May 10,

2010 RESOURCE COMMITTEE

The Committee met at 6:00 p.m. in the House of Assembly.

CHAIR (Harding): It is a little bit after 6:00, we are about to begin now

our meeting to discuss the Estimates for the Department of Fisheries and

Aquaculture.

I would like to take the opportunity to welcome you all to the meeting. First

of all, we will begin by having the Committee members identify themselves.

Mr. Verge.

MR. VERGE: Wade Verge, Lewisporte district.

MR. DALLEY: Derrick Dalley, Isles of Notre Dame.

MR. HUNTER: Ray Hunter, Grand Falls-Windsor-Green Bay South.

MR. DEAN: Marshall Dean, The Straits & White Bay North.

MS PLOUGHMAN: Kim Ploughman, with Marshall.

MS MICHAEL: Lorraine Michael, Signal Hill-Quidi Vidi.

MR. MORGAN: Ivan Morgan, Researcher, NDP.

MR. WOODMAN: Ron Woodman, Researcher, NDP.

CHAIR: Thank you very much.

Before we get into the debate, we have the minutes of our last meeting. It

was being circulated; it should be on your desk. That was the minutes for the

Department of Environment and Conservation. I ask a motion now to adopt the

minutes as circulated.

Moved by Mr. Dalley, seconded by Mr. Hunter, that the minutes as circulated

be adopted.

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Motion carried.

On motion, minutes adopted as circulated.

CHAIR: We will begin by having the minister - he may take up to fifteen

minutes if he wants to - introduce his departmental staff and then give a brief

overview of his Estimates for the year.

I would ask the officials - if you have to call on them any time to clarify

something, if they would identify themselves each time they speak because it is

being recorded down in the media centre.

Ms Michael has to leave around 7:00 o'clock, so both parties have agreed that

we will begin with Mr. Dean. He will take up to fifteen minutes, roughly, and

then we will switch to Ms Michael, and back and forth like that. Any of the

other Committee members, if they want to ask a question they are certainly

welcome to do so. We will begin now with the minister,

Minister Jackman.

MR. JACKMAN: Thank you, Mr. Chair.

I will start with the staff, I will introduce the staff and then I will have

a few brief comments. I will start with my Deputy.

MR. O'RIELLY: Alastair O'Rielly; I am Deputy Minister with the

department.

MR. LEWIS: David Lewis, Assistant Deputy Minister of Fisheries branch.

MS OATES: Lori Lee Oates, Director of Communications, the Department of

Fisheries and Aquaculture.

MR. WARREN: Mike Warren, Executive Director of Marketing and Development.

MR. MEANEY: Brian Meaney, Assistant Deputy Minister, Aquaculture branch.

MR. TOBIN: Andrew Tobin, Executive Assistant to Minister Jackman.

CHAIR: Thank you.

Before we go any further, I should ask the Clerk to call the first subhead.

CLERK: 1.1.01.

CHAIR: 1.1.01.

Shall that carry?

Minister Jackman.

MR. JACKMAN: Thank you.

Mr. Chair, this is a very, very interesting department. I have to say that

since I have come into this portfolio a number of people have almost laid things

on my shoulders like: you poor thing, what a snarl and those kinds of

connotations. I have to say, it is no part to do with the staff that are around

this department. I have worked in three departments now and I have to say that

the staff that are on both sides of me and behind are a staff that are very,

very much committed to this department.

In the House today I got up and spoke for a bit and I talked about some of

the issues in the fisheries and people talked about the fisheries being a rural

Newfoundland and Labrador thing. Well, little do people know that one of the

largest ports of call for the fishing industry is St. John's. If you go and take

a look at the Southside sometimes and see the vessels that are over there, the

capacity that these boats have, you will recognize that it is equally as

important to those who are engaged in this fishery in St. John's as it is for

rural Newfoundland and Labrador.

All of us know though, those people who represent rural ridings, the critical

importance of the fishery to so many of our rural communities. People talk about

a restructuring of the fishery, well, I kind of put it to that it is an

evolution that is happening in the fishery. There are two ways that we can go

about it, we can just stay out of it all together and let nature take its

course, if that is the way to put it, and I think there would be a painful

evolution for many communities and for many people involved but I am certainly

not of that mindset. We as a government are not of that mindset nor are the

officials in the department. I think everyone would agree that it is a matter

that we all have to be engaged, involved and then we somehow manage the

evolution, if I could put it that way.

Our department is made up of two branches. The fishery, which, of course,

every species that is involved in that plus the sealing industry, and there is

the aquaculture industry. Our investment as a government into the department is

really more - our total budget is more than the other Atlantic Provinces

combined. So, there is a commitment to this industry on a number of fronts.

There is much innovation and technology that is being available to processors

and to harvesters and we have a number of projects that are going on through our

FTNOP program, and the Canadian Centre for Fisheries and Innovations is another

division whereby the expertise - and working with the Marine Institute, we are

into developing strategies whereby people can have more efficient vessels. They

have plants that are more effective in operation; they look at equipment that

gives them better yield. So there are always ongoing projects of that nature.

Certainly, the seal issue continues to plague us. We invest money in that; we

do some marketing work. It is something that we are working with through some

European partners and trying build more European partners so that we can I use

the word infiltrate on the ground to influence the European market.

The aquaculture industry, no doubt, is growing more and more. There are major

advances being made and it is a real interesting side to this whole department.

The Centre for Aquatic Animal Health that has been opened in St. Alban's, this

is, I believe, an $8.7 million building - but I was really intrigued a little

while ago. There was a report that was written on the aquaculture industry in

this Province. The gentleman who did it said that this Province is probably the

best in what it is providing in terms of biosecurity now. That is always an

issue around the aquaculture industry. So, you have seen us as a government

invest in new wharves, waste water treatment and other types of biosecurity

initiatives to ensure that we protect that industry and we grow that industry to

the extent that we possibly can and that there are aquaculture capital equity

programs whereby companies in the aquaculture industry are availing of monies

through that program, and that continues to grow.

Up on the Connaigre Peninsula a reporter said to me a little while ago, it is

really interesting because he said: Where would 1,000 people be if they were not

working in the aquaculture industry? I think that speaks volumes for the

employment levels that are happening there. For anybody who has eaten the

product, it is a quality product that comes out of that.

So, Mr. Chair, that will be my introductory remarks and we will open the

floor to questions around our estimates.

CHAIR: Thank you very much, Sir.

Before we begin, I just want to welcome Mr. Baker to the meeting.

Mr. Dean.

MR. DEAN: Thank you, Mr. Chair.

I have a few questions. Mr. Minister, probably we could walk through some of

the lines. Again, like you said, there is so much that we could get into with

the fishery. We could spend a lot of time here and I know that we want to get as

much in as we can in as short of a time frame as we can I guess. So, we will try

and pick out the important things and then give Ms Michael an opportunity in a

few minutes to ask some questions as well.

Looking at the Minister's Office, we can start in

section 1.1.01., or 1.2.01.

in particular. Just a question about the Salaries amount that is there, the

Budget and the Revised, the Estimates for 2010-2011 seems to go back near to

where the budget was for last year. There is a discrepancy there of about

$130,000 or so. I am wondering if you can give us some idea of what that

represents.

MR. JACKMAN: Yes, there was at one point a Parliamentary Secretary there

and that no longer is the case now in 1.1.01. If we go to 1.2.01., Executive

Support, there is a vacancy there, an Executive Secretary I believe it is, to

the ADM - the ADM and the secretary there.

MR. DEAN: So, that is vacant and will be filled again?

MR. JACKMAN: Yes. Well, the Parliamentary Secretary one, there is no

indication that we will go ahead with that but the other positions are looked to

fill, yes.

MR. DEAN: Okay.

Section 1.2.02., under Administrative Support, the Property, Furnishings and

Equipment, there are some vast differences in numbers there. Again, compared to

the Budget for last year of $6.6 million, the Revised is $1.2 million

approximately, and this year the estimate is nearly $17 million. That is on page

128 in

section 1.2.02.

MR. JACKMAN: Oh, 1.2.02?

MR. DEAN: Yes.

MR. JACKMAN: 1.2.02.; yes, I can probably get Dave to speak to this.

These are issues related to the aquaculture industry. In 2009 and 2010, there

was the St. Alban's lab building that was up there and some equipment that went

with that, the South Coast infrastructure that I mentioned before around the

wharves and such, biosecurity and other types of projects. We had allocated,

like you say, $6.6 million then all that was used in 2009-2010 accumulated to

that total that you see there. Again, those are allocations that we will put

forward this coming year. I can highlight a few of them.

We have the St. Alban's laboratory building, we will be putting $3.3 million

into that; there is $500,000 that is going to be going into equipment that is

going to go into that building; and another expenditure under that is $2 million

to go into wharves. There is concern in the aquaculture industry about

off-loading and on-loading all on one wharf, so we have invested in wharf

infrastructure up there. So, that is some of the expenditures under that.

MR. DEAN: Where was that again, please?

MR. JACKMAN: In St. Alban's, up in the Bay d'Espoir area.

MR. DEAN: Okay.

You mention the aquaculture in St. Alban's. Can you give us an update on the

animal health facility there?

MR. JACKMAN: Yes, I will ask Alastair: Do you want to do it or do you

want to get Brian to do it?

MR. O'RIELLY: I can speak to it generally.

That project last year was a little slow getting underway compared to what we

would have liked, but it is underway at the moment. We anticipate that the thing

will be pretty much completed in this fiscal year and will be commissioned

shortly thereafter.

MR. DEAN: Okay. I think the last that we heard was that it had gone

probably from $4.2 million to $7 million or so in terms of the budget. Do you

have any idea where that is going to be?

MR. O'RIELLY: The final cost we fully expect to be achieved in the $8.8

million that has been budgeted.

MR. DEAN: Okay.

Looking at

section 1.3.01., Planning and Administration, back on page 128

again and the numbers, again the budget discrepancy, we had budgeted $136,000

and we spent $65,000; this year our budget Estimate is $151,000.

Can you provide some detail on that?

MR. JACKMAN: That is in which section?

MR. DEAN: Sorry, 1.3.01., page 128, line 03.

MR. JACKMAN: Yes.

This is travel and it is less travel than we had anticipated. I do not know

if you want us to break down anything, but we just did not expend the amount in

travel that we had anticipated.

MR. DEAN: Okay.

I guess when you look at your $65,000 versus your $35,000 it is approximately

50 per cent or a little bit less than that. Not to get into the nitty-gritty of

it all, but would there be something that we anticipated doing that obviously we

did not do that would give us that difference, that is all.

That is fine, in the next section, 1.3.02., line 10. Grants and Subsidies, we

are near our budget of $450,000 with just around $400,000 and we are going to

take that to $740,000 next year. Can you give us an idea of where that increase

will come from?

MR. JACKMAN: Yes. I will list off a few. We had a cod recovery program.

There have been some fisheries science carried out by Dr. George Rose. We have

an oceans policy that we are investing some money in.

Do you want to speak to that one in particular, Alastair? These are the types

of projects and there are a list of projects through these grants and subsidies.

They are available if you want to see them.

MR. O'RIELLY: If I could offer a comment on the oceans policy initiative,

we have been working towards this over the past three years in formulating an

oceans policy strategy for the Province. We have carried out a number of surveys

in previous years. In the current year, it is intended to distribute a

consultation document and discuss this a little further with the industry now

that we have the mechanisms and means to evaluate what society, in general,

would like to see the Province do in the area of oceans policy. So, the budgeted

amount for this year is incorporated into that subhead and it would amount to

about $140,000.

MR. DEAN: Okay.

MR. JACKMAN: We have done projects - I have some of them that are listed

here, even $2,500 to work with Ocean Net, for example. We have the FFAW, we put

$75,000 into the fishery stewardship program that they have on the go and other

types of projects that are related specifically to cod recovery. There are other

projects that we could certainly list out here.

MR. DEAN: Okay.

MS MICHAEL: (Inaudible) just ask for the list.

MR. DEAN: Yes, probably we could get a list of those if you do not mind,

please.

MR. JACKMAN: Yes, sure.

CHAIR: On that, when you provide the list, if you could send it to me as

Chairman and I will distribute it then to all members on the Committee.

MR. JACKMAN: Okay.

MR. DEAN: Again, I am not the expert on fisheries either, but it is

important to us and vital to our Province as we all know, and I have been around

the fishery somewhat all my life from a bit of a distance. You mentioned the Cod

Recovery Strategy, were there funding in that budget this year towards that

strategy?

MR. JACKMAN: In this year's budget?

MR. DEAN: Yes.

MR. JACKMAN: Yes.

MR. DEAN: I guess in the previous year -

MR. JACKMAN: Yes, it was. We spent $275,000 of it last year. Again, we

have requested another $300,000 to go into that again this year.

MR. DEAN: Okay.

What would you say in terms of a progress report, I guess, with the strategy

kind of thing? It has been around for awhile now, correct? It has been on the go

for awhile, the program?

MR. JACKMAN: I suppose if you take a look at the projects that are listed

under the cod recovery program it speaks to itself as to the types of projects

that were carried on. We know, for example - as a matter of fact we had a

discussion on it this morning - that the Northern Cod stocks in its heyday were

something about one million tons, and that is probably one-tenth to a little bit

more than where it sits right now.

You are probably all aware of COSEWIC putting forward a submission to the

federal government, but there are some signs that those stocks are certainly not

back to their historical levels but they are showing some signs of improvement

and that 3PS at the bottom on the peninsula still has a commercial cod fishery.

While some people would say that it is time to shut it down altogether or that

we have an endangered species or whatnot, it is certainly not to that particular

point at this time.

MR. DEAN: No. Okay.

Just one more question and I will give Ms Michael an opportunity to ask.

section 1.4.01., on page 130 - this is the next page - again, just really

talking to the total of the Fishing Industry Renewal Strategy and I guess it

comes to the difference or the discrepancy in your Grants and Subsidies again,

the budget versus what we did.

MR. JACKMAN: Yes.

MR. DEAN: We obviously did not put out what we had budgeted to do nor

what we budgeted to do again this year. Can you give us some idea again of where

the inconsistency would be there?

MR. JACKMAN: The Grants and Subsidies there relate to a number of things.

The $454,000 that you see there, this is related to the workforce adjustment

program, so that if there are in the industry, plant workers in particular, who

would require some support then that is what it would be used for.

I suppose it is a good thing that we do not require all of that, but we

budget it just in case it is needed. Another sector of that is the safety

council. We have $250,000 that is committed to the safety council within that.

We do not anticipate and we hope we would not need something through a workforce

adjustment program, but in the event that there is a plant closure or something,

we might need it.

MR. DEAN: Okay. So, that is essentially what the workforce adjustment

program would be, where plants are closed or mostly?

MR. JACKMAN: Yes.

MR. DEAN: Okay. There is nothing slated to be closed this year that we

know of?

MR. JACKMAN: No, but OCI has made some indications in terms of Hermitage

and details are still unfolding around that. That involves Cooke's purchasing,

and we do not know the full details on that at this particular time.

MR. DEAN: One of the concerns that I have, of course, on the Northern

Peninsula in my district in particular is or not in my district, on the

Northern Peninsula I should say, is the New Ferolle plant. We are concerned

about where that is because it seemed to be such a bright spot for awhile and

then doing what we did with the plant not that it was the wrong thing to do.

We handed it over to an operator for essentially nothing. While he is still

within the terms of his time frame and so on to do something, there does not

seem to be any intention there to do anything really at this point in time.

The other things that are on the go with Englee and Sandy Cove where that is

now, the Northern Peninsula is suffering, as I am sure other parts of the

Province that are trying to transition and get through this period and

understanding and so on.

Can you speak to that a little bit as to where you see

MR. JACKMAN: The Northern Peninsula?

MR. DEAN: Yes, and some of the things that are there.

MR. JACKMAN: Well, I think when I went to the department first it one of

the issues that was front and centre right off the bat, New Ferolle, and the

number of initiatives that had been attempted there to get the operation up. You

have spoken to me on it earlier this year. Myself and Wally Young, the member

for the area, spoke on it as well and we had Mullowney in and spoke to him about

it. We had certainly hoped and there were indications from him that there was

going to be an operation on the go there this year. This is the one that Mr.

Sneer was involved in as well. As I indicated to you today, Main Brook, he has

an application in under Main Brook and the licensing board I think will have a

response on that before the end of the week.

I think it goes back to what I said earlier, that I do not like to call it

restructuring of the fishery any more, there seems to be an evolution that is

taking place here. There are areas that are experiencing, it seems, more pain

than other areas are and when you get individuals who are in it Mr. Mullowney

and Mr. Sneer entered into an agreement and then the next thing you knew we had

to bring in a facilitator to see I do not know if facilitator is the right

word; a mediator, that is exactly the word. A mediator was brought in.

I would hope that Mullowney's will still have some operation there this year,

but it is a challenge, there is no doubt about, and people in the area are

continually questioning, and rightfully so. I do not know if there is either one

- Alastair, do you want to add anything?

MR. O'RIELLY: Maybe Dave does.

MR. JACKMAN: Dave?

MR. LEWIS: Yes, I was speaking to Mr. Mullowney this morning actually,

and his intention is to process turbot there this year. In fact, I understand

his plant manager was at the building this morning. He also has offered interim

employment - that will not start until early June. He has also offered interim

employment to people in New Ferolle at his plant in St. Mary's, as he has done

in previous years, in the last two or three years.

He met with the minister recently, and in speaking to him this morning, he is

fully committed to operating that plant this year.

MR. DEAN: Okay.

I guess offering the people of the Northern Peninsula some of the workers

from New Ferolle, obviously, would come pretty much from right up to Eddies Cove

down through there, I guess, and Wally would be familiar with that.

Them working in St. Mary's is probably a nice to thing to offer, but I am not

sure how practical that would be, really, if it would be effective for them or

not. Certainly, it seems to be a bright spot for the Northern Peninsula, and I

think they need to be held accountable and make something work there, because

there are not a lot of options left up there.

MR. JACKMAN: No. I think in terms of plants too and plant workers, if

something is not changed in the fishery before too long, we will not have to

worry about plant workers of the future because the majority of our plant

workers now are in their fifties to late fifties, and I do not see the younger

generation as a generation that are going to go into these facilities and work

for $10 or $12 an hour. They are simply not going to do it. So, how the fishery

is shaped in the future is going to determine where plants will be and if indeed

there are going to be plants, and more importantly, if there will be workers to

go in those plants because I do not see it as being a productive means now. They

are very seasonal, and the younger generation are much more of a mobile

population. They are expecting more things, and they simply will not go into

those facilities and work for those wages.

MR. DEAN: Okay.

CHAIR: If it is okay with you now, we will give Ms Michael an

opportunity.

MR. DEAN: Yes.

MS MICHAEL: Yes, thank you.

Just to come back to the research question that you were talking about with

Marshall and you did talk about the Marine Institute and the stuff that does go

on there with regard to vessels and plants, et cetera, but what about in the

area of fisheries science, Minister? What investments are there at the moment,

and what are the plans?

MR. JACKMAN: Well, the science and Alastair will follow up after I

speak a bit - the science of the management of the resources is primarily the

responsibility of the federal government. If you look at the projects that we

have, some of them are certainly in working with those agencies but I do believe

that, to a large degree, many of the people in the Province would feel that

there is simply not enough research happening in the field of science. As a

matter of fact, I had an e-mail from someone who very much tracks the science of

fish and he outlined to me the vessels that the federal government have put in

place and the inadequate science that he feels is taking place.

Alastair, do you want to speak to it?

MR. O'RIELLY: As the minister says, the challenge on science is

universally understood in terms of adequacy and DFO has exclusive

responsibilities there. Of course, the Province has been making forceful

representations to the federal people on the level of activity, the amount of

vessel time that is available and so on. Suffice it to say, it is not adequate

and there has been some significant slippage in the last few years.

In concert with the Cod Recovery Strategy, which the Province initiated in

2005, a lot of the work again, the minister noted - is done through Dr. George

Rose at the Marine Institute. He has developed and retained some significant

capacity through the Province's financial support because running at around

$300,000 annually, last year it was increased to $450,000, it has enabled him to

maintain some significant level of capacity, but one has to acknowledge that

without full resources for a more expansive program of junior scientists and

technicians and vessel time and so on, there are limits as to what the

university can do. It is one of the things that we have focused a lot of energy

on with Dr. Rose to figure out how best to expand the capacity of the Marine

Institute, and the university in general, towards fishery science and to find

ways to do it collaboratively with industry and with the federal government.

MR. JACKMAN: I think there is another thing, I am certain that all of you

heard about the engagement in the MOU process.

MS MICHAEL: Yes.

MR. JACKMAN: I have said time and again, I think the important thing in

that entire strategy is that we have to develop a I will call it submission,

from this Province that shows that everyone is in agreement with the way forward

here. I think that in the end, if we can develop a proposal that looks at how

the fishery should be shaped, along with the importance of having more science

in the Province, that we have to go to the federal government as to this is what

we need done. Before anything of that nature can happen, I think that all of us

within the Province have to come forward with a solid agreement. By that I mean

the associations of producers, we need the FFAW, and I would even suggest that

we need the support of both parties on the other side that says that this is a

valid process to go through.

At the end of the day, we have to come out with even though everybody may

not agree with everything, we have to come out with a package that everyone

agrees on. It is a package that we take to Ottawa and say: In order for our

fishery and many of our communities to survive and to be sustained, this is what

we expect of you as the federal government and we would expect that you come

onside and support those initiatives.

MS MICHAEL: If I can say, minister, I think what the expectation of the

Province is, is that an expectation is that you give the leadership in that

process, because I do not think that anybody would not agree with what you are

saying.

MR. JACKMAN: Have you been following the progress since December of the

MOU?

MS MICHAEL: Well, wherever we can get the information.

MR. JACKMAN: No, no, but I came in

MS MICHAEL: Oh, yes.

MR. JACKMAN: Yes, and the thing that I have done since I came into the

portfolio is I have been pushing that agenda.

MS MICHAEL: Yes.

MR. JACKMAN: Not only pushing the agenda, I have been establishing dates

by which we do regular reportings and on the progress of that MOU and I will

continue to do that.

MS MICHAEL: Well, I am really glad to hear that because it is not going

to happen unless the government is in there pushing.

MR. JACKMAN: Definitely.

MS MICHAEL: There have to be resources as well, and I do not have to tell

you that.

MR. JACKMAN: Yes.

MS MICHAEL: So I am glad to hear that that is your commitment.

MR. JACKMAN: I will say though, that there may be a requirement for

financial commitment but I do not see the solution to a different fishery in

this Province as being you are going to dole out $400 million, $500 million or

$600 million. That is not

MS MICHAEL: That is not how I mean it.

MR. JACKMAN: No. Okay.

MS MICHAEL: That is not how I mean it, but I think money has to go into

research. While I think the federal government has responsibility, there is a

role for the Province as well and I do not think we are putting enough in. That

is the kind of money I am talking about, the money that is going to help create

a sustainable fishery.

MR. JACKMAN: Definitely.

MS MICHAEL: If we do not have that coming from all levels and if the

Province is not in there pushing it, it is not going to happen. So, I am glad to

hear that.

I am also glad to hear you say that you would like to have the support of the

other two parties, but I think that would mean engagement at some point in the

discussion process, not just having something come to the House and in a day

pass it.

MR. JACKMAN: Well, I can put the invitation out to you that any time

either one of you want an update as to where this MOU is, simply flick me an

e-mail or a phone call and you can get updated. We might periodically call you

and say: Well, we need your support on this.

MS MICHAEL: Well, we need to be kept in the information loop in order to

do that, so I would be very happy to interact with you in getting more

information on that.

You covered several of my questions in one little discussion there. Let's

just stay there for a minute instead of my going to the line items right away

and talk about the seafood marketing. Where are you with that, as minister?

MR. JACKMAN: Well, it is interesting this year, in terms of getting the

crab fishery open, we have been talking about a model that has been used in the

Province at setting a price for lump roe and offshore shrimp. It is a system

that they use in Alaska in getting the fishery started. As much of a challenge

as it was to get both parties to even sit at the table and talk about getting a

price setting, they did have discussions on the Seafood Marketing Council.

We as a government, going back a few years, offered to buy the marketing arm,

which we know that this year showed a profit. We offered finances last year to

establish the Seafood Marketing Council. It did not happen, but like I said, the

indication that they have sat and talked and now think there is a merit to it,

we will be sitting with them again very shortly because we have the crab fishery

underway. Hopefully, we will have the price of shrimp within the next

twenty-four to forty-eight hours and that the shrimp fishery can start. So once

we get those fisheries underway the parties that are engaged in setting those

prices are consumed with that now. Once that is finished, I am hoping to bring

them together and further talk on establishing the Seafood Marketing Council.

MS MICHAEL: I am really glad to hear that. That is really good news.

MR. JACKMAN: Yes.

MS MICHAEL: Let me just come back then to a couple of line items, unless

Marshall, is there anything in this discussion we were just having that you

want to pursue a bit further?

MR. DEAN: There are a couple of things in the MOU (inaudible).

MS MICHAEL: You can go ahead.

CHAIR: Mr. Dean.

MR. DEAN: I guess the MOU - first of all, I do not think there is an

allocation in the Estimates for a financial budget to

MR. JACKMAN: There were some funds in there. Do you want to or Alastair

- one of you?

MR. LEWIS: Well, I can speak to the expenditures last year. The Province

has committed $800,000 to developing the initiatives in harvesting and

processing restructuring and in marketing as a part of the MOU process. That was

announced in mid-season last year; it was announced in July.

So within the department's accounts, funds were found to implement some of

those initiatives. There was $400,000 that was found in the Innovation and

Development Division that was used for the Deloitte study on harvesting and the

Grant Thornton study on processing. There were some funds within the Marketing

and Support Services Division that were used to fund some work that has been

done on marketing, the work that has been done to date on marketing. There were

some funds within the Planning Services Division that were utilized for the

independent chair of the MOU process, Dr. Tom Clift, and also for some

miscellaneous analysis work that has been done. So I guess in total there has

been about $500,000 expended so far on the MOU process.

MR. DEAN: Okay.

I think we all agree that there has to be rationalization, restructuring, or

whatever phrases you want to call it, to the fishery. Being a totally rural

Newfoundland district you are about as rural as rural can be and certainly

very dependent on the fishery, while other places have other options, there are

not a lot of options in certain parts of the Province. The Northern Peninsula

being a good example, that where the fishery is very vital. I look down through

The Straits; if there is no fishery I just do not see a future for The Straits.

I think the jury is out on deciding where that is, kind of thing. There is

nothing else to do, quite frankly. Why it existed for a number of years - if it

is going to continue to exist then I think there has to be some fishery

connection to it. There is just nowhere else to go.

In terms of the MOU agreement and process: Is there an evaluation being

carried out on the impact that this restructuring can have on these types of

communities? I look at Englee as a good example of a community that, simply by

taking away its fishing licence, basically what we did was devastate a

community. That community will not recover. It cannot, unless we somehow make an

attachment to the raw material, the resource that it is bringing into its wharf.

The community has survived well for a lot of years. The raw material, the

resource is still there. It is just that we have closed down the plant; we

shifted the licence and moved it away. It just cannot survive, and I have a real

passion about that because I do not want to question decisions at times

necessarily in the wrong way, but I wonder: Do we really understand sometimes

just how crucial those kinds of decisions are to those communities?

Again, not to reiterate I suppose but to repeat myself, if you look at Sandy

Cove again, if that licence somehow does not benefit Sandy Cove where does it

leave Sandy Cove? It leaves it with nothing. I realize that the years of a fish

plant in every community is over, and I think we all know that, but as a region,

as a district, whatever you want to call it, if we are not cognizant of the

impact a wrong decision on these communities can have, than I fear for that and

this MOU process. Again, is that considered? Is there planned restructuring? In

the planned restructuring are those communities really getting the due

consideration, I guess?

MR. JACKMAN: Well, I think there are a couple of points that Dave

mentioned the financial assessments that we had, and they spoke to the viability

of harvesting enterprises and the processing sector. As a government, there is

no way in the world we can dictate as to what it should be, what the fishery of

the future should be. That has to be a partnership, and the easy thing to do

would be to attempt to lay it all at the feet of government, and we get into the

blame game but it gets us nowhere.

What has to happen to change this industry in the Province, it has to be that

the processing side, with the harvesting side and government, have to make some

very tough decisions. I have said publicly what it means, is that you have to

lay yourselves open on the table and you have to be willing - and this means the

union has to be willing to open themselves up and give a little, so does the

processors, and then I think the role of government is in the facilitation of it

and some financial support to something that makes sense.

The day, like you said, of a plant in every town, it just simply is not there

but if we do not do something drastic - I do not know if drastic is the word,

but if we do not do something, what is happening is we are continuing to have a

harvester who does not have a viable interest. Some of these smaller boats do

not have enough quotas to sustain them. So, there has to be a way for us to get

some of the harvesting out so the quota that remains then gets allocated to the

individuals that are left in. Then they have something that will sustain them,

but if we do not do something of that nature than instead of having one

operation that is viable using two quotas, we are going to have two operations

with diminished quotas where neither one of them becomes sustainable. That is

the MOU process whereby that is going to have to be the admission of the people

who are involved in that process.

Again, I go back to it has to be a very tight, consolidated approach that we

have to have at the end of the MOU that says here is the package that we want.

If we want to look at something that went rather disastrous just go back to the

day of Raw Material Sharing. The principle behind that may have been fine but

there is no way in the world a government is going to impose something on it. It

has to be an engagement.

I even think there has to be an engagement of the entire community because in

this debate about the start of the crab fishery we had Mayor Elliott out in

Central who made comments about the importance of the fishery to his region. I

had letters that came in from councils about the importance of the fishery, but

none of them told me a solution. They just said it is important. My response to

them is you tell me then how we can make a difference here. The only way we are

going to make a difference is that the parties have to be engaged and they have

to come forward with sound, solid recommendations. It will be tough and you will

take heat from your memberships, both from the processing and the union side,

but if you want to do what is in the best interest of the industry that is where

it has to go. I think it is.

MR. DEAN: Yes, and I get a little scared when - we know what processors

are. Processors are business people, with all due respect, and they are about

profitability. Obviously, if they are not making profits then they do not

survive. That is understood, but if you look at that piece alone that does not

leave a lot in rural Newfoundland perhaps. You can do that from a small number

of places when you consider the processing capacity in some of those plants and

the ability to just probably put a lot more product through there than what they

are putting through today, as in any processing facility or anything. Their game

is to get the greatest bang for their buck and to make their plant as efficient

as possible and so on, and rightfully so, but if that becomes the only focus

then that really restricts the number of players and the number of communities

across our big geography in this Province that gets to take advantage of that.

MR. JACKMAN: Yes, but I suppose you do not want to stretch the thing too

thin where it becomes inefficient. I tell you, if there is one thing that I have

seen, there are a couple of things that need to come out here in this industry,

one is trust. There is total mistrust between everybody in this. People will

harp on the processors as being businessmen who attempt to gouge and I think

there are people who are very strong business people but equally there are

processors who are honest and upfront and they will be open with you.

Now, on the harvesting side it is likewise. Not all harvesters are clean and

doing everything on the up and up. So that exists in both parts. I think where

it has to go is we have to find that openness whereby people can see how these

businesses are operating and that they expose themselves to the operations of

their business so people can trust, because somewhere along the way we have to

start trusting each other if we are going to make a difference in this.

MR. DEAN: Yes.

I will just make one more comment and then Lorraine, you can - again, I think

it is important that you do involve other stakeholders in that process, other

than the union and the processors and so on.

MR. JACKMAN: Definitely.

MR. DEAN: I think to your point about the mayors, you are going to hear

from mayors and you are going to hear from local community groups who are going

to say: Mr. Minister, this is a problem. I do not know if they are going to have

the fix. I am not sure if we can really depend on them for the fix because they

do not know what the fix is. They know they want a fish plant; they know they

want their people working; they know they want that as a base of income probably

to the municipality in some places but I do not know if they really know the

fix. I think if we involved them, perhaps out of it all, hopefully at the end of

the day we have the fix, whatever that is.

If we all own it - and for myself, from where I am, and I would think from

where our party is, yes, as Lorraine said, I would love to be involved in a

process that helps us find a solution, but I would like to be involved in the

process, to be quite honest, as well, rather than just being given the end

result of something to ratify or whatever. So, I look forward to that. I believe

the MOU in principle is a good thing and if we put it out there far enough

hopefully we can find the right answers to it.

CHAIR: Ms Michael.

MS MICHAEL: Thank you.

While I was not speaking during that, I was certainly involved in the

discussion and totally agree with the things that Marshall has been saying. I

really like your approach with regard to saying the communities have to be

involved as well. They have to be. I am going to echo what Marshall said about

Englee, just to say that when I campaigned up there I cannot tell you what I

felt the day that I spent in Englee. It was devastating, it really was.

I am going to go to line items now, just to switch us a little bit. I would

like to go back to

section 1.3.01.05.

MR. JACKMAN: Yes.

MS MICHAEL: I am just wondering what that money is under Professional

Services. It was not there prior to 2009. It is $100,000.

MR. JACKMAN: Yes, one of the things that is involved in that is work with

the MOU, some of the pay for the chair, plus miscellaneous use there.

MS MICHAEL: Okay.

MR. JACKMAN: There is a portion of money that we put towards trade

policy. That is getting Dave, do you want to speak to that more specifically,

or Alastair, one of you?

MR. O'RIELLY: Yes, I think Professional Services would include trade

policy expenditures and the MOU, certainly some of the accountability reporting

as well. We spend some resources there as well under that subject.

MS MICHAEL: Okay, great. What about the Purchased Services, the next

line?

MR. JACKMAN: Purchased Services, yes. Well, there has been some money

expended around conferences, seminars and training. There have also been some

office renovations. If you go through some of the departments you can see some

of them. We have just recently had some new carpet put down over there and some

paint on the walls. So those types of things, and there has been some of the

other stuff, copiers and supplies related to that.

MS MICHAEL: Okay, thank you.

If we could just go back for one second to 1.2.02.07., you did name a few

things that come out of that $17 million. I wonder could we have the full

breakdown, not tonight but after the fact. Could you send us the breakdown of

that $17 million?

MR. JACKMAN: Yes, I can give them to you now.

MS MICHAEL: You gave us some of them but if we could just have it on

paper.

MR. JACKMAN: Yes.

MS MICHAEL: You already did give us some of them but I thought if we

could just have that whole listing.

MR. JACKMAN: Yes, $7.5 million of it is going to go into that facility in

St. Alban's.

MS MICHAEL: Right, so most of it is going to go into that facility.

Okay, thank you.

Moving ahead then; under 2.1.01.10., the Grants and Subsidies.

MR. JACKMAN: Yes.

MS MICHAEL: It is not a huge amount, $300,000. Who is it that gets those

funds?

MR. JACKMAN: Those are special assistance grants. You do not have a

fishing community in your district, so you would not know much about this.

MS MICHAEL: Well, I used to. There used to be one.

MR. JACKMAN: There are a number of them that we have here, but if you

have heard some of the MHAs talking about these $3,000 grants that are on the go

MS MICHAEL: That is where these come from?

MR. JACKMAN: Those are basically those, yes.

MS MICHAEL: Okay, very good. Thank you very much.

MR. JACKMAN: They are prized by communities, I can tell you that.

MS MICHAEL: Right, I bet they are.

Then also in the same section, 01., under the Salaries, I noticed that did

you just have a position not filled last year, because there is a $137,000

difference between the revision and the budget?

MR. JACKMAN: Yes, that is a delayed recruitment.

I do not know if you can give us a status on it, Alastair?

MR. O'RIELLY: Dave, do you know the specifics? It was a vacancy factor in

our regional staff.

MR. LEWIS: We had several fish inspection officer and fisheries field rep

positions that were vacant that we had to recruit new employees to.

MS MICHAEL: Right.

MR. LEWIS: So there was a delay in getting those positions filled, and

that resulted in the savings.

MS MICHAEL: Okay, thank you.

2.2.01. Seafood Marketing and Support Services. Again, the Professional

Services, subhead 05., what would the professional services be there?

MR. JACKMAN: There is some engineering work that is required by some of

our own work in the field out there. Again, we have a Fisheries Industry

Collective Bargaining Association, and they do some market intelligence around

that. That means getting information related to prices and so on and so forth,

so that we can get into establishing prices on the different species throughout

the year, and we put $40,000 into a mussel marketing study this year.

MS MICHAEL: Okay.

Under the next subhead, 06., Purchased Services, which is a fair sum,

$451,700.

MR. LEWIS: Most of the funding in Purchased Services goes into the

marketing programs that the departments engaged in, in the Boston Seafood Show,

the European Seafood Exhibition in Brussels, the China Seafood Show that happens

in a couple of different communities in China. We maintain the booths in all of

those shows, and we provide a support mechanism for Newfoundland processors to

get engaged in the marketing activities at those shows. So that is where most of

the funding goes.

MS MICHAEL: Good. Okay, thank you.

Under subhead 10. Grants and Subsidies, it is not a large amount, $200,000.

MR. JACKMAN: Now, I can specifically mention those. We had an initiative

around lobsters that was $83,000. We had waste utilization - and that was around

mink feed, I believe - that was $43,000. Certification of herring was another

$34,000.

MS MICHAEL: Okay. Yes, I heard one of the mink farmers on the radio today

not happy about the food for mink.

MR. JACKMAN: No.

MS MICHAEL: 2.2.02., the next one, and the Revenue head, the provincial

revenue money. You seem to have a consistent amount of money that is I do not

know if it is consistent because you did not have any the year before. You had

$1.7 million estimated to be revenue from the provincial government. What is the

source of that revenue? Why was it down by $700,000 and you have it back up to

$1.7 million again?

MR. JACKMAN: It is collection of fees, and oftentimes by the time they

are submitted by the individuals out in the field they straddle two fiscal

years. It is the end of March but you may not get them in until April.

MS MICHAEL: Okay. Right, the fees for the licenses, et cetera.

MR. JACKMAN: Yes.

MS MICHAEL: Okay, great.

I am going to turn it over to you, Marshall, because I am going to have to

step out soon.

So thank you for co-operating.

CHAIR: Mr. Dean.

MR. DEAN: Thank you.

Mr. Minister, back to

section 2.2.01., that you were just speaking to there a

moment ago a couple of things. Just an observation on the overall piece of

this, and correct me if I am wrong. This is where I would look to see the

support that would be put behind marketing our products. Would that be correct,

generally speaking?

MR. JACKMAN: Yes.

MR. DEAN: Okay.

In 2009, our revenue is $827 million approximately and I think the year

before that was a billion dollars or thereabouts. Normally, depending on the

model, I suppose, you would suggest that you put 10 per cent to 15 per cent of

your money into marketing your product, essentially. Not that we need to do that

necessarily as a government, but when we look at what we $1.6 million or $1.5

million is basically what we are putting into marketing the fishery of the

Province and it is a $827 million value, then I think that is a part of this

problem and that increasing this piece is part of the solution. Do you

understand what I am saying?

MR. JACKMAN: Yes.

MR. DEAN: We are putting very little money into marketing a product that

gives us such a great return. In the MOU process, I think that is where the

government has to come with a much heavier purse, if you will, not for the sake

of bringing money but just because that is the way it is. You go ask any

business person, as you know, or look at any success story or failure if there

is not money there to market your product, then you just do not have an

opportunity to, you are doomed before you start.

So, that is just an observation when I look, and I have been looking through

it to see where the market development support is. I see it here, it is $1.5

million into almost a billion dollar industry, and that ratio does not connect

at all.

MR. JACKMAN: I do not like using examples from other departments, but I

think most people in the Province would agree that the tourism marketing has

been a success.

MR. DEAN: Sure.

MR. JACKMAN: Well, how that happened to be is that you had government and

industry who agreed that something needed to be done. They came up with a plan

and that plan then was supported financially. If you look to the marketing

offers that government has made, we had the opportunity to purchase the

marketing arm, which we saw last year made $20 million. We offered up $5.6

million to put in the Seafood Marketing Council.

So, our commitment as a government has been there financially. What we now

have to do is to get both partners in this MOU process, and in particular the

processors, to work with us to develop that marketing strategy. As I said

before, our discussions on setting the price for crab this year and bringing

them in and looking at that possibility, I think they are closer to agreeing on

movement with that now than they have ever been. They see merits in it. Unless

they have turned sour in the last three or four weeks, we can get them back to

the table at the point where they were, maybe we might see something productive

coming out of this marketing aspect of it this year.

MR. DEAN: You might not know this, you might know, but do you have any

idea of what the processors spend in marketing the product?

MR. JACKMAN: No, but I can tell you that my trip to the Boston Seafood

Show was very worthy because we see that someone like OCI have a strong

marketing presence there. We know now that if you are going to be a player in

that game and as much as we think, in this Province, that we are a big player in

the fish world, in reality, we are very small.

So, if we want to be competitive with all of these countries, then we have to

do something with the marketing. There have been different things thrown around.

I am hoping - like I said before, I do not know what the amounts are that they

spend in it, but those that do spend, no doubt, are more successful than those

that do not.

MR. DEAN: Yes.

MR. JACKMAN: Therefore, that is where we have to get to.

MR. DEAN: Okay.

I am jumping around a little bit, there are a lot of topics that we could

discuss but seeing we are kind of talking about marketing and this issue with

the Fogo Island Co-op and being expelled as members of the ASP, where does that

leave them in terms of their marine stewardship certification or being able to

export their product now?

MR. JACKMAN: They came in the other day and asked us about that. I cannot

give you a response on it right now. Because the FFAW, for example, are

sanctioned by government as a group certified in bargaining and the ASP is not,

therefore we have no jurisdiction over how they operate. The MSC one is an issue

that Fogo Island continues to deal with. I do not know if there is anything else

that came in today on it or not.

MR. O'RIELLY: Alastair O'Rielly.

One of the challenges with that particular issue is that the Marine

Stewardship Council, of course, is an international body, it is entirely

self-regulating; it does not come under any federal legislation, or provincial

legislation, or indeed any other legislation internationally. It is a market

driven entity, so its rules and regulations in terms of who has access of use of

the label is entirely within their domain.

It is something that is evolving and we have dealt with in the past. I

suspect it will have to be resolved in the case of Fogo that have held the

certification in the past year, what happens going forward. We have not been

advised by the association that there is going to be any change.

MR. DEAN: Okay.

I guess the fact that - I know government puts so much money in to set it up

and to help ASP get certified, I guess, or whatever, and rightfully so, but the

certification is just so important it is like NSF on all kinds of products. You

buy an awful lot of products today and if it is not NSF certified people do not

want it, they just do not want to go there.

So, I assume this is a similar type of certification. It gives people

confidence around the world that this is a good product. I do not know that ASP

should have that kind of power over producers in Newfoundland. I am not sure

that they can just push you out of the association and effectively shut you down

to that international market because you cannot get access to that

certification. Is that correct? Is ASP the only body in Newfoundland? Are they

the body that holds that certification?

MR. O'RIELLY: They are.

The way this regime works and it really has not anything to do with

quality, it has to do with sustainability of the resource, which again is a

public sector issue in terms of how the resources are managed and how rules are

properly structured and enforced, and then whether or not the resource is being

managed in a way that is considered to be sustainable by some sort of an

independent scientific review.

What happens, in terms of process, it is entirely voluntarily. An applicant -

it could be an individual firm or it could be, as in the case with ASP, an

association - will make an application to the Marine Stewardship Council through

a certification body to go through the process of determining whether or not

they meet the standards and criteria that is in place, then they hold the

licence. That is the case here.

There is really nothing to stop any individual firm from going and pursuing

the same thing themselves, except time and money. It can be expensive. Sometimes

it can take many years to achieve certification. It probably cannot be done in

say less than a year. I do not think there are any examples of that.

So, it is a lengthy process and it can involve hundreds of thousands of

dollars. So that is the environment within which it operates, but there are no

regulatory instruments with which to intervene.

MR. DEAN: Would it be reasonable to expect that there could be safeguards

in place that it could not happen to members of the that is kind of a powerful

thing to hold over the head of their members: In, you have the certification;

out, you do not kind of thing. I do not know. Is there a way to safeguard

against that?

MR. O'RIELLY: Well, it is difficult, and I think it is fair to say that

the Marine Stewardship Council itself is trying to figure out how they are going

to deal with that element of their governance. Their default has been that if

someone does not hold the certification or is no longer entitled to it, to

achieve it through the affiliation or organization through which they first

obtained it, then the opportunity is for them to go and start again.

We have had similar circumstances with other fisheries shrimp in

particular, where people in the Gulf had to pursue their own certification in

other provinces, even though some of the work had already been done here. So,

that whole process of how the Marine Stewardship Council is going to structure

itself to deal with this, it is evolving.

There are many of these organizations worldwide certification entities and

stewardship councils of a variety of names and structures all attesting to the

sustainability of the resource. The Marine Stewardship Council was one of the

first and is certainly the most prominent. They wield a lot of influence in

terms of market recognition. Again, it is a market driven thing as opposed to a

regulatory regime.

MR. DEAN: Okay.

So, if you are a member of ASF you automatically have that certification, and

if you do not you automatically do not have it. Is that correct, more or less?

MR. O'RIELLY: We are not entirely certain about that. I would believe or

understand that generally, yes, if you are a member of ASP

MR. DEAN: ASP, sure.

MR. O'RIELLY: - you would hold a certification if you are a shrimp

producer, as is the case here.

MR. JACKMAN: When you said ASF, I thought we had another group.

MR. DEAN: Oh, sorry. I mentioned NSF a minute ago, and it is after seven.

The Fish Price Setting Panel is an interesting piece of work as well.

MR. JACKMAN: Yes, it is. It really is an interesting piece of work.

MR. DEAN: I have a couple of questions probably on that if you do not

mind.

MR. JACKMAN: Yes, not at all.

MR. DEAN: Last year, the HRLE Minister said that government was reviewing

a request from one party or the other to examine the role of the panel. Is that

review or examination ongoing? Is it complete?

MR. JACKMAN: Here we are in our annual ritual of trying to get a fishery

open, and whether it be the panel or whatever reason, two questions that we have

been asking, and anybody I have met with around the fishery I am asking them

these two questions: Why is it we are the only jurisdiction that seems, in the

world, to have a problem getting their fishery open on time every year? Why is

it that our prices generally seem to be lower than every other jurisdiction?

Now, whether that is because of collective bargaining or because of how the

panel works and is structured, one thing is certain; whether we do a review of

it or we attempt to tighten up the legislation around it, things cannot continue

and remain as they have been. Unless we change something and again, whether

that is the panel or how we arrive at the price for crab, and we intend to have

discussions starting pretty soon to start the next year's season, things cannot

stay the same.

The panel is in place. We have to have some semblance of that because every

fish out there that is caught has to have a price established, but it seems that

the ones we are most challenged by are crab and shrimp. Those are the high-end

commodity products, I suppose, and that brings more debate than in the other

fisheries. Maybe there is something that needs to be looked at.

I am not saying that I know that Minister Sullivan's department is

responsible for the Labour Relations Agency. My take on it is that if we get

these fisheries up and running that the whole thing has to be taken a look at,

not just the panel but the whole gamut as to how we arrive at prices in this

industry in this fishery in the Province.

MR. DEAN: It is amazing. The panel, of course, has been criticized so

much by the processors by one part of the body that they even refuse to even sit

to the table kind of thing. Thirty days after the fishery starts they go back

and accept the panel's price. I do not know how you arrive at that, how you go

through that process and come around and retain any credibility.

MR. JACKMAN: Yes.

MR. DEAN: Anyway, I guess that is where it is.

MR. JACKMAN: You think that the panel is not a credible body?

MR. DEAN: No, I am not saying that. What I am saying is that certainly,

from the processors point of view, they were not very credible sixty days ago.

Then all of a sudden they come back and say well we will accept the panel's

price. I am not really sure then what to think about the panel.

MR. JACKMAN: There are many things wrong, I think, within the system. I

was at an FFAW meeting in December where they set a price of $1.50 this is

what we are going in with, $1.50. They went in with their $1.50 and the panel

came back with $1.35.

I think the big question is: At $1.35, as the fishery gets into full swing,

will that price be maintained? As the market gets glutted, it very well may but,

quite possibly, it may not. It goes back to my previous point. This is not a

working mechanism. The way we arrive at establishing a price for crab, for

example, in this Province, I do not see it as a workable mechanism.

I am not only pointing at the panel, I am pointing at the whole debate.

Somebody made the comparison that maybe the way you arrive at the price is the

way that a hockey player arrives at his final contract. One side comes in with

this is my best offer, the other side comes in, this is my best offer. Then

somebody in the middle says: Okay, this is what you agree to. I do not know if

we need to get back to that or whatnot.

Definitely, something is wrong when the fishery is supposed to start on the

first of April and you are up to - when did it start? May 2 or something like

that this year? So, something has to change.

MR. DEAN: Yes. I think that one of the things that was debated in the

past thirty days or so makes a lot of sense, and I think that is inventory

control.

In some way, the more that you throw into any market, you are obviously going

to affect the price. If there is not enough resource there, if there is not

enough there for the buyers, than how are you going to get a better price? If

there is too much, if there is a gluten of market of anything than the price is

going to go down.

MR. JACKMAN: Yes.

MR. DEAN: I think that is probably one of the things that the fishery is

challenged with, because your harvesting season is so short. You take all that

product and you throw it out there, someone has to store it. If we do not store

it I will say we, being the harvesters, processors, whomever, if you do not

store it on this end it has got to be stored on the other end because it is not

going to be consumed for the next twelve months.

MR. JACKMAN: Storing it is not the issue. Financing it is the issue.

MR. DEAN: Yes, and I guess it is both of that because if you could

finance it you would not need to push it out in the market the same way.

MR. JACKMAN: You have not heard us, as a government, disagree with that.

It is just a matter that if you put a submission in on April 17 that you want a

$100 million line of credit and you expect that to be rolled out for the

operation of this season, it just becomes impossible to do. You take the chance

that this becomes seen as a subsidy. You are into countervailing and whatever

else might come once you open up that door. Certainly, I think there might be

some merit to it but we have to work out the details as to how it can be rolled

out, and quite possibly for the next season that might be something that we can

work on.

MR. DEAN: Yes, I agree with that. That is a short time frame to try and

set up a $100 million line of credit. I realize that, but again, if you can keep

it from getting out in the market too fast I think you can keep your price up. I

guess it is money and so on that it takes to do that and obviously space to keep

the inventory, whatever.

Okay. On page 133 in 2.2.04., Fisheries Innovation and Development, could you

speak a little to line 10. there in the Grants and Subsidies? Again, it versus

more so about what the estimate is compared to what last year was.

MR. JACKMAN: Yes. Earlier on I mentioned a couple of programs, like the

fisheries technology program, that is one segment of that, that is $2 million

and projects related to that. We are working with the Canadian Centre for

Fisheries Innovation as well. There is $1 million that is going into that. There

is some money that goes into issues and whatnot around sealing and just some

other regular programming that comes into place there, but the major ones are $2

million for the FTNOP program and $1 million for the CCFI.

MR. DEAN: Okay. I am glad you mentioned sealing because that was in the

back of my mind and again, an industry that we understand the trouble it is in.

What was interesting this year in my district, I went back to Tim's one morning,

as we all do for a little chat and to catch up on the gossip, whatever, and a

couple of brothers came in who I know well, who four years ago on their

thirty-seven footer made $70,000 sealing, and this year made nothing. Not

because of the price necessarily but because there was no one to buy it.

You can go out on the point and see boats that are part of that 60,000 quota

that was taken, whatever the final number was, but they could not participate

because there was no one to buy it. Of course, Barry's I think pretty much had

their quota for this year and obviously have their boats, their harvesters set

up. So again, do you see like, where is the solution to that? It has been a

part of and those small boat fishermen, I mean there are a lot of them around,

certainly around the Northern Peninsula and other places as well I am sure. They

have a little bit of this, a little bit of that and a little bit of something

else. They are forty, forty-five-years old now and they are twenty years in the

fishery or whatever and the seal was good to them four years ago, this year it

was nothing. Where does that go? How do they participate another year in the

seal fishery? If it rebounds - the $70,000 was great four years ago. Perhaps

this year it could have been $5,000 or $6,000 or $7,000 to them. It would have

been an important piece of income to them that they did not have.

MR. JACKMAN: Yes. We have a fair number of dollars I suppose that we have

put into it. We have expended this total here, right, $226,000?

OFFICIAL: Yes.

MR. JACKMAN: We put $226,000 into it and there is a list of projects that

we have here. We have worked with the Canadian Sealers Association. We all know

the issue around the animal rights groups and that whole situation. I think if

we are going to change the lot of the sealers to improve their lot in life that

is where we are going to have to do some work around marketing. We are

attempting a couple of initiatives.

We, for example, have joined a European organization on the conservation of

hunting and whatnot, and I presented to the group last spring on that. My

perspective on it is getting to the European market, despite the animal rights

activists. Because I am telling you that the message on our sealing, the

importance of it to our Province, the number of seals that are in our waters,

the amount of cod and other fish that they are consuming, the message is not

getting to the Europeans and therefore we have to find a way to do that.

There is an Inuit group that has launched a legal challenge. We have

supported them in that. We have supported our sealing industry, travel for some

of them to go to conferences. We are doing some advertising in the EU and the

Downhome magazine. We are doing public opinion polls on it. These are

various projects here that we enter into.

I think there are other things that we need to do within our own Province yet

to do some marketing. I, as an individual, love a good feed of seal meat. Not

everybody in the Province says the same thing but as much as we may think that

the folks who live in St. John's and Mount Pearl are not seal meat lovers, well,

I can tell you that a couple of Saturday's ago I went down to get some seal

flippers at 9:00 o'clock in the morning and the people who were lined up there

were not from out in my district. They were people who live right here in town,

which I think points to the fact that if we can do a few more things maybe we

can do some things within our own Province.

Going back to the larger issue, that will not attend to the affairs of the

folks, like you are talking about, who make the $70,000 on pelts but it is

around marketing. Unfortunately, sometimes it is a commodity that the markets

fluctuate up and down and whatnot. So I do not know if there is anything we can

do more specific.

I do not know if you want one of the staff to speak any further on it?

Alastair or yourself.

MR. WARREN: Mike Warren. We are doing a number of things. We are actually

going over and above the $100,000 for the communications and advocacy strategy

that we did because we are looking at it broader based than that. We are looking

at it from a developmental perspective.

We are just ending a major project with the Canadian Seal Marketing Group

that includes NuTan, one of the Barry Group of Companies, as well as Rieber,

which has the Carino plant. They are the big players in this business and they

saw the need for marketing. What they have done is they have worked together

with another company out of Quebec and they are looking at an international

marketplace for fur as fashion. They see the Russian market and the Asian market

as areas where they want to focus. So we have been working with them on that,

some fashion designs showing at the fur show in Montreal, just this past week as

a matter of fact. They have projects to move forward like that.

We have a number of activities and marketing and prevention of, I guess, the

trade barriers that are put up, like the US, MMPA. If you are going to have a

market, you are going to develop your market. For fur products you certainly

have to have the marketplace to sell them in and the US has prohibited the

importation of seal pelts and other seal products, and we have a risk that the

EU will do the same. So we need to be able to keep those markets open, and

reopen them in the case of the United States. We need to push and we need to

fight and we need to show that it is a legitimate activity. The EU ban should

not be in place, it should never come in place. We are working with the other

partners, the Government of Nunavut, the Government of Quebec, the Government of

Norway, the industry, federal government and funding a legal case to prevent

that ban from going into place. So those are the kinds of things that we are

doing.

MR. DEAN: Good. Okay.

Another issue that affects actually those same couple of brothers that we

talked about back in the by-election time, and you know that the issue came

forward after. We will call it the selling of the cod out of the back of the

truck. Again, it seems insignificant but it is not to a certain group of people

who do not have access to a buyer, first of all. It is kind of ironic in a way

that you could catch a codfish in Newfoundland and not have anyone to sell it

to, but that is the reality. There was no one on the Northern Peninsula last

year buying codfish and these guys were two that were. They have their small

quota, again, so many thousand pounds. You bring it ashore and there is a

fisheries officer waiting to challenge what you are doing, kind of thing. So,

where is that? Where do you see that going?

MR. JACKMAN: Yes. We are still doing an investigation. I thought it would

be rather simplistic to do something like that, but once we started looking into

it, Canada food guidelines have to come into play here; liability issues that

have arisen as a result of checking into it. So, we still have that ongoing.

There are a number of people who have contacted us to see what the status is but

it is certainly not a dead issue.

MR. DEAN: Nothing that will give them any support for the summer though,

type of thing?

MR. JACKMAN: No, not right now. I do not have anything definitive to

report, but just to say that it is ongoing.

MR. DEAN: Okay, good.

Back to our numbers again; in

section 3.1.02., in the Capital Equity

Investment, page 134, the $6.6 million, can you speak to that?

MR. JACKMAN: Yes, I am glad you raised that because I am going to ask

Brian Meaney to speak on it, because a large part of our budget now is the

aquaculture industry.

MR. DEAN: Yes.

MR. JACKMAN: This one speaks specifically to that. So, Brian, I think you

could enlighten the folks on some of the projects, because this is very much

evolving and becoming more and more. We expect to see, I believe, the amount of

production probably triple within the next number of years. So, if you would.

MR. MEANEY: The Capital Equity Investment Program was a program we

brought in to encourage and entice investment into the aquaculture sector.

Aquaculture is the largest growing food production system in the world right

now, and Newfoundland is one of the last areas left in North America which has

sustainable areas in which to develop aquaculture, particularly the salmonid

aquaculture industry.

Typically, these aquaculture operations in the salmonid side require huge

amounts of investment, in the tens of millions of dollars, in order to get up

and operating. As part of our program to help with that is that we have a

matching program that provides up to 50 per cent of the capital cost of the

start up. That would be the capital equipment, cages, nets and equipment that

would be required.

The expenditures in particular that you refer to are the planned

expenditure last year was partly due, in terms of the final payment, out to

Cooke Aquaculture, the $10 million that was placed in the Capital Equity program

four years ago. There was an expenditure of $1 million towards the final payment

of the hatchery as part of that program. The remainder was an anticipation of

additional expansion by other companies in the Province. That did not occur in

the fiscal year, and we have now carried forward that into the coming fiscal

year, anticipated from new expansion to assist with capital expansion in the

industry for that component.

MR. JACKMAN: If I could, maybe Brian you could add a couple of more

things about the biosecurity stuff, what is happening up there.

MR. MEANEY: One of the key focuses that we have had in terms of our

aquaculture development obviously, we want to see the industry expand and move

into the marketplace, but in doing that we have been extremely mindful of our

responsibility to manage the resources that are utilized for the aquaculture

industry, which in effect are the land and the water in which the aquaculture

takes place.

Our focus in the last three years has been to provide the best biosecure

system in North America and indeed the world. If you view aquaculture as an

extremely large food processing plant is the best analogy, everything that goes

in to your food has to be certified, it has to be clean and it has to be ready

for consumption, everything that comes out has to be of the highest quality to

go to the consumer.

We have the separation of your inflow and your outflow products. Everything

from ingoing to your farm, the juvenile fish which come in which are certified

disease-free, the feed which comes from certified processing plants, the clean

nets that the fish go in, the cages, all those pieces that are going to contain

these animals, which are, in essence, a food production unit, have to be kept

clean and secure and prevented from getting contaminated by outflow. If you look

at a processing plant, you do not want to have your fish fillet in contact with

the offal. It is the same thing in the aquaculture industry.

What we have done on three levels is: One, deal with the fish health issue,

which is the $8.8 million allocated to put a state-of-the-art fish health

laboratory and associated offices in the operation. That will provide us as the

regulators with monthly and weekly sampling of all fish farms and the assurance

of fish health, as well as provide that service to the operators on the other

farms so they can better manage their stocks.

We have the expenditures in terms of the wharf program, which is $9 million

in capital this year. Two wharves are now under construction: one in Pool's Cove

and the other one in Hermitage. These are outflow wharves; these are clean

wharves where products going out to the farm will be placed. There will be

additional contracts let this year for a new outflow wharf in Belleoram and

another one in Harbour Breton, so it will be a total of four.

We recently acquired two additional wharves from Transport Canada: the wharf

in St. Alban's and the wharf in Milltown. St. Alban's is an inflow wharf where

products come in from the farms and the Milltown wharf will be an outflow wharf.

In essence, what we have provided is an inflow and outflow from the farms, keep

them separated and keep them clean.

The last item is to deal with the waste water treatment system. We have

$600,000 allocated in the budget for this year. When you are processing, whether

it is wild fish or it is farmed fish, the effluent coming from a fish processing

operation you are taking fish, you are cutting it up, you have blood, you have

blood water and these are potential sources of contaminants that could carry

pathogens, could make the fish sick.

What we have, in essence, done is required that any processing operation

within a twenty-kilometre radius of a salmon farming operation has to have a

waste water treatment. This, in essence, would remove all the solids at the end

of the processing line. It would treat the water. So, in essence, the water

flowing out of that processing plant is of better quality; it is sterile than

the water that was incoming in the first instance.

So, you bring all of those items together and what we have is a system that

ensures that the grower is having the best quality product that he can produce,

he is saving money because he has very healthy animals, you are protecting the

environment so you ensure that the environment is protected the ultimate

resource that we are responsible for managing and finally the consumer the

gets the highest quality product available in the marketplace.

MR. DEAN: Okay.

I have another question on aquaculture. In the annual report, it stated that

a revised policy document pertaining to management will be completed in

2009-2010. I am just wondering where that is at this point?

MR. MEANEY: I wonder if you could you clarify which document you are

referring to?

MR. DEAN: It stated a revised policy document I am trying to think now

of where it was now exactly pertaining to the management of the aquaculture

industry.

MR. MEANEY: Would this be the Auditor General's report you are referring

to?

MR. DEAN: No, in the annual report the 2009 department's annual report.

MR. MEANEY: There are two processes that we are undergoing right now.

One, we have a revised fish health management policy that will be coming out in

this fiscal year, and that in conjunction in the new laboratory and the

additional resources we have placed on the fish health program. This one, in

essence, will state the policy and the requirements for all fish farms in terms

of how they have to manage their stocks from a health perspective everything

from how inputs move around the bay, the separation of bay management areas, and

testing the fish prior to entering the Province. This is all specifically laid

out in that new fish health management policy.

In addition to that, internally, we are working with our sister departments

to develop the best mechanism, for example, for how to deal collectively with

the development of the aquaculture industry, ensure that we have appropriate

policies, for example, in land use in the areas around the Connaigre Peninsula

in terms of proper access to resources, proper access for road networks, the

requirements for access to Crown lands processes, and the requirements for

access to the environmental assessment process. So there is an internal process

that we would have a strategy across government departments to be able to deal

with aquaculture uniformly, correctly, and in a time efficient manner.

MR. DEAN: Okay.

The last question, I think, for me and an important one for me to get in, the

wharf in Williams Harbour is it Williams Harbour?

MR. JACKMAN: Yes, I had an e-mail from (inaudible) this evening.

MR. DEAN: Yes, you did.

MR. JACKMAN: That has been a project that has been on and off and on and

off again a number of times. Specifically, I had a I do not know where it is

now. The latest on it was that it had been retendered and there were two bids

that came in on it. The lowest bidder, I think, disqualified himself in the end.

The other bidder came in with a project of somewhere in the vicinity of $1

million.

There is not money in the budget for it this year. What I have decided to do

is to take a look at it, to see the volume of traffic that uses it, and to see

if there is alternate means by which we can support the community in offloading

and having facilities around that. As of this year, there is not money in the

budget for it.

MR. DEAN: Okay.

Back to the aquaculture equity investment, can we have a list of the

Lorraine asked me to ask for that basically when she left. Can we get a list of

that $6.6 million?

MR. JACKMAN: Yes, we will provide a list. Having to recognize, as well,

that some of it will not we can show you what has been expended

MR. DEAN: Sure.

MR. JACKMAN: - but these are funds that are requested on a demand

basis, so you have some funds there in anticipation of what might be coming, but

certainly we can provide a list of some of the projects that have been approved.

MR. DEAN: Okay. That is it.

CHAIR: Thank you, Mr. Dean.

Any further questions from the Committee?

Okay, I will ask the Clerk now to call the subheads.

CLERK: 1.1.01 to 3.1.02 inclusive.

CHAIR: 1.1.01 to 3.1.02 inclusive. Shall that 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 I report the total carried?

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, Department of Fisheries and Aquaculture, total heads, carried.

CHAIR: Shall I report the 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

without amendment.

CHAIR: One item before we adjourn. We have one meeting left and that is

next Monday, May 17. We will be dealing with the Department of Natural

Resources.

Before we ask for a motion to adjourn, I would just like to thank members of

the Committee, the House of Assembly staff, as well as the minister and his

officials. I do not know if you want a minute or two to finalize anything or

not?

MR. JACKMAN: I am looking forward to the Montreal Canadiens game now, Mr.

Chair, and I want to thank everybody for their co-operation and the Opposition

for their questions.

CHAIR: Thank you very much, Minister.

Motion to adjourn?

MR. BAKER: So moved.

CHAIR: Moved by Mr. Baker.

This meeting now stands adjourned.

On motion, the Committee adjourned.