May 1, 2007 RESOURCE COMMITTEE

Pursuant to Standing Order 68, Wally Andersen, MHA for Torngat

Mountains, replaces Judy Foote, MHA for Grand Bank, for part of meeting.

Pursuant to Standing Order 68, Gerry Reid, MHA for Twillingate & Fogo,

replaces Judy Foote, MHA for Grand Bank, for part of meeting.

Pursuant to Standing Order 68, Wallace Young, MHA for St. Barbe, replaces

Charlene Johnson, MHA for Trinity-Bay de Verde.

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

CHAIR (Mr. Harding): Order, please!

Good morning, everyone. I would like to welcome you all to our first

Committee meeting of the Estimates for this year.

We have a little formality first, to nominate and elect a new Vice-Chair, so

I call for nominations for that.

AN HON. MEMBER: (Inaudible).

CHAIR: It is normally the second name on the list.

MR. REID: Who is it, Judy Foote?

CHAIR: Yes.

MR. REID: I will.

She is ill today, Mr. Chairman.

CHAIR: Judy, okay.

MR. REID: What salary is attached to that?

CHAIR: Judy Foote has been nominated for Vice-Chair.

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Motion carried.

On motion, Judy Foote elected Vice-Chair.

CHAIR: We will try to follow the same procedure as we have done other

years. After the first clause is called, the minister will speak. At that time

he can introduce his officials and give an overview of his department's

Estimates for the year.

Following that, then, a member from the government members' side may speak

and ask questions for up to fifteen minutes. Following that, we can alternate

questions or the first speaker may carry on.

For the purposes of Hansard knowing who is speaking, especially for the

government departmental officials, if you would say your name prior to any time

when you are requested to speak so that they will know who is answering or

commenting.

First of all, I would like to ask the Committee members to introduce

themselves by name and district.

MR. REID: Gerry Reid, MHA for Twillingate & Fogo.

MR. JOYCE: Eddie Joyce, MHA for Bay of Islands.

MR. BAKER: Jim Baker, MHA for Labrador West.

MR. HUNTER: Ray Hunter, MHA for Windsor-Springdale.

MR. YOUNG: Wally Young, MHA for St. Barbe, sitting in for Charlene

Johnson.

CHAIR: Thank you very much.

I am Harry Harding, Chairman.

I guess we are ready now, so I would ask the Clerk to call the first clause.

CLERK: Subhead 1.1.01.

CHAIR: Clause 1.1.01. of the Estimates 2007-2008 for the Department of

Fisheries and Aquaculture.

Minister Rideout.

MR. RIDEOUT: Thank you, Mr. Chairman.

Good morning to everybody. It is my understanding that we are going to

consider the Estimates of the Department of Fisheries and Aquaculture this

morning, as well as the Estimates for the Aboriginal Affairs side of the

Department of Labrador and Aboriginal Affairs, since that responsibility falls

with me as well.

I will introduce the officials who are with me at this time. On my immediate

right is Alastair O'Rielly, Deputy Minister of the Department of Fisheries and

Aquaculture. On my immediate left is Robert Coombs, Deputy Minister, Department

of Labrador and Aboriginal Affairs; David Lewis, Assistant Deputy Minister of

Fisheries and Aquaculture; Mike Warren, Executive Director of Fisheries and

Aquaculture; Brian Meaney, Assistant Deputy Minister, Aquaculture, Department of

Fisheries and Aquaculture; and Lori Lee Oates, Director of Communications.

Mr. Chairman, by concurrence or consent, I guess, I am not going to go into a

long

preamble. I understand that our colleagues would just as soon get into

asking questions and debating the details of the Estimates for Fisheries and

Aquaculture first, and then Aboriginal Affairs whenever they want to get to it.

I will just make this point, and that is it, and we will move on.

Since I appeared before the Committee last year, I just want to point out

that the financial commitment to Fisheries and Aquaculture in this department,

from a gross expenditure perspective, has doubled. It has doubled to just over

$30 million from last year and it has tripled the allocation, the expenditure

heads allocated to this department, from the year before in 2005-2006.

Obviously, we are pleased with that in the sense that the programs of the

department are expanding. We are certainly expanding rapidly on the aquaculture

side, and I am sure we will get into some detail on that today, but we are also

expanding in other areas: fisheries renewal, cod recovery, ocean strategy. All

of those activities are expanding in the department, and with them we are

bringing in expanded programs, additional resources in terms of people where

necessary, and certainly the dollars to put those programs into place and bring

them to reality.

That is the only point I will make in introducing the Estimates of the

department, and I will be happy to deal with questions as they come up and as we

go through the exercise.

Thank you, Mr. Chairman.

CHAIR: Thank you, Minister Rideout.

Mr. Reid.

MR. REID: Thank you, Mr. Chair.

I want to thank the minister for coming today, and his officials. It is good

to see them. I have worked closely with some of them over there. I have worked

with them and against some of them at different times, I guess. I am referring

to your deputy minister. We have interesting times in the fisheries, but that is

nothing new.

Minister, it appears that your budget has been increased by some $19 million

since I was the minister over there. Can you give us a breakdown as to how you

are going to spend those additional dollars? I know you are putting more money

into aquaculture and you also mentioned the Fishing Industry Renewal

Initiatives. Can you just give us some outline as to how this spending will be

done?

MR. RIDEOUT: Sure.

Thank you, Mr. Chairman.

Yes, the member is correct, there has been a significant increase in the

gross budget of the department over the last two years, actually. Part of the

new expenditure will go into the Fishing Industry Renewal Strategy, and I can

give some detail on that.

We are committing funding in the amount - in the 2007 budget, to implement

the Fishing Industry Renewal Strategy - of $5 million annually over a three year

period for a total of $15 million. That is new funding, obviously, and it

demonstrates, hopefully - I believe, at least - our commitment to try to bring

the renewal exercise to fruition.

The highlights of the renewal strategy and some spending associated with it,

I will briefly run down through it if the member wishes.

MR. REID: Yes.

MR. RIDEOUT: We are proposing to strengthen the fish processing licensing

board and the policies under which it operates. The three-year budget for this

initiative is $300,000. The boards leeway will be tightened up in the sense that

they will be operating with resource thresholds. The policy criteria will be

made more stringent and made - policy will be made operative, and rather than

guidelines, will become strict operating guidelines.

Under this head as well, licensing transfers would be publicly advertised but

they would not occur unless they meet the resource thresholds that have been

established. We are going to attempt to institute a regional balance in terms of

plant processing capacity in regions of the Province.

On the marketing enhancement side, which is another initiative under

fisheries renewal, we are setting up a Newfoundland and Labrador Seafood

Marketing Council and we are allocating $1 million annually over the next three

years for the work of that council. So, that is a $3 million initiative in

total. We are expanding the technology and new opportunities through research

and development programming. This will include funding of about $2 million

annually as part of our three-year commitment in new research and development

leading to technology and new opportunities. We are proposing to implement a

fish auction, voluntary fish auction on groundfish, first on the South Coast. It

will be implemented as a pilot project, hopefully for shrimp as well. We are in

discussions with the industry now on how best to go about that. We have

earmarked $500,000 annually over the next three years to implement this auction

system.

Fishing industry workplace health and safety, we are setting up a fishing

industry safety council and we are funding it with $250,000 annually for the

next three years. We have in place a worker adjustment program as part of

renewal as well and we are committing $850,000 annually over three years to it.

I can go on. We are also investing more money into seafood marketing. We are

targeting key international markets over and above Boston. We are spending more

money in the cod recovery program. We are contributing $300,000 a year as part

of a five-year commitment to this, and we have entered into a partnership of

$1.3 million doing inshore cod surveys in Smith Sound in Trinity Bay, mid-shore

surveys and offshore acoustic surveys, tagging projects in the Gulf of St.

Lawrence and so on.

I do not know how much detail the hon. member wishes. I can keep going or he

can stop me when he wishes if he has questions that he wants to zero in on.

MR. REID: Let's talk about the last one first, $1.3 million for surveys

and science in Smith Sound and on the West Coast. Isn't that a federal

jurisdiction and a federal responsibility?

MR. RIDEOUT: Well, yes, and the federal government is doing that. What we

have done, of course - I think it started back some time ago actually - we have

partnered with institutions in the Province here, like the university, the

Marine Institute, DFO and industry itself to do some of this work. So, the

Province is taking the position that this is - well, jurisdictionally, yes,

there is no question, it is exclusively the responsibility of the Government of

Canada, but it is to our long-term advantage and to the long-term advantage of

the industry that we support science, support research, and support this kind of

thing, and we do, through a partnership arrangement with DFO, and the

university, in particular. Dr. Rose has done a lot of this work for us, as the

member would know. So, we could take the attitude that we are not going to put

anything into it, but we think it is good public policy that we promote and

expand the scientific research part of this because it will pay dividends to us

in the future years.

MR. REID: I do not have a problem with that but my concern is, I think

you did the same thing with the river guardians a couple of years ago for

salmon.

MR. RIDEOUT: Yes.

MR. REID: The Province went out and spent some money because that was a

federal jurisdiction up until that time. We have taken that over and I think

that the feds have now backed away from it. Is that correct? I know that is not

your department, but my concern is if we continue to put additional funding into

science, that the federal government will just cut by that amount. We certainly

would not want to see the federal government get off the hook and I know that we

could never, as a provincial government, afford to pay for scientific research

on any stock of fish in the Province.

MR. RIDEOUT: We have been very strategic, Mr. Chairman, on how we do

this. The member is correct. There is no evidence that we can see, that the

federal government is cutting their scientific work, by the amount of funding

that we are investing. We cannot see any evidence of that. As a matter of fact,

if you take the numbers in their recent budget, they have increased the amount

of money that is dedicated to science.

In terms of the river guardians, the member is correct, it is not part of our

departmental responsibility, but speaking from a government perspective, again,

it is moving in where the federal government has not done enough, and we could

take the attitude that we are not going to do this and to hell with the resource

and whatever happens, happens. Perhaps the result of it might be, and I think it

is happening in terms of river guardians, that by taking action ourselves we

shamed them into not backing away and being more responsive, and we have seen

some evidence of that in terms of the river guardian program for sure.

MR. REID: The $850,000 for the workforce adjustment, what are you going

to be doing there?

MR. RIDEOUT: Well, that is in the renewal exercise. For example, when FPI

announced that they had no future plans for Fortune, then we brought in a

program that would allow the government to respond to the needs of people in

Fortune, in the sense that we would go in there and set up an office, do an

assimilation of what the worker requirements were, what their training was,

their education level, their skill level, what training programs could be

brought to them to provide them with a transition period; one fourteen-week

rotation at a little bit better salary than the regular job creation program to

help them along the way of making decisions as to where they look to see their

future as a result of that plant closure.

This program is meant to deal with that kind of situation. We used it in

Marystown, and Marystown was closed for more than a year. So in that context, it

met the criteria. We are all hopeful and optimistic that Marystown is not a

permanent closure, and neither does it appear that Fortune will be now as a

result of other interests, particularly by Cooke Aquaculture. The program is

there to assist communities where plants, for whatever reason - whether it is

economic reasons, whether it is bankruptcy, whether it is just somebody getting

out of the business - close and the indication are that they are permanent

closures. This program is meant to respond to that kind of a situation and offer

a suite of options and services to the people affected, not to help them move

off somewhere else or leave the Province or whatever but to help them in

whatever they deem the help that they require for their particular situation. It

worked very well and was very well received in Fortune - and Marystown, too, as

far as I know - and we believe it is a program that is useful and one that we

should have available if it is needed.

MR. REID: How much did you spend last year on that?

MR. RIDEOUT: Last year, I think the funding was actually in Municipal

Affairs. I cannot actually tell the member, but I think - was Fortune a

million-and-something and Marystown was a million-and-something? Do anybody -

WITNESS: I am not sure.

MR. RIDEOUT: It was through Municipal Affairs where the funding flowed. I

believe both of them was something over $1 million in total in the amount of

support, and that would include the job creation side of it as well.

MR. REID: Yes, that is the reason I asked because that is what I thought,

it all came from Municipal Affairs.

MR. RIDEOUT: It did, yes.

MR. REID: You are putting $850,000 in there for this year. Obviously,

when you said over $1 million last year that also included the make-work that

was taking

part in those communities, make-work programs, the community

development aspect. You know, the JCP projects.

MR. RIDEOUT: That is still staying in Municipal Affairs. The job creation

funding component of it is still, as I understand it, going to be funded out of

Municipal Affairs but the cost for setting up the office, offering training

programs, going down and meeting - or out, wherever it is - with the people

affected, determining what their needs are. The initiative for the program and

everything - except the job creation funding component of it because that is

going to come, as I understand, it if it comes, from local community initiatives

anyway in terms of what they say is best to do in their community.

MR. REID: But the funding for that would come from Municipals Affairs

(inaudible)?

MR. RIDEOUT: Yes, that component would still come from Municipal Affairs.

Alastair, do you want to add something to that? That is correct, isn't it?

MR. O'RIELLY: The minister is correct in as much as, the intent is to

continue to work with the existing program, similar to what it was in short-term

job creation for communities that have circumstances where people do not achieve

sufficient employment to quality for EI benefits. That is the normal program

that has been in place for some years, community development.

Last year, the extraordinary systems for Fortune and Marystown was kind of a

template for what we are doing here, in the event of closures that are likely to

be of a permanent nature, as demonstrated by a closure by at least a one-year

period with no immediate prospects for reopening.

In that circumstance, this money is really to spearhead some of that work

with those who may be directly impacted in terms of permanent loss of employment

through counselling and through - as the minister pointed out - short-term

employment at a slightly higher wage rate to qualify for benefits, plus

extraordinary support and counselling services. This is done in collaboration

with Municipal Affairs, with Human Resources and Employment and also with INTRD

in a joint effort to respond to these circumstances. We do not have an

expectation. Maybe we are being overly optimistic, but we do not have an

expectation of significant closures forthcoming in the coming year and we

believe that this will be an appropriate and an adequate level of response to

deal with that.

MR. REID: Given that Municipal Affairs will still be funding any

make-work programs.

MR. O'RIELLY: That is correct.

MR. REID: I still cannot see how you are going to spend, or did spend

$850,000 from the Department of Fisheries under that budget heading.

MR. O'RIELLY: This is the proposal going forward in the event -

MR. REID: What kind of things would you offer or pay for out of that

$850,000? For example, if Fortune were to go down - just to use Fortune, if it

was open today and it went down tomorrow, Municipal Affairs is going to kick in

the make-work programs. So what is the Department of Fisheries going to get for

the $850,000, or how are they going to spend the $850,000?

I know you said you would go down there and set up an office and things like

that. Would the Department of Fisheries be hiring people to work in that office,

and how many? For example, I know it is speculative and hypothetical, but how

would you spend $850,000 in a community when Municipal Affairs is going to

provide the money for make-work?

MR. O'RIELLY: What we anticipate is that this template of what happened

in Fortune and in Marystown gave us an estimate of what it would cost to

establish a vacated office, provide counsellors for the workers there, engage in

the short-term employment creation initiative on their behalf and respond

accordingly.

It is a difficult thing to project in terms of what the final cost would be,

depending on the individual circumstances and the size of the plant that might

be affected, but it is a contingency that gives us a mechanism to respond in a

more significant way if there is the risk or threat, or indication of a

permanent closure. The costs are really based on what the experiences were in

Fortune and in Marystown, which, in both cases, were fairly consistent, I think,

in terms of the response requirements, the participation rate of those who

availed of the services, which actually was roughly 50 per cent in each case.

Fifty per cent of the total workforce availed of these counselling services and

the support afforded through the program. So, based on those estimates, we feel

we have an appropriate contingency to respond at the level of $850,000 - and, as

you said, plus the program funds that are available through Municipal Affairs as

well.

MR. REID: So you are not anticipating spending that money this year, I

take it.

MR. O'RIELLY: We hope not.

MR. RIDEOUT: The funding that we are talking about here is part of the $5

million block dedicated to fishing industry renewal. We hope we do not have to

spend it in terms of the workforce adjustment, that there are not any

significant plant closures. That would be the hope.

Our experience has been, particularly emanating from Fortune and Marystown -

and there could have been, for example, when you had the Daley bankruptcy last

year, a requirement to have done something similar in other communities if those

plants had not gotten picked up as quickly as they did. We think it is an

appropriate safety measure to have in case there is such an unfortunate

occurrence in some community out there, to be able to respond to it.

MR. REID: Little Bay Islands -

MR. RIDEOUT: Little Bay Islands is a possibility, that is right. The

member just put his finger on it.

I am sorry to interrupt. Did you want to say something further?

MR. REID: No, that is -

MR. RIDEOUT: That is a prime example. The operator there has indicated

publicly that he does not intend to operate this year. The community is looking

to attract somebody else. Whether there is somebody else at this point, I don't

know, but it may well be that some kind of an adjustment program may have to be

available to the people on Little Bay Islands.

MR. REID: So you have $1.3 million for basically science; you have

$850,000 for workforce adjustment. The $2 million for research and development

that you mentioned there, what is that going to be spent on?

MR. RIDEOUT: Alastair, do you want to begin?

MR. O'RIELLY: Over the years the department had, in the past, some

significant R and D funds available to it. Most of these funds, in the past,

were available through federal-provincial funding arrangements. These have all

but dissipated. There was NIFDA and CAFID and a number of other initiatives over

time, so the program resources available to the department for R and D

initiatives were at a very low ebb in the last number of years. Now, with the

renewal exercise, the decision was taken to provide additional monies there for

research and development activities.

Now, that would include everything related to harvesting and processing, gear

development, and there are a lot of issues there with respect to appropriate use

of gear and bycatch mitigation, and mitigation of adverse impacts in terms of

gear on the bottom, that kind of thing. We see some research going into that

area. Avoidance of bycatch in a number of fisheries is indicated.

On-board handling systems for vessels is an important area in which to do

some work, and now with the changes in federal policy on vessel size we expect

that harvesters are going to be much better positioned to look at on-board

handling systems, items such as slush ice and other kinds of technologies, so we

have funds available to research some of those and to see what the applications

are.

Vessel design is another area where we have done some work, from a safety

point of view and an operating efficiency point of view, and we see that

continuing.

In the plants, quality is an issue but we think a lot of the funds are

probably going to be more directed towards technology in terms of efficiency,

process improvements, product development, and those types of initiatives, to

try and extract more value from the fishery. That funding, we think, will be

quite significant compared to what we have had in the past, and should spur some

investments by the private sector, and perhaps also some federal funds.

MR. REID: This is similar to the old NIFDA programs, I take it.

MR. O'RIELLY: Fundamentally. The only difference, of course, is that it

is not a federal-provincial fund.

MR. REID: No, I know. So you are talking, if somebody wanted to do

something with on-board handling, you would subsidize him, for example, an

individual fisherman or individual plant owner, if he wanted to put in

additional equipment?

Like, back in the late 1980s or early 1990s, for example, under the old NIFDA

program, if someone went out and bought a baiter or splitting machine, the

Province and the federal government, under NIFDA, kicked in a portion of the

money. Are you saying that you are going to do that again, or are you going to

put money into fish harvesters to improve their vessels or the handling systems

on their vessels?

MR. O'RIELLY: Yes, except the intent would not be to subsidize the use

of that technology. The industry, we feel, will be able to carry that themselves

if it is a good investment. The monies would probably more likely be directed to

adapt technologies to the use of the vessels here or to demonstrate it, where

people are not using certain types of technology, and to pay down the cost, or

help pay down the cost, of bringing it into the fishery, allowing it to be

evaluated in a commercial context, and demonstrate its value. To the extent that

we are successful at doing those kinds of initiatives, the industry, we would

expect, would take up the charge themselves.

So it is not the intent, really, to establish a program that would offer some

percentage - 50 per cent or some other percentage - of the cost of doing this

for everybody who wants to do it, because of a couple of issues. It would be

very expensive to do it that way. Also, it would be offering a subsidy to the

industry which probably is not needed and also has countervail implications.

MR. REID: We always worry about this countervail. Quebec doesn't seem

to be worried about that, but that is another topic.

Actually, if harvesters nor processors are going to be able to avail of any

of this $2 million - $2 million, is it, for research and development? - give me

an example of who might avail of this besides the Marine Institute.

MR. O'RIELLY: Actually, any processor or any harvester in the Province

will be eligible to submit proposals. We are still at a very formative stage in

terms of designing the criteria to how that is going to work this year. Up to

now, or in the past, we have had a very small budget for these types of things,

so the initiatives were largely driven either within the department or some

extraordinary collaboration with industry.

Now that there are some additional resources, we are going to be looking at

ways of communicating to the industry as to the availability of the money and

seeking their proposals for participation, so that will probably work out over

the next few months.

Some of the specific issues on how to do this, and at what level of support,

we need to do a little more work with the industry and we are consulting with

them further on that specific point.

MR. REID: I have an individual in my district who is a sea urchin

harvester, along with other things. He is having difficulty finding divers, so

he is looking to the federal government for some help to develop a new

technology for sea harvesting, or sea urchin harvesting. Would that qualify, for

example?

MR. O'RIELLY: Notionally it would. I obviously do not know what it is,

specifically, to the extent of, if it has been used before or if people are

familiar with it. That is the kind of thing - new technology for harvesting, new

techniques and approaches - that will improve operational efficiency or reduce

cost or improve quality. Those are the kinds of -

MR. REID: So, you have no guidelines for this program yet?

MR. O'RIELLY: We have draft guidelines, but we really need to spend

some time talking to the industry about what they feel is the appropriate and

best use of it. What we have is a global allocation of the $2 million, which is

part of the $5 million funding for the next three years. The specific criteria

is probably not going to be available to the industry in terms of application

forms and processes for another couple of months or so.

MR. REID: Under 1.4.01., Fishing Industry Renewal Strategy, is that the

budget there, $3.4 million in Grants and Subsidies, $1.5 million in Purchased

Services?

MR. O'RIELLY: That is our estimated, yes.

MR. REID: What are you buying for $1.5 million under Purchased Services?

MR. O'RIELLY: That will depend on how the profile of the program works,

but if we need to provide consultants or technicians to apply to any of these

initiatives, that would help pay for some of these types of costs; and, of

course, it applies to the entire program in terms of the $5 million.

MR. REID: Do you really anticipate spending $2 million this year when you

do not really have the program defined yet?

MR. O'RIELLY: It is really difficult to predict what the take-up rate

is going to be. We are kind of at a difficult time right now because the fishery

is under way and this is the last time in the world when people want to have a

conversation about an R and D initiative. They want to continue their fishing

and complete that fishing activity, so that is one of the challenges that we

have in terms of timing.

The other thing that is difficult to predict is what the take-up rate is

going to be. The industry has not had an opportunity to avail of a program like

this now for some years, so we really feel that there is a certain amount of

pent up demand and interest, and we are looking forward to seeing what kind of

feedback we get when we present it to the industry.

MR. RIDEOUT: I think the other thing that needs to be added is that this

is a three year funding commitment and that the intention here is - if it is not

possible and appropriate the expend the funds, we roll them over.

We did that in the aquaculture program this year and, as a result of not

being able to cash flow some of the funds, we put in our new amount of

commitment that we committed from the previous year and added on what was left

to it, so we have a $12.5 million program rather than a $9.5 million that we

would normally have had.

So, if there are funds left in this initiative - it is a three year

commitment - we will just roll it over and hopefully the program, as it gets

more experience and the industry becomes more acquainted with it, will start to

achieve more of the objectives for which it was established.

It is new in many respects, and it will take some time, but, from the

consultation process, we think it is something that could be useful and will, in

fact, be useful.

MR. REID: Can we go to aquaculture now?

MR. RIDEOUT: Aquaculture, of course, yes.

MR. REID: You just mentioned that you are going to have $12.5 million;

$3.5 million of that was a carry-over from last year.

MR. RIDEOUT: Well, I think it was cash flow debt.

Brian, do you want to speak to that?

MR. MEANEY: There was a total commitment last year of $7 million, $3.5

million which will be carried over into the current fiscal year. A total

commitment of $6 million, sorry, will be carried over into this -

MR. REID: All right, so you budgeted $3.5 million for that last year, did

you?

MR. MEANEY: Yes.

MR. REID: None of it was spent.

MR. MEANEY: No, we were concluding the contracts. The contracts with the

company could not be concluded before March 31.

MR. REID: What company are you talking about?

MR. MEANEY: Cooke Aquaculture.

MR. REID: So that is the $10 million that you are putting into Cooke

Aquaculture -

MR. MEANEY: Yes.

MR. REID: - that you announced last year. So you allotted $3.5 million

for that year, and how much for this year and next year?

MR. MEANEY: There was an additional $3.5 million allocated for this year,

to be carried over with the $6 million from last year, for a total of $9.5

million flow for this year.

MR. REID: So, what is your total budget for aquaculture this year?

MR. MEANEY: The total budget under that program would be $12.5 million.

MR. REID: So, $12.5 million. How much of that is going to Cooke?

MR. MEANEY: In the current fiscal year we anticipate roughly $9.5

million.

MR. REID: Where is the other $3.5 million going?

MR. MEANEY: We currently have proposals under review by two additional

companies. We anticipate there are some other companies who have an interest in

this program and that we would see some applications towards the program in this

coming fiscal year.

MR. REID: So, when you made the announcement last week about the $10

million investment in aquaculture and stuff, that was the Cooke Aquaculture

thing that was announced last spring?

MR. RIDEOUT: Elucidate a little further what you are talking about.

MR. REID: Did you say hallucinate?

MR. RIDEOUT: Explain a little further.

No, I didn't say hallucinate.

MR. REID: It was my understanding, when you came out in the Budget with

$10 million, is it, or $12 million in aquaculture, I thought that was in

addition to the $10 million that was gone into Cooke, but obviously it is not.

When Cooke made the announcement last year, along with the federal

government, and the Province said they were kicking $10 million into this plan,

I thought the $10 million that was announced in the Budget last week was in

addition to the $10 million that was already committed to Cooke. I thought it

had been spent, actually.

MR. RIDEOUT: Well, it obviously all did not get spent, and Brian has

explained that. I think the contracts were late getting signed - not through

anybody's fault. It is just that this project got announced late last fall and

by the time the legal documents were put in place - I mean, Cooke went ahead on

its own, on the strength that this program was coming into place, and spent

significant amounts of money on its own before the program was actually even

announced, let alone the legal details completed and the sign-offs done.

So, yes, there is some additional cash flow required to take up our

commitment. I think, when we made the announcement, we said cash would flow over

a two year period.

MR. REID: So, the total budget for Aquaculture this year, Brian, is what

in terms of grants, if you include what we are going to give to Cooke

Aquaculture this year? You said that is going to be $9 million or something?

MR. MEANEY: The total budget for that program is $15.5 million, which

$9.5 million would flow, hopefully, to Cooke this year based on expenditures.

The additional money, as I said earlier, for a total of $12.5 million would

look at potential new applicants and new projects upcoming. The total program

commitment over the three-year period is now $15.5 million.

MR. REID: How much are you committed to this year over and above what you

are giving Cooke?

MR. MEANEY: There is an additional $3 million.

MR. REID: All right, and the $3.5 million that was left in the Budget

from last year was for Cooke?

MR. MEANEY: Yes, it was carried over into the current -

MR. REID: All right. So, what will you spend an additional $3.5 million

on this year, the $3.5 million over and above what you are going to pay Cooke?

MR. MEANEY: As I indicated, there are a number of companies who are

looking at this program for new capital expansion, the addition of new capacity

to expand the industry, particularly in the South Coast, the Fortune Bay area.

There is some interest in the Placentia Bay area for new site development and

new production.

MR. RIDEOUT: We are currently assessing a significant application from

the Barry Group, for example, in terms of a significant new investment in

aquaculture on the South Coast. They have a significant ask before us now that

we are considering. Whether it will be all, some or none of it funded at the end

of the day, the decision is not yet made, but it is a significant ask for a

significant expansion of their activity on the South Coast.

Grey aquaculture, I think, is it, out of New Brunswick?

WITNESS: Grey

MR. RIDEOUT: Grey's are in looking to set up and start getting fish in

the water on the South Coast. We have a number of mussel aquaculture producers

that are looking to either start up new sites or expand current sites. The

take-up on the program is certainly positive and will, over time as more

proposals come forward, I think, get taken up.

The Cooke one was sort of late in the fiscal year, but the commitment that

the Province made to Cooke will certainly be paid out over the balance of this

fiscal year, I anticipate.

MR. REID: So, of the $28 million in this year's budget, $9.5 million is

going to Cooke, right?

MR. RIDEOUT: About $9.5 million. That is correct, isn't it, Brian?

MR. MEANEY: Yes.

MR. RIDEOUT: There was a total commitment to Cooke of $10 million over a

two-year period.

MR. REID: Your predecessor brought in a program, I think it was a loan

guarantee program for aquaculture, was it?

MR. RIDEOUT: For feed, yes.

MR. REID: It was not announced as feed originally, was it?

MR. RIDEOUT: I think so.

MR. O'RIELLY: The minister is correct, I think inasmuch as, primarily

as feed because that is the lion's share or the working capital requirements,

too. That program is administered through ITRD, in collaboration with our

department.

MR. REID: Okay. How much of a take-up did you get on that program?

MR. O'RIELLY: The most significant has been the activity, of course,

related to the Barry Group in the Natures Sea Farms.

MR. REID: Barry got an $8 million loan guarantee, yes. Did any others get

a take-up on that, because I asked that question last year, I think?

MR. RIDEOUT: Any others, Brian?

MR. MEANEY: We have three applications under review right now for working

capital, one for mussels -

MR. REID: He announced that two years ago because I think you were the

minister last year, weren't you minister?

MR. RIDEOUT: I was last year, yes.

MR. REID: So you did get any take-ups on that last year?

MR. RIDEOUT: Barry took up the year before that, didn't he?

MR. O'RIELLY: Yes.

MR. RIDEOUT: And Barry's loan guarantee is still in place?

MR. O'RIELLY: Yes.

MR. RIDEOUT: What is it?

MR. O'RIELLY: It is $7.2 million, maximum.

MR. RIDEOUT: Under the new proposal that Barry has before us, that we are

now considering, there would be a significant expansion of that exposure under

the Loan Guarantee Program if it is approved.

MR. REID: There were no other loan guarantees given to any other

individual or company, besides Barry, in the last two years?

MR. RIDEOUT: No, and Cooke did not look for any and did not want any.

MR. REID: When the minister announced that a couple of years ago he did

not specify that it was for feed. I know that when you are talking about

aquaculture you are not just taking about fin fish aquaculture, I say to the

deputy minister.

Are there any other loan guarantees put out for any other types of

aquaculture? Obviously not.

MR. MEANEY: The primary use of the program is for working capital, which

on a finfish operation or a salmon operation would be - 90 per cent of that cost

would come to feed.

MR. REID: On finfish? Yes, I am sure.

MR. MEANEY: Yes. We have some people looking at it from the mussel side

as well, but no applications.

MR. REID: No one has ever come forward and asked for a loan guarantee on

any of that?

MR. MEANEY: No.

MR. REID: It has always been feed. If you go back to your previous years

in the Department of Fisheries, minister, in the 1980s, the money that was going

into Bay d'Espoir, basically through the federal and provincial governments in

terms of grants, subsidies and outright pay outs at the end of the day because

of default on loans, it is all associated, for the most part, with feed.

MR. RIDEOUT: Yes.

MR. REID: Is there any way that we can overcome the problem we are having

with the cost of feed in that region, because it has always been a problem and

that is usually what has bankrupted these companies?

MR. RIDEOUT: Mr. Chairman, the hon. member is correct. Feed has been and

is a big, big cost of any aquaculture operation and financing the feed over the

period of time that it takes to grow out the fish and be able to repay whoever

the supplier is, whether it is a loan guarantee from the Province or whether it

was Shur-Gain or some other supplier who were big suppliers of aquaculture feed,

has been a real big problem. Some of the contracts that some of the operators

entered into previously, I suppose they would be considered usury today under

the interest rates and the way things went if there were defaults and all that

kind of stuff, I mean it would make the hair stand on your head. That was one of

the problems that - what was the name of the company that Barry bought out?

MR. REID: North Atlantic.

MR. RIDEOUT: North Atlantic, right. Well, they were actually in

receivership when Barry went in there and took them over. That was one of the

very significant problems that they faced, was the arrangement they had with

suppliers for feed. At the time, we looked at the Loan Guarantee Program that

was operating in New Brunswick. That appeared to make sense and we brought in a

program that was very similar and it has worked very well. Now, the only one

from that perspective that is using it, is Barry. Cooke has plenty of working

capital, plenty of lines of credit with their consortium of banks. The program

means nothing or has no value to them. They told us that right from the

beginning. They needed other support, and that was that aquaculture equity

investment program, which fitted their needs.

Now, the other point I want to make is now that Cooke is in and the critical

mass that is associated with feed is starting to change and there is now

competition in the industry, people are coming in here and storing feed;

bringing it in by barge, not a few truckloads at a time, like used to happen

when the industry was in no more of an infancy and growing itself. Things are

starting to change and you are getting more competition. You are getting

suppliers bringing in and storing larger amounts and that kind of thing.

Hopefully, as the industry grows you are going see feed suppliers set up down on

the Connaigre Peninsula, in particular, about where the finfish industry will

very likely be associated, and that will bring feed costs down again. By

bringing it in by barge and things of that nature, there have been improvements

made and the Loan Guarantee Program is one of the factors that helps larger

operators get over that hump.

MR. REID: Yes, it has always been a problem, minister. I went in over

there working in 1989 and it was struggling then. It struggled when a new owner

took it over. Maybe Brian remembers when North Atlantic took it over. I think

the government paid the outstanding fee that was owed to Shur-Gain or somebody

for the feed from the predecessor of North Atlantic before they moved in. Am I

correct, Brian?

When North Atlantic came in there was money owing down there for feed and

stuff, and I think the government - because it was just before I became the

minister over there - stepped in and paid off some of that debt. My

understanding, and yours and everybody else's, was that North Atlantic was

going to come in and that was not going to be a problem for them. Once we wiped

the slate clean they were not going to have any problem with feed. They were

going to make a go of this. We had lengthy discussions about whether or not that

would happen. Then, obviously, they went bankrupt as a result of feed costs. I

am praying that it will not happen again with the company that is down there now

because it has always been a problem. I think if you trace it back through the

various owners that it has had, at least since 1989 when I became acquainted

with the department, what has bankrupted every company since then has been feed

cost. Until we can get a grip on that, my fear is that some of it will go the

same way. Cooke, being a large company in New Brunswick, maybe they have the

wherewithal to change that around, but as one operator, I am sure it is going to

experience the same problems that all its predecessors did. I am not talking

about Cooke. I am talking about if Mr. Barry and his group are down there alone,

and I would assume that they are going to face the same difficulties that their

predecessors did. So, maybe Cooke will help out in that matter.

Let's back up a few things here now. You have $9.5 million in this budget

that is going to Cooke and you have $5 million that is going to the diversity

program, some of it which may not be spent this year. So that is $14 million of

the increase in your budget. You have gone from $10 million, when I was Minister

of Fisheries, to $28 million now. Fourteen of that twenty-eight, or $9.5 million

of it goes to Cooke Aquaculture, a one-time payout. There is another $5 million

for the fisheries diversification; some of which will be spent this year, some

of it will not. Am I correct so far?

MR. RIDEOUT: Carry on.

MR. REID: No, I am just doing a tally here of the increase in the budget.

MR. RIDEOUT: Yes, we want to see what the result of your tally is going

to be.

MR. REID: No, no. I am just adding it up as I go because I am somewhat

surprised, minister, and I do not mind telling you. I am somewhat disappointed,

because when I heard originally - maybe it is because I did not listen properly

or maybe there was not enough information out there. When I heard the new

investment of $10 million this year into aquaculture, I thought that was going

to be a new program.

MR. RIDEOUT: It is a new program.

MR. REID: Yes, but -

MR. RIDEOUT: It is built on from last year.

MR. REID: Yes, but is $10 million of that going to Cooke Aquaculture?

That is what I am saying.

MR. RIDEOUT: Well, $5 million from last year and $5 million from this

year.

MR. REID: Yes. So, $10 million of that increase in your budget this year

is going to Cooke Aquaculture. I find that somewhat disappointing because I

thought that was -

MR. RIDEOUT: I do not know what would be disappointing about that.

MR. REID: No, no. You are reading me wrong, minister.

MR. RIDEOUT: Okay. Maybe you are saying it wrong.

MR. REID: I know that we have to play politics with it and stuff like

this, but what I am saying is when I heard the announcement this year of an

additional $10 million or $12 million for aquaculture, I thought it was in

addition to what we had paid or were supposed to have paid Cooke Aquaculture,

because Cooke Aquaculture was announced when, last April? When did we make that

announcement on Cooke Aquaculture?

MR. RIDEOUT: Just before Christmas, wasn't it?

WITNESS: (Inaudible).

MR. RIDEOUT: It was just before Christmas, yes.

MR. REID: Just before Christmas, yes. Anyway, that is clarified now.

I am going to ask a few more general questions and then I have to go. You are

talking about increasing the loan portfolio for vessels. What is it currently?

MR. RIDEOUT: What is it Alastair? I had the number but I just do not

remember it now.

MR. O'RIELLY: It is $30 million-odd, $36 million. I think it is

something in the order of that. Finance administers it, but I think it is in the

order of $36 million that is under loan guarantee at the moment.

Now, the forecast in terms of what might happen in the next few years with

these changes in the program, between ourselves and DFO, the projection is that

in the next five years we could have $250 million of new investment in vessels

and in the industry in terms of combining enterprises and so on. Our estimate is

that if that happens, if that level of investment is made then we project

approximately $100 million of that would probably be submitted for loan

guarantee under the Province's program. That is where the $100 million

forecast is from, and that is the basis for it. There is significant

eligibility. The larger vessels are going to drive costs considerably, moving to

a size - it is eighty-nine feet, but all fleet sectors are allowed to move up.

So it will cascade down through the entire profile of the harvesting sector in

terms of new vessels or replacement vessels of a larger size.

Then, combining of enterprises is something we have to work on with the

banks, of course, in terms of finalizing the details as to how that would work,

but that kind of financing also will generate significant additional costs.

The other cost forecast that we see is being able to refinance existing debt

that is held by harvesters - that is held by processors or others. They will now

be able to refinance that, if they wish, under the program, and avail of maybe a

better loan rate or perhaps a greater level of financial independence.

MR. REID: But they would have to go to a bank first and be approved for a

loan by the bank before we co-sign it, am I correct?

WITNESS: That is correct.

MR. REID: Well, why would an individual go to a processor if he could

afford to do that - the current ones who have done it? What I am saying is, why

do you expect a lot of these people to leave the processor now and go to a bank

and then be guaranteed by the Province?

MR. RIDEOUT: We expect it because that is what they tell us. They told us

that is what they would do if they could do it under this program when we were

out as part of the fisheries renewal exercise.

MR. REID: What sent them to the processor in the beginning? One thing

might have been - correct me if I am wrong - their inability to negotiate a loan

with the bank, so they were forced to go with a processor. So, what would

increase their ability to go to the bank now, if they are in debt to a processor

or if they have their loan with a processor?

MR. O'RIELLY: That is a matter that, I guess, the proof will have to be

in the pudding in terms of what kind of take-up arises from it. Many harvesters

have said that they have had no choice in terms of they were unable to find

financing with banks, or unacceptable terms, but the most frequent criticism is

not that they could not get funding; it is that they cannot get it fast. The

administrative procedures of dealing with a bank and getting the loan guarantees

were too cumbersome and would take a month or more to do it, which, for some of

us, maybe does not seem like a long period of time, but I think in the context

of how things happen in the fishing industry, in the buying and selling of

vessels, people want to be able to act when there is an opportunity. The

procedures and processes that are in place, the necessary due diligence and so

on, just takes time.

It will be interesting to see how this unfolds in terms of take-up, but the

fact that the program is there and available for that purpose will obviously

give harvesters considerably more bargaining power.

MR. REID: The program was always there.

MR. O'RIELLY: It is, but the opportunity to refinance - there was a

window, I think, in the past, for a short period, to do that, but typically

refinancing is not an eligible item under the program.

MR. REID: Under the Loan Guarantee Program there is probably $100 million

worth of loans out there for vessels.

MR. RIDEOUT: No, (inaudible).

MR. REID: No, that is what the government's exposure is.

MR. RIDEOUT: That is what I mean.

MR. REID: What I am saying is, we only guarantee a certain portion of the

bank's exposure.

MR. RIDEOUT: Twenty per cent.

MR. REID: Yes, and I am not aware that the government was asked to pay

out much in the past years when I was minister.

MR. RIDEOUT: You are right.

MR. REID: Has that increased in the last few years?

MR. RIDEOUT: No, the payout, Mr. Chair - this is a program that works

very, very well; there is no question about it. While we have to carry a

contingent liability on our books, and that might look big with Standard and

Poor's or whoever looks at those items, in reality the payout on it is very,

very small. I believe it is less than 1 per cent now, isn't it?

WITNESS: Approximately 1 per cent.

MR. REID: If it follows through with what you are proposing with the

vessel size and stuff, how much are you proposing to increase the Province's

exposure, do you think? Right now you are saying the Province's exposure is

around $30 million.

MR. RIDEOUT: Up to $100 million, we think, might be possible. Therefore

we have built in, of course, in our financial projections, using the same

default ratio of around 1 per cent of that additional money, if it were to

happen.

MR. REID: Yes.

MR. RIDEOUT: The program has been a very, very solid program and very

little take-up by the taxpayer to support it.

MR. REID: Do you have a list of what we would have paid out on that in

the last couple of years or three years?

MR. RIDEOUT: I don't have it at my fingertips.

MR. REID: Is it available to us?

MR. RIDEOUT: Well, I would have to ask; I don't know about the

confidentiality aspects of this, because -

MR. REID: I don't know how much confidentiality a person has, once the

government has to pay their loans.

MR. RIDEOUT: I agree, but all I am saying is that I would have to ask. I

would think that it would be Finance who would have paid out the deficiency

amounts.

MR. O'RIELLY: There is nothing recent, that I am aware of.

MR. RIDEOUT: We are not aware of anything recent, the deputy says.

MR. REID: That is on the boats.

What about the loan guarantees that were outstanding on the fish plants, for

example, the one in Herring Neck? Has that ever been written off, or has it been

collected?

MR. RIDEOUT: Herring Neck? Dave, can you give us some -

MR. LEWIS: Herring Neck?

MR. REID: Yes.

MR. LEWIS: That was written off eons ago, I think.

MR. REID: No.

MR. LEWIS: It wasn't? I thought it was several years -

MR. REID: It wasn't written off when I was there; there was still money

outstanding.

MR. LEWIS: Oh, you mean the outstanding loans to the department?

MR. REID: Yes.

MR. LEWIS: The receivables of the department?

MR. REID: Yes.

MR. LEWIS: It was written off within the past year.

MR. REID: Was it?

MR. LEWIS: Yes, that and Coley's Point Fisheries for St. Lawrence or

something, I think.

MR. REID: Can you give me the details on the amounts on that, please?

MR. LEWIS: The department was owed, I believe, around $80,000 or $90,000,

somewhere in that order, $89,000 or somewhere thereabouts.

MR. REID: Can you get the details? Because I thought it was more than

that, actually. Was that the two of them combined, or just one?

MR. LEWIS: That was the two combined. My recollection is that is was

around $89,000 or somewhere thereabouts. Maybe I am wrong, but I will certainly

get them for you.

MR. REID: Can you get me the figures?

MR. LEWIS: Yes.

MR. RIDEOUT: We will get them, yes. That will be compiled for the member,

Mr. Chair.

MR. REID: All right, that is it for me, Minister.

There are lots more there, but I have another meeting and my colleagues will

ask you some now.

MR. RIDEOUT: I thank the Member for Twillingate & Fogo, the Leader of

the Opposition, for his participation, Mr. Chairman.

CHAIR: Thanks very much.

Mr. Joyce.

MR. JOYCE: First of all -

MR. RIDEOUT: Eddie, before we get going, can we take a couple of minutes?

MR. JOYCE: Yes, not a problem.

MR. RIDEOUT: If you don't mind.

CHAIR: We will take a short break of five minutes, maybe.

MR. JOYCE: Perfect.

Recess

CHAIR: I think we are about ready to begin again.

Mr. Joyce, are you ready?

MR. JOYCE: I will just be a few minutes; but, Mr. Chairman, that fifteen

minute rule didn't last with Gerry Reid around. You were supposed to enforce

that fifteen minute rule.

CHAIR: The flow was going so good that I didn't want to interfere.

MR. JOYCE: Well, Mr. Chairman, if you set the rules you have to stick by

them.

CHAIR: Now you can have your turn.

MR. JOYCE: I am just going to go for awhile to some line item, Minister;

it shouldn't take too long.

First of all, I know, with Labrador and Aboriginal Affairs, Yvonne Jones was

supposed to be here, but she is at the hospital with her mother who is having an

operation, so that is why she is not here, but I will ask a few small questions

on this.

WITNESS: (Inaudible).

MR. JOYCE: I am not sure, but that is why she is not here on Labrador and

the fishery.

In 1.2.01. -

CHAIR: I wonder, could we finish the Fisheries and Aquaculture first, and

then -

MR. JOYCE: That is what I am going through, Fisheries and Aquaculture.

CHAIR: You are talking about page 119?

MR. JOYCE: I am just going through what is in the Budget, line item

1.2.01., Fisheries and Aquaculture.

CHAIR: Okay, page 119.

MR. JOYCE: There is an increase there of $72,300. What new position is

that, Minister?

MR. RIDEOUT: Can the member tell me exactly where he is?

MR. JOYCE: Item 1.2.01.

MR. RIDEOUT: Yes.

MR. JOYCE: It is Executive Support, Salaries.

MR. RIDEOUT: Right.

MR. JOYCE: There is an increase of $72,300.

MR. RIDEOUT: Yes.

Executive secretary reclassification accounts for $33,800. Anything else,

David?

MR. LEWIS: That is all, plus there were some minor salary increases.

Budgeted last time was $731,000, and the new budget is $777,000, so it is

actually an increase of $44,000. There was a reclassification of executive

secretaries across government, and that accounted for around $33,000 of it. The

rest is just a standard salary increase.

MR. RIDEOUT: So it is not for any new positions; it is just

reclassification of positions, that increase in Salaries?

MR. LEWIS: Yes.

MR. JOYCE: In 1.2.02., Property Furnishings and Equipment, last year you

budgeted zero but you spent $80,000, and this year there is an increase of

$658,100.

MR. RIDEOUT: Last year we did not budget for it, but we ended up

transferring funds to buy two pickups for the veterinarians in aquaculture, and

inspections people. We are also planning - in the Property, Furnishings and

Equipment, there is $613,000 budgeted for the design of this new facility in St.

Alban's on the South Coast, so the design fees for that, $613,000. They are

purchasing a disinfection truck, $75,000, for aquaculture purposes. There is

$60,000 budgeted for aquaculture vehicles, and $40,000 budgeted for inspection

vehicle replacements.

MR. JOYCE: So it is $613,000 -

MR. RIDEOUT: Oh, I am sorry, I didn't mean to mislead the hon. member.

When I said the design fees for the South Coast, I said $663,000. I misread

the figure; it is $563,100.

MR. JOYCE: For design?

MR. RIDEOUT: Yes, for the design of the new aquaculture facility at St.

Alban's.

MR. JOYCE: On 1.3.01. there is an increase of approximately $220,000 for

Salaries this year. Is this mainly due to the increase across the department?

MR. RIDEOUT: There was a delayed recruitment from last year. The director

of fisheries adjustment, seal communications, trade analysts, those recruitments

went ahead but they were later coming on stream than we could plan for by the

time we went through the recruitment process, so that would have delayed the

amount of funds that were actually expended.

There is a trade development position, I believe, $59,500, that is included

in the global amount there of $663,100.

WITNESS: That is a one-year temporary position.

MR. RIDEOUT: That is a one-year temporary position, the trade analysis

position.

MR. JOYCE: Are all of those positions filled now?

MR. RIDEOUT: Is trade development filled now, Mike?

MR. WARREN: No.

MR. RIDEOUT: We are in the process of hiring?

MR. WARREN: (Inaudible).

MR. RIDEOUT: The rest of the positions are filled?

MR. WARREN: Yes.

MR. JOYCE: Okay.

Under 03. under the same subhead, Transportation and Communications, there is

an increase there of approximately $50,000 or $60,000. What was that for,

Minister?

MR. RIDEOUT: The increase, as I see it, is about $35,000, and it was

additional funding to be spent on trade development promotion, transportation

costs for sending our booth and that kind of thing to the various trade shows

that we attend.

MR. JOYCE: Okay.

Under 05., Professional Services, in the Budget last year it was $180,000 but

very little of it was spent.

MR. RIDEOUT: Yes.

Again, we were anticipating spending an additional $80,000 in trade

development under that head for Professional Services.

WITNESS: Eighty thousand less.

MR. RIDEOUT: Eighty thousand less, yes. We budgeted $180,000 last year

and didn't spend very much, as the member pointed out, but we are budgeting

$100,000 for that expenditure this year.

MR. JOYCE: What kind of professional services? Just setting up the

booths, or...?

MR. RIDEOUT: Dave, is that your shop? Do you want to speak to that, or

Mike?

MR. WARREN: That is actually the trade development analysis work that we

are going to do over the next year. It is a big issue for us. There are a lot of

trade barriers, and we are going to hire somebody. This will assist in hiring

the consultants that we think we will need to support that. The legal stuff, the

international business consulting services, we are working our way through that,

but these are the kinds of things that we would expect that our work and trade

analysis will require.

MR. JOYCE: Okay.

In 06., Minister, Purchased Services, once again there is a decrease. You

budgeted $124,000 and there was only about $49,000 spent, about a $75,000

difference there.

MR. RIDEOUT: Do you want to speak to it, Mike?

MR. WARREN: The reduction from $124,000 to $49,000 was related to the

delayed recruitments of the positions we just mentioned.

MR. JOYCE: The same thing, okay.

MR. WARREN: Yes.

MR. JOYCE: Last year, when we were speaking, I mentioned - and I went

through last year's minutes - it was fisheries grants for groups. I mentioned

last year that there was some money available, and I know some groups wrote in.

Was all of that money spent last year, the small grants and subsidies for

slipways and...?

MR. RIDEOUT: Yes, it was all spent.

MR. JOYCE: Can I get a list of who got funding for that?

MR. RIDEOUT: Yes.

MR. JOYCE: I remember bringing it up at the Estimates last year.

MR. RIDEOUT: Special Assistance Grants, yes. In the hon. member's

district there was a request from Lark Harbour, $3,000, that was funded. That is

the only one I see here.

The whole thing - but we can get the list - in Bellevue there was $21,000

spent; Bonavista North, $19,000; Bonavista South, the number is not totalled

there, about the same thing. They are all within the same range. In Burgeo &

LaPoile there was $9,900; Burin-Placentia West, $9,700; Cartwright-L'Anse au

Clair, $14,800, so I have a list. We will have the list available for the

member.

MR. JOYCE: Thank you.

Regional Services, 2.1.01.

MR. RIDEOUT: Under 2.1.01, yes, okay.

MR. JOYCE: There was an increase of $137,000. Was that new positions?

MR. RIDEOUT: Do you want to speak to that, Mike or Dave, when you get the

head open here?

MR. JOYCE: Under 2.1.01.

MR. LEWIS: You are looking at what? Salaries?

MR. JOYCE: Yes.

MR. LEWIS: The actual increase from last year's Budget is only $26,000,

and that would have been accounted for by just salary increases, just normal

salary increases.

There was about $100,000 less than the Budget spent last year because there

were some delayed recruitments.

MR. JOYCE: Okay.

In 2.2.01., once again Salaries, my estimation here is an increase of

$121,000. Is that the same thing, just normal...?

MR. LEWIS: Again, the Budget last year was $895,000 so the increase was

only $27,000, and that would have been accounted for by salary increases.

We had a savings last year of about $90,000 because there were two positions

that were vacant, that did not get filled until - they still have not been

filled, but they will be in the near future. Those vacancies accounted for the

savings of $90,000 last year.

MR. JOYCE: Okay.

Transportation and Communications, $135,000 last year and there is an

increase this year of about $80,000. What would that be used for, in

Transportation and Communications?

MR. LEWIS: This particular division deals with market development and

also with fisheries development projects and diversification projects. The

Transportation and Communications in that area would include the implementation

of fisheries development projects and it would also include our trade promotion

activities, including attendance at the Boston Seafood Show, the Brussels

fisheries exhibition and so on. Those are the main initiatives.

MR. JOYCE: In 05., Professional Services, what type of Professional

Services would be needed there?

MR. LEWIS: Most of the Professional Services money in that particular

subhead is spent for market intelligence and research in support of the

collective bargaining process; so, the John Sackton reports and the others that

we collect to support collective bargaining.

MR. JOYCE: Licensing and Quality Control - and I know the department is

aware of some instances. The crab inspectors - was there, or was I told that

there is some kind of education program for them this year? Because I know a lot

of them were taken off the street - a one-day program - and shoved in a crab

plant, and it caused a lot of problems.

MR. RIDEOUT: Alastair?

MR. O'RIELLY: Maybe, Minister, Dave would be best equipped to talk to

that. The nature of it is quite significant.

MR. LEWIS: Yes, we have had, over the years, some complaints about the

consistency and, of course, we have hired new recruits so therefore the

experience level varies across the inspection force - or it has.

This year we have developed a comprehensive training program in consultation

and in conjunction with the College of the North Atlantic. It is a seventeen

module program. Each module is about ten days, and we commenced delivery of it

in the spring. All of the inspection staff will be taking that program at the

College of the North Atlantic. The program is mirrored on the one that has been

developed for wildlife officers, that has been implemented over the last three

or four years, and we believe that training program will certainly ensure

consistency and professionalize our inspection force.

MR. JOYCE: That is a good program, by the way, because I know some of the

quality control people going out were not qualified the best and that caused a

lot of problems within the industry. It is great that the department recognized

that themselves and did something about it.

That is it for me. Wally, do you have some Labrador and Aboriginal Affairs

questions?

MR. RIDEOUT: First of all, perhaps we could ask Mr. Andersen whether or

not he has anything on Fisheries before we go and start the Aboriginal. Is that

okay with you?

MR. JOYCE: Yes.

I may be leaving soon, so thank you, Minister and officials. Thank you very

much.

MR. RIDEOUT: If Mr. Andersen is dealing with Aboriginal Affairs then we

can dispense with Fisheries.

MR. JOYCE: It is up to him.

CHAIR: Yes, we have finished the Fisheries.

MR. ANDERSEN: I do have (inaudible) to sign.

MR. RIDEOUT: I will sign it for you.

MR. ANDERSEN: Okay, sure.

I am acting as critic.

MR. RIDEOUT: Sure, just pass it over and I will sign it.

CHAIR: Are there any further questions from Committee members now on the

Fisheries and Aquaculture Estimates?

Mr. Andersen.

MR. ANDERSEN: Minister, I had a conversation with you a few days ago, and

I will raise it again here this morning, and that is the EI benefits for the

Aboriginal fishermen on the North Coast of Labrador. At that time, I outlined to

you that these people have the smallest quotas and the shortest fishing season.

As we speak, as I mentioned the other day, to be fair to you, their EI benefits

have run out. Yet, anyone from government, any level of government, can travel

to the North Coast. We can go on Ski-Doo and say this is where I am setting my

char nets in two months' time. We can drive out from Nain, stop in the middle

of the harbour or the ice and say, in two months' time this is where I am

going to drag for my scallops. Yet, their EI benefits are cut off. In these

small communities, where there is very little or no employment, for them to gain

employment has been a struggle over the years.

I have approached the federal government on different issues, and certainly,

I guess, from the Aboriginal standpoint, as I mentioned to you today. I know

what your response was. Again, just for the record, would you support these

people, the Aboriginal fishermen on the North Coast of Labrador, to agree that,

yes, they do fish extraordinary circumstances when it comes down to ice

conditions?

MR. RIDEOUT: Thank you.

Yes, Mr. Chairman, I acknowledge the representation made by the hon. member a

few days ago on that issue.

Look, nobody takes - I certainly don't take - any exception to it. The

fishing season, because of ice conditions, is going to be vastly different on

the North Coast of Labrador most times than it is going to be off Twillingate or

in White Bay or whatever. The opening of the fishery, the normal opening of the

fishery, in that part of the Province, and the EI benefits consequent thereto to

fishermen, to harvesters, should reflect that, so that the closing and the

opening, the beginning and the ending of EI obviously should be different, a

different time frame all together for the North Coast of Labrador than it would

be - under normal circumstances - for any other part of the Province.

I have no difficulty in supporting that proposition. I understand that the

member has spoken to my colleague, the Minister of Intergovernmental Affairs, on

that matter and we certainly will support, in any way we can, representation

more equitable program to reflect those environmental conditions in Northern

Labrador. No question about it.

MR. ANDERSEN: Thank you.

The second part on the fisheries, every year - or not every year but quite

often - when the new shrimp allocations are allocated, the Torngat Fisheries,

which operates on the North Coast of Labrador, have been trying for quite some

time to get an adequate quota that could supply a shrimp plant on the North

Coast of Labrador. So far we have not been able to get the federal government to

agree. At the same time - again, this is coming from, probably, the Aboriginal

community with regard to fisheries, is that the last allotment went to a whole

bunch of different people within Labrador and people on the Island. Yet, a large

portion of the shrimp today, in abundance, is off the North Coast of Labrador.

On a clear evening in the winter there are times when people can go up on the

hillside, particularly in Hopedale, and see the lights of the draggers about

thirty-five miles offshore dragging for shrimp.

Again, minister, I have been asked by the Torngat Fisheries for any support

that you could lobby the federal minister for when the next allocation of shrimp

comes out.

MR. RIDEOUT: Yes, we are certainly prepared to do that, Mr. Chair. I

think last year, if I remember correctly, we did indicate our provincial support

for additional allocations to Torngat, in particular. I know there have been

allocations given to groups that have not had them in the past at the expense of

legitimate Aboriginal requests. So, we would hope that the federal minister

would keep that in mind, if there is going to be any increase in allocations

this year. On the basis of the Aboriginal historic right to participate and

share in the resource and their adjacency to it and every other principle that

one can think about, they certainly have the case to be made and we support

that.

MR. ANDERSEN: Minister, a very sticky question when it comes to

Aboriginal Affairs, but one which I have been asked to ask again, and that is

the Metis find it very difficult that the Province has not recognized them. I

know, probably more so than anyone else, that really the federal government sets

the stage for the basis of land claims and recognition than the Province

follows. I know that quite well. That has happened with the Innu and the Inuit.

I know there were talks by the government in 2003 that they would carry on a

dialogue with the Metis. They feel today that the dialogue has not taken place

and they feel left out. I guess, in a nutshell, would the Province offer full

support to the Metis if and when the federal government recognize them as having

status for a land claim basis? I know right now they have certain benefits, like

education, health and so on. Would the Province fully support the Metis once the

federal government says: yes, you have the basis for status as a people and we

set the grounds for negotiations for a land claims deal?

MR. RIDEOUT: Mr. Chairman, let me make it absolutely, abundantly clear on

the Metis question raised by the hon. member opposite. The Province's position

has not wavered one iota from the beginning from this. The process, as the hon.

member correctly outlines, is that an Aboriginal group who feels that they have

the laid down criteria, like the Inuit had to meet, like the Innu met and like

Aboriginal groups across the country in province after province and territory

after territory have met. If the federal government - and they are the first

hurdle you have to get over, as the members knows - agrees that your group meet

that criteria, then they will say that and the federal government, the group

concerned and the Province will engage in a negotiation. Now that negotiation

may take years - as it did, unfortunately, in the case of the Inuit - but the

negotiation process can and will only begin once the federal government

determines that the group making the application meet the basic criteria for an

Aboriginal claim.

If the Metis meet that test, let there be no doubt about it, Mr. Chairman,

that this Province will engage with the federal government and the Metis in

negotiating that claim. We have never said anything other than that we would. We

are bound to, there is an honour that we do it, if the Metis meet the test.

In the interim, whether they meet the test or not, we have said clearly from

the beginning that we would support the members of the Labrador Metis Nation

of fact, I wrote Andy Scott and supported that position back in 2004, and to

this day - Andy Scott is long gone and there have been other ministers since -

the federal government have never responded to the written correspondence from

us requesting that the Labrador Metis Nation be permitted to share in the

non-insured benefits, even though no claim has been negotiated, no decision has

been made on a claim or on the application or anything of that nature. Why

wouldn't you allow them to? We know they are Aboriginal. The degree to which

they may end up having a claim is something that we can put off for now and talk

about letting them access uninsured health benefits and education benefits and

so on. That has never been addressed. We are prepared to address that if the

position as that in terms of the FNI here on the Island in particular, the

Federation of Newfoundland Indians, who still do not have any settlement.

So, that is the position we have taken. We maintain that position. If the

Metis are judged to have the basis of a claim, we will be engaged. We will be

there and we will begin the negotiation just as we were there with the Inuit and

just as we are there now with the Innu. I do not know if I can make it any

clearer than that, Mr. Chairman.

MR. ANDERSEN: Minister, one of the biggest concerns, I guess, in the

Aboriginal communities is housing. We look at the Aboriginal communities of

Sheshatshiu and Natuashish. The community of Natuashish, a brand new community

built by the federal government - but housing is a great concern.

When the Inuit were relocated years ago, one of the things that they were

promised was better housing. Even today, in the community of Hopedale and Nain,

we still face, not a housing shortage but more so, a housing crisis.

For example, while the Innu in the new community of Davis Inlet can get

federal funding again this year for an additional thirty houses in Sheshatshiu,

the five Inuit communities on the North Coast of Labrador get funding for nine

to ten a year and they still continue to fall further and further behind.

I know in 2000 the Province built an additional thirty houses over a three-

year period. Would the provincial government, through Aboriginal Affairs,

consider such a program to help alleviate and help the Nunatsiavut government

catch up to a standard where they could probably progress then on a yearly

basis?

MR. RIDEOUT: Mr. Chairman, we are prepared to engage in that type of

dialogue with the Nunatsiavut government, no question about that. There are

funds available for the Inuit communities under their off-reserve trust funds,

as they are referred to by the federal government, and there is a share of that

which comes to the Province, and we are engaged now with Nunatsiavut in trying

to determine how those funds can best be dispersed.

Yes, I am certainly cognizant of the tremendous strain on housing. Those are

growing communities. The only growing communities that we have in our Province

really are Aboriginal communities. So, the housing strain is a real stress

issue, a real social issue, one that we want to address and we are prepared to

address in any way we can in co-operation, in the case of the Inuit communities,

obviously with the Nunatsiavut government. The day is gone, not that it was ever

right, when we make those decisions and say this is what is going to be done and

how it is going to be done. We will engage with the Nunatsiavut government and

work with them. If we can make things happen faster, quicker with a better

result, than that is what we are there to do and we will certainly be part of

that.

MR. ANDERSEN: Minister, my last question, I guess, is not one that your

department is responsible for in general but I guess in some ways, particularly

from the Aboriginal standpoint. The people on the North Coast of Labrador, about

95 per cent or 96 per cent, are Aboriginal people. These people depend upon the

marine service more so than anyone else in this Province. I have already talked

to your colleague, the Minister of Transportation, and asked him - the concern

is this: He has outlined the ferry rates all across the Province except for what

is considered the long haul freight rates, and that would be from Lewisporte to

the North Coast. He has announced from Makkovik to Postville or Nain to Hopedale

for containers which people very seldom ship. As you are aware, 99 per cent of

their stuff, at the present time, comes from the Island portion of the Province.

With the closing down of Lewisporte Wholesalers and moving to St. John's,

when people work out business with the wholesalers on the Island, many times

included in the price that they are given is the cost of transportation, whether

that would be - well, both from Lewisporte to Makkovik or to Nain, and sometimes

the transportation from the wholesaler in Corner Brook. You know, the cost from

Corner Brook to Lewisporte now is all in there.

Until the people know the long haul rates, really, they are almost in limbo.

Again, my question would be: Would you, as the minister who holds the portfolio

for Aboriginal Affairs, do what you can to get the Minister of Transportation

to, as soon as possible, come out with the long haul freights, as it affects the

people on the North Coast of Labrador and the people I represent.

MR. RIDEOUT: Yes, absolutely, Mr. Chairman.

We are in discussions on that matter now, and hopefully it will be one that

will be resolved fairly soon, but I will certainly undertake to raise the matter

quickly again with my colleague, the Minister of Transportation, who is also the

Minister of Labrador Affairs and has a very good handle, as does the hon.

member, on the impacts of this for particularly the North Coast, as he outlined.

Yes, we will make sure that stays in front of us.

MR. ANDERSEN: I guess the last thing is a comment.

Minister, let me say that the previous government did a lot of work on the

land claims for the Labrador Inuit Association. Then, in 2003, when your

government became the government of the day - I just want to say to you, thank

you for the manner in which you carried on and did the necessary work, as

Minister of Aboriginal Affairs, to complete the land claims deal for the Inuit.

I just want to go on record as thanking you for the work that you have done to

make that deal become a reality as well.

MR. RIDEOUT: Mr. Chairman, I thank the hon. member for his kind remarks

and, likewise - and I have said it before in this House when we were in session

as a Legislature, not a Committee as we are this morning, and I have said it

publicly - this could not have happened without the dedication of a lot of

people, particularly that particular gentleman, the hon. Member for Torngat, who

has dedicated a lot of his adult life and adult work to making sure that the

Inuit land claim became a reality.

It was right and proper that we pick up where the previous government left

off, and make sure that it was concluded. I am just pleased and thankful, I

suppose, that I had a little role and a small part to play in it; so, thank you

very much.

CHAIR: Any further questions on the Fisheries and Aquaculture Department

Estimates from anyone?

No questions.

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

CLERK: Which department?

CHAIR: Fisheries and Aquaculture.

CLERK: Subheads 1.1.01. to 3.1.02. inclusive.

CHAIR: Shall subheads 1.1.01. to 3.1.02. inclusive carry?

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, subheads 1.1.01 through 3.1.02 carried.

CHAIR: Shall the total carry?

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Total carried.

On motion, Department of Fisheries and Aquaculture, total heads, carried.

CHAIR: Shall I report the 2007-2008 Estimates of the Department of

Fisheries and Aquaculture carried without amendment?

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, Estimates of the Department of Fisheries and Aquaculture carried.

CHAIR: We will do the Estimates for the Department of Aboriginal Affairs,

which we just did back on page 53.

MR. RIDEOUT: Which we just did.

CHAIR: Which we have already discussed, but we have to approve them.

MR. RIDEOUT: I am only kidding.

CHAIR: I ask the Clerk now to call the subheads for the Aboriginal

Affairs Department.

CLERK: Subhead 2.1.01.

CHAIR: Subhead 2.1.01.

Shall the subhead carry?

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, subhead 2.1.01. carried.

CHAIR: Shall the total carry?

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, Department of Aboriginal Affairs, total heads, carried.

CHAIR: Shall I report the Estimates of the Department of Aboriginal

Affairs for 2007-2008 carried without amendment?

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, Estimates of the Department of Aboriginal Affairs carried without

amendment.

CHAIR: That concludes this Committee meeting.

I would like to thank the minister and his officials, as well as the

Committee members and House of Assembly staff.

I just want to mention that our next meeting is this evening at 7:00 o'clock

here in the Chamber and we will be dealing with the Department of Environment

and Conservation.

Again, thanks very much.

I ask for a motion to adjourn.

MR. JOYCE: So moved.

CHAIR: Moved by Mr. Joyce.

This meeting now stands adjourned.

On motion, the Committee adjourned.