Resource Committee — Department of Business — 4 June 2006

2006-06-04

Newfoundland and Labrador — Committees

April 6, 2006 RESOURCE COMMITTEE

Pursuant to Standing Order 68, Minister Kathy Dunderdale, MHA

for Virginia Waters, replaces Premier Williams.

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

CHAIR (Harding): Order, please!

We have the official go ahead, according to the light in front of me.

I would like to welcome everyone here this evening. First of all, we will

begin by having the Committee introduce themselves, starting with Mr. Reid.

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

MR. JONES: Yvonne Jones, MHA for Cartwright-L'Anse au Clair.

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

MS JOHNSON: Charlene Johnson, MHA for Trinity-Bay de Verde.

MR. O'BRIEN: Kevin O'Brien, MHA for Gander.

CHAIR: Harry Harding, MHA for Bonavista North.

I will ask Minister Dunderdale, who is filling in for the Premier, to

introduce the officials that she has with her this evening.

MS DUNDERDALE: Good evening, Mr. Chair.

It is a pleasure to appear before you this evening to discuss the Estimates

of the Department of Business. This evening I have with me Leslie Galway, Deputy

Minister of the Department of Business; Beulah Bouzane, Director of Strategic

Policy and Planning; Linda Vaughan, Director of Financial and General

Operations.

CHAIR: Thank you, minister.

I ask the Clerk now to call the first subhead.

CLERK: 1.1.01.

CHAIR: 1.1.01.

Minister Dunderdale, you may have up to fifteen minutes to give an overview

of your department's estimates.

MS DUNDERDALE: Thank you, Mr. Chair.

The Department of Business has allocated just less than $4 million in

2006-2007 to allow it to implement its mandate of business attraction and to

provide leadership and coordination across government departments, agencies,

boards and commissions to promote business development and good business

relations.

I would like to highlight a few of the departments initiatives for this year;

its first full year with its organizational structure in place.

The department will promote the competitive advantages of the Province in

target markets and sectors for the purpose of developing and attracting

incremental investment in our provincial industries and businesses. We have

allocated $1 million in 2006-2007 for this purpose. Among other costs, this will

introduce five new contractual positions to implement the attraction strategy.

The department leads the development and implementation of the government's

Brand strategy. Along with other strategic marketing initiatives, the Brand

strategy will increase awareness of and promote Newfoundland and Labrador as a

place to do business. The department will introduce one dedicated position to

this initiative and, together with its Agency of Record for Brand, will continue

with its Brand development strategy. The Agency of Record contract is for three

years with a cost of $100,000 per year.

As part of strategic planning and communications, the department will deliver

government's Red Tape Reduction Initiative. The intent is to cut

administrative and regulatory inefficiencies while maintaining high standards, a

level playing field for business and effective and efficient service delivery to

our citizens. The initiative included consultation with business,

non-governmental organizations, associations and citizens by the Red Tape

Reduction Task Force, Chaired by MHA Paul Oram. Government's goal is to reduce

its regulatory requirements from its existing inventory of regulatory

requirements by 25 per cent over a three-year period. The department has five

temporary positions dedicated to this initiative.

In 2004-2005, an inventory of business development activities of the Province

was conducted which identified the service delivery supports provided by

provincial and federal governments to the private sector. The department's

mission involves putting in place a provincial business strategy that is based

upon its competitive advantages. This plan will establish a blueprint to

facilitate the growth of our diversified economy in a pro-active manner. There

is a one-time allocation in the estimates to cover the cost of development of

the strategy of $350,000. This strategy will feed into the provincial

development strategy.

The Business Advisory Board, which reports to the Premier as Minister of

Business, was established June 14, 2005. Comprised of fifteen members from the

business community, the board advises on provincial direction for business

attraction, growth and economic development. They have been very active over the

past year, having held eleven meetings. The board has several subcommittees to

review: targeted industries, access to financing, alternative financing and best

practices.

Thank you, Mr. Chair, for the opportunity to highlight some of the activities

of the Department of Business, and I will be happy to answer any questions.

CHAIR: Thank you, minister.

I just want to remind the officials if they are asked to speak or respond to

any questions, that you would identify yourself first.

Who is going to lead off? Mr. Reid.

MR. REID: Thank you, Mr. Chair.

I would like to say to the minister, with no disrespect to her, I will do

what I did in the previous two years and say that I am very disappointed that

the Minister Responsible for the Department of Business, who happens to be the

Premier, does not want to belittle himself to come and answer questions that we

have on his department. In the last two years we walked out because, I have been

here for - this is my eleventh year and unless somebody was sick or ill, the

minister for the department is usually the one who comes and answers questions.

I am not aware, in any Estimates meeting that I have attended in those eleven

years, with the exception of the last three, that any minister refused to come

to the Estimates meeting because I think we are all paid a salary to do a

particular job and I think that is an integral part of any minister's job to

come and sit before this Committee and answer questions pertaining to his or her

department. I find it an affront to the members of the Opposition. I just want

to have it duly recorded again, that we are not pleased with this. As far as I

am concerned, it shows nothing but contempt by the Premier for not only members

of the Opposition but for the taxpayers of the Province, that he does not see

fit to come and at least answer questions about a fair amount of money that is

being spent by a department for which he is the minister.

Now, having said that, we do have some questions for you. You probably do not

have the Estimates from last year but I do. In the Estimates right now - we know

it is an estimate of what you are going to spend and at some later time you will

actually put down the budget that you are going to spend for this year. If you

go to General Administration on page 96 of the Estimates, 1.1.02.

CHAIR: That is last year you are talking about, is it?

MR. REID: No, this is this years.

CHAIR: 1.1.02.

MR. REID: Under 1.2.02., I am sorry, on page 96.

In the Estimates last year for that department, under Salaries, you estimated

that you were going to spend $235,000. You budgeted, according to page 96 in

this year's Estimates, you budgeted last year, $410,000 and you spent

$173,000.

The numbers appear to be off, from one year to the other. This year, you have

budgeted $740,100. Can you tell me what is going on right there?

MS GALWAY: Leslie Galway.

This is with respect to the general and administration category of the budget

in Salaries. This past year, 2005-2006, there had been a budget for $410,000 and

that amount had been revised lower. That was to reflect vacant positions that

were not filled until later in the fiscal year than originally anticipated. The

hiring process did not proceed as quickly, of course, as first anticipated. That

explains the variance.

MR. REID: In your budget for this year, under Salaries, it says that the

total salaries for your department is $1,729,000. Is that correct?

MS GALWAY: I am sorry, could you repeat that?

MR. REID: In the department's salary details, it says that the budget

for your salaried positions in that department this year is $1,729,000. Is that

correct?

MS GALWAY: Yes.

MR. REID: It says you have five permanent employees.

MS GALWAY: The rest of the staff that is accounted for in those figures

are temporary or contractual positions.

MR. REID: Can we talk about the temporaries? Because, am I right in

saying your permanent salary is $476,000 for five people?

MS GALWAY: Yes.

MR. REID: Which, if you just did the average, you are talking in excess

of $90,000 each, I guess.

MS GALWAY: They would come from the executive category.

MR. REID: So, you have five people up there who are being paid an average

of $90,000 and you are going to spend an additional $1.25 million on contractual

and temporary employees. How many employees do you have in the department?

MS GALWAY: The total number of employees is twenty-one for this upcoming

fiscal year of 2006-2007. That would include the Red Tape Reduction Task Force

as well, which would be in that department. That is five positions, and they are

considered to be temporary positions for the department.

MR. REID: How many did you say are on that Red Tape Task Force?

MS GALWAY: Not the task force, the Red Tape Reduction unit of the

department. That would include a director, three analyst positions, and an

information analyst as well.

MR. REID: Can we get a list of those? I know you probably do not have

them tonight, but could you get us a list of those employees?

MS GALWAY: Yes.

MR. REID: Let me go through that again. You have five permanent employees

for $476,000. My God, that is not too bad, actually. I am into the wrong field.

Five permanent, and how many temporaries?

MS GALWAY: We have, within the department - I can give you a list of the

positions, if you wish. I can read them to you now.

MR. REID: Are there many?

MS GALWAY: Under the executive -

MR. REID: How many total employees? I know you answered that.

MS GALWAY: Twenty-one.

MR. REID: Twenty-one employees for $1.72 million, right?

MS GALWAY: Yes.

MR. REID: Twenty-one employees, so that leave fifteen or sixteen

temporaries, right?

MS GALWAY: Or contractual.

MR. REID: Or contractual.

AN HON. MEMBER: How many of them are contractual?

MS GALWAY: How many are contractual?

There is the director of brand development. There are the industrial benefits

co-ordinators; there are two of those. There is a PR specialist, temporary

assigned, a director of Red Tape Reduction, the three policy analysts, as I

mentioned, and the information management analyst. There is a principal

investment advisor, that is contractual; a director of business investment,

contractual; and a senior policy analyst.

MR. REID: Okay, so you have five permanent. How many temps, temporary?

MS GALWAY: The temporaries would include - just a second.

MR. REID: How many contractuals? Just give me the contractuals.

MS GALWAY: I do not have that in front of me right now, but I can break

that out and have that provided to you.

MR. REID: There are obviously sixteen - you said there are twenty-one

employees total in the department. Five of those are permanent; there are

sixteen temporary or contractual.

MS GALWAY: Yes.

MR. REID: Can you tell me how many temps or temporaries are up there, and

how many contractuals are up there? I would like to know what their titles are

and, if possible, the people who are in that department.

MS GALWAY: Yes, we will provide that information.

MR. REID: We will go back to 2005-2006, what you budgeted and what you

actually spent. That is in subhead 1.2.02., Professional Services. Last year,

you estimated $100,000, you budgeted $100,000, you spent $150,000, and this year

you are going up to $608,000. What was the reason for the increase last year

from $100,000 to $150,000?

MS GALWAY: The amount was revised higher than budget due to the cost

related to the brand development.

MS JONES: To the what development?

MS GALWAY: Brand development.

MR. REID: Is all of that brand development in the Department of Industry,

or is some of it in the Department of Business as well?

MS DUNDERDALE: It is all in the Department of Business.

MS JONES: What is the brand department?

MS DUNDERDALE: The brand is developing a brand for the Province. Right

now, I think, even within government, we have forty-eight different brands that

we use for different products and services that we provide. We are trying to, in

this branding exercise, have one brand that we will use right across government,

and hopefully right across the Province, so that we maximize our advertising

dollars, and we have a brand that will be recognized nationally and

internationally to Newfoundland and Labrador.

MS JONES: That is not done yet, is it?

MS DUNDERDALE: It is well on its way. We are getting to a place, I think,

where we are just about ready to make a decision.

MR. REID: So, that would have been under Transportation and

Communications? Is that what -

MS GALWAY: Brand development is under Professional Services.

MR. REID: Okay. So, what do you get for these Professional Services that

costs $150,000?

MS GALWAY: The costs include the Agency of Record, which is budgeted for

$100,000 per year. There are also, within the $150,000, other costs as well

associated with the development of the provincial brand strategy and consulting

costs around that.

MR. REID: This year you are going to put $458,000 more into it. Where is

that going?

MS GALWAY: There is a one-time cost of $350,000 for the development of

the provincial brand strategy and there is a further $100,000 for the second

year of the Agency of Record contract, and then there are miscellaneous amounts.

MR. REID: They are the ones I would like to talk about.

OFFICIAL: Are you talking about the (inaudible)?

MR. REID: Yes. That is under Professional Services.

MS JONES: Could I just get a clarification on that one, please? You said

there is $350,000 for the brand development?

MS GALWAY: No. That is for the provincial - if I misspoke, I apologize.

It is for the provincial business strategy.

MS JONES: What is the $100,000 for?

MS GALWAY: That is for the Agency of Record and brand development.

MR. REID: Can you tell us something about that provincial strategy?

MS GALWAY: This is an allocation for a provincial business strategy that

is going to involve review of the existing programs; what we are doing today

across government in terms of business; take a look at the work that has been

done in terms of individual strategies and individual sectors; look for gap

analysis as to what needs to be included; where the priorities should be in

terms of business attraction, and what the best practices should be. It will

involve a Request for Proposal and an award of a consulting contract to work

with the team.

MR. REID: What review did you say that was again? A review of...?

MS GALWAY: It is a review of the Province's existing business strategy.

MR. REID: How much of the total $608,000 - how much of that is going to

be spent on reviewing existing provincial - what did you call it again?

MS GALWAY: It is the strategies that are in place now.

MR. REID: Strategies. All right.

MS GALWAY: We are going to take a look at the programs that are in place

across government to support business at the present time.

MR. REID: How much is that review going to cost?

MS GALWAY: For the full review, which has several segments, it would be

$350,000.

MR. REID: Not bad.

MS JONES: But there is still $250,000 went (inaudible) that figure. Where

does that go?

MS GALWAY: There is another $100,000 that is associated with the brand

development that goes to the Agency of Record for continued brand development.

MS JONES: (Inaudible).

MS GALWAY: Yes, and that is in addition to the $350,000. Then there is

brand implementation costs and miscellaneous.

MS JONES: So, basically, half of it is going towards the brand and the

other $350,000 towards the review.

MR. REID: The existing provincial business strategies or initiatives, is

that right?

MS DUNDERDALE: No, it is a larger initiative than just reviewing the

present business strategies that we have across government. It is reviewing

those, doing a consultation under - identifying the gaps and a development as to

what programs and supports we need to put in place to fill those gaps.

MR. REID: Purchased Services, $324,000, up from a revised budget of

$55,000. What is that $324,000 for?

MS GALWAY: The estimates reflect anticipated costs associated with

advertising, marketing, printing and other related costs. It includes printing

and related costs specifically of $110,000. Advertising and marketing of

$200,000. Equipment and facility rentals, which would include such things as

office copiers, meeting expenses, et cetera, for $14,000.

MR. REID: You are going to have to excuse me, Leslie, but you are going a

little too fast for me.

MS GALWAY: I am sorry.

MR. REID: Advertising, how much?

MS GALWAY: Advertising and marketing was $200,000. I am not sure if you

have printing and related costs of $110,000.

MR. REID: Yes.

MS GALWAY: Equipment and facility rentals, that includes such things as

office copier, meeting expenses, and that totals $14,000.

MR. REID: This advertising and marketing, can you explain that?

MS GALWAY: That would include advertisements for investment prospecting

and specific advertisements for the Department of Business; marketing of the

business prospecting across various sectors, the print material and collateral

material associated with that.

MR. REID: It has been a long day. I was here late last night.

Most of that will be advertising programs that the Department of Business

has?

MS DUNDERDALE: It is larger than that, too. It is marketing the Province

internationally, where there are opportunities for business attraction.

MR. REID: All right.

On the next page, in the Business Attraction that you just talked about,

Purchased Services in that one is $205,000. There is not going to be any

advertising about business attractions there, I suppose. Where are you going to

spend that $205,000?

MS GALWAY: The estimates are up due to a full year of operations. That

includes printing and related costs of $100,000, further specified advertising

and marketing of $100,000, and equipment rentals of $5,000.

MR. REID: Advertising what though, because your minister just said that

you are going to advertise these business attractions under General

Administration under Purchased Services?

MS GALWAY: There are categories under Purchased Services that are broken

out by the department under the two branches of the department. For Business

Attraction, the $100,000 there would be more focused and specific to sectors,

whereas under the Strategic Planning and Communications, it would be the generic

marketing and marketing of the Province.

MR. REID: So, what you are saying is under 1.2.02 and 2.1.01, you are

spending $200,000 in advertising and marketing, under 1.2.02.06 Purchased

Services. You spent $200,000 there, you told me, in advertising and marketing.

Under 2.1.01, Purchased Services, $205,000. You are going to do some

marketing and advertising in that, as well. That should be a total of what,

$400,000, I suppose, under those two headings for advertising?

MS DUNDERDALE: Three hundred thousand, because there is printing and

related costs. So, there is $200,000 for marketing under Strategic Planning and

Communications around the international piece, and there is $100,000 under

Business Attraction.

MR. REID: Salaries there are gone up to $496,000 from $18,000.

MS GALWAY: Business Attraction?

MS DUNDERDALE: Where are you?

MR. REID: 2.1.01.01. That is some of those twenty-one people we talked

about, is it?

MS GALWAY: That is correct. In 2005-2006, we obviously did not have the

positions filled. There is a small amount of $18,800, that is a temporary other

employee category.

For the year 2006-2007, we are filling the positions associated with Business

Attraction in that department, and that accounts for the $496,300.

MR. REID: Under Transportation and Communications, you are spending

$151,000 this year, up from $49,000 last year?

MS GALWAY: Yes.

MR. REID: For twenty-one employees. So, you are going to spend $301,800

in Transportation and Communications in the department for twenty-one people -

is that right - five permanent and sixteen temporary or contractual people?

MS GALWAY: That includes the Business Advisory Board as well, in terms of

travel.

MR. REID: The business advisory group, is that the Red Tape Reduction

Committee?

MS DUNDERDALE: No. The Premier has a Business Advisory Board set up. In

my opening remarks I made reference to the Business Advisory Board from

businesspeople from all over the Province who advise the Premier on issues. They

met eleven times last year. So, there are costs that are affiliated with that,

that are included under these headings.

MR. REID: All right. It was my understanding - and maybe if the Premier

would come once in a while he could explain that to me, but it was my

understanding when you established the Department of Business it was more

in-line with helping small businesses get a start. That was certainly the

impression.

OFFICIAL: (Inaudible).

MR. REID: No? Because I do not see any money there for businesses. There

is no money in this department for businesses or any small business that want to

get up and running in the Province. That is handled by your department.

MS DUNDERDALE: That is right. INTRD are still the lead department in

terms of business development within the Province. We have several funding

programs: the SME fund, RSDF, the Business Market and Development and now the

innovation fund, and they are all within the Department of INTRD. The analysis

is there and the services are there to deliver that funding.

The Department of Business's primary function, from its earliest

conception, has been around business attraction and branding and Red Tape

Reduction.

MR. REID: Are you located on the sixth floor?

MS GALWAY: Yes.

MR. REID: Who is paying for the renovations up there? I do not see any of

this here for your offices. Are you doing renovations up there to accommodate

you?

MS GALWAY: We have had some renovations to that floor.

MR. REID: Under Property, Furnishings and Equipment, you only have - this

year you have $22,000 slotted out for Property, Furnishings and Equipment.

MS GALWAY: Yes. We have a suite of offices that include two executive

offices, three workstations, twelve offices, boardroom, a reception area. The

total cost of furnishings across all categories in the Budget was $51,000.

MR. REID: Who else is on that floor with him?

MS GALWAY: We have, in that suite at the present time -

MR. REID: No, I mean on that floor. Is there another department on the

sixth floor?

MS GALWAY: No.

MR. REID: So you do not know what has been spent on the renovations and

stuff up there? Would that come out of your budget or out of the works, services

budget.

MS GALWAY: There is a cost for the interior offices of $21,600, which

included repairs to electrical, plumbing, plastering, painting where necessary,

and replacement of floor coverings.

MR. REID: Where is that? Where do you see that in here? What heading does

that come under? It doesn't, does it?

MS BOUZANE: That is allocated under the executive allocation and it is

for Purchased Services. That is where renovation costs were allocated there, for

a total of $29,000.

MR. REID: Under your advertising you have - how much are you spending on

advertising again, I am sorry?

MS GALWAY: It is $300,000.

MR. REID: Do you have a standing offer with anyone for that advertising?

MS GALWAY: No, not yet.

MR. REID: Okay.

Do you have any questions you want to ask? Go ahead.

MS JONES: Thank you.

I just have a couple of questions, minister. I would like to pick up on the

renovations to the floor because I was quite familiar with it when the

Department of Labrador Affairs was there, and I realize now that they have been

reduced to one office on the fifth floor in the West Block. When I actually got

off the elevator a while ago on the floor, I was a little bit amazed because

everything looks completely different. I would really like to have the full cost

estimate on the amount of renovation work that went in there. So, I would like

to ask you to provide me with that, please?

MS DUNDERDALE: We can provide you with the costs that are associated with

the Department of Business.

MR. REID: Are there any other costs on that floor or in that area that is

associated with some other department?

MS GALWAY: No.

MS JONES: No, it is all the Department of Business.

MR. REID: Because there are people coming down out of there in the

mornings when I go up - you know, tilers and stuff like that, bringing in

furniture and things.

MS GALWAY: The department is still in the process of establishing itself

and hiring staff. So, there is equipment that will come in as employees are

hired.

MS JONES: Okay. So you are going to give us a full breakdown of the

renovation work and what the costs were?

MS GALWAY: That is related to our budget, yes.

MS JONES: Okay. You talked about the marketing campaign for Business

Attraction. Do you have a standing offer agreement with anyone for any firm for

that contract?

MS GALWAY: We have an Agency of Record that is Target Marketing, but we

do not have any standing offer for the advertising at this point in time.

MS JONES: So, Target -

MS GALWAY: - Marketing is the Agency of Record.

MS JONES: Okay. What about for the brand? Who is the firm that you are

having that work done with?

MS GALWAY: That is the Agency of Record.

MS JONES: Okay. Was that tendered?

MS GALWAY: Yes.

MS JONES: How many firms bid on the contract?

MS GALWAY: That happened a year-and-a-half ago and we can get you that

information.

MS JONES: Okay, yes.

Do you want to tell me what it is the Department of Business does? Besides

the Red Tape Reduction, besides the brand marketing strategy, what does the

department actually do?

MS DUNDERDALE: It does the branding piece. It oversees the Red Tape

Reduction. It also does a business attraction piece, companies that are

interested in relocating or are in expansion mode and who might be expressing

some interest in coming to Newfoundland and Labrador, or government is aware

that businesses are in expansion mode and we feel that they are a right fit for

Newfoundland and Labrador, then the department engages directly around that

piece of work in seeing if there is a possibility of bringing those companies to

Newfoundland and Labrador.

MS JONES: So, this department is basically importing business. It is not

about growing the businesses that are in the Province right now?

MS DUNDERDALE: No, it is both.

MS JONES: Give me an example of some of the things you have done through

the Department of Business. For example, a company that has moved in in the last

two years or a company that you have worked with that has expanded.

MS DUNDERDALE: Well, an example that I can give you in terms of sector

development, for example, and attracting opportunities to this Province would be

around the work that is getting done around the marine strategy, and that comes

out of government. It comes out of groups like Ocean Advance.

The Premier has led government in discussions with Ireland, as well as the

United States. We have Memorandums of Understanding now between all three of us

- Ireland, Newfoundland and Labrador, and Rhode Island - to develop our marine

technology in terms of seabed mapping, for example, between Newfoundland and

Labrador and Ireland. We are moving forward in developing an ocean observing

system here in the Northwest Atlantic and having all three of the partners that

I have identified participating in that. That will provide tremendous economic

development to Newfoundland and Labrador.

MS JONES: The mapping between here and Ireland, what would be the purpose

of having that done?

MS DUNDERDALE: In the most recent Law of the Sea Convention, coastal

countries were told to outline their Continental Shelf. Ireland has just

completed that. It had assistance from several companies in Newfoundland in

doing that work. The Continental Shelf of Ireland is far bigger than the land

mass of Ireland. They have developed a great deal of expertise around doing this

type of work. They have, as I said, formed a consortium with some Newfoundland

companies now to market themselves to the world, to other coastal countries, to

do this seabed mapping. So that is a great opportunity for Newfoundland and

Labrador companies, with the leading edge technology in this area to find work

around the world.

MS JONES: Why isn't Canada involved in that? Ireland is a country. We

are part of Canada. Why is it a provincial responsibility?

MR. REID: With that question, I guess, has there been any of that sea

floor mapping done by DFO, the Coast Guard or any of the oil companies?

MS DUNDERDALE: I am not sure where we are as a coastal state in terms of

our own seabed mapping.

MR. REID: You should know, it has been (inaudible).

MS DUNDERDALE: What I do know is that an expertise was developed by

companies in Ireland to do the work in Ireland, to do the seabed mapping. In

doing that work, they contracted work from Newfoundland and Labrador companies

to assist in that work. So, the expertise was expanded and refined.

We have a Memorandum of Understanding now and a relationship between those

companies in Ireland and those companies in Newfoundland to market themselves to

the world and other coastal countries. That was an opportunity for Newfoundland

and Labrador companies and we were there to take advantage of it in terms of

what the federal government's responsibility would be in promoting

Newfoundland companies with Irish companies. It is wonderful if it happens but

we see that as our primary responsibility.

MS JONES: I thought you said that, as a department, you were involved

with the mapping. I misunderstood what you said in the first place.

MS DUNDERDALE: No, no. It is the companies.

MS JONES: That is why I was wondering, at the Law of the Sea Convention,

Newfoundland would be mapping its own Continental Shelf but not country.

MS DUNDERDALE: No, the country would (inaudible). The Law of the Sea said

that the Convention asked coastal countries to map their Continental Shelf,

their territory. That has to be done within a certain length of time. So, there

is a call for this kind of work worldwide. The expertise has been developed in

Ireland to do it because they have done their own piece of work. Newfoundland

companies were involved in that piece of work. Because of that relationship and

because of our MOU with Ireland, our Memorandum of Understanding of promoting

business and sharing business opportunities and technology transfers and so on,

that a consortium has come out of that now to offer this expertise in these

cluster of companies to the world, to these other coastal countries that need

the seabed mapping done.

MR. REID: What does that have to do with the Department of Business?

MS JONES: Yes, that is my next question.

MS DUNDERDALE: Because it is the Premier who promoted all of those pieces

because of our relationship with Ireland. We are now, in terms of - for example,

the ocean observing system, the Premier has been down. He has met with Governor

Carcieri, Vice-Admiral Lautenbacher who was here and so on, and other people who

are responsible for security. Homeland Security are involved in weather

forecasting, weather predicting, environmental issues, all of those kinds of

things. We have ocean observing systems coming right up the Eastern Seaboard and

they stop in Maine, and they are very anxious for that coverage to continue and

cross the Atlantic. There are huge opportunities for Newfoundland and Labrador

companies if we are able to establish that relationship and that partnership

with the Americans.

MS JONES: Can you tell me who the five companies were in Newfoundland

that were involved with the mapping of the Continental Shelf in Ireland?

MS DUNDERDALE: No, I can get you that information. I don't have it with

me.

MS JONES: You said one was Oceans Advance, was it?

MS DUNDERDALE: No, no. Oceans Advance is an organization here that

consisted of the City of St. John's, the NRC, C-Core, the Centre for Marine

Communications, a number of companies that are involved in cold ocean research

or technology; a lot of technological companies who understand the great

expertise that we have in this Province in this area and have joined together to

promote our Province as a centre of excellence in marine technology and are

doing everything they can to advance us as that centre of excellence here in

North America.

MS JONES: Have there been any new businesses move into the Province as a

result of the efforts of this department in the last two years?

MS DUNDERDALE: Leslie, do you want to speak to that piece?

MS GALWAY: There are a number of files that we are working on currently.

I would have to get you the information on what had occurred prior to, but there

are a number of companies that we are working on at the present time. We have

seven active files at the moment that we are pursuing and this is to attract new

business that does not exist here in the Province.

MS JONES: Were you guys involved in a call centre that was supposed to go

on the Northern Peninsula but did not happen? Was that the Department of

Business, or Innovation, Trade and Rural Development?

MS DUNDERDALE: That is my department.

MS JONES: Your department. What happened there?

MS DUNDERDALE: I do not know to what you are referring.

MS JONES: Back a few weeks ago wasn't the government going to go into

St. Anthony and make an announcement on a call centre? It got cancelled the

night before. Was that through your department?

MS DUNDERDALE: That is not through my department - or it is not through

the Department of Business.

MS JONES: Was it any government department? The call came from the

Premier's Office.

MS DUNDERDALE: It is not from the Department of INTRD nor the Department

of Business.

MS JONES: I will have to ask the Member for The Straits & White Bay

North. I was just informed by the Chamber of Commerce in St. Anthony that they

were told they were getting a call centre and government was coming in. In fact,

the Premier was coming in to make the announcement the next day and it did not

happen. I am wondering what happened with the deal?

MS DUNDERDALE: It is not through either of these departments.

MS JONES: Well, if the Department of Business and the Department of

Innovation did not know much about it -

MR. REID: Can I ask a question on the call centre that went into Mount

Pearl? Is that open?

MS DUNDERDALE: They are gearing up now. They are starting to do their

hiring.

MR. REID: How many employees will that have, any idea?

MS DUNDERDALE: Potentially, in their projected hirings, when they are

right up to full speed, which is going to take them some time, they projected

about 600.

MR. REID: How much are we subsidizing each of those jobs?

MS DUNDERDALE: I will have to get you the percentage.

MR. REID: Is it in line with previous subsidies?

MS DUNDERDALE: Yes, and in line with what is happening, I think, in the

rest of the Maritimes.

MR. REID: Any other government money besides the subsidizes per job in

there?

MS DUNDERDALE: No.

MR. REID: Have you ever thought about trying to put them into areas with

lesser population, like St. Anthony or Twillingate?

MS DUNDERDALE: Absolutely. Every time a company comes back to us

expressing an interest, we try to market the rest of the Province. In fact, I

engage MHAs in that process because they are passionate about - if the company

agrees to go into an area that they have not traditionally been, we try to

engage the people who are passionate about that area of the Province because we

find they are the best salespersons.

The labour pool is an issue for them, but the biggest issue for them is

having access to transportation. They have to bring their clients in to market

the facility. So, sometimes the location to an airport is sometimes critical in

where a call centre goes. When we get some of the bigger centres in they are

getting to a place now where they can do what they call a hub and spoke. If we

have a major centre in St. John's or in Corner Brook, there is a capacity now

to do some smaller offset offices. So, there are some opportunities there, we

hope, to get some of these businesses into smaller communities.

MR. REID: With regard to the proximity to an airport and stuff to get

their clients in there, I guess they would only need to do that once. I guess

they are just coming before they sign on with a company to determine if you have

a telephone in the building, I guess, for the most part. Why would that be of

such a major concern to them when, for example, you could have a client drop

down in Gander and take a helicopter to Twillingate and be there in a half hour?

MS DUNDERDALE: It is not my issue, Mr. Reid. It is the companies that are

coming in. It takes a long time if you are sometimes coming from Southern United

States to the Province, and if we have to put somebody in a vehicle then and put

them two or three hours down over a highway then the company does not seem to be

interested. So we are doing everything we can, even in terms of trying, on these

bigger centres, while we are doing that negotiation, to try and see if we can't

get offsets of smaller centres.

MR. REID: I find it a bit ironic, if you are subsidizing someone and they

do not even want to drive for an hour.

MS DUNDERDALE: Yes, for them it is a business practice. For them, in

terms of the marketing of their own company, when they have a client that they

are trying to sell their service to, they are trying to take as many obstacles

out of the way of them capturing the contract, because that is what is important

to them. TeleTech or Convergys will not be here if they are not able to attract

clients, so they are just trying to remove barriers. We are doing our best to

counteract. Our best hope so far is the satellite offices coming off the larger

centre. We hope there are some real possibilities there, to get some into our

smaller communities, to get some of these call centres in there.

MR. REID: The company that is going into Mount Pearl, earlier the summer

when it was announced, there were also some stories that came out about their

past in some of the states in the United States. Obviously you have done further

investigation into this company. Do they appear to be quite legitimate, or are

they one of these companies that will take the high subsidy income for a while

until they are offered a lower one and take off? That is the impression that was

left this summer in some of the stories that were on-line about it.

MS DUNDERDALE: All of that investigation has been completed. I mean, we

do the Dun & Bradstreet and do all of the things that have been

traditionally done. TeleTech is a billion dollar company, a blue chip company,

doing business in twenty-nine countries internationally. It did have a class

action suit against it in the United States, and that was the reference here.

The action in the United States was that they were expected to come in to

work ten minutes early and be prepared to go to work once 9:00 a.m. or 1:00

p.m., whenever their shift started, to be at their desk and in work mode, and

there was a class action taken out against them because the employees felt that

should be paid time.

The legal action hasn't gone forward, or isn't through the courts. Any

time a big international company like that comes through, there could be any

number of actions over - most of the large companies that operate within this

Province and have strong reputations would still have actions. The government

itself, the Government of Newfoundland and Labrador, has actions pending against

it.

What Dun & Bradstreet does, as you are probably aware, it takes into

account all of that and is aware of all of that, and their analysis is on what

impact that would have on the company's financial stability. In the case of

TeleTech, they found that it would have no impact, so that information was there

with us right from the beginning even through we would not have had the detail

of the case.

Any company that comes into this Province, we have a Labour Standards Act

here and they would be expected to abide by the laws of Newfoundland and

Labrador.

MR. REID: The one in Gander, I know that a couple of years ago - maybe

the Member for Gander might be able to tell me - they were having trouble

retaining employees. Are they still having that problem? Is that centre still

open in Gander, and how is that doing? There was a big turnover in employees

there for a few years, when it got up and running at first.

MS DUNDERDALE: I am not aware of any difficulty at the moment. Our

interest is usually just around the subsidy piece.

MR. REID: Can I go back to these line-by-line items again? Because some

of my colleagues will not appreciate it if I do not get all of this right.

Under Purchased Services, on both pages, page 96 and page 97, I think,

Leslie, you told me that, under Purchased Services on page 96, the $324,000, am

I right in saying that $200,000 of that was for advertising and marketing?

MS GALWAY: On page 96, Purchased Services, you are asking about the

$324,000, that is Strategic Planning and Communications.

MR. REID: I think you told me that $200,000 of that was for advertising

and marketing.

MS GALWAY: Strategic Planning, Purchased Services, line 06., I told you

that there are printing and related costs of $110,000, advertising and marketing

of $200,000, equipment and facility rentals of $14,000.

MR. REID: Under 06. on the next page, Purchased Services under Business

Attraction, the $205,000, did you tell me that was for advertising? How much of

that is for advertising?

MS GALWAY: Advertising and marketing is $100,000.

MR. REID: The other $105,000 is?

MS GALWAY: There is $5,000 for equipment rental and there is $100,000 for

printing and related costs.

MR. REID: Under 06. on both pages there is $300,000 for advertising.

MS GALWAY: And marketing, yes.

MR. REID: I am almost finished.

I have a question that is not related to this, but someone told me today that

there was a piece in The Independent or somewhere this weekend that

talked about the company - I do not know if it is the company - that is doing

the Humber Valley. Is the owner of that moving out of the Province to set up

elsewhere? Someone told me that today. Did you hear anything about that?

MS GALWAY: I am not familiar.

MS DUNDERDALE: You are talking about Mr. Dobbin?

MR. REID: Yes.

MS DUNDERDALE: I can't speak to that.

MR. REID: No, I was just wondering if you - someone told me today that

they read it in The Independent . I was wondering what was going on there.

Obviously, you don't know. That is all right.

Go ahead, Yvonne.

MS JONES: The twenty-one employees that you have there on a temporary and

contractual basis, were any of those positions advertised?

MS GALWAY: Yes, the ones that we have at this point would include the

Director of Strategic Policy and Planning. There is a hiring process underway

that was advertised internally. The Director of Brand Development was

advertised. The Director of Red Tape was filled internally. Policy Analysts,

there were three positions there; that was advertised internally. The Principal

Investment Advisor was advertised - I beg your pardon, that is an internal

position. The Director of Business Investment was advertised, and the Senior

Policy Analyst was advertised.

MS JONES: That is most of them.

MS GALWAY: Yes.

MS JONES: Have the others been filled?

MS GALWAY: They are not all filed. There are some that are currently

under the actual screening or they have gone through first interviews and are

waiting for second interviews.

MS JONES: You said you have seven active business files ongoing in your

office now. Do you expect that you are going to be able to successfully conclude

any of those in the next year?

MS GALWAY: We would hope so. There will be progress made on all of them

and, as in any sort of business attraction, it is very difficult to say exactly

how each file will eventually turn out, but there is a large amount that is done

upfront that is very important for overall business attraction, including

providing the information on a particular area or a particular industry that can

be used to further attract on other files as well.

MS JONES: Are you guys involved in any way with the Lower Churchill

development project?

MS GALWAY: No.

MS JONES: Okay.

MR. REID: Can I ask a question while we are waiting?

MS JONES: Yes, go ahead.

MR. REID: Who is your PR director or specialist?

MS GALWAY: That position has not been filled yet.

MR. REID: How many people are actually working in the Department of

Business today, out of the twenty-one?

MS GALWAY: Out of the twenty-one, there are fourteen.

MR. REID: I do not see any transportation for the minister. Does that

come out of Transportation and Communications?

MS GALWAY: Are you speaking about 1.1.01?

MR. REID: No, I am just asking where it comes from. What heading would it

be under, the minister's travel and things like that? - like it is for every

other department.

MS GALWAY: There is a category for the minister's office.

MR. REID: Where it is in this -

MS DUNDERDALE: 1.1.01 Minister's Office.

MR. REID: 1.1.01, okay.

MS DUNDERDALE: Page 95.

MR. REID: Under Executive Support?

MS DUNDERDALE: Under the Minister's Office.

MR. REID: Okay. So, it is $45,000?

MS DUNDERDALE: Yes.

MR. REID: Does he have an executive assistant or parliamentary assistant,

or anything in that department?

MS DUNDERDALE: Not assigned to the Department of Business.

MR. REID: So, there is no executive assistant, political executive

assistant there?

MS DUNDERDALE: No, he uses the same staff there.

MR. REID: Any political staff there at all?

MS DUNDERDALE: No, he uses the same staff from the Premier's Office.

MR. REID: That is it for me, for now.

MS JONES: With the business advisory council, how often do they meet?

MS DUNDERDALE: They met eleven times last year.

MS JONES: Eleven times. So on an average, once every month or so.

MS DUNDERDALE: About once a month.

MS JONES: What do they do, provide advice to the staff, to the deputy, to

the Cabinet?

MS DUNDERDALE: They provide advice to the Premier, in terms of calling on

their own experience, in terms of running their own businesses, in terms of

their own intelligence with regard to businesses in this Province and direction

to best practices, alternative financing, financing of businesses and so on.

MS JONES: Who Chairs that committee?

MS DUNDERDALE: The Chair is Dr. Gary Gorman from the Department of

Business at Memorial University.

MS JONES: Okay. Where do they meet? Here in the department, normally?

MS GALWAY: Generally, they will meet either on the fourth floor of this

building or possibly they can meet at the university, as well.

MS JONES: Okay.

MR. REID: Is that where Doug House is, in that department?

MS GALWAY: No.

MS DUNDERDALE: Doug is in Executive Council.

MR. REID: He is in Executive Council.

MS JONES: This department now - this committee, for example, would they

be reviewing those seven particular files that you have on your desk right now,

those business files?

MS DUNDERDALE: No, not necessarily.

MS JONES: Okay. So they give advice to the Premier and not to the rest of

the people in the department, but to the Premier on their business experiences.

MS DUNDERDALE: And in terms of their own intelligence with regard to

business in this Province, in terms of where there are opportunities for growth

or expansion, for startup of new businesses, what is required in terms of access

to capital. All of the issues that would be associated with business development

in the Province, they would use their skills, their knowledge, their experience

to facilitate business development in the Province.

MS JONES: Are any of them paid for their advice on this committee? Do

they receive any money?

MS DUNDERDALE: I am not sure. They do not get a per diem. A stipend is

paid to the Chair and the Vice-Chair, otherwise all the other services are

voluntary.

MS JONES: Okay. The Red Tape Reduction Committee, when do they finish

their work?

MS DUNDERDALE: We get our first report within a month, this month. We are

expecting our first report within this month. All the departments have looked

within their own departments for their regulations and have developed a

three-year reduction strategy. Most departments now across government have

reported and identified their targets for year one, two and three. We are

expecting that report within the month.

MS JONES: So their first report is done?

MS DUNDERDALE: Yes, in terms of doing a scan of how much regulation we

have in government and so on.

MS JONES: What do they do from here now? Is their job finished? Do they

have other responsibilities?

MS GALWAY: Each individual department has filed a three-year strategy

that identifies how they will go about reducing regulatory requirements and

regulatory burdens within their department. They have identified the priorities

that they will pursue in order to do that. We will be reporting the progress on

a quarterly basis, in terms of the reductions that are achieved by department

and agency board and commission.

MS JONES: The committee will continue then?

MS GALWAY: The task force? You are referring to the task force?

MS JONES: Yes.

MR. REID: (Inaudible).

MS JONES: She told me what the departments were doing. I am just

wondering what happens with the committee now.

MS GALWAY: The task force will be filing their report as well, based on

their consultations. We would expect that within the month as well.

MR. REID: That committee should be around for about 500 years, I figure,

if they are going to reduce red tape in this Province.

MS JONES: When did you say the task force will file their report?

MS DUNDERDALE: All within the month.

MS JONES: All within the month, okay, because you guys have a pretty big

budget still in there for that red tape stuff, that red tape committee.

MS GALWAY: It is an ongoing project for a three year period, so there are

costs allocated to ensuring that the programs proceed and that the three year

strategies are achieved.

MS JONES: I don't have any other questions, Mr. Chairman, but I would

like to thank the minister and her officials for the answers they gave us this

evening and for giving us their time. I am sure, with all those dynamic women

over there, we will soon see the Department of Business flourishing with those

seven new contracts.

MR. REID: As soon as you get rid of your minister.

MS JONES: What?

MR. REID: Not her; the Premier is the minister.

MS JONES: Not her, God, no; she is a fabulous minister.

CHAIR: Thank you very much.

MS JONES: Thank you.

CHAIR: Are there any further questions on 1.1.01.?

MR. REID: I would just like to thank the minister for being very

co-operative again tonight. It is too bad that the minister for the department

does not come and do likewise. This is the second night in a row now that I have

complimented her on her frank, open and honest answers. It is unfortunate that

all of her colleagues are not like it, especially the minister responsible for

this department.

CHAIR: Are there any further questions on 1.1.01.?

I ask the Clerk now to call the remaining subheads.

CLERK: Subheads 1.1.01. to 2.1.01. inclusive.

CHAIR: Subhead 1.1.01., does that carry?

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, subhead 1.1.01 carried.

CHAIR: Subheads 1.2.01. to 2.1.0. inclusive, do these subheads carry?

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, subheads 1.2.01. through 2.1.01. carried.

CHAIR: Shall the total carry?

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, Department of Business, total heads, carried.

CHAIR: Shall I report that the Estimates for the Department of Business

for the fiscal year 2006-2007 carry without amendment?

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, Estimates of the Department of Business carried without amendment.

CHAIR: I would like to take this opportunity to thank Minister Dunderdale

and the officials from the Department of Business, and also the members of the

Committee and the Members of the House of Assembly staff.

We have a couple of things left. We need to adopt the minutes of our meeting

that was held yesterday evening, on April 5.

I ask for a motion now to adopt these minutes as circulated.

MR. O'BRIEN: So moved.

CHAIR: Moved by Mr. O'Brien, seconded by Mr. Hunter, that the minutes

of our meeting held on April 5 be adopted as circulated.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, nay'.

Carried.

On motion, minutes adopted as circulated.

CHAIR: I just want to remind members on the Committee that our next

meeting is scheduled for Tuesday morning, April 11, here in the House, when we

will debate the Estimates for the Department of Natural Resources.

I think you have all had notice that there is a change in the Estimates for

the Department of Fisheries and Aquaculture, and Aboriginal Affairs. That is

being held on Tuesday evening in the Committee room at 7:00 p.m. I think, as far

as I know, everyone has notice of that.

Now I will call for a motion to adjourn.

MR. HUNTER: So moved.

CHAIR: Moved by Mr. Hunter that this meeting adjourn.

I declare the meeting adjourned.

Thank you all very much.

On motion, the Committee adjourned.

Document details

Collection	Newfoundland and Labrador — Committees
Citation	2006-06-04
Type	committee
Volume / chapter	committees_standingcommittees_resource_ga45_rs06-04-06.htm
Language	en
Format	html
Source	PROVINCIAL
Identifier	ac580d9e1df9a0e885ce7a48720c971f14becc46

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