Resource Committee — Department of Forest Resources and Agrifoods — 4 March 2008

2008-03-04

Newfoundland and Labrador — Committees

April 8, 2003 RESOURCE COMMITTEE

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

MR. K. AYLWARD: I would like to welcome everyone to the Estimates

Committee of the Department of Forest Resources and Agrifoods. I believe we have

to move a motion for the Chair and the Vice-Chair.

On motion of Mr. Butler, seconded by Ms Kelly, Mr. Aylward was elected

Chairman.

On motion of Mr. Hodder, seconded by Mr. Butler, Mr. Byrne was elected

Vice-Chairman.

CHAIR (Aylward): I said I wasn't running for anything else but, gee,

that is pretty good. I just got elected again, as Chairman.

It is good to see you folks. Good morning. Maybe we will have the members of

the Committee introduce themselves and then, Mr. Minister, if you could do the

introduction of your officials. If we could go here on my right to the members

of the House.

MR. TAYLOR: Trevor Taylor, MHA for The Straits & White Bay North.

MR. E. BYRNE: Ed Byrne, MHA for Kilbride.

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

MR. H. HODDER: Harvey Hodder, MHA for Waterford Valley.

MS KELLY: Sandra Kelly, MHA for Gander.

MR. BUTLER: Roland Butler, MHA for Port de Grave.

CHAIR: Okay.

Mr. Minister.

MR. WOODFORD: Rick Woodford, Minister of Forest Resources and Agrifoods.

I have with me this morning: Allan Masters, Deputy Minister; Dr. Mohammed Nazir,

Associate Deputy Minister of Forestry, and Chief Forester with the department;

and Marty Howlett, who is Associate Deputy Minister of Agrifoods.

CHAIR: Thank you, Mr. Minister.

Before we proceed, we normally allow the minister up to fifteen minutes to

give an overview of his department. Also, before speaking to the Estimates, do

we want to go ten minutes at a time for each member and then we will kind of let

it go from there?

MR. E. BYRNE: Can I ask a question?

CHAIR: Yes.

MR. E. BYRNE: Normally, and I would assume it is the same, the critic for

our parties here - (inaudible) part of the Committee - the practice has been

that, as critic, the time be allotted, and we would give up our time if

necessary, okay?

CHAIR: Okay, no problem.

Also, when we speak into the mike, because of the system we have, we need to

identify ourselves; so, if we could identify ourselves when we speak. There is

some give and take going back and forth as we get going, but if we could still

keep identifying ourselves we would appreciate that. The Chair will try to

identify you, or will identify you, as we go back and forth. If I interrupt you,

it will only be for a second, just to say it is the Member for Kilbride or it is

the minister or whoever. We need to do that for clarification with Hansard. I

think that is about it.

On the Estimates, we will start at 1.1.01. and leave it open-ended for the

duration, if that is okay with the Committee.

Mr. Minister.

MR. WOODFORD: I am going to try to keep this brief. I gave the boys a

copy of the statement. I will do the Forestry one first.

In Forestry, most of the programs such as silviculture, insect and fire

control, are expected to the same level as last year; however, there are changes

in the components of these programs which are worth noting. For example, after

considerable re-evaluation of silviculture, my department is placing more

emphasis on tree planting. As a result, tree seedling production at Wooddale

Tree Nursery will be expanded from 7 million in 2002 to 10 million trees in

subsequent years. The expansion in the tree nursery will allow both the increase

in forest tree plantations in the future and will also allow the propagation of

planting stock for new agricultural crops, which I will talk about in a few

minutes.

Overall, approximately 4,500 hectares will receive thinning treatment, 3,500

hectares will be fully planted, while approximately 1,000 hectares will undergo

incremental planting - that is fill or gap planting whereby nursery seedlings

will be planted among existing natural regeneration to bump up stocking to

optimize site productivity - and 1,000 hectares will be treated with additional

planting stock - that is gap planting - to improve tree productivity.

Approximately 9 million seedlings, including in Labrador, will be planted in

2003. The silviculture program alone will result in 5,000 work weeks of

employment.

In the insect control program, while there is a modest increase in forecasts

for insect infestation with the hemlock looper and the sawflies, the major

change is in the distribution of the forecast areas on the Northern Peninsula,

Western Newfoundland and Central Newfoundland. While infestation declined in

some areas, such as Bay d'Espoir and last year's treated areas in

Western Newfoundland, new areas are expected to be infested.

I want to provide the explanation for increased firefighting costs in 2003,

as shown in the revised figures in the Budget document. This was because of

large fires in Labrador and on the Northern Peninsula. This required an

extraordinary increase in cost.

A major and very significant change in the forestry program is the emphasis

on Labrador. As you may be aware, last year we made substantial progress in

facilitating involvement of Aboriginal people in forest management in Labrador.

We completed a process agreement with the Innu and negotiated another interim

forest management agreement with the Innu. An agreement was also signed with the

Mtis in Labrador. As a result, a forest management plan in District 19 - that

is in the Goose Bay area - has been completed and registered for another

environmental review. Work on management plans for Coastal Labrador will

continue this year.

In order to facilitate forestry operations in Labrador, additional funding

has been provided for forestry road construction in Labrador. While major

emphasis will be on the Coast of Labrador, the Goose Bay area will also see

significant forest road construction activity. Approximately 100 kilometres of

forestry roads will be either constructed or reconstructed in the Province, and

funding for continued Aboriginal participation in forestry has been provided.

My department is constantly working on improving the effectiveness of

integrated forestry, wildlife and law enforcement. A few weeks ago I announced

the creation of a new special investigation unit in the Province. This unit will

become fully operational in the current year. This is another example of using

the existing financial resources to improve the effectiveness of our law

enforcement program. This department processes approximately 1,600 violations

concerning forestry, wildlife, ATVs, inland fisheries, migratory birds and

others. That is the forestry, and a little short one here now on the agriculture

part of it.

Agriculture and agrifoods production in Newfoundland and Labrador is a growth

industry. Sales at the primary and value-added levels are over $500 million and

the industry provides employment to over 4,000 people in many areas of

Newfoundland and Labrador.

The agrifoods branch promotes development of the agrifoods industry in the

Province. Specifically, the agrifoods branch works to further advance and grow

the industries competitiveness, sustainability, and profitability; increase the

value of secondary food manufacturing in the Province; enhance agriculture land

productivity; minimize the impact of animal diseases on our agricultural economy

and public health; and expand agriculture production in Labrador.

The 2001 census of agriculture reported some significant developments for

agriculture in Newfoundland and Labrador. Farm cash receipts increased 19 per

cent over the 1996 figures. Other findings include: Land in production increased

by 10 per cent to 44,900 acres and an average farm size increased by 7 per cent

to 156 acres. There was positive growth in the number of sheep and lamb, hens

and chicken, cattle and calves. Activities in greenhouse, nursery sods and

Christmas trees doubled over the last ten years. Since 1996 Christmas trees has

expanded 30 per cent, while nursery products and sods grew 47 per cent and 22

per cent respectively. The total of capital value of farms increased 11 per cent

to $204 million. While the vegetable sector declined somewhat, the industry

diversified into nontraditional crops with a 40 per cent increase during the

period of 1986 to 1996. During the period of 1996 to 2001 traditional vegetable

areas declined by 21 per cent as compared to 2 per cent for the nontraditional

vegetables.

The Newfoundland and Labrador Agrifoods Industry has grown significantly in

recent years and the future looks bright for the expansion of some of our

traditional commodities; for example, the dairy and for a new and emerging

industry such as: neutraceuticals, cranberries, and life science in general.

However, the global marketplace and the influence of the World Trade

Organization on funding levels for industry will be critical factors that the

industry and government will be required to face.

Federal and provincial governments are finalizing a new funding program that

will consider the support necessary for a stable industry based on growth and

profitability. The APF is a new approach which ensures that the industry is

positioned as a world leader in food safety, innovation and environmentally

responsible production. Newfoundland and Labrador will be a full partner in the

development and implementation of the APF. As a result, the agrifoods industry

will grow and prosper.

That is a little outline of both departments. Members have a copy of that.

Thank you, Mr. Chairman.

MR. K. AYLWARD: Thank you, Sir. Thank you, Mr. Minister.

Mr. Byrne.

MR. E. BYRNE: Thank you.

Good morning, thanks for coming. I guess there will be lots of questions, I

suppose, over the morning. I just have some dealing with specifics in the budget

as opposed to the larger issues at first.

Last week in the House I asked a number of questions to the Minister of

Finance dealing with what was in the budget in terms of what is being requested

under a variety of headings, particularly under Salaries and actually - in terms

of Departmental Salary Details - what is there. There seems to be a discrepancy.

The minister talked about - I think what is in the Salary Details are

permanent employees but it does not allow for contractual employees. I just have

some questions, minister, just general ones throughout different subheads. I

will start with your own office. For example, salaries in your office are

budgeted at $271,400 - this is in subhead 1.1.01 - yet in the Salary Details it

says the total request for salaries in your office is $230,096. Is the reason

for discrepancy dealing with temporary employees, or contractual employees, or

units yet to be hired, or considering being hired? What is the discrepancy

there?

MR. WOODFORD: The first one, you are asking why the increase?

MR. E. BYRNE: No, not why the increase. In the Departmental Salary

Details, under forestry, it says that the Minister's Office under Salaries is

$230,096. Yet, in the budget you are requesting $271,400. I am just wondering

why the difference? Can you make those documents compare there, Minister?

DR. NAZIR: (Inaudible) overtime and (inaudible) the total comes to

$271,000. So $230,00 is permanent.

CHAIR: Minister Woodford.

MR. WOODFORD: There is no $230,000 here.

WITNESS: No, he looking at this one.

MR. WOODFORD: Okay, in the details. You are looking at the Departmental

Details.

MR. E. BYRNE: Yes, basically I am comparing what is requested in the

budget -

MR. WOODFORD: The Temporary & Other Employees is $21,500; Overtime

& Other Earnings, $13,000; Permanent & Other Adjustments is $6,804, for

a total of $271,400. That is where they come from there.

MR. E. BYRNE: That is where they come from, okay.

MR. WOODFORD: So the Temporary & Other Employees there and it is a

breakdown of the overtime - oh yes, that is right, that is here for you. You can

see it.

CHAIR: Mr. Byrne.

MR. E. BYRNE: So these are -

MR. WOODFORD: It comes up to $271,400.

MR. E. BYRNE: So these are additional costs that are just factored in for

contractual or temporary employees that you may hire from time to time?

MR. WOODFORD: Yes.

MR. E. BYRNE: Okay. I guess the same would apply then - maybe you have

answered the question for me altogether. In the next section, 1.2.01. under

Executive Support.

MR. WOODFORD: 1.2.01., Executive Support?

MR. E. BYRNE: Yes. In the budget, the department is requesting its budget

estimate to be $483,100 and in the Salary Details it is $439,904.

MR. WOODFORD: For Overtime & Other Earnings it is $28,300. For

Permanent & Other Adjustments it is $14,896.

MR. E. BYRNE: What other adjustments (inaudible)?

MR. WOODFORD: I do not know what they have that one there for, Ed, to

tell you the truth.

MR. MASTERS: That would be step progressions and that within their

income.

MR. WOODFORD: Oh, yes. I am sorry.

MR. E. BYRNE: In terms of contractual employees, and I am speaking about

the department generally - I don't know the number, I asked the question last

week and wasn't provided with it - within the department, how many contractual

employees would you have?

MR. MASTERS: Three or four.

MR. E. BYRNE: The entire department.

MR. MASTERS: Within the entire department, we would have three to four

contractual employees; very few.

MR. E. BYRNE: Very few in that department.

MR. MASTERS: Yes.

MR. E. BYRNE: What about temporary and seasonal, given the nature of the

department both on the forestry side and on the agricultural side?

MR. MASTERS: We have a permanent complement of around 400, but during the

season we will go as high as 660 to 700. There is a fairly large discrepancy

again, as you pointed out, due to the nature of the work we are doing. There is

a big increase in the summer in seasonal and temporary employees.

MR. E. BYRNE: A question dealing with, I guess, the current land freeze

in the Land Consolidation Program: There is a lot of debate occurring right now,

Minister, within the industry - and, as you know, I represent a district where

there are probably sixteen dairy producers in the area, within the electoral

district I represent - a debate over granted land versus leased land. I would

like to hear some of your thoughts on that debate. I can give you mine first, so

you will understand where I am coming from on it.

Many years ago, government entered into the Land Consolidation Program,

purchasing land, then leasing it back, but maintaining control over the land, in

the future interest and the future protection of the agricultural industry

throughout the Province. I know some people have talked to me within my own

district saying: We believe we should be granted that land. Personally, I don't

agree with that, but that is my own view on it. It would, in my view, go against

the very reason why the Land Consolidation Program was set up.

Is the department looking at reviewing its policy on that, moving in a

different direction on leased land versus granted land, or taking some of that

leased land now and looking at granting it, giving outright grants for it?

MR. WOODFORD: We have had a committee set up on that for the past year,

that has been looking into the whole situation of grant versus lease, which is

very topical. You are right, it is one that has been garnering a lot of

attention in the agricultural industry and especially in municipalities such as

Kilbride, out in your area. They have had a number of meetings on it, and we

have also had a public one that I attended down here at - I don't know where

it was - the Newfoundland Hotel or the Civic Centre somewhere, on that very

subject, with a lot of the farmers in the area, a lot of the people who were

involved. That committee is still active and it involves people from your area

as well.

MR. E. BYRNE: Who is on the Committee?

MR. WOODFORD: I think Hector is on the -

MR. MASTERS: It is a joint committee with us and the Federation of

Agriculture. They have picked some out of that, so we have a number of people on

it, and they have.

As the minister alluded to, we did have a large group where we brought in the

lands people and other government departments at the Newfoundland Hotel last

year. From that larger group, a smaller working group was formed and they have

been meeting and hoping to report back on that, but it is in conjunction with

the farmers and the Federation of Agriculture.

MR. E. BYRNE: I am just wondering why, and maybe you can speak to it,

after twenty-odd years of a program of land consolidation which was brought into

play, and a public policy issue of leased land for the protection of

agricultural zones within the Province, at the same time maintaining Crown

ownership and leasing it back to people who are involved in the industry and

prosecuting that in the industry, why we would even consider, after millions

upon millions of dollars being spent from the Treasury to purchase such land,

granting some of that land to the very people who - we bought it for Crown

purposes and leased it to them. Are there situations where that would be

justified? I am certainly open to be educated on it, but it seems to me that, if

we are going to move in that direction, to undermine the very reason why we

brought in the Land Consolidation Program in the first place, and undermine, in

my view, the future protection of lands for the exploitation and prosecution of

the agricultural industry in the first place.

MR. WOODFORD: In your area, land, as you know, would go for around $3,000

to $5,500 per acre under the Land Consolidation Program. You are right, when

government buys back the land to save from losing it and then, all of a sudden,

gives a grant which is gone again....

I think where it came from is mainly outside of St. John's. What happened,

you get a short-term and a long-term lease, which is a fifteen or fifty year

lease for agriculture, and they spend a lifetime working it, cultivating it and

clearing it. What happens is, they do not give you a farm. Crown Land gives you

a piece of wilderness out of which you have to cut a farm. A lot of the

arguments were there that there was no security. Although Farm Credit and some

of the other lending institutions will lend on the basis of a lease, they were

looking at something to pass down. They would always have that fear of losing

their land in a lease. Say, for instance, someone had 100 acres and they

cultivated eighty and then all of a sudden there was no security, they got sick,

the terms and the conditions of the lease were not met and therefore they would

lose it and their family would lose it.

That is where the concerns came from. There is a big difference between the

land consolidation one that you are talking about here and elsewhere in the

Province, working with the lease part of it. Like I said, you got a piece of

wilderness out of which you had to cut a farm.

In here, under the land consolidation, you would buy, say, fifty acres,

probably thirty was cleared - whatever the maximum on that would be cleared,

probably thirty or forty acres - and yes, it would be worked and leased back.

There is a difference there, there is no question about that. There are two

different areas of the Province with different thinking.

MR. E. BYRNE: The principle is the same, though.

MR. WOODFORD: Pardon me?

MR. E. BYRNE: The principle is the same.

MR. WOODFORD: The principle is the same, yes.

MR. E. BYRNE: No matter where it is, it is still leased land or whatever

the case may be.

MR. WOODFORD: Yes. Your arguments - you are right. The arguments for

that, had it gone to - say, for instance, it went to a grant; there still would

have to be conditions on it, that it would be kept in agriculture.

You are right. Can you imagine paying $5,500 for an acre of land, to get it

from someone who is probably going to put it into something else - into, say, a

housing development - use it for agricultural and then all of a sudden you grant

it and then they have the right to sell it. You could lose it.

MR. E. BYRNE: I do not mean to monopolize, because when I am finished I

am going to be finished, if that is okay with everybody?

CHAIR: That is no problem.

MR. E. BYRNE: In recognition of, your own recognition of, the differences

between agricultural land in an urbanized setting like on the Northeast Avalon

as compared to the demand for land outside of that, and particularly on the West

Coast and Central Newfoundland and other areas, how does the department arrive

at the dollar figure per acre of land? Is it an arbitrary figure you just talked

about, $3,055 per acre under the Land Consolidation Program? How do you arrive

at that amount?

MR. WOODFORD: Under the Land Consolidation Program, I will get Marty to

refer to that one. (Inaudible) things on it, the details, but I think they would

look at these certain areas, for instance Kilbride versus in around the St. John's

or Torbay area, and the price of the land, what is going for housing development

and so on.

I know outside, what they do is look at - say for instance if Farm Credit

brought land, if a farmer sold land in the last five or six years, they take an

average of the land that is cleared. Say, for instance, you had a hundred acres

and there were fifty acres cleared on it, they would average it out. Instead of

$1,000 an acre they would give you $500 an acre for what is cleared. You would

get probably $500 an acre for what is cleared on that hundred acres. That is it.

So you would get paid for the fifty acres. That is how they do it.

Usually out around our way now the difference is around $498 for cleared land

and $211. That is the Farm Credit price now that they pay for forested versus

non-forested, and out around other areas, Springdale, Grand Falls, pretty well

everywhere out there.

The Land Consolidation Program: Do you want to refer to that one, Marty?

MR. HOWLETT: With regard to the Land Consolidation Program: As you are

aware, when a person applies to the Land Consolidation Program, in the

department there is a committee set up, and we have the funds. Realty Services

does the negotiations with the applicant to sell the land.

MR. E. BYRNE: At Works and Services.

MR. HOWLETT: At Works and Services, yes. They do the actually

negotiations.

MR. E. BYRNE: Does the committee - I don't mean to interrupt, but this

is pretty freewheeling here.

MR. HOWLETT: Yes.

MR. E. BYRNE: There is a committee set up to deal with that, is there?

MR. HOWLETT: Yes, that is right.

MR. E. BYRNE: Who is on that committee?

MR. HOWLETT: I don't know the names, but we have a representative who

sits on the committee, Realty Services, and Realty Services does the

negotiations. We, as a department, do not do the negotiations.

MR. E. BYRNE: I know Martin Balodis is involved, I think, from Works

Services. Who is on from Agriculture?

MR. HOWLETT: It would be Hazen Scarth or Grant Martin, one of our lands

guys. Jeff Whalen, not Hazen.

MR. E. BYRNE: Is there another government appointee to that?

MR. HOWLETT: There probably is. Jeff is from us, Realty Services, and I

think there is an independent guy who sits on that committee too. So, there are

three.

MR. E. BYRNE: Appointed by government.

MR. MASTERS: Yes.

When the committee gets the application, they have Realty Services branch of

Public Works that does the negotiation. We do not do the negotiation as a

department.

MR. E. BYRNE: Why is that?

MR. HOWLETT: Because they are the guys with the expertise on lands. They

look at lands in the area; what they are selling for; what has been sold in the

area; the ones that have been sold for agriculture, both in the land

consolidation, privately, and what have you.

MR. E. BYRNE: So they arrive at a figure somehow based upon -

MR. HOWLETT: Yes, they arrive at a figure based upon the number of acres

that would be cleared on the land, how long it is cleared, how much is not

cleared, how much is bog, how much is suitable to clear, how much is treed.

There are a whole bunch of factors that come into play. Then they will come up

with an average price per acre. It could be anywhere from probably $3,000 to

$5,500 per acre. All those factors would be factored in and that will determine

what it would be. It could be $4,000 or $4,500. That would be paid for every

acre, whatever the average will be.

MR. E. BYRNE: Do you think that is cheap in the more urbanized areas of

the Province?

MR. HOWLETT: I guess if you look at it and compare it to lands for

probably housing, you might say it is cheap. As you know, when the zoning

principle is done lands are zoned and the value applied to the land based on the

purpose of the zoning. We have lands around St. John's, for instance, for

heavy industrial, oil and gas, and so forth.

MR. E. BYRNE: I do not disagree with protecting agriculture land, by the

way. I think you know that. I want to state that for the record. I am a big

proponent of it myself.

MR. HOWLETT: Yes, I realize that. What would happen then when the average

price is determined is to determine on the use of it that it is zoned for. You

would not go in and come up with an average price for housing because the land

is not going to be sold for housing.

MR. E. BYRNE: On development costs, et cetera.

MR. HOWLETT: The land is for agriculture or for oil and gas, or what have

you. All those factors come into play. We have had a range of prices. Anywhere

from probably $2,500 to $5,500 to $5,600 per acre.

MR. E. BYRNE: The reason I ask is because a couple of years ago - I know

the Simmons Report went a long way to addressing many of the concerns of private

landowners on the Northeast Avalon - not all of them, but some of them. I still

believe there is a significant opportunity for the protection of more

agricultural land on the Northeast Avalon. Land base is what is going to make

agriculture and dairy producers - access to land base and having it will mean

the difference in them surviving or not surviving as commercial entities and

viable commercial entities forever and a day.

I know a couple of years ago a group of people who owed - private landowners

came to see me looking for support because they felt the prices being offered

were not reasonable enough, I guess is the best way to put it, and talked about

agriculture stymieing this and that. I said to them at the time: Look, why don't

you sit down with the producers in the area? You are not diametrically opposed.

What you want is what maybe they want. If you want a fair price for your land,

or a fairer price for the land than what is currently being offered - I mean

support from the industry will be there because they want the land too.

Have there been any overatures made in terms of assessing - because some of

it is pristine, pretty well right on the doorstep, that could be developed, and

with mounting pressure as time goes on - and you have seen it, I am sure, Marty,

and I know others have as well, in terms of the last twenty years, the continued

pressure - that maybe there is an opportunity to clear up what is remaining

within the freeze, even if we have to be a little bit more reasonable in terms

of the prices that we are offering. Would you see that as a possibility?

MR. WOODFORD: Some people might, but like you say, there may be some

farmers out there who are willing to pay pretty well the same price. When they

look at the fact that government will pay it, whether it is $3,000, $5,000 or

$10,000 and then lease it back to them, I suppose, being prudent and nipping the

dollar and everything, they look at and say: Well, why pay out this upfront? I

carry the loan or the mortgage on it.

MR. E. BYRNE: I am talking about the department being more reasonable, I

guess, in terms of prices - from a point of view of being able to get within its

own shop larger tracks of land.

MR. WOODFORD: Larger tracks and then -

MR. E. BYRNE: The problem is this. I will give you a legitimate case. A

person who has come to see me - with thirty-four and thirty-five acres - but

cannot do anything with it because it is protected in an agricultural zone. If

they do not lease back to a legitimate and bonafide agricultural operation, the

City of St. John's is going to zing them, from a tax point of view. They would

never be able to afford it. So they are sitting there and saying: Well, this

land is mine. I own it. It belonged to my father and grandfather. It is

thirty-four acres and it is just as well that I did not own it. I cannot develop

it. I am in a position where unless I lease it to a legitimate agricultural

operation, I am going to be taxed on it from the municipalities point of view,

and I will never be able to afford to pay the taxes on it.

In terms of fair consideration, it does not seem to be that those interests -

I mean, if government has an absolute right to zone for agricultural purposes -

I, as one person, support that in terms of the larger public policy issues

surrounding that, but, at the same time, there has to be some recognition of

what - once we infringe upon and want to exercise that right, and we are

infringing upon someone else's private property rights, then, I guess, the

legitimate question is: Are we compensating that person or that group or class

of people fairly?

MR. WOODFORD: Yes.

MR. E. BYRNE: Twenty-five hundred to $5,500 an acre on the Northeast

Avalon, given the proximity to that piece of land being open for development,

and many developers looking for it, as you know, many developers who would

develop it tomorrow, I guess in terms of the ultimate protection of the zone and

the land in it, could we not be a little bit fairer in terms of the prices that

we are offering to people?

MR. WOODFORD: That question has come up from time to time, and some

people say, well, boy, you are paying too much for it; but, like you say, every

day it is getting more expensive, especially in that area. That is something

that we are going to have to take a serious look at out there.

By the way, that Simmons Report, that ten-year - that is up this year. It has

to be done again, reviewed, but there is an awful lot of pressure out there. As

you say, to take out this piece, and take out that piece, and I want to develop

- there is an awful lot of pressure.

MR. E. BYRNE: We are not talking about a lot of people.

MR. WOODFORD: No, not a lot of people.

MR. E. BYRNE: That is the other side of it. If we chose to do it now, we

really could, forever and a day, on the Northeast Avalon, with the land that is

remaining, solve it. When the land freeze first came into effect, I think it was

Ed Maynard who was the Minister of Forestry and Agriculture in 1972, it was

supposed to be a temporary measure until they sorted it out, and it has kind of

evolved into still where it is today.

I am not different than yourself on it, other than speaking from a proponent

of the industry, from someone who supports it, that we have an opportunity to

clear this up, that it will be bothered anymore, that pressure will not be there

because it will be in the Crown's hands and not in some private hands.

The only issue outstanding, as I see it, and I have worked with people in the

area on it, is the issue of: What is fair compensation? I do not think anybody

reasonable would expect thirty-four acres divided into half acre lots and give

me $40,000 per half acre lot. No one is expecting that, that is foolishness, but

for undeveloped, unserviced agricultural land, $2,500 (inaudible), people were

getting that fifteen years ago, twenty years ago. Maybe it is time to review

what the department is doing in that respect. You do not necessarily have to pay

it out all in one lump sum. People would be willing to take it in increments

too, I think.

MR. WOODFORD: You are right in regard to the pressures out there now,

especially with the new 31 million litre industrial milk quota. I mean, there

are more pressures on for land. Like you say, the cost of production now for

feeds is the biggest element in that. It is something like 26 per cent or 27 per

cent, so it is an area that we are going to have to take a serious look at, and

other areas in that, too, with regard to the Crown part of it, that we can

accommodate them.

MR. E. BYRNE: It is an important public policy issue. I mean, last year

we entered into - the department, along with the Department of Finance - a

drought assistance program. The fact of the matter was, we have enough land

base, if it was developed properly, that we could grow more than our own needs,

cut costs for producers in terms of - you know, there has been elimination of

the feed freight transportation subsidy. When we get into a position, or

producers get into a position, where they have to import feed, it is the bottom

of the barrel. It is junk, basically.

MR. WOODFORD: That is right.

MR. E. BYRNE: What has to be added to that just to keep the quotient and

the quota for milk production, and where it should be in terms of quality,

raises costs; but if there was enough access, or more access, where people could

really be self-sufficient and then some. Because I know at that time of year

when government entered into the drought assistance program, the only place in

the country, really, was parts of Saskatchewan where there was feed available.

Everybody in the country experienced the same dry climate for the whole year, so

that was a tough summer.

We could get to a position, and it is not a quantum leap to think that it

could not be done fairly quickly, where you could provide enough land base for

people to grow enough to be self-sufficient and not having to import.

MR. WOODFORD: And it is the biggest cost. They are doing some real good

things out that way, too, with regard of the corn production. I mean, really,

really good enhancement of work.

MR. E. BYRNE: I was down in Codroy Valley the summer. See the corn down

in Codroy Valley. You know, we should send a CBC camera down to picture it. No

one would be believe it. It is unbelievable.

MR. WOODFORD: Yes.

CHAIR: The Chairman wants to interject.

It is a good spot. The Codroy Valley is a beautiful spot. I just want you all

to know that.

Thank you very much, Mr. Byrne.

MR. WOODFORD: (Inaudible).

MR. E. BYRNE: The stuff at Walsh's farm on Pearltown Road -

MR. WOODFORD: Kevin Williams and (inaudible), what they are doing is

excellent. That is the biggest cost of production, the feed. That is our biggest

cost. We need a lot of land. I think we need something like, I do not know if it

is 7,500 hectares now or 15,000 in order to accommodate -.

WITNESS: Fifteen thousand acres.

MR. WOODFORD: Yes, 15,000 acres to accommodate the new 31 million litre

quota, if they get it. We only have fifteen years to produce it. Two of them are

gone.

MR. E. BYRNE: Yes, we have to move on it.

MR. WOODFORD: We have to move on it.

MR. E. BYRNE: It is there. The land is there. We just have to move on it.

MR. WOODFORD: We are looking at the inventory part of it, Ed, on that

one, and also the Crown; there is some Crown in that area out around the

Cochrane Pond area. We are looking at that, to try to get the boys into

something out there that would enhance their whole business.

MR. E. BYRNE: We should move on that out around the Cochrane Pond area

before government, other departments, scoop it up for other public policy

purposes, because there is pressure on it for that too. That needs to be done

quickly.

MR. WOODFORD: Yes, exactly.

MR. E. BYRNE: That is where the growth of the industry is.

MR. WOODFORD: That ten year review is up now, too, and that is another

area, when they do the review, that there are going to be some pressures. I know

in this department I get them every day of the week from so-and-so who wants to

do this and do that, but they are certainly not in agriculture.

MR. E. BYRNE: One final question.

You referenced the industrial milk quota and the price, I guess, that the

national supply program pay for getting Newfoundland and Labrador involved in

the national milk strategy and, I guess, possibly closing a loophole from a free

trade point of view and world trade.

I am told that we have opportunities for - and you are aware of this, too, I

am sure - cheese production, yogurt production, cottage cheese, speciality

cheeses, and that there are possibilities within the Immigration Investment Fund

to pursue some of this. You can correct me if I am wrong at all on this, but I

am also told that getting the Department of Industry, Trade and Technology to be

more aggressive in pursuing that has been a challenge; I guess I will put it

that way. Any comment on that whatsoever?

MR. WOODFORD: I know that the dairy commission has - the Newfoundland

Dairy Farm Association - has met with Industry, Trade and Technology on that

very subject. They are looking at it and they should have - because there are

people over there who were in the agricultural industry before, like Phil

McCarthy. They are looking at it. I do not know how successful they are going to

be with it, but there is a possibility of accessing some money there. They were

looking at it primarily from a land enhancement point of view. For instance, you

are going back to the land part of it, either buying the land or clearing other

land, getting it ready so to speak, so they can get into more production with

regard to the industrial milk quota. That is the approach they have taken.

On your other one with regard to the industrial milk, like cheeses, yogurt

and things like that, there are people looking at that now by the way. Now,

other than the Central Dairies and the Brookfields of the world, there are other

framers, two or three farmers probably getting together and doing things. So

there are people -

MR. E. BYRNE: I know, we have a real big advantage. We are the only

Province in Canada that has an industrial milk quota of 31 million litres

available to us - to be able to leverage that. We are on the doorstep and the

trading partner with the largest market in the world. There are other countries

who are interested in getting a way in, an access to that market, and this is

one of them.

MR. WOODFORD: Oh, yes.

MR. E. BYRNE: How we leverage that - there should be an all out, flat

out, aggressive strategy on the one hand, but pursuing it relentlessly on the

other, because that is where real economic opportunities exist; particularly in

rural Newfoundland with the quota. That is where the opportunities will enhance,

in terms of government's economic strategy for - as part and parcel of its

economic strategy. The potential for this is twice the size of Voisey's Bay in

real employment, real jobs, year over year, sustainable forever and ever; and no

one talks about it.

MR. WOODFORD: Forever and a day, yes.

That 31 million would double the production of milk in the Province. That is

what it is today.

MR. E. BYRNE: And double the workforce.

MR. WOODFORD: Yes.

MR. E. BYRNE: Okay, that is all I have.

CHAIR: Thank you, sir. Thanks, Mr. Byrne.

Mr. Hunter.

MR. HUNTER: I would just like to get into some of the areas of the

budget, and I will ask questions to the appropriate people opposite there.

Perhaps I should make some comments, Mr. Chair, before I get into that. I

will start with forestry first, I guess, seeing forestry is an area that I am

most familiar in Central Newfoundland. I understand, Minister, that you are

trying very hard, I know, to find a solution to the problem in Stephenville with

the wood supply out there. Do you foresee any problems with respect to the Grand

Falls-Windsor mill? If you find resources on the Island, would there be any

impact on the Grand Falls mill with respect to the two paper machines there? Do

you see any problems arising there?

MR. WOODFORD: No, I do not see any problems arising from the Grand Falls

situation, because they have their AAC pretty well for that mill. There is no

fundamental change really with the Stephenville mill now and what was there all

along, except for the fact that they are saying they have no supply. They never

did have a supply for the Stephenville mill. They were sort of guaranteed a

twenty year supply but that was twenty-three, twenty-four years ago.

The Grand Falls mill, I do not see any repercussions whatsoever. On the

Stephenville one, we have a task force set up now to look into it from Abitibi

and government. In fact, there are more meetings this evening on that very

subject, to look into the possibilities of what could be done there. Really, on

the fibre side, we can increase the AACs in the Province. The Labrador wood,

there is a possibility but the only thing you are going to get out of Labrador,

as far as I am concerned, is the residue because everything that should be done

with the resource in Labrador should be done, and the value-added and whatever,

can be done there, should be done and then the residue come back to the Island.

Like, for instance, the chips or the pulp wood that is no good for the saw lines

or something like that. Recycling, they could get into recycling. They could get

into - less than the cost of Stephenville, say co-generation. We just opened the

one in Corner Brook on Friday.

Getting back to your original question, the Grand Falls one I do not see -

they have their own AAC out there. Based on the production they have there, they

should be safe and sound. Stephenville is the one that is in jeopardy right now.

We are doing everything in our power to try to access wood, whether it is

offshore, recycling, co-generation, whatever. We are working on that with them

to see if there can be a resolution.

MR. HUNTER: I have had calls from mill workers actually in the mill at

Grand Falls-Windsor, they are noticing wood leaving the yard going to

Stephenville. They were quite concerned that if this is wood designated for the

mill in Grand Falls-Windsor, then why is it going to Stephenville? Wasn't that

cut under a permit for the Grand Falls-Windsor mill? Are there any regulations

in the department to say that this wood cannot be trucked from one yard to the

other? These people were told that this wood was en route to Stephenville from

the yard in Grand Falls-Windsor. They want to know - this was the question they

wanted me to ask you. Are there any regulations saying that that wood could not

be trucked under the permit of the Grand Falls mill to Stephenville?

MR. WOODFORD: That is a fairly common thing under the inventory part,

under AAC. If they are only going to use 500,000 cubic meters in the Grand Falls

mill and they are up to production and so on, and they have, say, 50,000 or

100,000 left - as you know, in the last five years Abitibi left something like 1

million cubic meters of their AAC on stump. If they want to ship it to the

Stephenville mill, that is their prerogative, because that is their AAC for the

year, the 602,000 or whatever it is that they got there. It is within their AAC,

they are not going over it, so they have a choice as long as the production is

up in that Grand Falls mill.

MR. HUNTER: Workers want to know: That AAC is designed for the Grand

Falls mill and if it was left on stump or if they decided to cut it and send it

to Stephenville, is there any regulation saying that they cannot cut that wood

and ship it to Stephenville? That is what the workers want to know. As far as

they are concerned, that AAC and the permits that the mill got are for the Grand

Falls mill. That is what they think it is. They want to know: Is that so? Can

Abitibi cut that wood and ship it to Stephenville if they want, as part of their

AAC?

MR. WOODFORD: It is within their AAC and what they do with it in their

operation is entirely up -

MR. HUNTER: There is no policy, no legislation, saying they cannot do it?

MR. WOODFORD: To say they cannot, no. As you know, in that agreement last

year, they have to keep up the production at the Grand Falls mill.

MR. HUNTER: What they are worried about right now is, they are having a

lot of downtime and by having downtime if the woods keeps on getting cut, then

what is the company going to do with the wood? They might encourage downtime in

the Grand Falls mill so that they will have wood for Stephenville. That is what

the workers there are surmising and they are expecting that is what is going to

happen. They are saying: This mill had an allocation of wood 100 years ago and

Stephenville doesn't. The workers in Central are saying that wood is for the

machines here and if the machines are down they don't cut the wood. That is

what they are saying. They wanted to know and they were asking me the question.

MR. WOODFORD: There is always the fear out there of that, especially with

the other mill there. There was always a fear of that. As you say, we have that

agreement with them now and they have to keep the production up. They cannot

violate that agreement with us. If they do violate that agreement, well then

they are going to have to answer for it.

MR. HUNTER: There is still a fair bit of wood on the West Coast yet that

is not being cut this year. I know one contractor who just went out of business.

Bruce Budgell went out of business and I think he has a fair amount of wood that

he was supposed to cut this year for the Stephenville mill, and that wood is not

being cut now because he has gone out of business. It has not been allocated to

anybody else. Would your department try to find a way to make sure that his

quota of wood for the year will be cut to keep the Stephenville mill going for

those twenty-three days? I understand he has a large quota of wood to cut for

Abitibi over around the Burgeo road somewhere, in that area somewhere. Have you

looked into that to find our why they are not allocating that permit, that

allocation wood?

MR. MASTERS: Yes, they did have their contract, Mr. Budgell, that went

into receivership or had some business troubles I guess this year. They have

been working. There are other contractors extra. I would be surprised, given the

situation at Stephenville, that Abitibi would undercut their limits this year. I

am not saying they would not, but I would be surprised. As the minister alluded

to earlier, going back the past ten years, they have on occasion undercut their

limits.

I want to go back to your question of wood moving from Grand Falls to

Stephenville, if I can. That is a fairly common thing. All the wood off the

Bonavista Peninsula in the Clarenville area is trucked into Grand Falls. It is

just easier than trucking it to Stephenville, although that Crown land wood, in

theory I guess, goes to Stephenville. So it gets trucked into Grand Falls. It is

not uncommon, particularly in the spring of the year, to see a lot of trucks

leaving Grand Falls and trucking wood into Stephenville, or vice versa if that

is where it is, but normally it is east to west. So they have enough wood on

their own limits to keep Grand Falls going. Then all of the Crown land wood in

Central and Eastern Newfoundland also flows into the Grand Falls mill and they

take some of the wood off their western limits and move it towards Stephenville.

It just makes an operational sense for moving wood around.

MR. WOODFORD: They have around 50,000 cubic meters today out on the West

Coast.

MR. MASTERS: On the West Coast, yes.

MR. WOODFORD: Virtually, all the rest is central and east.

MR. HUNTER: Yes. I have a few complaints also from some of the

contractors complaining that a lot of the larger logs are not being accessed by

the sawmills. They are coming back and saying the logs are too large. They are

too big to be handled by certain sawmills because of the technology they have in

their equipment. These logs are going back to the paper mills to be used as pulp

wood. Have you encountered anybody specifically concerned about that, that these

bigger logs are coming to sawmills and they cannot be handled so they are going

back to the paper mills? That is a crime to let that happen today with these

larger logs.

MR. WOODFORD: Yes, it is, but I am getting the opposite, to tell you

truth. They are telling me that they will not pick the logs out for them. They

will not give them the proper size logs, especially the sawmillers in central

and east. Abitibi will not give them the good logs. They just bring them in and

(inaudible) stuff.

MR. HUNTER: I am not talking about the oversized logs, you know.

MR. WOODFORD: Yes, I know, the oversized. But there is no such thing as

oversized for some of those mills. They can saw them. Now some of the mills,

like further east, like Bloomfield, they do not mind the small run of logs, but

in a lot of cases the sawmillers out there are complaining to me about bush run

stuff. They are just taken out of the bush in small, tiny logs but some of the

mills can accommodate it.

MR. HUNTER: Yes, there is a certain amount of logs they can take but -

MR. WOODFORD: Yes, I know.

MR. HUNTER: - some of these logs, with the mills they have cannot handle

the great, big logs.

MR. MASTERS: I could address that. It is a very small proportion, but you

are right, I have seen it in the Glenwood operation where they are geared for

stud wood, for the most part, smaller dimension trees. If you look in their

operation you will see a few tractor-trailer loads of these really big logs.

What we did last year is we made an arrangement with Northco, which is in Baie

Verte, and had the logs trucked up there because their sawmill cannot handle the

much larger dimension. I have not heard tell of any going to the pulp mill but

they certainly would have been seen leaving the sawmills heading west, but we

did make arrangements for Northco to saw those. It is much more in the direction

that the minister indicated where the sawmills are saying: This stuff is too

small, as opposed to it is too big. But there is a proportion like that, you are

right.

MR. HUNTER: Perhaps I should get into some of the agricultural stuff. I

know under the new APF Agreement, Mr. Howlett - are there any monies available

to continue the work at the feed mill for Stephenville? It has been a concern

now that this - they are anxious to get this finished, and with the season

coming up on us fast, to get the feed into that mill. It seems to be sort of

slowed down now and they want this up and running as soon as possible. Is there

any extra funding around that they can get to finish off that feed mill project?

MR. WOODFORD: My understanding with the feed mill, there is quite a bit

of agricultural money gone into that.

MR. HUNTER: Yes, there is.

MR. WOODFORD: My understanding, there is supposed to be enough money

there to finish it, unless there is something that come up lately that I do not

know about. I know that under the different programs there they got monies to

finish that feed mill. So if there is anything new there that it is not

finished, it is news to me, Ray.

MR. HUNTER: I spoke to some of the producers on the West Coast and they

said a commitment has not been made to allocate the money to finish the project

this spring. Are there any concerns on that?

MR. WOODFORD: No, I have not received anything new on it. I was talking

to Bruce Simmons, who was really involved in that, he is from - just before you

get to Corner Brook there. He has a layers operation there, and dairy. I

understood that that was supposed to be finished. I can check it out for you. I

will check it out and see what the status of it is.

MR. HUNTER: Actually, one of the Deer Lake producers I was talking to at

the federation AGM was concerned that the money would not be there fast enough

this spring to finish it. They are hoping to get this up and running for early

shipment to feed coming in.

MR. WOODFORD: Yes, we will check into that one for you but my

understanding was they had the funds to do it. I will check it out for you.

MR. HUNTER: Under this APF Agreement, is the criteria set down yet for

where the money is going to be spent with respect to farm development, land

development, and stuff like that? Is there any criteria set out yet?

MR. WOODFORD: No, there will be an implementation program there. The APF

is not signed yet, officially signed by the feds, but it is pretty well agreed

on. The $3.9 million from the feds and $2.6 million from the Province this year,

which is the best agricultural agreement that was ever in this Province, to be

honest with you, for the next five years. As you know, the old Safety Nets

agreement was finished March 31.

This agreement pretty well covers everything, to be honest with you. We have,

as far as I am concerned, enough flexibility in that agreement. It was tough

slugging with the feds because they do not want, as you alluded to, the land

part of it. They did not want that involved at all, but under the five pillars

in the agreement - for instance, the environmental part of it, the renewal,

science, and business risk management and so on - we have enough flexibility

there, I think, to cover pretty well every aspect of the agricultural industry

in the Province, from the small right on to the biggest. Even some - and I am a

bit hesitant about talking about it - in the supply management area. As you

know, under the Safety Nets agreement supply management was not mentioned at all

- or it was not eligible, I should say. Even in this one, I think we might be

able to, in some of the programs there, enhance some of the supply managed

areas.

MR. HUNTER: What type of emphasis will your department be putting on

berry production, like blueberries, cranberries and stuff? Will a lot of that

funding come from that program?

MR. WOODFORD: It did before, under Safety Nets. As you know, some of the

cranberry production was enhanced. We had our first commercial harvest this

year, out in Kevin's area. It was fairly successful. The blueberry industry,

the enhancement fund for the blueberry industry, we had that and I think we will

be able to access funding under this one for that. We are talking to a fellow in

your area, a fellow by the name of Jeff Milner. A letter went out to him, I

think, just yesterday, telling him just that. Once we get the agreement signed,

we should be able to accommodate the blueberry.... All those sectors, the berry

sector especially, are areas where we can enhance the agricultural industry.

Those are areas where, pardon the pun, it can really grow.

MR. HUNTER: There is a lot of interest in Central now.

CHAIR: The minister has a good sense of humor, I must say.

MR. HUNTER: There is a lot of interest in Central. I think there is

another fellow trying to get one going near Buchans there, to get an operation

going there. He was wondering if the criteria would be that he could access

funding to get his place up and running. He has only just started. I wasn't

sure, because I did not see any criteria only on the APF program to say that

they would be funded for development.

MR. WOODFORD: I do not see any reason why not, Ray, to be honest with

you. I do not see any reason. Why shouldn't they?

MR. HUNTER: I guess we will get into some of the Estimates in the Budget.

There are some areas there that I would like to question you on. The Vice-Chair

has already questioned some of it there.

section 2.1.02.06. Purchased Services, Operations and Implementation for

Forest Management, could you tell me what those purchased services would be for

Operations and Implementation?

MR. WOODFORD: I am sure that has to do with the move to the -

WITNESS: Maintenance (inaudible).

MR. WOODFORD: Maintenance, is it? I will get this - 2.1.02.

MR. HUNTER: There is $355,300 budgeted, estimated.

MR. WOODFORD: Under 2.1.02.06., that is maintenance and repair, and

vehicle and machinery rentals, and - contracting of services such as snow

clearing of forest access roads, services for road grading, ditching, spreading

of pit run and crushed aggregate and so on, culvert installation and washout

repairs.

MR. HUNTER: The next question I was going to ask, would that include

vehicle leasing and stuff?

MR. WOODFORD: Yes.

MR. HUNTER: Is there anywhere in the budget there, instead of leasing

vehicles, that you replace some of the vehicles this year? Because a lot of the

vehicles now are ten years old, or more, and some of them - I know I have talked

to a lot of the technicians and they are finding that a lot of the vehicles are

just not dependable.

MR. WOODFORD: Go right to your next one, Ray, 07. Property, Furnishings

and Equipment. That would cover that.

MR. HUNTER: That will one cover - okay, that was the next question I was

going to ask.

MR. WOODFORD: That is the one that will cover -

MR. HUNTER: So, there is a plan to replace some of the vehicles this

year?

MR. WOODFORD: Yes.

MR. HUNTER: There was a big difference last year. You spent $69,500 and

then this year you are up to $549,700. Most of that would go into the

replacement cost -

MR. WOODFORD: Yes, that would be the one to cover that.

MR. HUNTER: Are there a number of vehicles that you have in mind to

replace?

MR. WOODFORD: We would like to replace pretty well all of them, to tell

you the truth. We would like to, but -

MR. TAYLOR: (Inaudible).

MR. WOODFORD: What?

MR. TAYLOR: I know one (inaudible) needs to be replaced.

MR. WOODFORD: Now that the season has ended, I think most of that will be

going into trucks.

MR. HUNTER: We had concerns last year in the Bishop Falls regional

office. They had one truck for - I think there are five or six during the fire

season. There was one truck available and they had to take turns to go out in

the truck while the other ones were sitting by, could not do patrols and

whatever. The truck that they had was really old, even though some of the

management vehicles were pretty good, fairly new, but when you get down to the

workers, technicians, and the fire patrol people, they could not understand why

there were so many of them there with one vehicle. If you are going to have six

people, you should have at least two trucks with three in a vehicle.

This year, I guess, you will be looking into that and finding out -

MR. WOODFORD: We will be, and we have had complaints about that. We know

that we have some vehicles that should be replaced. It is trying to get the

money to do it all, to be honest with you. We know that out there, there is

definitely a need for some new vehicles, no question about that.

MR. HUNTER: Seeing, too, that some of the vehicles of some of the

management - I mean, they were driving extravagant vehicles compared to what

some of the lower workers were driving. They were driving ten-year old pickups

that were falling apart. Those in the top management jobs were driving $50,000

vehicles, extended cap, full (inaudible), dressed up and everything. They were

quite upset over that. Why would they have to drive these vehicles when the top

management were driving the best?

MR. WOODFORD: I had some reports about that last year. We checked it out,

and with regard to the pricing of the vehicles they got them at pretty well the

same price as what they had gotten the others because of the package deal and so

on. I have never heard about the management - I have heard it, I suppose, but I

haven't seen or witnessed it, that some of the management are driving around

in those vehicles and they are parked, and the person on the road who must

depend on that vehicle is out driving around in something older. If that is so,

I would like for it to come to my attention.

MR. HUNTER: Well, it was brought to my attention, that some of the

management people were driving long distances, commuting back and forth to work,

and even when they were not on call they were still driving an hour's drive

from work to home, when all the rest of the employees had to bring their own

vehicles to work. They were pretty upset over that. This was going on daily,

people driving, I suppose, eighty and ninety kilometres to get to work in a

government vehicle, and even when they weren't on call they would take the

vehicles home with them. That was a bit of a concern that some of the workers

were bringing to my attention.

MR. WOODFORD: I can understand why they would be upset, to tell you the

truth.

MR. HUNTER: That might be a way to trim some fat off the budget, on

vehicles there.

On the next page, 2.1.04, Capital, Resource Roads Construction, there is also

under Purchased Services there an amount of $3,683,500 estimated for this year.

Could you tell me, Minister, what that Purchased Services would be?

MR. WOODFORD: That is primarily for the resource road construction. That

is up this year, up all over the Province, and we are hoping to be able to do

more work with access roads both on the Island and in Labrador this year. As you

know, the more access roads we have in the easier it is to access timber.

MR. HUNTER: So that would be for that purpose, that new extra amount of

roads you are putting in this year.

MR. WOODFORD: Yes, and that will be done all over, Ray, across the

Province, both on the Island and in Labrador, like I said, to enhance the

forestry industry and to be able to make it easier and more accessible to people

to get it. We got an increase this year and we had an increase last year in

that. As you know, a couple of years ago there was only $2 million in that, or

$2.2 million, so we got it up pretty good, with that and the agricultural part

of it.

MR. HUNTER: What other services would be included in that, besides that

purchased service? Would there be any other major services?

MR. WOODFORD: No, all forest access roads and things like that. There is

nothing else in that. There is no equipment or anything in that, I don't

think, is there?

WITNESS: (Inaudible).

MR. WOODFORD: No.

MR. HUNTER: Okay.

Up the page there on Silviculture Development, 2.1.03., also for Purchased

Services, 06., the $4,636,800, what would those purchased services involve?

MR. WOODFORD: I would say it is all to deal with the spray program.

WITNESS: No, (inaudible).

MR. WOODFORD: Oh, that is right, that is the contract.

WITNESS: Page 116.

MR. WOODFORD: Yes, page 116, under 06. Yes, that is contract services for

the various Crown and silviculture projects. For instance, you go out and you

contract people to do the silviculture, to work the planes and the helicopters

or what have you. It was all scarification equipment, and if you needed anything

with regard to doing silviculture, whether it is any kind of -

MR. HUNTER: Any Wooddale expense come in under that?

MR. WOODFORD: What?

MR. HUNTER: Any expense at Wooddale Tree Nursery come in under that?

MR. WOODFORD: I would not say.

WITNESS: Yes, it does.

MR. WOODFORD: Does it? Oh, yes, the nursery alarm, miscellaneous items

for (inaudible) in conjunctions with nursery tours (inaudible).

MR. HUNTER: That do not include the expansion, though, does it, at

Wooddale?

MR. WOODFORD: Would that include the expansion?

WITNESS: Most of the expansion is paid off.

MR. MASTERS: Wooddale is in the silviculture program, as it always has

been, so it is all included. Most of that service, the $4.6 million, would be

contract planting, contract pre-commercial thinning, but the operations of

Wooddale are part of that cost too. With respect to the expansion, most of the

capital cost of that has already been paid down but the operating part of that

would certainly come out of this particular account centre.

MR. WOODFORD: It would not be the capital. By the way, we have expanded

that, as you know, to go from $7.5 million to $10 million this year.

MR. HUNTER: Under the heading 01. Salaries, $2,342,200, does that include

the salaries at Wooddale too?

MR. WOODFORD: Yes.

MR. HUNTER: How many new job positions are you expecting to increase this

year with that new expansion?

MR. WOODFORD: I do not expect there to be any there. There might be some

temporary. You can elaborate on it.

DR. NAZIR: Most of the job expansion will be giving longer employment to

the existing employees because we will be producing more trees and there will be

more shapes of trees in the greenhouses so they will get a longer employment

period as compared to the forest. There will be, I believe, around three people

more.

MR. WOODFORD: The people who are there will get more weeks.

MR. HUNTER: I was told the other day that there would be six new

positions, but they do not know if they are going to be permanent or part time.

MR. WOODFORD: Six new ones?

DR. NAZIR: Probably three would be more like longer term permanent and

three could be temporary.

MR. HUNTER: That would come out of that salary portion of -

MR. WOODFORD: That would come out of that salary vote, yes.

MR. HUNTER: Minister, on 2.2.02.03. Fire Suppression and Communications,

Transportation and Communications, last year it was budgeted for $761,600 and

there was $1,916,600 spent, revised. Could you tell us why this increase

occurred?

MR. WOODFORD: I will get Allan to go over that one now, but, as you know,

last year.... With fire suppression we cannot - I know that I said in my

statement that it was pretty well going to be the same as last year, but we

cannot predict fire. In the last few years we have been pretty lucky. In1999, as

you recall, the fire in Badger, we drove everything - we were spending $500,000

a day. Just imagine that compared with what we did last year on fire

suppression. We have a vote in there, and we have an increase in the vote this

year, but we cannot really predict it. It is so unpredictable it is not even

funny. I will get Allan to elaborate on the details.

MR. MASTERS: Just to follow up on the minister's comments, our base

salary or estimate for 2003-2004 is basically a man-up salary. That is what it

costs to get everything in place for the fire season. We could handle some small

fires with that, but as soon as we get into any kind of a major fire situation

we have to come seeking additional funds. You will notice this year there is an

additional $200,000 in the man-up, and that was because of some reclassification

issue within the firefighter ranks last year which required that and we were

successful in getting it. Basically, that is just a man-up budget and, as the

fires happen - that is why you get wide discrepancies each year if there are any

amount of fires.

MR. HUNTER: Wouldn't the higher costs come in Purchased Services under

Forest Protection Services?

MR. MASTERS: No. On fire, our biggest cost is aircraft, whether

helicopters or -

MR. HUNTER: You would rent helicopters. Wouldn't that come under

Purchased Services?

MR. MASTERS: No, that is under Transportation and Communications.

MR. HUNTER: So, a lot of the helicopter hiring is done under that, and

that $1.9 million (inaudible).

MR. MASTERS: Oh, very much so. I would think, out of that figure, I would

say 90 per cent of it was probably aircraft, but it would be in that 80 per cent

to 90 per cent range.

MR. HUNTER: Would you still hire under Purchased Services, too, if you

still had (inaudible).

MR. MASTERS: No, the Purchased Services you see there are really the

maintenance of equipment. Like, if you have a major number of fires, you have to

repair pumps, you have to repair everything, so that is where Purchased Services

come in.

MR. WOODFORD: Under that man-up, Ray, there is around 100 or 103, is it -

WITNESS: Firefighters.

MR. WOODFORD: - firefighters that we hire back, usually in May, and

usually they work until around September, so you have to use that salary there

mainly for man-up. Now, that could increase. It depends on -

MR. HUNTER: That $2 million in the Salaries portion there, that would be

for the extra man-hours?

MR. WOODFORD: Yes, exactly.

MR. HUNTER: But the Transportation would not include salaries for -

MR. WOODFORD: No, no, that is up in the salary (inaudible).

CHAIR: Mr. Hunter, before we move on, we have some coffee. What do you

say we go for about ten minutes, until10:30?

MR. HUNTER: My colleague would like to ask a question first.

CHAIR: You want to ask a question first? Sure.

MR. TAYLOR: (Inaudible), if that is alright?

CHAIR: Okay.

Trevor Taylor.

MR. TAYLOR: On the Fire Suppression and Communications, I listened to the

reasoning for the wide fluctuations and it is perfectly understandable. Does the

department have any - talk about forecasting now. You know, they missed a storm

down in St. Anthony the year when we all got buried, so I don't know that I

would put a lot of dependence in it a lot of days. Nevertheless, there is some

suggestion from Environment Canada or various meteorological services suggesting

that this year for the Southern Island portion of the Province anyway, with the

exception of the Northern Peninsula - which is no surprise, and Labrador - that

we can expect probably a hotter summer than normal.

I was going to ask this question, but Ray started to get into it. Is it

prudent to basically budget a similar amount to last year's, given what

happened last year and given that we are expecting probably a climatic - weather

wise, we are in a situation very similar to last year also. Would that be a

prudent approach? Wouldn't it be more reasonable to budget a higher number for

that? Or do you have a contingency somewhere that you draw on from within the

department? I know you say that if there is a major fire you have to go looking

for additional funds.

MR. WOODFORD: Yes.

MR. TAYLOR: Is it to go looking within the department, move it around

from other heads or special warrants?

MR. WOODFORD: Usually, Trevor, with the fires - as you say, you cannot

predict that stuff. If you go back - we have been pretty good, like I said, the

last four years since 1999. We have budgeted pretty well the same. Even in 1999,

the budget was pretty well the same, except for when it happened - you would

naturally make sure that the department is covered for it because it is an

expense and you have to deal with it. You cannot go back that day and ask - and

don't spend anything and don't fight a fire because you do not have the

money.

Usually the basic wage is there, the basic vote is there, and if you go over

it - you usually go back. What happens, instead of going back and back and back,

if you go over it, then you go back in September or October after the fire

season and ask for a special warrant to cover that, whatever it is, if it is

$500 or $2 million. To go asking for a vote before is - like you said, last

winter was supposed to be a nice winter, too, under the Almanac. According to

the Farmers Almanac: Oh, my, it is a wonderful winter. If they keep on

predicting that, we will just go the opposite because it was the coldest and

snowiest winter we ever had. As you alluded to, that storm in St. Anthony this

winter as an example.

If you start putting money in the vote, say $5 million, and you will not

spend a million - it is hard enough to get it out of Treasury Board when you

know what you have to spend it on, to tell you the truth. So if you go in for

something like that: we might spend it; you can forget it. Hang up your hat! But

we will look after it and make sure that the fires are looked after.

MR. TAYLOR: Oh, yes, I am sure you will.

MR. WOODFORD: Yes, but I see your point.

MR. TAYLOR: I did not mean to suggest that you would not because it was

not there. I was just looking at it from a budgeting and anticipation

perspective, I suppose, given that the forecast is that it is.

MR. MASTERS: I will just step in for a comment, if I could.

I had a climatologist come to the Province and give us all predictions on

where our weather is headed. Of course, everywhere in the world it is warming

up, except for this nice ring from Newfoundland to Iceland. Over the next fifty

years it is going to get two-and-a-half degrees colder than what it is right

now. I do not know what that means in this state but it really is impossible to

tell. We are having a late spring. That is going to help because there are two

critical times in the fire season. One is spring, when you do not have the green

up right away and you have that dry. Once you get into the green-up you are

okay. Then as the plants start to shutdown later in the season there is another

critical period. Hopefully, we can get past the spring critical period, but who

knows? The weather in this Province - tomorrow it could be something different.

It is shaping up to be good but let's cross our fingers.

We do have a lot of bug kill stands, particularly up in your area. That just

adds to the fuel mass. There are so many pros and variables within this, it is

really difficult. We have a decent thing where we man up and then we just keep -

if there is a fire, there has never been an opportunity in the quarter of a

century or so I have been at this, that somebody said you cannot fight fires. We

just go and do our thing. Then we come back and get the money.

MR. WOODFORD: We have a lot to look forward to, haven't we? A

two-and-a-half degree drop for the next fifty years.

MR. TAYLOR: Yes, I will not sell my skidoo yet.

MR. WOODFORD: I say you should keep it.

CHAIR: We will take a ten minute break and be back here for 10:30.

Recess

CHAIR: Order, please!

That is a good question there.

We will go to Mr. Taylor, do you have a few more questions?

MR. TAYLOR: Yes, I can ask a couple of more questions, I guess, if you

want to hear them - if you want me to fill up the time.

CHAIR: No problem, Sir. We welcome all questions in this Committee, a

very open Committee.

MR. TAYLOR: Just a couple of questions. They are not really, I suppose,

related to the Estimates, but one is and one maybe not - related to the policy

on sawlogs. As I understand it, departmental policy is wood over five inches, if

it is useable for straight or whatever, has to go for sawlogs. As you may be

aware - I know you are aware of the Northchip situation in Roddickton and the

fact that the mill was closed down. It looks like the company is in the process

of disposing of some or all of its assets there. Back within the last

month-and-a-half, I guess it was, the sawlogs that were on the premises were put

up for tender and a successful bidder - I guess for lack of a better way of

putting it - was Abitibi. The logs were taken off the premises and taken to

Stephenville to go through the pulp mill.

How does the department see that? It is obviously in contravention of the

policy and - does the department have any problem with that? I wish the people

of Stephenville get whatever wood they require, but having said that, for

opening the door on sawlogs moving off a lot to a pulp and paper mill, then what

is the difference? If you cannot take it off the stump and go to the mill, how

can you take it off a lot and go to a mill? That is the question I would have to

ask, I guess. It was only a small number of logs but is the door creeping open a

little bit there?

MR. WOODFORD: We did not like that at all, Trevor, to be honest with you.

I am with you on that one, but once it got into the tender system - they had cut

their permit. They had left it in the yard. It was logs that were left in the

yard, and under the conditions of their permit they were - like you say, it was

cut for that mill and that area. Once they put it up for tender, and anybody

could tender on it, well we are caught between a rock and a hard place because

under the tendering process you have the right to tender. Yet, under the mill

permit, those logs were meant for that mill and for that area. There is not much

we could - what was the law? I just forget exactly. We could not do anything

about that once they put it on tender. I do not know if there is anything else

Allan can add to it, but once they put it on tender we could not - you could

bid, Ray could bid, Harvey could bid, and I could bid. Then, under the tendering

process, if I did not want to saw it in Roddickton, or Harvey wanted to take it

back to Mount Pearl, what could stop him? We are really caught on that one.

Overall, on that situation there in Northchip, we are making sure that those

permits stay with those people down there. It is not going to anybody else as

far as we are concerned.

MR. TAYLOR: Yes, I understand that to be the case. The reason I asked the

question - I guess I will lead into a second question on it - would be, if there

is nothing that you could do, don't you think that you should probably

re-examine policy or regulation to make a change so that a situation like that

would not be able to happen in the future? I will just use an example. Say

tomorrow contractor x decided to cut 2,000 metres, put it on a lot and put it up

on auction, put it up on tender, call tenders on it, wouldn't it be pretty

much the same as what Northchip did? I would see it the same way, anyhow. Given

the appetite and the circumstance of Stephenville, for example, right now, I

would expect that they would, in the short term at the very least, probably not

in the long term, be prepared to pay premium prices, so to speak, for fiber

supply. We could find ourselves in a very similar situation any number of times

in the future.

MR. WOODFORD: I would question that one. What are the limitations we

could put on the permit because that is an annual permit, right?

MR. MASTERS: Yes. Under the permits, Sir, we can force it to go as logs

to the sawmill, but once we get into the second and third purchaser, it is a

gap. You are quite correct in pointing it out. We have the same concerns, that

if a company wanted to start trying to get cute with this, what would prevent

it. We recognize that and we are trying to plug that hole, if you want to call

it a gap or a hole.

On Crown land our policy is quite clear, sawlogs go to sawmills, they don't

go to pulp mills off Crown land. We have to take whatever steps - oftentimes,

these regulations are on the books for years and years and years and it is only

when something like that happens and they get challenged that you see there is a

gap there. It is a valid point you raise and it is the same concern we have. We

will be taking steps to make sure this doesn't get out of hand. I don't see

it getting out of hand, but to make sure it doesn't, because you are quite

right: What would prevent you from cutting the wood, putting it up on tender and

then having it go?

MR. TAYLOR: If a couple of contractors wanted to get cute about it, I

could sell my logs to you and you could sell yours to me, and then the person

who buys it from me is now the second purchaser, put it on tenders and we are

around that.

MR. WOODFORD: That is true. That is exactly what we questioned.

MR. TAYLOR: We are a pretty creative lot when it comes to figuring ways

to get around rules in systems.

Anyway, related to Northchip again: Obviously, we all know there was a

significant amount of money lost by their logging contractors there in that

area, and truckers and what have you, probably in excess of a half million

dollars or roughly half a million dollars. The irony of it all is, I suppose,

that the fellows who cut the logs for Northchip, who paid the stumpage at the

end of the day, they got nothing out of it. I don't know if they brought it up

to you, but they brought it up to me, so I will bring it up to you.

Has there been any consideration, any willingness, on the part of the

department, given the special circumstance there, to consider a reimbursement or

a waiver of the stumpage fees that were charged to the fellows who cut that?

MR. WOODFORD: No, we did not because the stumpage thing is something that

we are very, very strict on, to be honest with you. To the point of closing down

some mills, we are not issuing the permit until the stumpage is paid. We have

gone that far. I have talked to the people that you have mentioned in Corner

Brook, we had a couple of meetings in fact, and it is too bad because those

people pay their stumpage.

MR. TAYLOR: That is why I asked. If they did not pay their stumpage and

they were having trouble with them over the years, I would not even raise it.

MR. WOODFORD: They paid it to the parent company, say, Northchip, and

they were supposed to have paid it to the department, which they did. Northchip

doesn't owe us any money for stumpage, do they? I can't remember, but I don't

think.

DR. NAZIR: They have paid.

MR. WOODFORD: They have paid

DR. NAZIR: Northchip (inaudible).

MR. WOODFORD: Pardon me?

DR. NAZIR: Northchip paid those fees.

MR. WOODFORD: There were others- to answer your question with regard to

it, we have not considered that at all. In fact, I told the fellows at that time

that we would not even consider it, to be honest with you, because of the

pressures that we put on some other operators in the Province. That is not

saying - because I do not know what is going to shake down on Northchip, to be

honest with you. I do not how the situation is going to -

MR. TAYLOR: (Inaudible) there yet.

MR. WOODFORD: Yes, because with Bloomfield they have not touched

Northchip yet, and the permit, we are ready now. The first of April their new

permit is available to them in that area. There are some questions to be

answered with regard to it, down there.

On the stumpage fee itself, a lot of people get caught. They pay through a

company, they pay it themselves through a company, and the company does not

reimburse it or the company reimburses it and they figure that they have not had

their AAC cuts, say if it was 3,000 cubic metres in that area and did not cut it

and so on. There are a lot of questions on the stumpage part of it.

To get back to your question, no, we have not consider it on actually

forgiving them or reimbursing them.

MR. TAYLOR: I suppose it is somewhere in the Estimates, or maybe

somewhere in some estimates, but I noticed as I read the Economy - I went

through the Economy book over the last couple of days, and I do not know what

page but it really does not matter, I suppose - Canada Bay Lumber - and they are

not referred to as Canada Bay Lumber in the book, but Wood Products Industries

Limited - the particle board manufacturing plant in Roddickton which has been

under construction, I guess, since the fall of 2000, at an estimated cost here

of $8.2 million, it says that there are private, provincial and federal funds.

I was not involved with politics at the time and did not pay a whole lot of

attention, to be quite honest, to some of that stuff at the time. I am just

curious. I would like to know how much in provincial funds, how many dollars,

approximately, from the provincial Treasury at the very least, are going into

that initiative?

MR. WOODFORD: I do not think there are any funds from our department. I

will check, but you could check with Industry. There are some funds, I believe,

gone in through Industry, Trade and Rural Development, whatever that department

is over there, and they deal with that. By the way, they are still planning on

opening that in June, is it?

WITNESS: The date keeps moving, but June is the latest one (inaudible).

MR. WOODFORD: That is a nice way of putting it. The date keeps moving and

the last one we heard was June. If it is, Trevor, if that does go ahead, that

will be great for the area with regard to employment.

MR. TAYLOR: Yes, indeed, it will be. Hopefully, as you said, the date

will soon stop moving and it will go ahead.

MR. WOODFORD: It will come to fruition.

MR. TAYLOR: A lot of people are looking forward to it.

I am just curious as to the $8.2 million and how much of it was federal and

provincial funding and how much of it was actual private investment.

MR. WOODFORD: Mostly federal and private there, but Industry, Trade had

something to do with it.

MR. TAYLOR: Right.

Well, those are all the questions I have for now. Ray, do you want to pick

her up again?

CHAIR: Anybody else?

Mr. Hunter.

MR. HUNTER: Minister, there is going to be a high price tag, probably, on

solving the short-term problem for Stephenville, but it has been brought to my

attention, and I got calls on it from contractors, too, that there is still a

lot of over-mature wood on the Island. It seems to be unaccessible. I guess with

the roads program it can be accessible, but it is going to have to be probably

subsidized somehow to get at it. I refer to wood up around the Granite Lake

area. There is a lot of old, aged wood up there, and it could be a short-term

solution to some of Stephenville's problem. I know it is a very hard place to

access. Are you planning on doing anything to access this old age wood,

particularly in the Granite Lake area? There was a contractor who called me, and

he has no wood to cut but he is quite willing to go up there and cut this wood

for whoever wants it. Is that Crown wood in that area, or is it Abitibi's

wood?

MR. WOODFORD: On Granite Lake, it is Crown.

MR. MASTERS: Yes, that is Crown wood. It is part of District # 7,

actually, the Bay d'Espoir area. What has made it available now, and why you

are getting some calls, I suspect, is that the latest Hydro development up

there, where they upgraded the road to Granite Lake, there is some fibre up

there. We do not have a really good estimate on what is there, because it was

always further south than where inventories went. We are actively looking at

that area, particularly as it relates to the operators in the Badger area and

the Bay d'Espoir area. What would come out of it, I do not know, but there is

an opportunity there that we are looking at.

MR. HUNTER: I think there are plans to connect Bay d'Espoir to Island

Pond and over to Granite with a road?

MR. WOODFORD: There is talk of it.

MR. HUNTER: If that is done, then there is going to be a lot of wood

accessible. I guess with your roads program, and help for the contractors to go

in there, there is a lot of wood in there that could be accessed through that

initiative.

MR. WOODFORD: That project there would make it easier, because if you

have to put an access road then from the one you are talking about, from Granite

Lake and Long Pond, it would make it much more viable.

That was a stand of timber there that - was that included in our petition? It

was not even included in our AAC. It is a good stand. We do not have a handle on

how much is there, exactly, in that area, have we, Mo?

DR. NAZIR: We do not have any updated -

MR. HUNTER: So, will that go to existing contractors who have permits,

who have nowhere to cut, or will you issue a new permit to somebody?

MR. WOODFORD: If someone came in to us today with a good business plan

for a petition stand or a class tree stand in the Province, we would entertain

it. It does not matter who it is.

DR. NAZIR: (Inaudible). That is why we have to (inaudible).

MR. WOODFORD: Yes, I know.

Usually, with the adjacency, as Mo reminded me, you run into, Ray, out your

way, the Bay d'Espoir people would want that wood.

MR. HUNTER: Yes.

MR. WOODFORD: We have to see what is there first, how much is there, and,

like you say, if it is over-matured, how much has fallen down, and how much is

bug kill or whatever.

MR. HUNTER: There is a contractor from my district now cutting into Upper

Salmon, heading that way. They are already over there cutting. The wood is

really old and the centre of it is rotten. We have to try to harvest that before

MR. WOODFORD: Yes, because that is what we are running into in Labrador.

MR. HUNTER: Yes, the same as Labrador woods.

MR. WOODFORD: Taking two or three (inaudible) chunks off it and end up

with very little of the log left to go anywhere. Everybody figures it is perfect

for a sawmill.

MR. HUNTER: With respect to the Bloomfield operation now, there are not

cutting their AAC for the year. Is there going to be anybody else operating on

that permit for the remainder of this year, or is that situation almost settled

now?

MR. WOODFORD: Their permit would not come in until April 1, which is just

this week, for this allocation this year. We are monitoring that - I cannot say

daily, but at least weekly - to see what is going on there. As you know, there

are two or three partners involved in that situation, but we are watching it

because Northchip is tied into it down in Trevor's area. All told, isn't it

around 30,000 cubic metres down there? Ten or eleven for the - and twenty for

the other one, or twenty in total? Anyway, it is quite a bit of wood in the

Northern Peninsula area.

MR. HUNTER: It is going to make a difference to Abitibi out there,

because they avail of a lot of chips from that.

MR. WOODFORD: Yes, big time.

MR. HUNTER: They are a bit concerned over that amount of wood not being

cut and not being delivered.

MR. WOODFORD: To add to that, with Abitibi, about 40,000 cubic metres of

the Labrador stuff was coming in, going through Bloomfield, and going right on

to Abitibi.

MR. HUNTER: Yes.

MR. WOODFORD: It is a concern. We are watching that one. There is not

much we can do with it now because of the -

MR. HUNTER: It is still in the early stage.

MR. WOODFORD: - because of the receivership thing, but once that is dealt

with we have to look at exactly what you were saying, the permit, and see if

that is going to be exhausted this year.

MR. HUNTER: I had a call from a small contractor, he is a firewood

contractor, and he is really concerned that this royalties have increased, over

double from last year. That is Terry Saunders from Central. You are familiar

(inaudible). He was paying sixty-seven cents a cubic metre, I think, royalties,

and now he is up over $2. I am not sure if that is the exact amount now, but

somewhere around there.

MR. WOODFORD: On his domestic, you said?

MR. HUNTER: Yes, he is a commercial firewood cutter. He is cleaning up

the Northern Lake area, on Abitibi's area. He is being charged - and he cannot

maintain that operation with that type of increase. He wants to -

MR. WOODFORD: Give us the name and we will check that out, because I did

not think it was that much of an increase with regard to -

MR. HUNTER: According to him, it is.

MR. WOODFORD: We brought the pulpwood and the lumber royalties into sync.

I will tell you one of the reasons why we did that. It was because of the

softwood lumber dispute. The first thing is, they come out and they are looking

at us individually, like the Atlantic Provinces. They look at us as holding

private property shares and private lands. That is one of the reasons why we are

escaping the softwood lumber thing.

We looked at this and said, the first thing they are going to look at is

stumpage - the first thing they looked at in other provinces - so we did bring

that in line with the pulpwood as a token. It was not very much, but I did not

think we increased that -

MR. HUNTER: No, he is cutting dry burnt wood that is in burn over -

MR. WOODFORD: Firewood, yes.

MR. HUNTER: - firewood, as a commercial operation. That is putting a lot

of extra cost on his operation.

MR. WOODFORD: We will check that out.

MR. HUNTER: He is the guy in there with a harvester cutting firewood,

burnt-over wood, and that kind of increase is going to put him out of business.

Really, he is doing the environment a favour by going way back where he is, to

clean up these areas, these burnt over areas. He is not too pleased with such a

MR. WOODFORD: Do we have his name?

MR. HUNTER: Yes, Allan got his name here. I would like to check that out.

MR. WOODFORD: Yes, we will check that out.

MR. HUNTER: I am just going to pass it over to my colleague for a few

minutes. He has a few comments there, then I will get back to some of the other

issues.

CHAIR: Mr. Hodder.

MR. H. HODDER: Thank you, Mr. Chair.

First of all, I have to say that I am very interested in all this discussion.

I grew up in a family where we had a sawmill licence for an operation for

fifty-seven years. Only with the passing of my father, did the operation cease

to exist.

CHAIR: I thought you were a St. John's type, Mount Pearl (inaudible).

MR. H. HODDER: There you go. I had a life before I came in here. I grew

up in this milieu of forestry. Also, I should say, that until quite recently I

was one of the few St. John's members, together with my friend from Kilbride,

who actually had a farm in his district.

The Dooley farm on Blackmarsh Road was there until just recently when they

sold their milk quota after 120 years of operations. So I have some interest in

that. Of course, many years ago I was very much associated with the farmers in

Kilbride and the Goulds for the metropolitan area board, but I also had the joy

of being very much involved in parimutuel betting where I was the chief

agricultural officer with the federal department for many years. So I got to

know a lot of the farmers and they were wonderful people to be around.

I wanted to draw some attention to the fact that in some of the background

that I have done in preparation for this, I met with some of the agriculture

people and they note that Newfoundland is the only Province of Canada that does

not participate in the national plan. This is the producer run organization that

manages the collective marketing of milk quotas through the Canadian Milk Supply

Management System. Why is Newfoundland not part of the national plan for the

Milk Supply Management System?

MR. WOODFORD: The dairy association of Newfoundland and Labrador - it is

up to them what they get involved in. In the last two years they have negotiated

with the feds - I forget what it is called now, the national dairymen's

association or whatever they call it - on this 31 million litre industrial milk

quota and that it where it came from. We were never involved in that. We were

never included in the industrial milk quota across Canada. This is the first

time that we have been included - isn't it? - with regards to the industrial

milk quota. So if we do not produce that we could lost it in fifteen years.

MR. H. HODDER: My understanding is that the 31 million litres that we are

talking about is there, it is protected for Newfoundland now for a period of

time?

MR. WOODFORD: Yes.

MR. H. HODDER: If we do not use it we will lose it?

MR. WOODFORD: Exactly.

MR. H. HODDER: And this will be added to other provinces?

MR. WOODFORD: It could. It is up to them where to allocate it or

reallocate it but we have that commitment now. I think there are two years gone

on it, if I am not mistaken, already. We have 31 million - as I said earlier, if

we do not do it - I mean it is going to double the dairy industry in the

Province, pretty well double it, because that is what we are producing now in

fluid milk.

MR. H. HODDER: One of the industries in this Province where we have great

potential for growth is in the dairy industry, the agriculture industry. The

notes I have here says that we could create up to 500 permanent, sustainable

jobs in this industry.

My question to you, Mr. Minister, would be: What steps are we taking to

permit our farmers to meet the challenges that are associated with them and

enable them to access and use the 31 million quota that they could access

through the federal program?

MR. WOODFORD: Well, where we could help is having some, like you say,

policies in place with regards to - the biggest problem here, Harvey, is the

land, the feed costs and so on. For instance, us compared to Nova Scotia, there

is something like a 26 per cent or 27 per cent difference. So that is the

biggest thing, cost of production. We are going to try to help out with regards

to land enhancement. Getting back to what Ed said this morning, somewhere along

those lines, with regards to clearing more land or acquiring more land that is

already cleared, cultivated in other places, or whatever. That is a big

challenge.

We have people in the Province who may come under the APF, for instance, the

Agricultural Policy Framework agreements you were about to sign with the feds.

Under the environmental part of it - say, for instance, you have 100 head of

cattle and you only have the land to spread it for fifty, total was fifty, they

may be able to come under land enhancement to get extra land cleared or acquire

extra land that has been idle and cultivated - some way to try to help them.

That is one of the biggest ones we have addressed in the agreement and with the

provincial part of it, is to try to help them out with regards to land base.

MR. H. HODDER: The notes that were provided to me show that the Canadian

average is eight cents per litre for the production costs of purchased feed, but

in Newfoundland it is twenty-eight cents per litre of milk. So really we are

three-and-a-half times. The farmer in Newfoundland is paying three-and-a-half

times the Canadian average cost for purchased feed. Also, when I talked to the

farmers they indicated that much of the purchased feed was of - the nutritional

value wasn't as high. They have done studies on that.

When I was over to Kilbride last Saturday, the big truck arrived - you know,

you see them going down the Trans-Canada - and talking to one of the farmers

there, they have no choice. If they are going to keep their farms going they

have to buy this feed. Are there standards that we have for importing feed in

terms of the nutritional value of that feed? Who sets the guidelines as to what

the nutritional value is of the feed? Because they say to me that the value of

what they are bringing in, in terms of its nutritional content, is not equal to

the value that they would have per ton.

MR. WOODFORD: Well, what you are talking about there, it cannot be grains

because grains are usually uniform. It depends on what you order. Is it 16 per

cent or 18 -

MR. H. HODDER: This was hay.

MR. WOODFORD: Yes. This would be hay or silage or something like that.

That is usually left up to the farmer themselves. I was in the business for

years and if I go over to one farm, if I go into Ray's, I would do a bore,

take samples. A like of people buy but do not check anything. They just go and

buy, and say: Send me in twenty bales of hay from P.E.I. The truck arrives and

there is about 10 per cent protein in it. What I will do, I will have someone in

P.E.I. or Nova Scotia or someone take a bore, get an analysis done of it and a

sample done of it, and if it is 15 per cent or 16 per cent, grab it. Take it

right quick. But you are right, some of the stuff that is coming in is garbage.

MR. H. HODDER: Yes.

MR. WOODFORD: What a person is doing in Kilbride or Cormack or Deer Lake

or Codroy Valley, they are sitting down and taking the phone, and saying: John

Doe, send me down ten ton of feed. That could be the worst that is going on, but

usually if it is a supplier that has quite a bit and he is moving into the

Province, he is usually pretty good. He usually keeps his protein and his

nutrients up.

MR. H. HODDER: What this farmer said to me was there are not any

standards that they can measure against. When they going out to order in feed,

as you said, they are often on the phone and they may be talking to three or

four suppliers - most of them are in the Maritimes, rarely do you go - if you

cannot get them in the Maritimes - because the cost of bringing it in is less,

but there is nobody saying: Here is what the content has to be. His suggestion

was that somebody needs, together with the industry, to develop a standard so

that when you are bringing feed into the Province of Newfoundland then there has

to be somebody saying: Here is what the nutritional content has to be. That can

be done.

MR. WOODFORD: It can be done but the only thing about it, I venture to

bet that if I did that tomorrow, brought in rules and regulations for that, I

would be hung out to dry. I would be the first one - what a lot of people do is

they bring it in for roughage. They are looking at a 8 per cent or 9 per cent

protein rate, which they should not. How do you check it? If it comes to Port

aux Basques to come in, I have to take a sample and go somewhere to get it

checked. It is a logistical nightmare with regards to the protein content and

what it would cost to do it. I can see their point because I have seen it come

in. I have seen it down as low as 6 per cent or 7 per cent. It was ridiculous.

You would know by the colour of it, especially hay.

MR. H. HODDER: It was the discard that some farmer had in P.E.I.

somewhere.

MR. WOODFORD: Exactly. The danger with that is calling someone who

probably has three loads or four loads or five loads - they do not care. Once

they are rid of it, they are rid of it, but someone who has 100 loads they are

more particular with it. They are more particular with making their silage and

their haylage and they have a pretty good content in it, if not they would not

make it.

MR. H. HODDER: The answer to it is that there is a 30 per cent deficiency

in forage in Newfoundland, approximately. Farmers are only producing about 70

per cent of the food that they need for their animals.

This morning, in talking to the Member for Kilbride, you were talking about

the strategics you have to assist farmers to increase their forage, to be able

to get more land opened up. What are some of the constraints on that? For

example, we know there is a strong agricultural industry, let's say, out in

the Lethbridge area. We know there is a strong one here in St. John's. There

is one over on the West Coast, in the Codroy Valley area, and there is a strong

one in Cormack that we know you are very familiar with. What are some of the

problems in terms of being able to develop forage lands, let's say, on the

Avalon?

MR. WOODFORD: Well, on the Avalon - I would say anywhere else in the

Province the basic problem is money, because you have access to pretty well lots

of farmland outside. It is questionable in some areas, but here in this area you

are constrained by the boundaries. You are constrained by the price of land, for

instance. We were talking this morning, we will average our land consolidation

one by about $3,000 to $5,500 an acre. You can go out in Cormack and buy all the

land you want for $400 or $500 an acre. Just imagine the difference of buying

100 acres of land consolidation here and going to the Cormack area, which I am

familiar with.

One of the biggest problems we had as a department over the years too, a lot

of land was sitting idle - and to say the department would not help. They would

give the farmer $600 or $700 or $800 to develop new land, cut down the trees and

develop new land, but they would not touch land that was already cultivated. For

example, if you had 50 acres and 40 acres of it was cleared, and I wanted to buy

it, well there was no help for that. But there was help to cut a new farm out of

the forest.

These are some of the things that we are looking at now under the new

agreements in the Province, but the biggest constraint, as far as I am

concerned, is money. It costs around - I don't know what the latest figures

are - a couple of thousand dollars or more per acre to try to get down to

production. We helped out the last time, around $700 per acre. You can imagine,

it is a big cost. If you put fifty acres down, you are talking about 100,000

bucks (inaudible).

MR. H. HODDER: If you look at it from a development perspective,

agriculture is still one the growth industries that is underdeveloped in

Newfoundland and Labrador, particularly in the Newfoundland part of it. There is

tremendous potential in this industry because we have perhaps just realized that

you do have the industrial milk quota. Ed mentioned that the morning. Money

invested in this area can generate - studies that I have here with me this

morning show that we could have 500 sustainable jobs. There are not many

industries in Newfoundland where you can say you can create 500 jobs that are

not going to be gone in ten years, five years, that they are going to go on and

on and on.

One of the other things that got mentioned was the - and, of course, I should

point out that most of the jobs we are talking about are primarily in rural

Newfoundland, which is significant. The big growth industry in rural

Newfoundland is in agriculture. We have done some studies on that, and I have

some papers here with me that indicate that.

One of the things that the committee I met with talked about was training

programs for farmers, getting them better training, more up-to-date training,

access to new technologies, that kind of thing. What training programs do you

have for farm people? How accessible are they to the average farmer?

MR. WOODFORD: Well, the training programs that we have of late,

especially in the last Safety Nets Agreement, if I can recall, were done

primarily - farmed out through the Federation of Agriculture, either through the

Safety Nets Agreement or through another (inaudible) agreement or whatever we

had, whatever agreements we had with the feds. They were farmed out. Say the

Federation of Agriculture decided they wanted someone to do - we do a program,

for instance, on pesticides, herbicides, stuff like that, with the farmers every

year. There are different programs like that, but they are usually done through

the Federation, in conjunction with the Federation.

I met with the Federation just last week and that is one of the concerns that

they had with regard to training programs and so on. That is something that we

are going to try to address under this new APF agreement as well. If there is

anything there, working in conjunction with them, if they can identify something

- it is no good to go out and call a training program for something, for

someone, if you are only going to get 1 per cent or 2 per cent of the populous

to take advantage of it.

MR. H. HODDER: No.

MR. WOODFORD: If there is something there, a program that the Federation

of Agriculture can identify with, then we will try to put it off.

MR. H. HODDER: I was very encouraged by the fact that they were asking

for more access to training. I look at some of the farmers that I know from

Kilbride and the Goulds as being pretty knowledgeable people, but they are

saying that they would like to have more access to training and more

opportunities for the department to show some increased leadership in that area.

The other problem the came up, which was already alluded to this morning, was

the issue of farm succession and how we can assure that farms - farmers get old

and, as farmers will tell you, as one farmer said to me one time, it is the only

business where you live poor and, if you are lucky, will die rich; because all

of the assets you have are right there: your land, your machinery. Everything is

there and you have all of this in assets but sometimes your liquid cash flow is

not as great.

One of the things that we find in some of the areas is the issue of farm

succession. Again, the farms are often passed on to a family member, but

increasingly that is not the case. They are not passed on to family members so

the herd, the quota and the moveable equipment can be sold but the farms and the

barns and the operation go out of production, so you have what you have in the

Eastern Townships of Quebec, for example. You drive up through the area there

and you have those old looking buildings that are empty.

What steps are we taking in Newfoundland to try to address the issue of farm

succession to assure that even when farms are not passed on to family members

that the farm does keep in production?

MR. WOODFORD: It is a good question because this has been a topic - when

we are doing the program, this APF program across Canada, it is very topical out

West and places where they have the bigger farms.

MR. H. HODDER: Yes.

MR. WOODFORD: As you know here, Harvey, in this Province, most other

provinces are first, second, third, fourth, fifth, sixth generation farmers. We

here are just a development province when it comes to agriculture.

MR. H. HODDER: Absolutely.

MR. WOODFORD: This was a big topic, this succession part of it, with the

program, with other ministers. We addressed it in the pillars. One of the

pillars that we have in the APF is a pillar called renewal. In that, that does

address succession.

So there will be some funds there for some training and to bring in some

professional people to deal with this succession problem. Although here in

Newfoundland it was not a big problem but now, getting back to what you said, a

lot of the dairies, say, for instance, I will use the dairies, they are supply

and management and they are big dollars. You are talking about $1 million, $2

million, $3 million operations. You are not talking about chicken feed any more.

It is big business. What they do, they are selling the quota, say, to John Doe

over in Codroy, or someone out in St. John's, and the buildings and the land

are left there. So one dairy operator is getting bigger, the other is getting

smaller, because, when you sell the quota, you sell just that, the quota.

MR. H. HODDER: That is right.

MR. WOODFORD: The cattle and the right to milk their fluid quota, and the

barns, are left there. The land is left there. This is what I was saying

earlier, a lot of vacant farmland left in some places that may not be in

proximity to the person who got the new quota but it could be utilized. I know

people who are utilizing it in our area and trucking it as far as the Goulds;

making it and trucking it as far as the Goulds and the Northern Peninsula. Mr.

Brophy used to come up to Cormack and make it and truck it, on this absent or

vacant farmland that is not being utilized, and truck it back to Daniel's

Harbour.

That is a problem that has been identified across Canada. We did not run into

big problems here, but we are doing it now. We are starting to run into it with

the bigger dairies. I notice in my area, two or three or four dairies in the

last few years have been sold. Their quotas have been sold and the land and the

buildings are still there, like you say, empty.

MR. H. HODDER: It is so sad.

MR. WOODFORD: It is sad because those buildings are worth a lot of

dollars to someone who is starting up. Some of them may be utilized with this

industrial milk quota. They may be. There are people asking about it now

already, but it depends on what the dairy people do in the Province with regard

to the allocation of that quota.

MR. H. HODDER: Or the land is simply then used for forage or, you know,

they do still sell their product -

MR. WOODFORD: Yes. They still sell their product.

MR. H. HODDER: - if somebody is there who has a connection to the family

and the land is not passed on to somebody else.

I think the point is that, when that happens, we lose something in terms of

our growth in the industry. We have a piece of a puzzle. There are a thousand

pieces in a puzzle and suddenly there is one little piece of puzzle - the puzzle

is minus a piece every time that happens.

MR. WOODFORD: I know of one operation in my way - you talk about the land

base - there was about, I would say, 300 to 350 acres down in production, being

cultivated. Now, lucky, so far, it is still being used, but you have to remember

that the person who is going into cut that and to salvage it on a short-term

basis is not going to put the nutrients and the same things back into the soil

that you would if you were working it. That is the sad thing about it. After

three or four years it starts to degrade, it starts to go down in production. It

is like getting back to the lease versus grant. They put the money into granted

land but they will not put the money into production in the leased land the same

as they would in grant. It is a problem.

MR. H. HODDER: No, and there is logic in that, too.

CHAIR: Mr. Hodder, can I give a break to Mr. Butler to have a few words

and then we will come back, if we could do that? Are you almost -

MR. H. HODDER: I have a few more questions.

CHAIR: Sure, okay.

MR. BUTLER: Just the one question.

CHAIR: Mr. Butler.

MR. BUTLER: I was wondering if there are any new developments - an issue

that I have discussed with the minister in the past and other officials, as

well, with regards to the issue of crop damage caused by moose. I was wondering

if there are any developments or any new areas that are being looked at with

that situation? I know it is a problem in my area and, probably, other areas.

MR. WOODFORD: As you know, Roland, heading back to the moose damage. A

few years ago, or seven or eight years ago, we had some real problems with moose

damage - especially out your way, but right across the Island - to the tune of

somewhere in the vicinity of - I saw some figures out your way, some farmers

have been out $250,000, $300,000. We addressed some of it but very small. Now we

are in the process - we have this new type of fencing and it seems to be pretty

good the last few years. What is the name of the fencing called?

WITNESS: (Inaudible) braid.

MR. WOODFORD: It is electric braid, is it? Because we used to use

electric fencing for dairy and so on but this must be a different kind of - but

it seems to be pretty good. They tapered off the last three or four years. I do

not think you will hear too much about moose damage but it was a real problem.

Some of those people are still feeling they are out a lot of money.

CHAIR: Okay. Anybody else?

MS M. HODDER: I do not have any questions, thank you.

MS KELLY: I just have a couple. I was listening when Mr. Byrne was first

speaking this morning, and he says: No one talks about our agricultural

strategy, so how can we help it grow and everything? Then Mr. Hodder was just

saying that it has tremendous potential.

I remember when I was Minister of Industry and we took a look at trying to

figure out how to use an immigration policy to bring some people in because, as

we all know, we do not have a culture of farming here. Our history is on the sea

and it is very difficult, now especially. To make a living at it you have to be

in it on such a large scale and it is very hard to start small.

I have several questions. One being: Are farms still having trouble getting

employees? Because one of the major pieces to all of this - in our society now

our young people are being brought up that they have aspirations to have more

than a minimum wage job. I know that in many farms, even employing their own

families, it still turns out to be very minimum wage work. So, I am wondering if

that is improving? If most of our farmers, or most of their employees, are just

making the minimum wage, and are they still having difficulty getting employees?

I know over in your region, Minister, that is the area they were saying to me:

People do not want to go to work, having to get up on a dairy farm and be into

work at 4:30 or 5:00 in the morning, then be off during the day and sometimes

have to be working again in the evening. It is hard enough to get your own

family to do it, let alone get employees that you are paying the minimum wage.

MR. WOODFORD: I have not had much brought to my attention over the last

while with regards to an employee problem. Maybe because the industry,

especially the dairy industry, is getting more mechanized.

MS KELLY: Fewer jobs.

MR. WOODFORD: Some of them are milking three times a day now instead of

two.

But you are right, one of the problems we had was getting up early in the

morning. I know what it is like. I spent a good many years getting up at 4:00

a.m., and then all of a sudden you are down to a meeting at 10:00 in the morning

and someone says: Well what were you doing all day? You have a days work down

before anybody else gets up.

It was a problem there for awhile in parts of the dairy industry. I think

now, like I said, farmers are getting bigger and more mechanized, milking more

cows, different dairy parlors and so on involved.

The other part of it with regards to people leaving the industry, and getting

back to Harvey's question about succession, this is why a lot of the younger

people today - I know (inaudible) out my way, have left and gone away or gone

somewhere else to work because they know - they worked when they were young and

they know how hard it is. Once they get that last report card from the school

they are gone. One of the big reasons at that time was the work that was

involved in the farming operation. I have not heard much lately of it, to be

honest with you.

MS KELLY: One of the things that I know, and as Minister of Industry,

when we looked at it we were trying - I met with a few veterinarians over on the

west coast who were interested in helping us take a look at the EU. A lot of

farmers have been bought out there, especially in Holland. They have quite a bit

of money. Some of them have been immigrating to Canada with this money in their

back pocket and some incentives offered by various provinces to set up. We had

thought, at that time, that would be a good strategy for Newfoundland but it

appeared, as I was talking to people - and I got shuffled before I really got

into it in greater detail - but it appeared that we did not have the vast amount

of land. We were not far enough along in our development to get them interested,

the way they were in Prince Edward Island, for instance. Do you know of any

farmers who have moved here from the European Union that have been successful?

MR. WOODFORD: I know of a couple who have moved here but they are

primarily small mixed operations, and for different reasons they are much older.

Also, you are right, we are a developing Province when it comes to agriculture.

We only have 1 per cent, I think, of our total land masses suitable for

agriculture. It is developing. It is a job, in this Province, to find a farm

that has 1,000 acres cleared. Yet, when you hit Ontario and Quebec and out west,

that is the norm. It goes from that up. There is no doubt about it, I have not

seen any - I do not know of anybody who has moved here from Europe, or any of

the other countries, that has any big operation. I know of people who have moved

here from other provinces, I must say, and brought up dairy operations and so

on. That has been fairly successful.

MS KELLY: I guess the milk quota seems to be all utilized that we have,

but the production in our strawberry farms, our vegetable farms and everything

like that, are the farmers able to sell everything they grow in the Province?

Because I would imagine it is pretty hard to export from this Province when you

consider how expensive it is with the small scale operations we have to make a

living. Are they able to sell everything they produce?

MR. WOODFORD: I am not getting any complaints from the strawberry

operators or anybody like that with regards to the selling. They run into some

problems, depending on the type of season we have. I know the people over my

way, they pretty well sell - with regard to strawberries and things like that,

that type of crop, they have no problem with it.

MS KELLY: (Inaudible) vegetables and that sort of thing.

MR. WOODFORD: Yes, they have no problem with it.

In fact, I had one fellow last year - well, it i

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Citation	2008-03-04
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