June 3, 1993

RESOURCE ESTIMATES

COMMITTEE

Pursuant to Standing Order 87, Mr. Edward Byrne,

M.H.A. (Kilbride) substitutes for Mr. Rick Woodford, M.H.A. (Humber Valley).

The Committee met at 7:00 p.m. in the Legislative

Chamber of the Colonial Building.

MR. CHAIRMAN (PENNEY): It being 7:00 p.m. I

will now call the meeting to order.

I would like to welcome everybody here tonight to

our fourth meeting of the resource sector of the Budget Estimates Committee

meetings. Tonight we will be reviewing the estimates of the Department of

Industry, Trade and Technology and I would like to welcome the minister of the

department the hon. Chuck Furey. I am the Chair for this evening, my name is

Melvin Penney, I am the Member for the District of Lewisporte.

I would like to explain briefly the role of the

Chairman of the Committee, basically it is the same as the role of the Speaker

of the House of Assembly, to maintain order and decorum, but this is a much more

relaxed format. The dress code is considerably relaxed, you need not keep your

coats on or ties and of course you can bring coffee to your desk. Members need

not be addressed by the district they represent, they can be addressed by name.

I would like to introduce as well the members of

our committee; to my right is Ed Byrne, the Member for Kilbride, who will be

filling in as Vice-Chairman tonight for Mr. Woodford, the Member for Humber

Valley. On my left, Gerald Smith the Member for Port au Port; Oliver Langdon the

Member for Fortune - Hermitage; Dr. Bud Hulan the Member for St. George's; on my

right, Paul Shelley the Member for Baie Verte - White Bay; Alvin Hewlett the

Member for Green Bay and our Clerk for this evening is Elizabeth Murphy. I would

also like to recognize two other members from the House of Assembly here tonight

and they will be more than welcome to ask any questions they wish when we get to

the appropriate times.

Before the minister introduces his officials I

would like to ask everybody to cooperate with the Chair and speak directly into

the microphones. If any of the minister's officials answer any questions from

the Committee they should first introduce themselves because this is all being

recorded and transcribed by Hansard. It is important, since you are not elected

members that Hansard would already be familiar with, that you introduce yourself

each time. I would also like to remind the minister's officials that they are

permitted to answer questions only if asked to do so by the minister and even

then, they are required to limit their answers to fact and not engage at all in

anything pertaining to policy.

Before we go any further, the minutes of the May

31st meeting has been distributed. Could I have a motion please that the minutes

be adopted as distributed?

On motion, minutes adopted as circulated.

MR. CHAIRMAN: Mr. Minister, if you would now be

so kind as to introduce the members of your committee and then you could

continue directly into your opening remarks. We will allow you fifteen

uninterrupted minutes for that. If you go over, we will just allow you the

leniency and we will give the Vice-Chairman or his designate, equal time to then

make his comments to you as well.

Mr. Minister.

MR. FUREY: Thank you, Mr. Chairman, and

members. You know that I would not go over my fifteen minutes, not at all like

me.

On my far right is Dorothy French, who is the

financial person with the Economic Recovery Commission. Dorothy I am sorry I do

not have your title. Is there some kind of a nice name?

MS. FRENCH: Director of Administration.

MR. FUREY: Director of Administration, sorry.

Cathy Duke is next to Dorothy, she is here appearing with us tonight on behalf

of the Recovery Commission too and I think Cathy you are executive director?

MS. DUKE: Yes.

MR. FUREY: Next to Cathy is David Butler who is

the financial director of administration for Industry, Trade and Technology:

next to me is Peter Kennedy, who is the Deputy Minister; on my far left is

Patrick Kennedy, the Vice-President for corporate services of Enterprise

Newfoundland and Labrador and next to me on my left is, Jim Janes, who is the

President of Enterprise Newfoundland and Labrador.

First of all, Mr. Chairman, may I thank all these

officials for coming out tonight; I did not realize so many people were going to

come. Normally we just have the deputy and the president and somebody from the

Recovery Commission, but I am glad that everybody is here tonight and I thank

them for coming.

I suppose if you allow me a few minutes I can break

this into four parts. I do not feel that it is necessary to go from a script

tonight to describe the role of the department or the ministry. I think,

basically, the budget and the estimates have been before the people now for some

two or three months, democracy sort of intervened and we had an election; the

election basically was on this budget and these estimates and so we present them

formally to this committee tonight.

The Strategic Economic Plan, essentially tabled by

the government last June, said that we ought to look at some areas and focus on

them in terms of economic development. That gave rise to the government

considering creating two new departments, the Department of Development, Mr.

Chairman, of which I was minister for three years and three months, essentially,

it was the collapsing of four-and-a-half ministries under the former government

into one ministry. It was most difficult, most cumbersome and it took a great

deal of my time and energy to focus on a lot of issues. The strategic plan

determined that we ought to break out some of these divisions and create some

new departments, and after consulting with the people around the Province they

said we ought to create Tourism and Culture so we moved on that rather quickly

and the new department, Industry, Trade and Technology, which in its very name

tells you the direction and focus of that department.

Some of the things we learned as we studied and

prepared to set up this new department was that there are new emerging

industries that we really have not taken hold of and one of the things we

learned was that, while it is all well and fine to rely on our resource based

economy and the traditional industries that have sustained us for 500 years, we

have to start looking in new directions toward the new economy, that is not to

say we abandon the old, but there has to be a happy balance between the old and

the new economy; and the new economy, where industries such as information

industries, which accounted for some $15 billion across this country last year

and had a growth factor of 8 per cent, when you think about that, what was

Newfoundland and Labrador doing to capitalize on that? Not a whole lot.

Environmental industries which is a multi-mega

billion dollar industry worldwide, as the world becomes more sensitive to the

ecosystem, what were we doing with that? Not a whole lot. Manufacturing, which

is an unsung hero in this Province, many people do not realize it but 610

businesses in this Province create products within this Province for the

domestic market and for export, you know, what were we doing with that? It had a

$700 million value in production last year and accounted startlingly, for 4 per

cent; 4 full percentage points of our gross domestic product can be targeted to

the manufacturing sector.

What were we doing to that to enhance it to cause

it to grow and to put it on a positive path? There was no discipline and focus

in these areas, so that gave rise to the new department of Industry, Trade and

Technology. There are two divisions in this, two separate assistant deputy

ministers, one for Trade and Investment, the other for Industry and Technology.

Then there are sectors that we highlight in the department, and I can table

these for you later if you would like, but offshore industrial benefits, which

essentially allows us to monitor the Hibernia project to ensure that the

agreements put in place, the very good agreements put in place by the previous

government are adhered to. There is a whole division that monitors these things

and in fact, in that little division we have monitored some 102 companies, who

all, these Newfoundland companies, gained contracts in excess of $100,000 each

in the last two years. That's pretty substantial. We've helped to create joint

ventures with local companies which don't have the technological know-how,

matching them worldwide, whether it's Europe or in Asia, or in Canada or in the

United States or South America. Bringing and bridging the technology back into

these companies. So that division is responsible for that.

The industrial technology and information

industries. We talked a little bit about that. There are some thirty or forty

small information industry companies, mostly located on the Avalon Peninsula,

that are doing really fine work, that need some help to grow and need to be

nurtured and need to be helped along. The manufacturing industries, I just

talked briefly about that. I will get into more debate about that later if you

like. The service industries, consulting companies and that kind of thing. Those

are four sectors that sit right underneath Industry and Technology.

Over on the other side in Trade and Investment we

have a branch that is called business analysis. What that does is look at all of

the - in partnership with other departments, particularly Finance - they'll

review business plans and loan guarantees and requests through government,

through the line departments, wherever it's necessary to pitch in and help

there. Mostly on the loan guarantee side. There's marketing and investment,

which we see in that division great potential and great opportunities. I will

talk a little bit about that later. The other one is strategic procurement,

which essentially has taken the great work of the ERC in respect of supplier

development and is moving forward to say to Newfoundland companies: what kinds

of things are you buying and what can we provide, and how can we be competitive

to provide those products?

I'm trying to give you the quick, thumbnail sketch

of the department. We can certainly get into the heart of it later if you'd

like, but there are some other things I'd like to talk about.

That's essentially the department. Our mandate is

outlined very clearly in the action items in the Strategic Economic Plan. The

deputy and the senior management of the department have met with each of the

divisions, separately and collectively, and in effect have had a number of

retreats just to talk about how we can focus laser-like on this department to

create economic opportunity.

That's, as I said in the beginning, to try to marry

the old economy, which is the resource base that's declining, with the new

emerging economy. Not to abandon the old but to, as we find ourselves in

difficult times, with the depletion and diminution of the resources, fish and

timber. You see what's happening in the paper industry around the world.

Recycling has come on. The blue box program. People aren't using as much paper.

There's less demand and therefore it's causing a ripple effect back through the

economy. Less trees are being cut, less paper is being made, that kind of thing.

While we're seeing a reduction in the resources - whether it's fish or paper or

minerals - we have to try to accelerate and kick start the engine of the new

economy in our own little corner of the world. That's essentially what this

department is attempting to do.

Mr. Chairman, if I can just switch gears for a

second. There are four parts, as I said, to my opening. The Department of

Industry, Trade and Technology. The second

part is Enterprise Newfoundland and

Labrador. This corporation, as you know, was set up two and a half, three years

ago. It's mandate was to seek out new opportunities for small and medium-sized

businesses. We can certainly get into the kinds of things that they do over the

next couple of hours tonight. It has a capital loan portfolio of $2 million per

month which is $24 million per year. It doesn't normally flow, that $24 million,

because there's a lag time between actual approval and actual dispersement. I

guess it's operating budget is around $13 million. That about right?

AN HON. MEMBER: (Inaudible).

MR. FUREY: Eleven point eight million dollars.

Under the umbrella of this particular corporation lie a number of agreements.

The Innu agreement of Labrador, the Inuit agreement, the Labrador comprehensive

agreement, the world development agreement, the Enterprise-ACOA network

agreement, which is the electronic highway agreement we put in place some years

ago. Does that about get all the agreements or did I miss one?

AN HON. MEMBER: (Inaudible).

MR. FUREY: Oh, and the NRC, the National

Research Council, also sits under there. I guess we have about 175 employees

spread across five major regions in the Province with eighteen satellite offices

reaching into isolated areas. Its mandate is to deliver the decisions right in

the areas rather than here in St. John's. That was one of the great complaints

that the former government discovered under the House Royal Commission, that

decision making was always in a cocoon here in the capital city so we wanted to

break out of that.

We allow loans of up to $100,000 to be approved in

the regions and we are just gearing up now to increase that threshold to

$150,000. Under the Rural Development Agreement we allow grants up to $2000.00

or $ 3000.00 in the regions so that they do not have to track down paper work

and get signatures. If it is good and the region says it is good we will stand

by the region. Last year, I guess, we helped 375 companies and there were 3000

new jobs created, and some 5000 protected, maintained or enhanced, for 8000

jobs. It is not just the dollars these people dispense and disburse. Ninety-five

per cent of the people at enterprise, 95 per cent of their energy and time is

dealing and communicating with companies, and offering them expert advice,

whether it is a business analysis, a person, an engineer, all the expertise that

come under that umbrella, or our business resources library where we can

actually get instant information on contracts and what is happening anywhere on

the planet to our people rather quickly. Enterprise is performing, I think, a

very valuable service to our people and the reaction we generally get back is

very positive.

Moving to the Economic Recovery Commission, they

essentially have been given as you know a six to nine year, or ten year,

depending upon which document you are reading, mandate to look at the general

structure of the economy and be our think tank and policy people, offer up some

solutions and some specific programs. In the early going they indeed formed the

board of directors of Enterprise Newfoundland, when we set it up, which gave

them not only an avenue to think policy through but also a vehicle to find

expression for that policy whether it was financial or otherwise.

We are just moving now to put some private sector

people, for the first time, on the board of Enterprise Newfoundland. We just

appointed three private sector people, a businesswoman from Stephenville, a

businessman from Gander and a businessman from St. John's. In concert with that

we have taken one of the four commissioners off Enterprise Newfoundland to free

up that person to do some more policy work and to move in other directions. We

will be doing more of that over the next number of months. We will be taking

another commissioner off and putting another private sector person on because we

believe that enterprise is up, it is young but it is strong. It is young but it

is strong and it can move forward on its own.

The Recovery Commission has done some brilliant

work in developing new sectors of what they call opportunities for growth. They

have isolated eleven sectors and put forward for public consumption eleven very

good studies that show new directions for people who are interested in going in

these directions, new pathways to break into business. They have also done some

superb work on the craft industry, the five year craft study was produced by the

Recovery Commission, and the adventure tourism study was produced by the

Recovery Commission. The latest program they brought forward was the

Newfoundland and Labrador Conservation Corp for young which I think is

absolutely exceptional, so they have done lots of good work. With respect to

their budget, initially in 1989 they were given $3 million but they have never,

ever seen $3 million. What is the most you have seen Dorothy?

MS. FRENCH: $2.6 million.

MR. FUREY: They have never, ever used what was

there initially for them to globally use and I think that augers very well for

them because lots of people try to fill up their budget, spend it, and then come

back. Every single year, as far as I can tell, you have reduced your budget.

Right down to this year it is below $2 million?

MS. FRENCH: This year it is $1.8 million.

MR. FUREY: I think you have to be commended. It

is one of those things where people attack blindly without really knowing and

flushing out the kind of things that are happening or the kind of things that

are being done. I know you are also doing some valuable work on a new income

support strategy which we hope to be in a position to talk about publicly in the

next number of months.

There is one other area, Mr. Chairman and members,

that comes and reports to the Department of Industry, Trade and Technology and

those are three Crown corporations. The first of these is Newfoundland Hardwoods

which has its head operation out at Clarenville. We have about forty, I think if

memory serves me, about forty or fifty employees there. It is one of those

Crowns that actually makes money and pays dividends into the government yearly.

So we are pretty happy about that but in line with our private sector strategy,

we intend, when it is proper and right to divest of that if indeed the

marketplace is willing to pay the price.

The other one is the Marystown shipyard. That is

quite an enormous Crown corporation which operates out of Marystown. It is also

involved in a joint venture arrangement with the Norwegian company, Kvaerner

Rosenberg out of Oslo, Norway. That joint venture is a 50/50 operating company

which was put in place to operate the magnificent new state of the art facility

at Cow Head, five miles north of Marystown. In fact, I was down there last week

with the Premier and Mr. Crosbie was supposed to come but the weather was bad,

he could not fly and we opened that facility. That facility was purpose built by

the people of Canada and the people of Newfoundland, cost-shared, to seek out

the mechanical shaft outfitting contract at Bull Arm for the gravity base

system. If we are successful in getting this contract it will be worth some $100

or $110 million and could put 400-500 people to work for a good long time down

there preparing this work.

We have been successful in winning the barge

pontoon contract for $4 million that has put 100 people to work. We have a very

good solid bid in on the refurbishing of the fisheries vessel, which if we win

it, it could be a $25 million contract. There is also a $2 million training

program on the way, 160 people taking advantage of that. So there are good

things happening at Marystown. We have a solid base, good infrastructure, a

skilled and trained workforce, a fabulous new president, a great joint venture

with a Norwegian team and we are positioned well to take advantage of that

contract.

The last Crown that reports under my particular

department is the Labrador stores which used to be in the line department of the

government, the old Department of Development, then we moved it out under

Enterprise Newfoundland, the Labrador region and created a subsidiary called

Labrador Stores Incorporated. They have an operating budget of roughly $5

million. We did a study some two years ago which was prepared by Deloitte &

Touche and they told us that there were a great many efficiencies that could be

built into this operation. Governments by their very nature are not good

shopkeepers, we were losing a lot of money but I am happy to tell you that we

have gone in two years, from over $1 million in operating subsidies to less than

$200,000. So we have built in some good efficiencies, we have improved the

service and there has been no, that I can see or tell, any diminution of

service. There has been no, on the other hand, gouging, unfair pricing or

practices in that region. I will be visiting those stores in two weeks time and

talking to the public up there as well.

With that, Mr. Chairman, I am sorry if I went on

and on but there it is.

MR. CHAIRMAN: Thank you, Mr. Minister. The

minister has just used seventeen minutes in his opening remarks. I will now

allow the Vice-Chairman equal time, seventeen minutes or if he wishes a

designate.

MR. E. BYRNE: Thank you. I would like to thank

the minister and welcome everybody this evening. I guess I have some questions

in a number of areas. The Strategic Economic Plan, is that directly under your

department or is it run strictly out of executive council?

MR. FUREY: The Strategic Economic Plan is

budgeted under executive council.

MR. E. BYRNE: All right, fair enough. I just

wanted to clear that up.

Some of the environmental industries that you have

talked about, could you elaborate on the types of -

MR. FUREY: I am sorry?

MR. E. BYRNE: With respect to the environmental

industries that you've spoken about, or identifying new opportunities in the new

economy. Could you elaborate in any way or in detail on what some of those

industries are that have begun, or have not begun, or that you hope to begin?

MR. FUREY: Yes. The only problem is how much

can I talk about, because there are a lot of companies that come to see me, they

want to talk (inaudible) -

MR. E. BYRNE: I understand, but are there any

examples where your department has initiated or helped initiate?

MR. FUREY: Yes, there are. The three that I can

think of are still on the drawing board and there are patents pending and -

MR. E. BYRNE: Oh, fair enough.

MR. FUREY: - there's a lot of confidentiality.

But in a general sense I can tell you that one of them deals with major cleanups

of oil using new technology called imbiber beads. That's a technology that's a

joint venture arrangement between a St. John's company and a mainland firm which

we're now currently helping. We had helped them under the ocean industries

agreement and we're helping them under the SIID agreement. That's the Strategic

Investment and Industrial Development agreement, which is a $45 million

agreement.

If the hon. member just thinks in a general sense,

when I talk about environmental industries we're talking about industries that

are coming to the forefront which recognize that the world is demanding that we

clean up the mess of the past.

MR. E. BYRNE: (Inaudible).

MR. FUREY: Right? The environmental legislation

that's currently in place in a very strong way protects future development,

because the hoops that you go through - they're almost mind-boggling when you

think about it. One of the chief complaints I get as the minister of business

is: just tell us if we can't do it, stop giving us the runaround. There is a lot

of work out there to be done to clean up what's happened in the past. Whether

it's pollution of rivers and streams, or whether it's the Long Harbour

pollution, whether it's in our forests or whatever.

MR. E. BYRNE: So (inaudible) -

MR. FUREY: The companies that are looking to

Newfoundland, and the Newfoundland companies that are here now that are involved

in the environmental industries, are looking at our marine environment. They're

looking at potential oil spills. They're looking at the bilges that are being

flushed along our coast lines. They're looking at the outfall of sewage from

municipalities, which really augurs negatively for aquaculture. They're looking

at these kinds of areas, many of them, in terms of our marine environment.

It's difficult for me to talk about specific

companies, because the ones that are on the tip of my tongue are -

MR. E. BYRNE: I guess the question really was:

have there been any companies initiated that your department has helped? Not

ones that are still on the drawing board, but any specifically. You've answered

the question generally, so....

MR. FUREY: Yes. Hi-Point Peat out of Bishop

Falls is a good example of a company that's been helped. There are some other

environmental companies. Helitactics, for example, is a remote fire fighting,

which of course is to protect the environment. We just helped them with a major

grant and they're now pursuing work this summer in Central Newfoundland. It's a

St. John's company. There are a number of other companies. I can give you a

list.

MR. E. BYRNE: No, that's fine. On another

subject -

MR. FUREY: But that's an emerging industry -

MR. E. BYRNE: No question.

MR. FUREY: - that has just immense potential.

MR. E. BYRNE: Are there any federal-provincial

agreements looming on that front, are in place or -

MR. FUREY: There's one that we did sign. As I

just said, it's called the Strategic Investment and Industrial Development

agreement. Which has a whole series of components which allow companies to come

in through one or more windows. Whether it's marketing, whether it's hiring

expertise, whether it's world travel to trade shows to find joint ventures,

whether it's taking new products and building a bridge commercially across into

the marketplace. Those kinds of things. It's a substantial agreement, it's $45

million, 70-30 cost-shared.

The ocean industries agreement, which was amended

some time ago, is a $14 million agreement which also provides that kind of

opportunity for companies to come in and access government funding. We have a

small component in our department called the market and product development, the

MAPD, where we cost-share 50 per cent of anybody's travel to world shows,

environmental shows et cetera. In fact, our department just brought some

companies to the Vancouver World Environmental Conference and they made some

connections and joint ventures there. I just can't think of the companies

offhand. Moya Cahill's company, what's that called? Does anybody remember?

Enterprise also helps small companies and

medium-sized companies but they do not get involved in grants; it is straight

commercial banking with preferred rates in certain instances.

MR. E. BYRNE: With respect to the Maritime

Economic Union Initiative, do you see that potentially hurting the Province here

and the workforce? Do you see it as a golden opportunity for the people of the

Province and the workforce that is here, could you elaborate some of your

thoughts on that?

MR. FUREY: The Maritime Economic Agreement?

MR. E. BYRNE: Yes.

MR. FUREY: I have not heard that one spoken

about in a long time.

MR. E. BYRNE: No, but it is something that I

think is of importance anyway, and will, as time goes on be of more importance

specifically if we do not have the infrastructure or training in the technology

available to take advantage of other opportunities; it could be that at this

point in our time and history we could be taken advantage of yet again, but it

is again, a general question just to get your general comments on it.

MR. FUREY: Yes, and in a general sense, if the

trading block forms and if that economic block forms. This is a personal opinion

but from everything that I have read and some economists to whom I have spoken -

I do not think it will hurt us, I do not think it will hurt us, but that is me;

but you know, was it George Bernard Shaw who said you can put economists, line

them up head to head until the last one falls down and they still would not

reach a conclusion, so who knows?

I can tell you one thing though, that if that

trading block happens, it will radically shift our trading patterns back to what

they were pre-confederation, we never traded East/West, we always traded

North/South. We sent our fish South, we took goods back from the South; when

they came North we were a trading nation along the Eastern Seaboard.

Confederation in some ways, while it was a blessing perhaps cursed us in other

ways, because subsidization allowed Central Canada to dump their products in and

displace that which we made and were proud of making. In a general sense I do

not see it hurting us, but who knows.

MR. E. BYRNE: I guess a couple of questions

with respect to Enterprise Newfoundland and Labrador. With respect to the loan

that was given recently to Triton Airlines, could you elaborate on what the

decision-making process was on advancing a three-quarter of a million dollar

loan to a private company; it is the process in which I am interested and not

necessarily - Yes, you should have given it to Triton Airlines or, No, you

should not have, it is the process in which I am interested.

MR. FUREY: I would be happy to do that.

This is a young, aggressive company and it is one

that I have said publicly deserves high marks for their energy, their efforts,

for everything that they tried to do. The process is very simple. They came to

me as minister and told me their story. They put a lot of cash, their own

personal wealth into kick-starting this. There were a 100 or a 120, depending

upon the numbers that you use, Newfoundland and Labrador jobs on the line. It

was a wholly owned Newfoundland company, they came to me and said: we are in a

crunch and here is why and they told me why, and without getting into the

details, their basic problem was one of a technicality.

MOT, the federal Department of Transportation -

MR. E. BYRNE: Yes, I am aware of that.

MR. FUREY: - allowed them to do certain things

by way of ministerial exemption. When it got down into the bowels of the

bureaucracy with great deference to the bureaucrats, it got triggered by some

technicality, they were grounded. That cost them a lot of money. In their

initial business plan which appeared to be a sound plan, they had allocated X

numbers of millions of dollars for operating capital, smart! That capital was

flushed out to pay other airlines for stranded passengers to fulfill their

contract, because every time we buy an airline ticket, it is a contract. That

sapped their operating capital; they came to me, their problem was two-fold.

Number one: we need some help with operating capital in the short term. Number

two: we need an answer right away.

The normal process for that kind of a large pool of

money and $1 million was the original request; that kind of process takes a

while, I mean you just do not give a loan guarantee over night, that is not the

way governments in the past or this government operate. In a sense you have to

analyze the plan, you have to get into the details of what it is they are

asking, it has to cross over three departments, it goes to treasury board and

then finally makes its way to Cabinet, then there is approval and then the

arrangements have to be put in place and the letter sent out... to long

minister, it will take too long. So then as part of the process, I said: well,

if we cannot do that I will ask you to go over to Enterprise Newfoundland and

Labrador. They have, as you know, authority up to $1 million to approve, beyond

$1 million it must go to Cabinet for approval. I think since the life of the

corporation, there may have been about four that came to Cabinet, two turned

down and two approved, as I recall.

So, they went to Enterprise and the Enterprise team

put a team of specialists and financial people right on this problem to deal

with it as quickly as they could to help these fellows out of a bind. So, they

came up with an offer and the offer was $750,000 with a series of conditions

that must be adhered to. The principles accepted our offer - our approval in

principle and signed a letter of acceptance, as I recall. Now, they came back

and said: there are a couple of these that are tough. You know, you guys are

really choking us on this one, can you loosen up some of these terms, or one of

the terms?.. as I recall, and we said yes. We softened one of the conditions but

you see, we have a delicate balancing act to play too. I mean on the one hand

our hearts go out to this Newfoundland company that are creating jobs and I tell

you, I am really serious when I say that I am really - when I sat with Mr.

Roberts I was most impressed with this fellows energy, his drive, he is almost a

neo-nationalist in some ways when I got chatting with him but on the other hand,

the other side of the scale is that we have to balance that, that these are

taxpayers dollars, they are not mine, they are not his, they are not yours, we

all -

MR. E. BYRNE: So, the process then went to you,

from there it went to Enterprise Newfoundland. Enterprise Newfoundland then

looked at the business plan I suppose -

MR. FUREY: Yes.

MR. E. BYRNE: - and made a decision that there

would be a short-term loan of $750,000 -

MR. FUREY: Until November.

MR. E. BYRNE: - provided to Triton Airlines up

until November you said?

MR. FUREY: November 30th, that is right and

that was satisfactory to the company because essentially it was a bridging

arrangement which will allow their planes to get off the ground, put them in a

cash-flow position, allow revenues to come back in, those revenues will be

diverted to cover that loan and ratified by November 30th. It all made sense but

you see the problem was that we - the other half of the balancing act is that we

have to protect the taxpayers. Not only have we got to protect the taxpayer but

I, as minister, have got to protect myself from you guys who are going to throw

the Auditor General's report at me next year as you did this year, for not

securing the loan. So, we secured the loan, we secured it in a very reasonable

manner, we believed, but as far as I know they have not taken up the offer yet?

AN HON. MEMBER: No, they have not.

MR. FUREY: Have not signed for it. So that is,

in a general sweeping sense, how it evolved.

MR. E. BYRNE: Okay. With respect to the

Economic Recovery Commission, again a general question, there is not a lot of

time to get into details. In terms of actual jobs created you eluded to earlier,

how many jobs has the Economic Recovery Commission - is it estimated how many

jobs that the Commission has created or is it more a research and policy sort of

set up that assists government in evaluating other areas from other departments?

MR. FUREY: Yes, I think you have answered my

question for me in the second part of your

preamble. Anybody that is going to

look at the Economic Recovery Commission and ask you or us to march out with ten

or fifteen or eighteen jobs, they are going to be most disappointed. That is not

the nature of the Economic Recovery Commission. Its job was to look at the

structural - what are the weaknesses in our economy and how can we correct

those? You see, I suppose in a sense, we fell down on the job in our

communications when we first set up the Recovery Commission because its very

title almost misleads - somehow there is going to be an instant economic

recovery and therefore everybody will be working, the unemployment rates will

drop and prosperity will happen. These are all ideal things that we would strive

for but that is not the nature nor the mandate of Economic Recovery. They are

there to create a climate and to fix some of the inherent structural weaknesses

in our economy. Some of them have to do with the things they are working on now,

the income security system, everything that we do in this country and in this

Province now, if you look at it and you are honest about it, is a disincentive

for people to work. We've got to try to straighten out and level the playing

field and pull the disincentives out and create incentives and opportunities for

people to go to work.

If the hon. member is asking me to march out the

list of jobs there just -

MR. E. BYRNE: No, it wasn't so much a request

to march out the list of jobs as it was a - I just tried again to get a general

sense of, with you as minister, what is the role the Economic Recovery

Commission plays within your department, and for the Province as a whole.

MR. FUREY: It's very much as you said in the

last half of your

preamble a think-tank policy generator that allows them to

say: here are our ideas. By the way, you should do this in forestry. Here's some

new and interesting things that you should be doing in the environment side.

Here are some things you should track down in terms of business opportunities.

It's loosely structured that way so that it's not hemmed in by the traditional

bureaucratic rules and not smothered. We intentionally set it up that way.

MR. E. BYRNE: Okay.

MR. CHAIRMAN: As members of our Committee have

become aware, and I'll ask the minister to note, the procedure that this

Committee has been following is that it will ask the members to not make a ten

minute speech in which would be five or six or eight or ten questions, and then

ask the minister to answer them all. But to proceed in a manner very similar to

what we would use during question period in the House of Assembly. That's to ask

a simple question, with a

preamble if required, and as the minister answers that

one then to ask another. We will limit this time to ten minutes per Committee

member, but we will allow it to go back to those Committee members as often as

required.

I would ask that as the Committee members are

cooperating with the Chair in this regard that the minister would also cooperate

with the Committee in keeping his answers as brief as possible.

I now recognize Dr. Hulan.

DR. HULAN: Thank you, Mr. Chairman. Mr.

Minister, I might say I think that you have probably one of the most exciting

portfolios in this government of ours, and I think you're doing a good job. I

have to say that, because I watch it very carefully, being a scientist and a

technologist. I know some of the people here, especially from the Economic

Recovery Commission. I've dealt with these people a lot in the past and I can

take my hat off to that Commission for the job that it's doing.

I think it's fair to say, and others before me have

said, that if we are going to come out of the doldrums that we are going through

in Newfoundland today, and going to the year 2000, we're going to do so with

having a strong base in science and technology. I've included in here science as

well as technology. Because it's very difficult to separate the two when it gets

down to the nuts and bolts and the practicality.

Having said that, and that's enough of a

preamble,

what will your department be doing in the future with regard to - are there

plans for cross-fertilization of the Department of Industry, Trade and

Technology with the Department of Education to take care of what is somewhat of

a void today, the science aspect, and marrying it with the technology?

MR. FUREY: Thank you very much for your kind

remarks. It's nice to hear somebody say that you're not doing a bad job. I know

you to be a sincere fellow so I accept that, and I thank you for your comments

about the Economic Recovery Commission.

The short answer to your question is - there are a

number of parts actually that I'd like to speak about. The government released

about a year and a half ago its new science policy. I think you're aware of

that. It's actually a wonderful, very simple document that lays out the

objectives of what the Newfoundland and Labrador Science Council, which also

reports to this ministry, lays out where the Province should be going in its

education system, in its business system, right up through the political system.

Incidentally, we just put a new board in place on

the Newfoundland and Labrador Science and Technology Advisory Council, and for

the first time in years and years it is top heavy with private sector people,

people who operate in the real world. Now that is not to say that it is not good

to have people from the academic world or the political world, but we thought we

would try this at least once, to put the majority of men and women who sit on

that board who are presidents and CEOs of small and medium-sized companies, that

operate out there in the real world and sign the front of cheques every week.

The President of Matrix Industries, Ultimate East Data Communications, I cannot

remember some of the other ones, but these are people who are out there chasing

contracts in the real world, exporting to Japan, the South China Sea and these

kinds of areas.

The government thought long and hard about what you

were saying, creating that synergy between industry and education, removing the

barriers, crossing the lines and in fact, a lot of thought went into it through

the ERC, Susan Sherk in particular, did a lot of the spade work to create the

foundation upon which we built that new human resources agreement, and that

human resources agreement is aimed very much at making our schools - Mr. Decker

was telling me in the House today, that every single school by late next year

would be computerized; there will be a network and electronic highway right

around this Province to every school because if we are going to operate the new

economy, we must have instant communication, instant transmission, instant

reception of information. We cannot operate otherwise. We have done that with

the ACOA enterprise, electronic highway through the development associations

around the Province. Mr. Crosbie and I signed that agreement a year-and-a-half

ago, two years ago. That is up, it is running and it is magnificent. Anybody who

looks into it will find it is operating just first class. Richard Fukes is just

on a brain storm with the job there with that.

Similarly, we need to tie all of the education

system into this new electronic world in which we find ourselves. The $43

million human resources agreement will do just that. Let me, while I am on that

subject recommend a book to you. There is a lady who writes for the Globe and

Mail, her name is Nuala Beck; she is quite an interesting writer, she just

published a book called Shifting Gears. It is called Shifting Gears, The New

Economy, it is a short read, about 125 pages, it is easy to read, a brilliant

book, and in there she says: If people are to be trained, there are three areas

where they ought to be trained otherwise it is just the game of moving rocks,

one pile of rocks from here to a pile over there; it is make work, make madness

is what it is, but if we are really going to put dollars into training and we

are really going to cause them to seek out new opportunity, there are three

areas that they must learn, computer literacy, you have to become computer

literate.

How many in this room tonight I wonder are computer

literate, that is not to say turn the mouse on and punch it and get a few graphs

up and a game of golf, I can do that, but how many are computer literate,

prepared for the real world out there because that is what is happening. You

should see them in Grades V and VI; Gerald you have seen them in your school, it

is just amazing to see these little kids go rabid on these machines; they are

breaking their minds into the new economy and they do not even realize it.

Secondly, we have to understand and learn how to

transmit information and receive it. How many of us around here know how to use

a phone modem to get information from Infaglobe, pulling it down off a satellite

anywhere around the world; how many can send a fax? I cannot, how many in this

room can send a fax? I swore on that fax machine yesterday about 20,000 times

but I know how to do it now and the other one is basic use of numbers. I do not

know what we are doing wrong, maybe it is because we have sent the calculators

too quickly to the classrooms at kindergarten and wherever, but young people are

not learning to use basic numbers. Computer literacy, sending and receiving

information and working with basic numbers. That's what she says will create the

new opportunities.

There's something else we've got to do too. We've

got to get out of this mind-set that we send our youngsters to school to get a

job. That day is gone, it's over. We see what's happening in Japan, in Germany,

and parts of Europe. They're sending them to school to get the tools to create a

job. They're sending them into the schools to create a job. Not to make one. Not

to get one. Not to depend on somebody else. But to learn independence to go do

it yourself.

You'd be interested in this. We're helping

companies in the Canadian space industry. Space station Freedom. We met in the

Washington Embassy with the Ambassador last year, twenty or thirty of our

companies. We managed to hook into some small contracts. The group at the

University just did -

AN HON. MEMBER: C-Core.

MR. FUREY: C-Core, yes, just pulled down a

$500,000 job. As they start linking and learning and picking up subcontracts we

can build on that as well. But you're quite right when you say that there has to

be a stripping down of barriers and a razing of walls and starting to find that

synergy to work together so that we can all pull this team forward.

DR. HULAN: I was interested in your comment

about the 610 companies. You're right. Most Newfoundland people don't know how

much is manufactured in this Province. I've been doing some work with that group

of people over the last number of years and they just put on a great display

here. What they have done is identified something here in the Province and gone

with it and developed a great organization and encouraged a lot of

manufacturers. I'm just making a comment now, Mr. Chairman. I see the same thing

needed in the other great industry that's not even touched in this Province,

really, and that is the agri-food industry. Until they do what the manufacturers

have done it's always going to be where it is.

Anyhow. You mentioned information industries. What

are we going to do, Mr. Minister, about the proliferation of networking around

the world? Networking is great, but it's - everybody and everything is

networking today. It's almost getting to the point that it's no longer an

interesting novelty any longer. There's a lot of networking out there that isn't

of any value. How do we sift out the wheat from the chaff as far as networking

is concerned?

MR. FUREY: Boy, I tell you, that's almost as

easy as winning the lottery, that question. That's a tough one. I don't know

what the answer to that is.

AN HON. MEMBER: (Inaudible).

MR. FUREY: Yes, fourteen million to one. That's

a tough question, Dr. Hulan. Networking is extremely important.

DR. HULAN: Yes.

MR. FUREY: We tend to - I did, as an Opposition

member, tended to slam the government when there were missions moving around the

world and stuff. Funny old thing, though, you know, when you get involved in it

yourself and you see what's happening, and you start seeing some of the good

things that are happening, you start feeling a little bit guilty. Not too

guilty. A little bit guilty for some of the things that you said back in your

old form.

Let me give you just a small example. When I was in

Houston last year I spoke at a press conference about Hibernia. There were some

fifty international media there. I was struggling to put the best face on

Hibernia that I could. This fellow came up to me after, he was from New Orleans,

and he said: I believe what you said, I believe that you're going to find a

partner, I believe that Hibernia is going to go ahead, and under difficult

circumstances you did well. Then I discovered that this fellow had been talking

to one of our companies. It was a diving company.

The company is called Pro Dive. I don't think it's

any problem to talk about the company. The president of that company, he's just

a little dynamo of energy, this fellow, David Squires. David said: Minister,

we're just arranging networking here to pull together a joint venture. This is a

year and half ago. Would you on your way back from Texas drop in to New Orleans

and meet the president of this company? I'm not a great traveller but he

convinced me to do this little leap. It's not far from Houston.

I went in and we spent the day in the boardroom

talking to Sub Sea International. It's one of the largest companies in the world

dealing with remote underwater equipment. They did their joint venture. I

thought to myself: this is great for that company but what's it do for

Newfoundland? What I hung my hat on was that the technology that's garnered by

this huge company can be bridged in some small way into this little company in

St. John's so that it can compete in the domestic market, and its skills and the

new technologies, it can be right up to par on everything.

Never in my wildest dreams did I think that this

little company using that networking to joint venture with Sub Sea would get a

contract. I thought Sub Sea would be in here chasing Hibernia contracts, using

our people, transferring technology. Two weeks ago this little company in St.

John's landed a $1 million contract through Sub Sea in New Orleans, its joint

venture partner, to send twelve Newfoundlanders into the Gulf of Mexico for a

year.

I think what you're asking me is: how much

networking is a waste of time, and how much (inaudible) -

DR. HULAN: That's right.

MR. FUREY: Lots of is -

DR. HULAN: It's becoming a problem, that's the

reason I was raising it.

MR. FUREY: To be honest, lots of it is a waste

of time.

DR. HULAN: But some of it is -

MR. FUREY: It's -

DR. HULAN: - (inaudible) fantastic.

MR. FUREY: Yes. It's the golden moment where it

just, the magic happens. I've seen it happen quite a bit.

DR. HULAN: One last little question, Mr.

Chairman, a very quick one. You mention adventure tourism, of which I'm very in

favour of. How much emphasis is being put, right now, and in the immediate

future, on four season tourism?

MR. FUREY: I can't speak for the Minister of

Tourism, but I can tell you from my knowledge of when I was Minister of Tourism,

there is quite a bit of emphasis being put on it. The areas of the Province that

I think about - the Strategic Economic Plan isolates the West Coast. Not because

the West Coast is any more beautiful than the magnificent -

DR. HULAN: Now watch it there.

MR. FUREY: - Cape St. Mary's bird sanctuary, or

any of that, but see we have a head start out there in that we have two UNESCO

World Heritage sites at the Tablelands, at Gros Morne National Park, through its

geological tectonic plate theory. That in itself has created a World Heritage

Site. Then the north, at L'Anse aux Meadows, where the Vikings first landed

1,000 years ago.

There's a new one coming up over at Red Bay.

UNESCO, which is, as you know, a part of the United Nations, is just about ready

to move very soon on creating a World Heritage Site at the Basque whaling site

at Red Bay, which was the first manufacturing plant in North America. Where they

rendered the whale blubber into oil. That oil was transported in barrels,

manufactured the barrels right there, and exported to light the kerosene lamps

of Europe.

Marble Mountain, the winter season; Gros Morne, the

spring and summer season, for walking trails and through the Park; L'Anse aux

Meadows, Red Bay. It's all interconnected and there's a strategy being put in

place now to increase the sports fishing on the Humber River. There's talk of a

new golf course, a major golf course complex across the river. Then there's the

winter product. There are a number of private operators looking to develop the

base of the mountain with major hotels and ski chalets and this kind of thing.

In that sense we're moving forward.

That's not to take from the East Coast. I represent

the West Coast too, but one of my slices of heaven, I'll tell you, is at Cape

St. Mary's bird sanctuary. It's as close to heaven as you can come, I think. But

I can't speak for the Minister of Tourism, but personally -

DR. HULAN: No, but you mentioned it in

connection with the ERC.

MR. FUREY: They've done some great work on it.

Cathy, I don't know if you want to pitch in there and say anything, do you?

MS. DUKE: No, I think that you're (inaudible) -

MR. FUREY: Or have I lied enough?

MS. DUKE: - comments are fair, I think.

Certainly (inaudible) a great deal of work went into developing the strategy.

There was quite a bit of consultation with industry people during that process,

and certainly after the release of the strategies, the implementation was then

handed over to the Department of Tourism and Culture.

MR. FUREY: There are some terrific things going

on there, you know.

MR. CHAIRMAN: For the benefit of Hansard, that

was Cathy Duke -

MS. DUKE: Oh, I'm sorry.

MR. CHAIRMAN: - (inaudible).

MR. FUREY: I was just going to say, there are

some really neat things coming out of this ERC work too, you know. I'd never

seen it before, but there are two companies operating in my own district right

now, sea kayaking and they are just going crazy with it. These guided walks

through the park for photo journalism and bird watching, and all that kind of

stuff is just going gangbusters. The new discovery centre which Cabinet approved

this morning, an $8.3 million geological discovery centre which will be built on

the south side of Bonne Bay in the Woody Point area will draw scientists from

all over the world to come in and explore and study. These are great jobs that

will be happening in that area, so things are looking up in that sector. That is

one of the reasons why we pulled that out of development, to let it have its own

legs and run as fast as it can on its own. There is another project in Gros

Morne and I talked to the proponents this morning, a green wilderness group that

are looking to put a first class restaurant and chalet in Gros Morne to cater to

the German and European market. The price would be $300 a night, that kind of

thing, with spas, saunas, and all that good stuff. It just happens to be in my

district. I cannot handle it. It is terrible.

MR. CHAIRMAN: The Chair must make a comment at

this stage. The Chair also agrees with one of the comments that was made

earlier, that the minister's department is probably one of the most exciting

ministries in the entire administration, and I can appreciate the minister's

enthusiasm, but I would ask if he would be so kind as to limit his remarks to

the answer to the questions that are being asked as opposed to making speeches.

MR. FUREY: Could I just responded to that?

MR. CHAIRMAN: No, Mr. Minister, you cannot.

Mr. Shelley.

MR. SHELLEY: (Inaudible) not being a business

person - and now a member being contacted by people about ideas, and these

people get these crazy ideas about business and you want to tell them where to

go and what to do, but I have a couple of general questions that I am interested

in personally and then I have a couple of specific questions so I will try to

keep them as brief as I can. First of all, I just wanted to see if you could

give me a brief update on the rural development agreement, the

federal/provincial one. I am not sure about the funding, how it is going, and

basically to know just where it is at right now.

MR. FUREY: Do you want me to deal with that

right now?

MR. SHELLEY: Yes, I will just ask that one.

MR. CHAIRMAN: This is the way the Chair would

prefer it, that we go back and forth. It is much easier to maintain some kind of

control.

MR. FUREY: That is a good question. That

agreement, as you know, was signed in the spring of 1989, I think, or the summer

of 1989. It is a $30 million agreement, as you know. There are fifty-seven

associations and we basically provide administrative funding and then there is

the community block fund for drawing on for grants for various projects. The

agreement will expire March 1994 and you may well see an amendment brought

forward by the government, or will seek an amendment for a one or two year

period. The reason why I say that is because if you look at the Strategic

Economic Plan it provides for breaking the Province into seventeen zones. Now,

what is that going to look like? What will it mean, and how will it fit into the

bigger scheme of things? We do not know yet. It is starting to evolve. There

have been discussions and consultations, so we may need that little buffer

period of a year or two, I would think, three years on the outside, to see how

that is going to evolve, because one of the great criticisms I get as minister

is that we are over administered. There is too much money going into

administration and not enough hitting the heart of the problem, and when you

think about it it is not really an unfair criticism.

In my own area of the Province on the Northern

Peninsula there are six development associations. They are doing good work but

there is also the Womens' Enterprise Bureau, two Enterprise Newfoundland

offices, three community futures, two business development centres, two economic

development offices, ACOA, you know, after a while you start bumping into these

people -

MR. SHELLEY: Complications (inaudible).

MR. FUREY: - too often and you say - pardon?

MR. SHELLEY: Those are the complications I'm

talking about.

MR. FUREY: Those are the complications. So when

you become over-administered, and when all of your dollars are going into

administration, it really gets pretty frustrating for people who are looking for

meaningful things.

The reality is, perhaps we should be collapsing all

of this into these so-called zones, and giving a one-stop shop for the benefit

of the local people. I don't know. It's a bit too early to say that. You also

have to recognize that historically the development associations have played

quite a significant and good role in our Province. They've just issued, as you

know, a twenty-five year catalogue of everything that they've done. You go

through it. It's not all graveyards and ice cream projects. There are some

fantastic stuff there too.

Woody Point in my own area, I'll give you an

example. They built a little fish plant for herring, mackerel and caplin.

Underutilized species. They set it up, they sought out an operator, they got one

there. The guy's been there for six years now. He's going to buy the plant this

year. There are 140 people working there. That was the good efforts of the

development association on the south side of Bonne Bay where nothing was

cooking. There was nothing happening.

That agreement - this is my own view - it's not

government policy, but it would be my intention to try to move forward with Mr.

Crosbie to seek an amendment for two years to give us an opportunity to flesh

out these economic zones and to have public consultation and to almost take down

some of this administrative structure that's there so that it's more flexible.

MR. SHELLEY: That's why I made the comment in

the beginning actually about your department. First going through that. I can

tell you, locally - I don't know how the other districts feel - but you go in,

there's a development association, then there's a community futures, then

there's the economic development something else, and you're trying to match them

all together. People are confused, is my point. I've talked to people: where

should I go this time, who shall I talk to? Then there's ACOA and ENL and the

Economic Recovery Commission.

I'd agree with you, that there's got to be some

breakdown there so there's a little simpler process for the people who are not

used to it. As a matter of fact, I know people who had ideas and started to go

through the red tape and said: my God, I've got to get out of here, I just don't

know what's happening. They got lost in the shuffle. I'm sure that you've come

across that situation.

Like I told you I wanted basically some examples. I

picked out a couple here just so I could run them together. In 23.02, I started

to look through that and -

MR. CHAIRMAN: What page are you on?

MR. SHELLEY: Page 162. 23.02, Strategic

Supplier Development.

MR. CHAIRMAN: That would be 2.3.02.

MR. SHELLEY: Sorry, yes, 2.3.02. Page 162.

MR. CHAIRMAN: That's subhead two decimal three

decimal zero two on page 162.

MR. FUREY: Yes, sorry, go ahead.

MR. SHELLEY: Basically I was just trying to

understand it, I guess, so I'm just looking for clarification or an explanation.

In that particular one, then I'll relate it to your 2.3.01 above, but basically

the money allotted there is for salaries. I'm just wondering what those people

are doing there?

MR. FUREY: That's a new division, I can tell

the hon. member. Strategic Supplier Development, what they do is go out and tell

companies - well, let me give you a couple of examples.

They got a bunch of Newfoundland companies to

what's called a reverse trade show in Moncton a little while ago. What happened

was all these companies set up in Moncton in a stadium. I believe it was at the

Moncton - whatever the arena is called. Nova Scotia Power, Abitibi-Price, all of

the big hitters in Atlantic Canada. Allowed all these small companies to go in.

Instead of the companies going to a trade show to buy something, it was quite

the reverse. They went to learn what it was that Abitibi was buying. What it was

that Newfoundland Power was buying. What it was that Nova Scotia Power was

buying, and hydro, and on and on. Right down to the thumbtacks and the paper

clips, to see whether they could get in on some of the bidding and providing

some of these.

That's only one little part of it. These fellows in

this division also monitor federal contracts. They monitor defence spending. For

example, the latest round of spending dollars in the last two years show that

there is going to be a substantial amount of money spent in Canada on the

maritime coastal vessel program. They have prepared an absolutely superb piece

of research with the help of a retired admiral in Ottawa to seek three of these

to be stationed here in St. John's. The report and presentation has already gone

to the federal ministers seeking that participation here in St. John's and a

team from there was very much involved in that. They also help set up the trade

shows, the various trade shows, they are involved in the supplier development

forums. We just finished one at the Cabot College where small companies in St.

John's could go into the Cabot College and say to them: now you spent $20

million last year, how did you spend it? Where did you spend it and how can we

get in on it? So, they opened doors that way.

Some of the companies they have helped; the

Newfoundland Tea Company, Sunnyland Juice and people like that, getting their

products into the local domestic market and getting them known. They have also

helped people in other areas, not just in the domestic market. You are familiar

with Heritage Woodworks out of Eastport? They just landed a contract to supply

products into Japan, right out of Eastport into Japan, into Tokyo. So, they are

helping companies find new niches, new markets through these kinds of reverse

trade shows, through procurement, through government agencies and large

companies that do business in the Province.

MR. SHELLEY: Okay, that is better. That is what

it is, the identification part of it basically.

MR. FUREY: Yes, it is hard to know, is it not?

MR. SHELLEY: Yes, it is just from looking at

it. Okay, 3.3.01, the Economic Recovery Commission, page 169, just an

explanation again about numbers because I am still confused about - in relation

to the - I was a little clear when you asked a question on policy and basically

the Recovery Commission but then it says two small things in this, just for

explanation, Grants and Subsidies, how is it dispensed, to whom and how is it

used? What is that for, Grants and Subsidies?

MR. FUREY: Oh yes, what that is, is a block

fund which they are given for operating the entire Economic Recovery Commission.

So, we have to put it under a subhead, that is right, it is the salaries, it is

the employees, it is the contracts. I guess they have about fifteen to twenty

people there now? Fifteen full time and five on contracts, something like that?

MS. FRENCH: Yes, that is right.

MR. FUREY: So, that would look after salaries,

benefits, travel. But the way it is done through government systems is that it

has to come through a line department. So it sits in my department, we grant the

money over to them, they tell us how they are spending it, we report back

through treasury board -

MR. SHELLEY: Basically, that is administrative

costs, right?

MR. FUREY: Absolutely.

MR. SHELLEY: I just want to ask one specific

thing, it is only short but I will just bring it up, I thought those were

provincial things which I brought up but I have to mention something of my

district. You talked about new things, actually I was on the committee as you

are probably aware, but for many years I didn't live on the Baie Verte Peninsula

and I went back there four years ago. I have always said that when they put the

hill in Clarenville, this is my own bias feeling for it and I am sure the

members feel differently, but we are in a much better position for a ski jump

than Clarenville just simply because of common sense as far as weather and

terrain. We have a mountain there, we have weather for it, we have the perfect

winter. We have the snow before Corner Brook, it stays longer than - winter is

winter there, not fog and rain, it is winter. The snow is on the ground much

longer than -

AN HON. MEMBER: (Inaudible).

MR. SHELLEY: Yes, that is what it was but it is

winter, it is a real winter. In any event, the truth is, I mean if you look at

the climatic maps and everything else, it is a perfect location for a ski hill.

MR. FUREY: And you are not prejudice at all are

you?

MR. SHELLEY: No, but it always has been. You

know that it is ongoing now that we are trying to get a ski lift off the ground

and it is not in any way a competition for Marble Mountain, it was never meant

to be. What it is, is basically an introduction to skiing for the people in the

area because it is one of the fastest growing winter sports in North America.

Anyway how do you see that moving so far?

MR. FUREY: I spoke to the Chamber of Commerce

there, I do not know if you know that, three or four months ago -

MR. SHELLEY: I missed it.

MR. FUREY: You missed it?

MR. SHELLEY: I was out of town when you were

there but I would have liked to hear what you -

MR. FUREY: Three or four months ago I spoke and

afterwards actually I met with the group, the lady who runs the hotel there -

MR. SHELLEY: (Inaudible).

MR. FUREY: Yes and a group. I think I was the

minister who gave them some seed money last year -

MR. SHELLEY: Yes you did.

MR. FUREY: - some $5,000.

MR. SHELLEY: Yes, you did.

MR. FUREY: I gave them $5,000 this year too,

didn't I?

MR. SHELLEY: Yes, that is right.

MR. FUREY: I have not issued the cheque yet.

MR. SHELLEY: You have not? That is why I

brought it up; I am the vice-chairman of the committee by the way.

MR. FUREY: Actually no. I was really impressed.

I must say, I was really, really, really impressed with the work they are doing

and in fact, is it not a shareholder's arrangement now, where you join up -

MR. SHELLEY: It is a co-operative basically,

where the whole peninsula (inaudible).

MR. FUREY: - and you pay so much to get in. I

can only tell you that I am very supportive of it; I do not see it as

competition for Marble, I see it enhancing Marble. There is no question about

that and you are quite right, the climatic conditions are absolutely bang on. I

do not know where it is right now but I know that there was an awfully energetic

group with whom I met and they were ready to rock and roll on this thing. They

were going to approach ACOA and the feasibility study was done -

MR. SHELLEY: It is ongoing now.

MR. FUREY: Yes. Maybe you can tell the group

here where we are on that now.

MR. SHELLEY: Well, basically we went through

the second phase of the feasibility. The physical structure and the mountain is

mapped out for a double chair lift to the top with seven runs coming down and it

has all worked out well because now they are even looking at - you saw the

scenery. Basically there is a river at the bottom of the hill right into the bay

where planes can come in. The other guy went on to say a golf course would look

really good at the bottom of the ski belt.

MR. FUREY: Well you tell them that their grant

is still there. It was a small grant but it is still there.

MR. SHELLEY: A small grant but it certainly

helps in the early stages of this type of thing.

MR. FUREY: You miss my little innuendo there.

It was a small grant but it is still there.

MR. SHELLEY: I got it, I got it. Thank you very

much.

MR. FUREY: But I tell you, look, take a message

back from me that I am very supportive of that and anything we can do, I will be

most happy to do it.

MR. SHELLEY: Yes, thank you.

MR. CHAIRMAN: The Chair would like to stick to

the acknowledged procedure of the Committee asking the minister questions as

opposed to the minister asking questions of the Committee members. The Chair

would also like to comment to Mr. Shelly, when you stated that the minister was

at a meeting in your district and you did not attend, but you would like to know

what he said, you were setting yourself up for about a two-hour answer.

AN HON. MEMBER: That is just want a recap.

MR. CHAIRMAN: Mr. Langdon.

MR. LANGDON: I agree with the minister. I think

there is a need to look at the development associations all across the Province.

Some of them like Gerald's no doubt have done tremendous work, but when I look

at my area, there is a small population of around probably 8,000 to 10,000 and

we have three development associations.

I heard the comment the other day where, one of the

boys said his main job is to go around the other stores and see what the prices

are in relation to what he has in his own. I am sure they probably were not

serious when they said that but I think in many of the associations the people

who are there, the people who run it probably do not have the expertise that is

needed to go out and do the work to attract business and so on. I think a lot of

times they compete with councils and they see their jobs as getting ten weeks

work for somebody, for a student or projects of this nature. That is not to cast

doubt on many of the good things that have been done, but I think it is

top-heavy in its administration and I know that in my area as I said, one could

take the place of four, so I think that makes a lot of sense and in the long run

would pay dividends.

The other point I want to make as far as new

industry is concerned, is on the Connaigre Peninsula with the dimensional stone

that we have, granite, lots of it. Someone the other day asked how much do we

have and one of the proposed developers said that if Christ did not come back

for another million years, there would still be lots. So we have no shortage of

product to say the least, but one of the things that bothers me about it - and I

just want to get your comment afterwards - I think that the stone, from what I

understand is going to be taken from its site on the Connaigre Peninsula in

large blocks, three feet by three feet or meter by meter whatever, and then it

would go back to Buchans where you would have a manufacturing plant or whatever

and then they would slab it and put it in its form for market and then probably

would have to bring it back either to Botwood or to the South Coast for

shipping; that does not make a whole lot of sense to me. On the South Coast, the

Minister of Mines and Energy said what we have is better than gold.

Those were his comments to the association there.

With the vast amounts of stone, and with the two trade shows that were into

Florida about a month ago the Japs were basically saying: where can we send our

ships to get it? I really think that within the next few years it is going to be

an upcoming industry and it is going to provide hundreds of jobs for the

Connaigre Peninsula and probably diversification even from the fishery. From

your own department how do you perceive that, from having it done on the South

Coast rather than having the rock trucked from the South Coast to Buchans, which

is roughly 350 or 400 kilometres, and back to the Coast after it has been

processed for shipping again?

MR. FUREY: Mr. Chairman, I am sort of

mesmerized as to why people would do that. I do not see the economics because

the transportation costs must be just enormous.

AN HON. MEMBER: The manufacturer moved from

Springdale to Buchans and that is where the manufacturer of the stone products

is located in the Province.

MR. LANGDON: Then they were going to bring it

from Lumsden to Buchans, from Deer Lake to Buchans, and from the South Coast to

Buchans. To me it is not good economic sense.

MR. FUREY: You are right when you say there is

a lot of economic opportunity there. That is why ENL helped to form up the

Newfoundland and Labrador Dimensional Stone Association and held those

conferences and stuff. I met with some of the Europeans, particularly the

Italians, but I have always found that their attitude is - at least it has been

my experience, limited as it is, but my experience has been that they want to

come in and lease up the mountain and move large chunks of it, and not

value-add, just take it in the raw, and I think that is wrong. We had that

experience up at Roddickton in the Main Brook area on the Northern Peninsula.

There is a beautiful marble find up there, just gorgeous marble, but the

proponents just want to come in and slice it up, as you say, and export it.

Surely, we must be able to do more with it than that. I hear from the cross fire

here that the manufacturer has moved his operations to Buchans.

MR. HEWLETT: Well, the virginite from the Baie

Verte Peninsula was running low and the operation that was set up in Springdale

producing the finished product moved into Buchans, I think, probably taking

advantage of some of the monies that were made available to Buchans with the

closedown of the mine and so on.

MR. FUREY: Are the economics there to move

large quantities of rock?

MR. HEWLETT: They had a display at the

manufacturers show with all kinds of rock from Buchans.

MR. FUREY: I saw that. I cannot answer the

question because I just do not know. I know what you are getting at, it is an

inherent unfairness to take the resource right out of the area and leave very

little in its wake in terms of economic opportunity for people.

MR. LANGDON: As regards adventure tourism you

have gone no doubt along the South Coast and it is different than any other part

of Newfoundland, the Bay d'Espoir area with the fiords almost like you would

find in Norway, and we have the Bay du Nord wilderness area there. In fact I

flew over that about a month ago with the Minister of Education when we went to

area, on the South Coast, up the Grey River, Francois, and so on. In my opinion

it has never been promoted the way that it should and I think it has as much

potential as anywhere else in the Province. I am amazed that people in a

department and people around say, I have never gone to the South Coast, it is

the last place we would go to visit. I think it has tremendous potential for

tourism and you will probably see a proposal in the near future from a person

who wants to take tourists, not to St. Pierre, but to Miquelon because the

Connaigre Peninsula is only about twenty-three miles from Miquelon. We will

probably get a chance later on to see that it is different from St. Pierre. In

Miquelon it is outport life and there are about 500 or 600 people there. I think

it has tremendous potential and there is nobody involved in doing that right

now. Again, it would generate jobs and it would generate development for that

particular area which has been so hard-pressed over the years. I think it would

change the face of that part of the South Coast forever.

MR. FUREY: I can only agree with you but I

caution you that it cannot happen from the top down.

MR. LANGDON: I know that.

MR. FUREY: It has to happen from the grass

roots up. I have had a close up experience with that one, the Viking Trail,

which is moving along at a beautiful pace but I tell you, getting people to

cooperate and agree in seventy-five communities stretched along 400 kilometres

of coastline is a pretty amazing thing to watch, to try to orchestrate. So it

has to be nurtured from the grass roots up and once it happens, it is pretty

extraordinary.

MR. LANGDON: And this is my point - you have

four development associations within that radius and everyone is trying to grab

onto it and there is competition among themselves rather than for the area. What

is good for Harbour Breton is good for Gaultois or whatever the case may be. So,

we are working toward it because I think -

MR. FUREY: There is a parochial view of life -

MR. LANGDON: That is right.

MR. FUREY: But you know in your earlier comment

about the three development associations do not - we can sometimes get carried

away a little bit and I tend to some times too, our criticisms of these

associations, bear in mind that they only get $36,000, that is it.

MR. LANGDON: Oh, yes. It was not a criticism.

The (inaudible) Development Association, as you know, got $100,000 from the

Department of Industry, Trade and Technology - Development at that time - and

they have attracted in a credit union and a craft shop. It is a real credit to

the association, things are happening there.

MR. FUREY: When I was Tourism Minister I used

to get letters from around the world saying: your people are wonderful, your

landscapes and seascapes are gorgeous, your weather, well that is not so great,

but we could not buy anything, that was the biggest complaint that I got. We are

tired of seeing little lobster pots with `made in Taiwan' on the back of them.

You know seriously they were funny but it is not so funny when you think about

it. I guess your comment is well taken, I understand what you are saying and I

agree there is a magnificent potential down there too but it is not so

(inaudible).

MR. LANGDON: We have one more of which Cathy is

familiar with and that is a bio-digester so I think there is something to come

with that as well later on.

MR. HEWLETT: (Inaudible).

MR. FUREY: You guys have to stop throwing

around these fancy words like artificial insemination, cross - fertilization and

all of this stuff. I thought we were talking about information technology. Yes,

you are right, that was one of the mandates of the old Department of Career

Development. They did not quite get it right, so we are going to get it right

now.

MR. HEWLETT: (Inaudible) cross-fertilization is

not taking place so I will keep working on it.

MR. FUREY: Actually that was a very good

department, I should not sound facetious, Career Development did some good work,

no question about that.

MR. HEWLETT: One other quick point, you

mentioned initially the creation of an image of instant economic recovery, would

it not also be a fair comment to make, Mr. Minister, that politically speaking

at that particular time, that was probably advantageous to your party?

MR. FUREY: Well, if you want me to get into a

dissertation on the political ups and downs of it, I do not think that was

really the intent when the Premier announced it, to give us a quick political

fix. Certainly people were reaching for some answers, there is no doubt about

that. Anybody that tells you that politicians have all the answers or any

politicians that tell you that, especially, are not telling you the truth. There

are no easy answers. We assembled a magnificent team of men and women who form

the Economic Recovery Commission, who, as far as we know, have no particular

politics, slant or leanings. They are a group that has performed for all members

of the House of Assembly. I get calls back from all members and former members,

in all parties, who are very happy with some of the things that the Economic

Recovery Commission have done in their particular districts.

I suppose we banter back and forth, whether it's

cucumbers or whatever happens to be on the go that particular day, and we get

flying in our high rhetoric and beat things around and sometimes beat them to

death. I suppose they became an easy target early in the game, politically, and

they were not prepared in the initial go-around to go out and bang on the drum

and beat their cymbals about the work they were doing, because it was intensive

hard studied work that was to prepare plans for certain sectors and get on with

it.

They actually moved ahead despite the political

commentary from all circles. I can only give them credit. But it was never meant

to be set up to be a political easy out for the government It was never set up

to be an easy quick fix or band-aid solution. It was set up to look at, as I

said earlier, the real structural problems in our economy, and to try to find

ways to fire up this economy. It's not going to be an easy task and it has not

been an easy task for them. Or for anybody who takes on that burden.

MR. HEWLETT: I think, Mr. Minister, you just

described the mandate of the House Royal Commission. If I might use the

minister's phrase and focus laser-like on a particular matter, and that's

vis--vis Triton Airlines. I understand they were into ENL in the order of

$750,000. I also understand the dispersement of that money was to be in two

segments. One, $350,000 to be dispersed temporarily on the strength of a

promissory note and certain guarantees as required, with certain other

undertakings to be provided later so as to get the advancement of the remaining

$400,000.

The question that I tried to put to the Premier the

other day which he really didn't answer, he sidestepped and said my question was

tripe -

MR. FUREY: Utter tripe, I thought (inaudible).

MR. HEWLETT: Utter tripe, I do believe, yes.

But then again he generally says that of most things that I say.

SOME HON. MEMBERS: (Inaudible)!

MR. HEWLETT: The proponents in this particular

case insist to me, by telephone, and I do believe their legal counsel have or

are going to insist to Enterprise Newfoundland, that they had met the

requirements for the initial dispersement of $350,000, and when they showed up

with their requirements they had another requirement relating to liquid assets

thrown into their lap, and this is what's caused the system to clog up somewhat

and the company to not draw down on the offer of assistance. I'm wondering if

you'd make a brief comment on that.

MR. FUREY: Yes. I'll ask Mr. Janes to speak to

the actual details, because the president himself was involved. Don't anybody in

this room think for a minute that we weren't there to help this company. Don't

anybody get their backs up and think that Enterprise wasn't there to help. We

were there to help. There were time restrictions put on us. We had to act fast

and we had to balance that with protecting the taxpayers dollars. But we wanted

to help them. That was the initial go-around.

Let me tell you in this room too. I've taken a lot

of phone calls and a lot of heat from the business community because we

authorized this. I think it was the right thing to do. I don't think it affected

the competitive balance of what's happening out there. I think we have to be

earnest and honest enough to say: let's help these people, they're

Newfoundlanders, they're trying hard, and they put their own dollars where their

mouths were. So in that sense we were quick to react. We put the money on the

table but we had to also protect the taxpayer and make sure that the Auditor

General wasn't screaming at us.

As to the actual loan, you're quite correct. It was

had to come up with certain things. Let me caution the member on this, Mr.

Chairman. I don't think we should be negotiating in public that which ought to

be negotiated in private. It's not fair to the company, it's not fair to the

taxpayer. But I'll allow the president to say what he can say without

negotiating in public. I don't think that's fair or right.

MR. JANES: Jim Janes, Enterprise Corporation.

Mr. Hewlett, the information that you've stated is reasonably accurate. Indeed,

the Enterprise Corporation made the offer. It has been accepted. There was a

need by the company to obtain funds in a very quick manner in order to deal with

the accessing of an aircraft to start their business. If one has the

opportunity, or the offer is available to them to study, it is very clear that

the Enterprise Corporation required certain items of security to complete the

transaction. There is never any doubt about that.

In addition, the security to be provided was to be

provided in a manner satisfactory to the sole discretion of the Enterprise

Corporation, and there is never to be any doubt about that. We have no quarrel

whatsoever with the facts that are presented, that there was a two-staged

allocation or advancement of these funds. I guess it is fair to say that a

company like Triton, which is basically fighting to keep their business going,

would perhaps have a very different perception of how this funding might take

place, particularly as it is very important to their ongoing start up of the

operations of Triton Airlines.

However, we differ with the principals as to their

perception, and will maintain that position. It's very clear in the letter of

offer as to what the position of ENL is. We stand by that.

MR. HEWLETT: You're saying even though the

company per se is indicating that an additional condition was put on the initial

dispersement, under your

interpretation of the agreement you had the discretion

to put such a condition on, assuming that's the case.

MR. JANES: We at the board of Enterprise

approved a deal that required certain items of security to be provided. Full

covering security, liquid security. It was really no more than an arrangement

that would see the principals of Triton use their own security to access funds

from the Enterprise Corporation in a manner timely enough to permit that airline

to get going. The type of security, the amount of security to be obtained was at

the sole discretion of the Enterprise Corporation. There should never be any

doubt about that.

MR. HEWLETT: Okay, sir. I thank you for that

phrase, "sole discretion." One comment, and maybe a quick reaction from the

minister. I had a look at the manufacturers' show that was on the go there on

the past weekend. There were a lot of companies there with some very impressive

hi-tech gadgetry and so on. I realize the direction that we have to go as a

people and I suppose as a world, in order to keep our standard of living alive,

and so on and so forth. This question may be too general for you, Mr. Minister.

The one impression that I had was that even though there were a great number of

companies present, they were not, how shall I say, labour intensive companies,

certainly not as yet. Apart from your Newfoundland Margarine companies that have

been around for a long, long time.

While it is obviously very much a step in the right

direction it does very little to solve a growing unemployment problem in the

short to medium term. I guess the Department of Development you had might have

had a broader mandate, but does your own Department of Industry, Trade and

Technology have a mandate that would have, as part of it, large numbers of jobs

- not only a diversification into higher tech and so on and so forth, but a

mandate to do something to take care of the literally thousands of people who

are now unemployed and thousands more who are going to be landing on your

doorstep once this federal fish package runs out?

MR. FUREY: That sure is a general question. It

is quite broad stroked, broad brushed. This is the first time in history that a

department has ever had an actual division of manufacturing. This is the first

time ever, so we really have focused on that sector. We see it as a growth

sector.

The companies that are here we are trying to

enhance quality so they can export, and we are also trying to displace imports.

One of the areas - you noticed Superior Gloves, did you, the other day, from

Point Leamington?

MR. HEWLETT: Yes I did.

MR. FUREY: Just terrific products; the quality

was superb, and they are selling quite a bit in the local markets but they are

also exporting. You turned the corner at the show and you ran into Brookfield

Ice Cream. The fellow on the desk there at the show was telling me that they had

just received another order for six tractor trailer loads into the Ontario

marketplace. Do you know they supply ice cream in the SkyDome - Brookfield Ice

Cream? A lot of people do not know that.

MR. HEWLETT: Terra Nova Shoes provide work

boots and military boots to a good part of North America.

MR. FUREY: That is right, and they have this

really lovely boot called the Wild Sider - probably developed on George Street -

that they are marketing in Europe now, and it is just going over gangbusters -

manufactured out here in Harbour Grace.

Bell & Howell, the manufacturer, just latched onto

a contract to do the woodwork and cabinet making for a hospital in Cape Breton.

So it is getting the quality up, getting the name, and not being afraid or

ashamed, but daring to go into the other market places and say we are as good or

better and we can meet the price and meet the quality.

MR. HEWLETT: One quick follow-up, Mr. Chairman,

and I will pass.

I noticed in a display, I think maybe by your

department or one of the government's departments, there was a reference, a

photograph actually, in a display, Superior Logging, Springdale. That plant

seems like a good idea, but it seems to have stalled in infancy. Part of it, in

my questioning you in years past, had to do with marketing, but I have also been

told informally that one of the problems that company is having is quite

literally obtaining wood in terms of birch and aspen, which are not used by our

paper companies at all, and I was wondering if you had a comment on that because

I find it passing strange with all of these unemployed people on the go that

people cannot cut birch and aspen to supply that particular company which I am

told could supply markets if it could only get someone to cut birch and aspen.

MR. FUREY: Yes, my mind boggles at that one

too. I am with you on that one. Government has helped substantially that

company. By the way, their products are absolutely superb.

Correct me if I am wrong. Did they not do the

Kilmory - was that Kilmory or was that out of Gander, the same fellow?

MR. HEWLETT: I am not sure.

AN HON. MEMBER: (Inaudible) in Gander.

MR. FUREY: Yes, but they are both equal

products are they not?

AN HON. MEMBER: Yes. (Inaudible).

MR. FUREY: They service the domestic

marketplace, yes. Boy, I will tell you, both of those companies produce -

MR. HEWLETT: I have seen a bunch of their

chalets up in Gros Morne.

MR. FUREY: Oh yes, they are just absolutely

superb work, and they could be exporting their products too but I do not know

what the answer is on the aspen and birch that is being left there.

MR. HEWLETT: Because the paper companies are

not cutting it.

MR. FUREY: I know. They are just -

MR. HEWLETT: It is just standing there in the

woods. We have people walking around going on welfare, and somehow we cannot get

a supply of birch and aspen. You are almost tempted to take your chain saw and a

pickup truck and -

MR. FUREY: Have you talked to the forestry

people about that?

MR. HEWLETT: No I have not, I must say.

MR. FUREY: Maybe if you get a chance you can

get a letter off to Graham and copy me and we will see what we can do about it.

MR. HEWLETT: Very good. That's it, I pass, Mr.

Chairman, thank you.

MR. CHAIRMAN: Before I recognize Mr. Smith, I

would like to remind everybody here that at this time of the evening, we would

normally take a break for about a ten minute recess. When we are in the House of

Assembly, it is convenient so we could go out to the Common Room and get

ourselves a coffee or a tea. I notice everybody has been doing that already here

tonight, and unless I hear an objection from anybody here, I am going to

continue without our recess.

MR. FUREY: I am just going to sneak out to the

bathroom but there is quite an artillery here -

AN HON. MEMBER: Mr. Minister, if you want a

break there is no problem.

MR. FUREY: I will just be a second.

MR. CHAIRMAN: In that case, we will take a one

minute recess.

Recess

MR. CHAIRMAN: Order, please!

Our meeting will now resume and the Chair recognizes

Mr. Smith.

MR. SMITH: Thank you, Mr. Chairman.

Mr. Minister, I may as well ask one of the first

questions tonight to deal directly with the estimates and it will probably be

the only one that I will reference. The very first item, page 157, 1.1.01,

Minister's Office, under Salaries, a reduction from last year of $189,200 to

$173,200, what does that reduction represent?

MR. FUREY: I guess that represents the operating

salary and the overtime (inaudible) -

MR. SMITH: But was not this 4.5 announced after

this document was printed? This document was before the House -

MR. FUREY: Yes, we cut the overtime, Gerald, that

is what that was.

MR. SMITH: So it would not be the 4.5?

MR. FUREY: No, that came after. Sorry.

MR. SMITH: Okay, 2.1.02 -

MR. FUREY: Sorry.

MR. SMITH: - so do you want to add anything

further to that?

MR. FUREY: No, no. That is basically it, just

removed the overtime but it also reflects the 1 per cent and 3 per cent.

MR. SMITH: Okay, 2.1.02, the Marystown Shipyard

Subsidy. I was interested in reading through that because over the years I have

followed the Marystown operation with some interest, and I am aware that it has

had its problems in the past and I am just wondering right now, or maybe you can

just inform this committee as to the present situation of the operation, in

terms of the stability of the operation. I understand there have been some

developments in recent years that have perhaps put it on a fairly sound footing.

MR. FUREY: Yes. The hon. member knows I guess,

that we came very close to selling the Marystown Shipyard a little over a year

ago. We had actually structured a very good deal, close to $21 million for the

assets of both facilities and bringing in a world renowned company and it would

have been their North American headquarters here. We took a portion of the debt

and wrote it down, $14.5 million and the other dollars that would have flowed in

from the sale would have gone against the debt and we would have written off the

balance giving it a zero balance sheet, brand new state of the art assets and a

new company in there.

That fell through but we managed to continue and

struggle along and basically we had a skeleton crew on for a while. A little

over a year ago things started turning a little bit; joint venture arrangements

were finally signed off; quite a number of people went to work there on the

construction of the Cow Head facility. We managed to bring into place a $2.5

million training program to get people up and running.

We landed a couple of contracts, the latest one is a

$4 million barge pontoon contract which is metal fabrication of the underside's

of the GBS which are down there. We are going to be bidding on the skirts, I

guess, as well. The mechanical shaft outfitting, all of the intricate pipe and

metal work that goes in one of the legs. Is it the utility shaft?

MR. KENNEDY: Yes, all four.

MR. FUREY: All four will be bid upon, the bid is

in now. We will know the answer to it, the end of this month?

AN HON. MEMBER: Yes.

MR. FUREY: - the end of this month and if we win

it, it is $110 million and 500 people working over the next four to five years

and very good high paying jobs.

MR. SMITH: So what is the workforce there right

now in terms of what it has been traditionally?

MR. FUREY: The workforce fluctuates. It goes

anywhere from 400 up to - it had a peak at one point, an artificial peak in my

opinion, of 740 but the real core workforce is roughly 450-550. That is the real

- it is less than that today the deputy tells me because a number of our people

were siphoned away to the St. John's shipyard and other areas but I would still

say it is 400 as a core, is it not? Does it even drop below that?

AN HON. MEMBER: (Inaudible).

MR. FUREY: 350, yes. The numbers may have changed

but you are quite right, there are a lot of positive developments down there and

there are some good things happening. It can also turn that state of the art

facility into capturing - you see, everybody when they think about Hibernia,

they think $6 billion on getting ready for the production, the development

phases, but the production phase over the life of that agreement, royalty

arrangement that has been structured, that twenty-five years will flow another

$18 - $19 billion servicing Hibernia. Well, I think Marystown is in a key

position to service a great deal of that maintenance and looking after that kind

of stuff.

MR. SMITH: Thank you, Mr. Minister.

Page 167, 3.2.03, Enterprise Newfoundland and

Labrador; certainly Enterprise Newfoundland and Labrador has come in for a good

deal of attention in the press and the Opposition members have been known to

have taken a few shots at it over the last few months and question the wisdom of

the government in establishing Enterprise Newfoundland and Labrador. Just as a

point of interest, I am not sure if either you or your officials will have this

information ready at hand but I am aware that while ENL is a new entity, there

was a fair amount of restructuring done and that a lot of the people within ENL

were people that came from other departments in government that - the old

Department of Rural Development, a lot of these people are now working, in some

aspects within ENL. I am just curious in terms of the creation of ENL, how many

of the positions were absolutely new positions that were created as opposed to

just a restructuring of various departments and bringing people in from the

other departments?

MR. FUREY: Just off the top of my head, Mr. Smith,

in the old NLDC I believe there were seventy employees transferred over from the

old Department of Development and Tourism. Under the business

section and the

RAND

section there were eighty employees transferred over for 150 and there were

thirty-five new positions created for a total of 185.

You are quite right, ENL came in for some criticism.

Basically, upon the Auditor General's Report of last year which really looked at

its first full year of operation. I think the Auditor General had some

legitimate criticisms. These are criticisms that we accept and that we are

setting about dealing with. The basic criticism was financial controls. This is

being handled now and I can assure you that delinquent accounts and these kinds

of things are being dealt with. Where the unfairness came into the criticism was

when people misinterpreted the numbers on what the Auditor General had to say

about ENL. They did not look behind the numbers to see where the real debt and

delinquency was. For example, under the twenty year life of the old NLDC there

was an accumulated bad debt of $20 million. Well unfortunately, that scarred ENL

because it is the new corporation that had to absorb that. The old Rural

Development Authority which had the low interest loans, three points below

prime, all of those loans that were given out over the twelve or fourteen year

life of that particular system, the $7.5 million was absorbed by ENL. So now you

have $27.5 million that came from the old structures into the new structure. The

reality was that the allowable doubtful accounts under ENL was less than $2.5

million over the two and a half years of operation.

We weren't doing bad, but if you wanted to you could

paint a bad picture of ENL, because you have $20 million, $7.5 million and $2.5

million. Wrap it all together and put it under ENL and it looks bad. But break

it our properly and you'll see that it's over quite a period of time and from

different structures really.

MR. SMITH: Thank you. 3.3.01, the Economic

Recovery Commission. If I might be allowed just a comment here, and certainly I

would invite the minister to respond if he's so inclined.

As I'm sure hon. members are aware, my view with

regards to the ERC certainly differs from a lot of other people, in the sense

that I'm a strong supporter and believer in the ERC and what they've done and

what they've accomplished. I really feel that one of the most positive things

that the Wells government did was to create the Economic Recovery Commission. I

think it's unfortunate that anyone would actually believe that economic recovery

was such a simple process that by setting up a commission of four or five

individuals that suddenly overnight we were going to see a complete recovery in

this Province. I think what it has done, and I think too from my perspective -

and if I look at the allocations for the Economic Recovery Commission, to me

it's a very modest sum, even out of your budget, I must say - like, we've gone

through a number of estimates for other departments, and for your department

generally, I mean overall, in terms of what we're talking about here, economic

development, it's a fairly modest figure in comparison with what we're spending

in areas like education and health.

Not to say that these are not important. But to me -

like, the Economic Recovery Commission has been key in a lot of the things that

have developed over the last four years. In fact, I would suggest, and I would

be interested in hearing your response to it, that indeed the structure and

appearance of this new Ministry that you now head up, Industry, Trade and

Technology, is in large part a result of the kinds of initiatives that this

group have identified and gotten into over the past four years. Because I've

seen the kinds of work the commissioners have been doing and the areas that

they've gone into, and the kinds of things that they've brought into the

Province.

To me just the energy and the blue sky idea, like the

idea of having visionaries. I really welcome that. I mean, to me, like in

government, as in anything, that it's so simple, if you go through life with the

blinders on you and everything is just straight ahead. But you really need to

have somewhere visionaries. People who allow their imaginations to run wild and

really sit down and think and come up with ideas. At some point in time these

have to be transferred to other agencies which then must try to look at the

practicality of these things, to pick out what we can action now or what might

more be a long-term undertaking.

This to me is something that the Economic Recovery

Commission has done and done in an admirable fashion. Indeed, I think the kind

of model that we've set up here in Newfoundland, I think that other provinces

will look at and will want to draw from in terms of planning for their own

economic recovery.

I just wanted to mention that, but I did want to -

because as I say, point out - because I know with the new Ministry that's now in

place, and I really do feel that in large

part it does reflect the kinds of

initiatives that have been sparked by the Economic Recovery Commission.

MR. FUREY: I can only second everything that

you've said, Mr. Smith. The Economic Recovery Commission is essentially two men

and two women and a support team. It's a small group of men and women who, by

the way, work very long hours. A lot of people don't realize it. They're back

after supper. They're on the road dealing with people in Bay d'Espoir, whether

it's a fish farm, or the Northern Peninsula development group about Nortip

logging, or in Nain about the Caribou factory. We don't hear about those flights

and those hours and that time and that energy away from their families. It's

easy to swipe and to take knocks (inaudible).

I can tell you, Dr. House and his team of people are

some of the most diligent, hard-working men and women whom you'll find anywhere

in this Province. They don't get overtime and they don't get special benefits

and they don't get perks. There's no joy in sitting in Air Atlantic on a Sunday

night heading for Hopedale or wherever they go. Within the limits of their

budget they've performed some magnificent feats.

One of the things that they ought to take credit for -

and I suppose, Mr. Smith, one of the areas where they've fallen down, and I keep

harping on it with Dr. House. He and I meet every Monday morning. We have an

hour together. I keep telling him: get out there and tell your story. It's a

good story. Because politicians trying to tell it, we're tainted. Ah, you're

just getting on with propaganda, or you're doing this or you're doing that.

They're not tainted. They're not politicized, they're not a political animal.

They have that independence and arm's length. That's why we give them their

budget and we say: run with it. We'll put the whip to them if we think they're

doing things wrong, but I tell you, they themselves have to communicate the good

things that they're doing.

That's not to say that they're 100 per cent right all

the time. I'll tell you something, they were instrumental in helping us to

achieve twenty-three federal-provincial agreements that brought $550 million

into this Province. Not all of them. Pieces of them. They were instrumental in

the Strategic Investment and Industrial Development Agreement that sits in my

department, $45 million. They were instrumental in the $43 million Human

Resources Agreement. They helped give birth to the first ever Cultural

Industries Agreement. Who ever cared about the arts, and painters and crafts

people in this Province, before it was given discipline and focus and its own

agreement and its own life? No other province in the country has that. We have

it. The Economic Recovery Commission helped to give birth to that.

So, you know, there's a lot of things that they've

done. The whole innovative work that they did when Richard Fuchs was there -

he's now with Enterprise Newfoundland - on the electronic highway, the

ACOA-Enterprise network. I spoke in Prince Edward Island at an international

rural development conference and I used that as my theme and as my discussion.

There were ministers from around the world who had discussion papers. I spoke

about just the electronic highway and what we're doing here. It blew people away

that we were doing that.

Our geography's immense, our population's small. We've

got to connect them somehow,. We've got to bring them into the speed of light

somehow. We've got to connect them as everywhere around the world people are

doing, connecting their people. The Economic Recovery Commission did it. Not

Chuck Furey. Not Premier Wells. Not the government. The Economic Recovery

Commission came up with that and gave it life and put it into being.

The eleven sectors that I talked about earlier. Get

those background papers, get those studies. They're out there. They're for

everybody to have. They did that. We didn't do that. Unfortunately, we're living

in a item where perception, as McLuhan would say, is the reality, isn't it? If

the perception is that you're not out there every day ringing the bell and

beating the drums, well, you know.... What was it Smallwood used to say? If you

get up at 6:00 a.m. and everybody knows you're up at 6:00 a.m., you can go to

bed for the rest of the day. It's perception. The perception is that - how do

you sell policy and think-tank? It's a difficult one to do. That's what they do.

MR. SMITH: Thank you. I'm not finished, Mr.

Chairman. Are you going to cut me off or what?

MR. CHAIRMAN: We will get back to you. You have

gone well past your time, but I'll get back to you. Mr. Byrne.

MR. FUREY: By leave, Mr. Chairman.

MR. CHAIRMAN: The minister is absolutely correct.

It is the minister's fault that Mr. Smith is out of time, but we will get back

to you. Mr. Byrne.

SOME HON. MEMBERS: (Inaudible).

MR. E. BYRNE: I think the Member for Baie Verte -

White Bay might have been right. I have just one quick question, and it's again

dealing with the Economic Recovery Commission. You talked earlier, Mr. Minister,

that training and education for the future belongs in three areas: computer

literacy, the transferral of information and the receival of information, and

the basic use of numbers. I'd make a suggestion that in this Province there are

probably four. That before any of those could take place, and before we have an

opportunity to take advantage of what these three areas of training and

education might do, basic literacy must be a concept that is not only

introduced, I think we must get away from the thought and notion that literacy

is just a Department of Education point of view.

I'd like to know the Economic Recovery Commission -

not in a general sense. Anybody can say that graduation or having a high-school

education and moving on to other areas of training and education is a wonderful

thing. But does it play really a central role in the development of the

information highway that you're talking about. That there is a large number of

people out there who are in need of basic educational upgrading, not only in

their own personal skills but the workplace is changing drastically every day.

The whole notion of workplace literacy is something that we must be concerned

about as well.

MR. FUREY: Mr. Chairman, the short answer is that

you are absolutely correct. I suppose I was operating from the assumption that

that's a given, that literacy -

MR. E. BYRNE: No, no, I was just wondering, does

that notion play a

part in the Economic Recovery Commission's thought processes?

MR. FUREY: Very much so. It really does. If Cathy

wants to speak to it, feel free, Cathy.

MS. DUKE: Yes, sure. If I might. I think that the

point that you're bringing up is a very important one. Certainly the work that

the Economic Recovery Commission has been doing in the last two or three years

has really dealt very much with stimulating and supporting enterprise and

economic development, and generating ideas and opportunities for growth and so

on.

One of the other things that we like to think that our

work focuses on is improving the business climate. One of the important elements

of that, as we have identified it, is education and training. Certainly there

are a number of aspects of that that we feel are very important. One of the

projects I thought I would mention, because I think that the whole area of

literacy training and so on comes in there, is I guess an initiative that we've

been pursuing for the last year or two. It's called Community Education. I don't

know if you're familiar with that concept or that model.

One of the initiatives that we had undertaken at the

Commission over the last year or so was the initiation of a pilot project in

Port au Port. Within that concept it basically brings all of the partners in a

community together, working towards education together. Bringing in existing

resources. Certainly under that concept informal methods of education - that's a

very important part of that. By bringing existing resources together - whether

it's through the Department of Social Services, or the community college, or the

K to XII system - certainly dealing with the literacy problem is a key to that,

and bringing education to the people and allowing them to take advantage of

situations such as they can become available.

Whether it's a situation where single moms are

interested in going back to school and upgrading. Then perhaps another program

offered through the community college where they would provide training for day

care workers would come in, so that the children of the single moms would go to

the day care, while the moms go and do their upgrading. So Social Services may

then make allowances in its transportation allowances to perhaps bend the rules

to allow the moms to have the expenses paid to travel to school. It's a kind of

a situation where all agencies come together to work cooperatively. I think in

terms of our overall strategy for education and training, illiteracy is a very

key part of that.

AN HON. MEMBER: (Inaudible).

MR. E. BYRNE: That's all I have, sir.

AN HON. MEMBER: Was that answer short enough for

you?

MR. E. BYRNE: That's fine.

SOME HON. MEMBERS: (Inaudible)!

MS. DUKE: Sorry about that.

MR. E. BYRNE: No, that's fine.

MS. DUKE: I'm taking my leave from the minister.

MR. CHAIRMAN: Dr. Hulan.

DR. HULAN: Thank you, Mr. Chairman. If you'll

permit me a couple of short comments, and then I have some questions on the line

items here. A couple of them I'm concerned about. You can imagine what areas

they're in.

Anyhow, I found it very interesting here this evening,

after the years I was away. When I lived in Western Europe I always made a big

issue that North America was the best. When I lived in Central Canada, Atlantic

Canada was unbelievable. In the United States, Canada was the best, here in

Newfoundland tonight, we had the man from Baie Verte - White Bay declare that

that was the most beautiful area of the Province, then we had my friend right

here, he declared the same thing and we all know that the West Coast is the most

beautiful, you know -

MR. CHAIRMAN: The Chairman would like to correct

that misconception. It is Central Newfoundland.

DR. HULAN: I thought I would liven it up with a

little -

MR. HEWLETT: (Inaudible).

DR. HULAN: The other thing, is before my hon.

colleagues pick up on this one, when I look at the salary figures, Mr. Minister,

I sometimes think you must have a couple of task force chairpersons working for

you in there somewhere, but anyhow, I thought I would slip that one in.

I notice on page 161, 2.2.02 and 2.2.03, the wide

variation in the figures; for instance, in 1992-93, the total was, $2,268,000,

this year an estimate of $500,000, that is on page 161 under 2.2.02. If I go

down below, I see for 2.2.03, again wide variations. I imagine there is an easy,

quick explanation.

MR. FUREY: A very simple explanation, do you

believe me?

The first one is the wind down of the last part of the

flow of money for construction for the Cow Head facility which flowed through

that subhead; that is why you saw it high on one end and lower this year because

it was just completed. The bottom one, 2.2.03, is the same thing except that

deals with the Bull Arm site which is a $300 million site of which the Province

put in $95 million but the 100 per cent assets revert to the provincial Crown.

DR. HULAN: Okay, sir.

MR. FUREY: I am going to be out marketing that

site next year.

DR. HULAN: Now, on page 164, 3.1.04. With the

important role that I feel, and to which you alluded to some degree tonight,

sir, that the Newfoundland and Labrador Science and Technology Council is

playing, and the role that they must play in the future in this Province with

regard to getting into high schools and so on and so forth, I am surprised that

there is no increase budgeted at all, in fact, it is a decrease.

MR. FUREY: There was a very small decrease, yes,

but one of the things you have to bear in mind is that, as we were going through

the budgets, there was a block fund left hanging under the Strategic Economic

Plan in the Executive Council that departments could draw upon. This was enough

to cover our week-long intensive science and technology week, this year the

theme being Communications, to allow for our school program and to keep a

skeleton support staff in place for the board, but, I recall making the argument

to Treasury Board that we ought to be able to reach into the Strategic Economic

Plan pot to draw out twenty, or thirty or fifty or whatever is required to make

sure that whatever projects are coming forward, we can certainly help.

DR. HULAN: Well, I will just make a comment on

that. As you know I have had some dealings with this and I appreciate what they

are trying to do and I can tell you that will be money wisely allocated and

spent because they are doing a lot -

MR. FUREY: There were a lot of tough decisions to

make in this Budget -

DR. HULAN: Oh, of course, I realize that.

MR. FUREY: - and that was one that had the axe put

to it, I can tell you and we managed to return it to the subhead.

DR. HULAN: Okay. Without picking out specific

areas, I could name a few, 3.1.05 and so on. I notice that there is a decrease

in dollars for research. If there is a case in point, 3.1.06, Long-term Research

MR. FUREY: Can I just explain what the story is on

that?

DR. HULAN: Yes.

MR. FUREY: Mr. Hewlett would know this. The

offshore development fund is there and it is a large block fund. This is a

particular project that flowed for one or two years. The fund, while it has been

depleted over the number of years, can still be drawn upon. You may see in my

estimates next year Matrix Technologies and two other companies, for specific

projects which we drew out of the larger pot and put into that subhead. That is

all that is. There is a $300 million offshore development fund for research. A

lot of the buildings you saw attached to Memorial, the centrifuge and a number

of other matters came out of that fund and are funded directly through this

specific subhead rather than the general block. Once the general block is

appropriated it has to come under a subhead and show the specifics and that is

what that reflects.

DR. HULAN: You touched on the other one I was

looking at and that is the reduction for the total C-Core centrifuge facility

from almost $50,000 to $222,500. That is on Page 165, 3.l.08.

MR. FUREY: Okay. That is the same thing. As a

matter of fact we are opening that this month.

DR. HULAN: I know. I am familiar with it. This is

where some of us, depending on from where we come, start becoming paranoid when

we see dollars disappearing out of research.

MR. FUREY: I know what you are saying, but it is

really reflective of the larger pot wherein there was a $300 million, a 75/25

pot of money under the Offshore Development Fund. Departments could go and draw

on that whether it was for the Offshore Technology Training Program or any other

various programs, but do not be too spooked by a reduction. It just simply means

that that particular project, whether it be bricks and mortar or research, is

coming to an end. That is all that means.

DR. HULAN: Thank you, Mr. Chairman.

MR. CHAIRMAN: Mr. Shelley.

MR. SHELLEY: You mentioned a little ago the

Japanese and their attitud