’m finished with the questions on Fisheries and Aquaculture, but I will go back to 2.2.02.

A quick question, I noticed, Minister, that you implemented in your funding of Grieg, milestone targets before the release of funding and also you’ve lowered the amount. I’m just curious when it comes to setting performance milestones, is there also an accounting for the mitigation measures that they’ve put in place? Is that part of the milestones that you’re measuring as well, as to what mitigation measures that they’ve taken to reduce harm to wild Atlantic salmon and to the marine environment? MR.

BYRNE: Well, to answer the question, and I’ll have to keep it broad, but they have responsibilities under the environmental process that was undertaken. They will fulfill those responsibilities. What elements of that were directly related to the milestones – OFFICIAL: (Inaudible.) MR. BYRNE: Yeah, that information was captured and released, announced publicly when we provided the details of the memorandum of understanding or the agreement. I will also say that Grieg is investing $210 million of capital, of equity, in their own operations.

They have responsibilities that must fulfill, they will fulfill them and I think a reasonable person would come to the conclusion that when there’s a $40- million public expenditure after performances are met but there’s a $210-million expenditure from the company itself, the vast majority of that will be captured by their own requirements and their own investments. CHAIR: Thank you. Maybe when we finish this section, we’ll have a quick break. Mr. Parsons, back to you. MR. K. PARSONS: I just have a couple of questions left here now on

section 2.3.01 on Property, Furnishings and Equipment. Can you explain the $22,000 less in the revised? MR. BYRNE: In this particular year, there was less of a requirement to replace equipment during that fiscal year. We have a database or a collective knowledge over the course of years of what might be the requirements. In this particular year, instead of replacing the equipment, we were blessed by the option of being able to repair equipment, and that’s why that number was less than what was anticipated in the budget. MR. K. PARSONS: Okay.

Under Grants and Subsidies, I assume this is still for the Atlantic Veterinarian College, is it? MR. BYRNE: That’s correct. MR. K. PARSONS: Okay. Just one final question: Can you give us an update on the Canada-Newfoundland MOU for aquaculture? MR. BYRNE: Delighted to. The first MOU was signed in 1988 and it’s the only MOU that was signed between Newfoundland and Labrador and Canada regarding aquaculture. It is obviously dated and we’re actively engaged with the Department of Fisheries and Oceans as the lead federal department to update that MOU.

While this has been, I can say, a priority of mine, a lot has changed since 1988 and some of the jurisdictional responsibilities and the activities have not kept up to pace within the MOU itself, so I’ll be able to report, in the upcoming months, progress that we’re making on that MOU. I can also say that, based on our federal-provincial discussions, it is also a priority for the federal government. We brought them to that table.

June 19, 2019 RESOURCE COMMITTEE 134 MR. K. PARSONS: Okay, thank you. Madam Chair, my colleague has a question also. CHAIR: (Inaudible.) MR. FORSEY: One question on Grieg aquaculture. What is the depth of processing in this province in regard to their fish? MR. BYRNE: Good question. One of the requirements under the separate agreement, the overall MOU that we’ve signed, is that Grieg must produce the fish – 75 per cent of the quantity of fish that gets produced from the Grieg operation under the minimum processing requirements, directly charged to them is 75 per cent to the fresh fillet stage.

Right now, in Newfoundland and Labrador, the minimum processing requirement for production of salmon is HOG. It’s HOG, right? H-O-G or HOG, which means cut down, slit, head on and gutted. Grieg will be required to take 75 per cent of their entire production, beyond the normal minimum processing requirement, to a filleted form. MR. FORSEY: H-O-G – head on, gut out – when it leaves the processing plant here in Newfoundland, would that be ready for market, packed and ready for market? MR. BYRNE: Filleted generally means that’s – now it may be redistributed in a retail package, but that would be inefficient.

If you’re going to produce 75 per cent of your product to a filleted form, you do so in a way to prevent that additional labour, that additional logistical inefficiency. It’s ready for market. MR. FORSEY: Okay. If it’s ready for market, it’s good because that would open up more plants, more spinoffs, more plant workers. MR. BYRNE: Do you know what’s exciting about the Grieg NL aquaculture opportunity? It’s their partnership with OCI. OCI is a fantastic company. It’s produced results for Newfoundlanders and Labradorians.

It’s one of the key partners that work with the Government of Newfoundland and Labrador on our initiative to make sure that industrial shrimp gets processed for the first time in onshore plants in our province. OCI, of course, is a wild commercial harvester now having an equity investment into the Grieg NL operation.

When you look at the synergy that gets created from a wild fish harvester and processor now having access as well to aquaculture-produced products, they can bring fresh product, high value-added product to the world marketplace by the synergies of both having wild capture fish and aquaculture product. Being able to market that simultaneously, the opportunities within the logistics chain that creates, is significant. It’s one of the reasons why OCI decided to get into the aquaculture field. Remember, this is a company with a history and a positive track record in wild capture, now investing in aquaculture product.

Why? Because they see that’s where the market is going. Not exclusively, not to the detriment, not to the exclusion of the other; they’re not getting out of the wild capture, they’re saying to themselves having that product mix of both wild capture and aquaculture product – that’s where the marketplace is going. A Newfoundland and Labrador company is seeing that vision and they’re investing in it and they’re part of that. That’s really exciting. MR. FORSEY: Okay, so just to make sure I understand it, 75 per cent of the HOG is going to leave the province. Seventy-five per cent is going to leave here – MR.

BYRNE: Filleted form. MR. FORSEY: – in filleted form. MR. BYRNE: Yeah. MR. FORSEY: Okay. I’m satisfied with that answer. CHAIR: Okay, any other questions? Mr. Dinn, any other questions for this section? MR. J. DINN: I’m good, Madam Chair.

June 19, 2019 RESOURCE COMMITTEE 135 CHAIR: Shall 2.1.01 to 2.3.01 carry? All in favour? SOME HON. MEMBERS: Aye. CHAIR: Carried. On motion, subheads 2.1.01 to 2.3.01 carried. CHAIR: Okay, five-minute break. At 7:40 we’ll start again with Forestry and Wildlife, very exciting. Recess CHAIR: Thank you very much, everyone. Very exciting Forestry and Wildlife sections. We’ll do 3.1.01 all the way to 3.3.02. Mr. Parsons or Mr. Forsey. MR. FORSEY: On 3.1.01, Salaries, more was spent in revised and extra $209,000 budgeted this year. Can you explain the steady increase in Salaries? MR. BYRNE: Madam Deputy, take over. MS.

COMPANION: The increase in Salaries was due to severance and leave costs for some employees who retired during the year. MR. FORSEY: Okay. Transportation and Communications, $63,000 less spent in revised and $56,000 is back in this year’s budget. Can you explain that? MR. BYRNE: This is a really good one. We were able to get some savings through more effective use of helicopter time. The department uses an awful lot of helicopter time, and we need to. It’s how we do wildlife surveys, forest inventory surveys and a number of things.

What we experienced in this particular fiscal year, we’re engaged in a number of different kinds of surveys and, through efficiencies, we were able to lower that number by a certain amount. We don’t know next year if we’ll be able to accomplish the same thing, so we’ve rightsized it. Those surveys are super important, so we put the budget, basically, back up to where it was traditionally. But, where we can, we’ll continue to make savings there. MR. FORSEY: Okay. Purchased Services, there was a significant increase of $31,700 last year and there was an additional $2,600 increase in this year.

What is included and can you explain the increase? MR. BYRNE: As a department, within Forestry, which also includes Wildlife, we have a fairly significant fleet of vehicles, which we need, of ATVs and snowmobiles. So we’re responsible for the maintenance of that. There were some arrangements that were made with Transportation and Works around fleet management in terms of regular motor vehicles and also as well with other things.

But we’re responsible for maintenance to our ATV and snowmobile fleet and that’s why there’s a jump in that expenditure in the last year and we’ll have to budget for that on an ongoing basis in future years as well. MR. FORSEY: Okay. Grants and Subsidies, what is included in the Grants and Subsidies? MR. BYRNE: Okay, good question. Grants and Subsidies in the forestry sector, we spent, by way of example, in this past year, $200,000 to the Labrador Innu, Metis forest management agreements with the Labrador Innu and Metis nations.

We spent $100,000 with the Newfoundland and Labrador Lumber Producers’ Association – $75,000, sorry. And FPIinnovations, $20,000, that’s a not-for-profit Atlantic-wide company that does forestry research. Our membership to the Canadian Council of Forest Ministers, we have annual dues that are owed of $6,500. We provided $2,800 to the Canadian Institute of Forestry. We provided $700 to the Atlantic teachers’ forestry tour; that’s a program where secondary school teachers become more aware of and learned in

June 19, 2019 RESOURCE COMMITTEE 136 forestry practices. We also provided a grant of $3,000 to the Junior Forest Wardens, and there was a contribution $400 to an envirothon. MR. FORSEY: Okay. 3.1.02. MR. BYRNE: Operations. MR. FORSEY: The phrase wildlife offices are added to this description. Is this simply a wording change or does this have broader implications? MR. BYRNE: Madam Deputy, would you like to field that one? MS. COMPANION: We added wildlife offices to the description. MR. FORSEY: Okay. That’s it? Just for that reason only or are there broader implications? MS.

COMPANION: No, we were just cleaning up the wording around each of the subheads so that they appropriately reflected what was happening. MR. BYRNE: So these expenditures in the past included those wildlife offices as not a new expenditure or new addition. The wording was added to ensure that it met the properly described. MR. FORSEY: Okay. Salaries, can you explain the variance in the Salaries? MR. BYRNE: On a $7.8 million line item, there was a variance of just about $27,000. So that would be explained through normal employee transitions. MR. FORSEY: Okay.

Transportation and Communications, $16,500 less spent last year and it is not there in this year’s budget. Can you explain? MR. BYRNE: That’s where we made some savings. We reviewed our cellphones and our satellite phones for field operations. We were able to make some improvements there. So on the zero-based budgeting cycle that would be a rightsized number at that point in time. MR. FORSEY: Okay. Supplies, $26,000 more spent in revised and $11,000 less than budgeted for last year. Can you explain? MR. BYRNE: This was related to safety supplies.

When you have employees that come in – again, forestry operations, that’s the biggest employee component of our entire department, so it’s very important to get a proper kit for those employees. That’s part of the explanation there. MR. FORSEY: Okay. 3.1.03, Silviculture – Salaries, can you explain the variance in Salaries? An additional $16,200 was spent in the revised and this year’s budget is $9,800 less. MR. BYRNE: Again, this is related to transitions of employees. These are variances due to severance and leave costs that were paid out. MR. FORSEY: Okay.

Transportation and Communications; $15,500 less was spent last year, $7,300 more is included in this year’s. Can you explain? MR. BYRNE: Under Silviculture, which is separate, this is again related largely to helicopter time and being able to realize efficiencies within our helicopter time. MR. FORSEY: Okay. Purchased Services; $200,000 less was spent in revised and $21,000 more than the revised budgeted for this year. Can you explain? MR. BYRNE: With these Purchased Services, if my memory serves me correct, this is related to our relationship with Corner Brook Pulp and Paper.

Corner Brook Pulp and Paper, of course, has a silviculture arrangement with the Government of Newfoundland and Labrador and it is performance based. We provide them the

June 19, 2019 RESOURCE COMMITTEE 137 funds based on what they actually do and what they do in terms of silviculture. We only pay out what is actually done. MR. FORSEY: Okay. Under silviculture, could I get a list of how much pulp is being harvested in Central Newfoundland in zones 10, 11 and 12 for sawmills, pulp and firewood? MR. BYRNE: We definitely can get you that. MR. FORSEY: Okay. MR. BYRNE: Mr. Balsom, would you have some of that information handy? MR. BALSOM: I’m just having a look, one second. MR. FORSEY: Yeah, you can give that – MR.

BALSOM: No, I think it’d be better if I got you those numbers, because we do have them accurately … MR. FORSEY: That’s fine. You can get back to me on that. 3.2.01, Salaries; can you explain why $50,000 less was spent last year? MR. BYRNE: In Salaries – Madam Deputy, would you … MS. COMPANION: Insect Control. MR. BYRNE: That’s Insect Control. MS. COMPANION: It’s lower than anticipated salary costs with the Insect Control. We had a few vacancies and it resulted in some lower salaries, but we are staffed up and we should be back at – MR. BYRNE: Full complement. MR. FORSEY: Okay. CHAIR: Thank you, Mr. Forsey. MR.

FORSEY: Okay, thank you. CHAIR: Mr. Dinn. MR. J. DINN: Just a few questions based on the questions before this. I think, in two budget lines in 3.1.01 and 3.1.03, in both lines I think the explanation of transportation costs – and there was a reference to the fact it has to do with the use of helicopters and that for aerial surveys. I ask this question: Considering that in the use of drones – and I’m not just talking about the over- the-counter type drones, but you look at the film industry, where once helicopters were used, drones are used.

Has there been any thought – and drones would be considerably cheaper – to using drone technology in this, and purchasing drones and training the people to do this, the people that you had hired rather than renting out or hiring out a helicopter service. MR. BYRNE: Thank you very much for the question. Remote sensing is a key component of doing forest inventories, as well as habitat surveys and other components. We have contemplated and looked seriously at the use of drones, but there are limitations.

Using aerial photography is one component of this; it’s not unlike a drone-like activity, but some levels of detail cannot be captured by drones. I think it is a worthwhile discussion and so I’ll ask Steve Balsom, our assistant deputy minister, to just talk through what things we have considered, what some of the limitations are, but where drones may still be employed. I agree with you, it’s an innovative – it is the future, in many respects, but there are limitations to the use of drones. MR.

BALSOM: Yeah, so we have done some preliminary feasibility studies on doing some of those assessments as the minister described, such as operational level planning for harvesting, and also looking at some of the work that’s already been done in silviculture where we do site work that we can verify that the work has been completed. What we find when we look at our larger survey program such as big game, the distance that these drones can fly is kind of the limitation because these are large flying programs.

June 19, 2019 RESOURCE COMMITTEE 138 In reference to the two line items that you’ve described, these are specifically related to moving staff into the field. Of course, we wouldn’t be able to do that with drones under these two heads. MR. J. DINN: Thank you very much. In other words, a small portion of that is for the helicopter rental services and the rest is for moving staff into the field. MR.

BALSOM: No, it is the cost of the helicopter, which is moving the staff to do both the forest inventory program where we have a permanent sample plot and a temporary sample plot network across the Island where they measure the trees. The other portion is under the insect control program where we move staff to check pheromone traps and to do branch sampling in the fall, related to the insect control program. MR. J. DINN: Thank you. That’s for the silviculture. Okay, that’s forest management.

When it comes to surveying the moose population and such, would that require moving staff into the field to be there, or would that be mostly to do with aerial surveys? I understand moving staff into looking at the silviculture, progression of insects, but I’m just curious with regard to the animal surveys. That’s just strictly to do with aerial surveys, moose management and counting of the stock and such or the population? MR.

BYRNE: (Inaudible) on that, the flying transects to do with aerial survey for wildlife population census, one line may be 16 kilometres or 50 kilometres long and then you will fly 20 transects. So to use a drone basically to do a straight line transect of 16 to 50 kilometres in length distance, you’re using one heck of a drone. MR. J. DINN: No, Minister, I appreciate that. But I’m sure that I’m at least comforted in knowing that we’re going to be looking at that technology as a way of the future and probably a lot less stressful with the CO2 emissions as well when you look at it.

With regard to the Purchased Services, the fleet of ATVs, I think you said a lot of that servicing has to do with ATV, snowmobiles and the like. Is it possible, I guess, to have an inventory of the vehicles and where they are located? I’m assuming most of them are probably in the Western area, Central and in Labrador where they’d be most needed? MR. BYRNE: Absolutely. We can get you a further breakdown but I’ll see if this suffices. In FLR, we are a highly mobile department; we’re a field-based department. What I can report to you is that we’re out in the field a lot. We have 322 light vehicles. We have 162 ATVs.

We have 192 snowmobiles. Marine boats, marine equipment, we have 54 boats in total of various lengths. So that may sound like a significant volume, 162 ATVs and 192 snowmobiles but, as you can appreciate, all of our conservation officers and our enforcement officers, when going out into the field, this is the kind of equipment that they do require, so that’s why we have that kit available to them. MR. J. DINN: No, I will not question the need for them to do their job, that’s for sure.

With regard to forest management, last year the minister spoke about his hopes for a biofuel plant in Botwood, a proposed woodchip facility operated by the UK from Bulk Logistics. Is it possible for the minister to update us on the work done to revitalize the forest industry in Central, as well to get that plant for Botwood? MR. BYRNE: We, too, would like to enter into bioenergy, biomass as a source of energy. One of the biggest factors, one of the biggest limitations in developing our forest resources comes from the closure of the two Abitibi mills.

When you look at the forest product mix, when you look at a forest you think that all trees are marketable trees and so there’s no real differentiation that’s required. Such is not the case. You have many product classes within a forest, within a timber stand. You have significant large-dimension trees, fibre sawlogs. Within the sawlog component, some may be used within stud mills. In other words, they can take it down –smaller diameter sawlogs can be used for stud mills

whereas larger diameter logs must be used

June 19, 2019 RESOURCE COMMITTEE 139 for secondary-value products such as wood siding. So you have sawlogs, you have pulp sticks which is smaller diameter wood and then you have waste. You have basically biomass which are the trees and the materials that really do not present a marketable product in and of themselves in terms of further processing. When we had three pulp and paper mills in the province, this was really never an issue because our smaller diameter wood had a ready market for all pulpwood.

And as a valuable by-product, sawlogs could be then taken from the forest inventory and then sold or used or harvested by sawmillers, with their pulpwood going to the paper industry and then the sawlogs going to the sawmills. With the closure of two mills, we no longer have a ready market opportunity for pulpwood. So the biggest economic constraint of developing our forest resources right now is generating a market for our smaller diameter wood. Because if you go and take a particular timber allocation and you harvest it, you do have to harvest the whole stand.

It’s not deemed or understood and the experience has never been that you can selectively harvest in Newfoundland and Labrador. The full harvest is the management practice which is conducted across the entire country, and clear-cutting does resemble natural events such as forest fire, natural events which cause forest succession, and it’s prudent and economically and ecologically viable. So, with that said, the big issue that we face is finding a market for small-diameter wood. There are good markets for large-diameter wood, not for small-diameter wood. This is why bioenergy comes in.

It’s really important to be able to attract companies. In the Botwood example, in Bulk Logistics, unfortunately, they were not able to bring forward a business plan which they were prepared to act on, and which provided some capacity to be able to ensure successful operation. Their expectations were higher than what we could provide, and their expectations of a long-term commitment were higher than what we were could provide. I would point out that there have been about 15 different initiatives or overtures in Central Newfoundland since 2006; none of which have met with success.

Everything from Rentech to – I could give you a full list, but this is grail that we seek, is finding a way to use bioenergy, biomass, to be able to stabilize and revitalize our sawmilling sector, and there’s only so big a market for firewood. It’s a good market, and you’d be surprised how much of our timber resources, our fibre, is currently used in commercial firewood operations. But with that said, getting a viable market opportunity and a production opportunity for small-diameter wood and for waste is really what we hope to achieve, and we’ve got some plans in mind to be able to fulfill that. MR. J.

DINN: Thank you, Minister. CHAIR: Okay. Thank you. Mr. Forsey or Mr. Parsons? MR. FORSEY: Before we get in on the Forestry and Wildlife, just to add to Mr. Dinn’s comments there, you did offer the Timberlands the same in November 2019 I believe it was. November 29, 2018, Timberlands got a contract for the biofuel plant in Hawkes Bay. What’s the current status on that project? MR. BYRNE: Timberlands International requested a 20-year forest management agreement in Forest Management Districts 17 and 18.

We felt it more prudent, for a number of reasons, not to offer a 20-year forest management agreement, which would be almost the equivalent of a property right. We offered a five-year forest management harvesting permit for a total of 100,000 cubic metres per year for five years, but with a specific provision that by midway point of the five years, within 30 months, 40 per cent of the timber must be harvested. If not, the permit will be amended to reduce their forestry permit.

June 19, 2019 RESOURCE COMMITTEE 140 Now, what makes that Timberlands International, the AEG subsidiary, somewhat unique in all of the different initiatives that have come forward and that have been developed in the province is they did not, nor were they granted, one dime of government money, of taxpayers’ money. They accepted the full responsibility of financing the operations on their own. They simply asked for a harvesting permit, which we did give.

We put in strict requirements that 25 per cent of the entire fibre that they extract – in terms of their sawlogs that they harvest – must be offered to local sawmillers and that they must perform. If they fail to perform within the halfway point of their contract, their permit will be amended to reflect a lesser volume of fibre, and there are other milestones that they must meet, and if they fail to meet them, their timber permit will be amended accordingly.

I reflect and draw attention to the fact that that is very different than other initiatives on the Great Northern Peninsula where a company called Holson Forest Products was granted upwards of $12 million in taxpayer money from both federal and provincial sources to build a pellet plant and to revitalize the sawmill. Holson Forest Products has never produced a pellet.

They suspended operations in 2012 – their sawmill operations in 2012 – one year or about 18 months after receiving this significant financial contribution, and also that other additional assistance as well, to be able to keep the insurance on the equipment subsequent or post-that. So, while Holson Forest Products – which was an operation intended to produce pellets – received upwards of $12 million in government assistance, taxpayers’ assistance, it never produced a pellet, closed the sawmill and actually rescinded.

I believe they even stopped applying for their sawmill permit from the government back in 2014 or 2015. We would like to see AEG and Timberlands – if they do, as part of the arrangement, the requirements that Timberlands International has, that they must sell to local sawmillers. We’d be very enthusiastic and excited if Timberlands and Holson Forest Products, or some entity like Holson Forest Products, were to establish a sawmill on the Great Northern Peninsula. MR. FORSEY: Okay.

In the news clippings seen around the Bulk Logistics – in some news clippings that I have there, you offered Timberlands a contract of 100,000 cubic metres for five years, which in total is 500,000 cubic metres. For Bulk Logistics, it was offered one year at 60,000 cubic metres. Why just one year? Couldn’t it have been a five- or 10-year plan? MR. BYRNE: The operation with Bulk Logistics – we have a significant resources shortage, believe it or not, in Central Newfoundland. Your ears are going to start to perk up on this, I know, and they should.

While we have a lot of uncut trees and unused fibre, we still have several plants in Central Newfoundland that have growth expectations, that would like to be able to grow their operations, and there is not as much timber or fibre that’s available as one would like as one might normally assume. I’m going to ask Steve Balsom to pick up the conversation at this point in time. What we do know is that we would like to proceed incrementally. If a company wants to come forward and prove themselves over the course of time, we would be happy to work with them to allow them to do that and prove themselves.

When you start tying up forest resources in a contractual and legally liable way to a company that does not necessarily have either the capital or the experience to be able to successfully harvest these resources, you create a circumstance where you can have forest inventory tied up, unused for very, very long periods of time. The expectation of Bulk Logistics, if my memory serves me correctly, was that they wanted a very large allocation of fibre and wanted it for an extended period of time.

We wanted to negotiate with Bulk Logistics to be able to mitigate those expectations to compromise, and at the end of the day it was really a question of all or nothing. Steve, would you like to pick up on some of that?

June 19, 2019 RESOURCE COMMITTEE 141 MR. BALSOM: Minister, no, I think you hit all the main points there. The Northern Peninsula is an area that’s been historically underutilized for many years. We really had no interest from any outside company other than, at the time, Timberlands International;

whereas, Central Newfoundland, which is considered the fibre basket for our main sawmilling industry – Sexton Lumber, Cottles Island Lumber, plus we have a number of other traditional operators – we have more asks and requests for fibre in those districts than we have fibre available. As the Minister pointed out, it

Document details

Collection	Newfoundland and Labrador — Committees
Citation	2019-06-19
Type	committee
Volume / chapter	committees_standingcommittees_resource_ga49_pdfs_2019-06-19_20_rc_20-_20department_20of_20fisheries_20and_20land_20resources_.pdf
Language	en
Format	json
Source	PROVINCIAL
Identifier	79bc577f17bccabb3c98e3845a503a2e51ed0d87

Source file is stored in the law ingest library (json).