Resource Committee — Department of Agriculture into ENL — 5 April 1995

1995-04-05

Newfoundland and Labrador — Committees

April 5, 1995

RESOURCE ESTIMATES

COMMITTEE

Pursuant to Standing Order 87, Alvin Hewlett, M.H.A.

Green Bay, replaces Nick Careen, M.H.A. Placentia.

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

Chamber of the Colonial Building.

MR. CHAIRMAN (Smith): Order, please!

I would like to welcome the minister and his

officials here this evening. This evening we will be examining the Estimates for

Industry, Trade and Technology.

I would like to begin by introducing the members of

the committee first of all; my name is Gerald Smith, the Member for Port au Port

and Chairman of the committee.

MR. WOODFORD: Rick Woodford, the MHA for Humber

Valley.

MR. HEWLETT: Alvin Hewlett, visiting MHA for

Green Bay and critic of the department.

MR. PENNEY: Melvin Penney, the MHA for

Lewisporte.

MR. WILLIAM ANDERSEN III: William Andersen, the

MHA for Torngat Mountains.

MR. CHAIRMAN: Now I would ask the minister if

he would introduce his officials.

MR. FUREY: Thank you very much, Mr. Chairman.

On my right is David Oake, who is the Deputy

Minister of Industry, Trade and Technology; on my left is Phil Wall, who is the

President and CEO of Enterprise Newfoundland and Labrador; on my far right is

Dr. Doug House, who is Chairman of the Economic Recovery Commission; next to him

is David Butler, who is the Financial Administrator for Industry, Trade and

Technology; Patrick Kennedy next to the President, is the Vice-President of

Corporate and Financial Affairs of ENL and Gordon Kane, is Executive Director

who just moved to the ENL branch from the Fisheries Loan Board and Executive

Director of -

MR. KENNEDY: (Inaudible).

MR. FUREY: Having said that, Mr. Chairman, any

question?

MR. CHAIRMAN: You are getting on as bad as the

Member for Lewisporte; he wants to call the heads already.

Just to lay down the groundwork, first of all as

the procedures are set down, Mr. Minister we will offer you the opportunity to

make an opening statement for fifteen minutes if you so choose or we can go

directly to questions and after that, the Vice-Chairman has fifteen minutes in

which to speak or raise questions and after that, ten minutes to each member on

an alternating basis until everybody is satisfied that they have all the answers

that they need.

Mr. Minister, over to you.

MR. FUREY: Thank you very much.

I will just make a very brief statement.

The Estimates are laid before you, the Department

of Industry, Trade and Technology and all of the components that make up that

department, allow for a Budget of $68.9 million, $50.2 million of it on current

account, $18.7 on capital account; it is broken out this way: 86 per cent of the

department's budget actually flows out to other organizations; $37.9 million to

ENL and its operation; $4 million including the ACOA Enterprise network to the

Economic Recovery Commission.

The interest subsidy on the Marystown Shipyard is

$3.3 million; capital support for Hibernia, $4 million; commitments under the

Offshore Development fund, $4.5 million; The Canada-Newfoundland Strategic

Industrial Investment Agreement, $3.6 million; the Science and Technology

Advisory Council, $200,000 and General Departmental Administration, $2 million

which makes up roughly $59.5 million.

Mr. Chairman, of my departmental Budget that really

flows for other outside Crowns and other outside initiatives, that leaves about

$9.4 million in departmental programming and operations, and we are one of the

few departments of government that was given an increase this year of $3.5

million for new initiatives which I outlined in response to the hon. Member for

Green Bay in the House the other day, and I think I gave some of the outline of

what those new initiatives are for.

They are basically to implement an information

technology strategy, the on-line strategy, $500,000; high technology trade

development, $50,000; investment for the first time in our film industry and

audio-visual industry, $50,000; manufacturing related initiatives, $50,000; the

Call Centre Swat Team as I refer to it, grossing $500,000, $250,000 equally

shared under a public/private partnership. The Hibernia production phase study,

that is post-Hibernia construction that is actually into production, $75,000;

the establishment of some general business development initiatives such as an

Ottawa procurement office, $150,000; investment prospecting activity, $400,000;

a multi-year national and international industrial marketing program, $1.4

million; enhancement of departmental technical skills and trade development,

$50,000; enhancement of departmental strategic planning and program evaluation

capabilities, $50,000; strategic improvements to our management information

system and information technology systems, $200,000; and full commissioning of

the recently created project economic and financial analysis branch of our

department, $250,000. That is to say, all projects that commence with various

line departments will now fall through the window of ITT. We have a branch now

which will analyze them and give quick results and give the benefit of our

knowledge to all line departments. That makes $3.5 million.

There are a number of agreements that flow through

our department as well. The SIID agreement - I guess that is about it right now,

isn't it? The other ones are pretty well concluded.

WITNESS: The Offshore Development Fund

(inaudible).

MR. FUREY: The Offshore Development Fund. So

you can see that while we have a large budget of nearly $60 million, the great

majority of it, just short of 90 per cent, actually flows out to ENL, to the

Recovery Commission, to Marystown Shipyard, to Hibernia, the Offshore

Development Fund, and other areas. That is why we made a case to government to

give us actual new money to trigger new developments in the information

technology, high technology, light manufacturing and other areas that were

identified by the ERC in the growth opportunities study it did some time ago.

Those are my opening comments. If there are

particular questions I would be happy to answer them. With your indulgence, Mr.

Chairman, maybe we could give the Chairman of the Economic Recovery Commission

three or four minutes just to talk about what he does, and maybe the President

of Enterprise Newfoundland and Labrador. Then we could open the floor up if you

would like.

MR. CHAIRMAN: Yes. Just a point Mr. Minister as

well. I had neglected to indicate at the beginning, whenever you defer to any

members of your staff I would ask that they identify themselves for the purpose

of the recording so that it can be properly transcribed.

MR. FUREY: I just gave you a snapshot of ITT.

With your indulgence -

MR. CHAIRMAN: Sure.

MR. FUREY: - maybe we could ask Dr. House for

two or three minutes?

MR. CHAIRMAN: No problem. Within your fifteen

minutes you are free to do as you please.

MR. FUREY: I'm trying to keep this within a

modicum of reason. Go ahead, Dr. House.

DR. HOUSE: Thank you. I think perhaps I could

bring people up to date a little bit in terms of the mandate of the ERC as kind

of I guess redefined in August and the fall of 1994. First of all (inaudible)

Premier and then some subsequent meetings that we had with Cabinet.

Basically our agency has four major mandates.

Firstly, to advise government on social and economic policy issues. Secondly, to

identify new economic opportunities, and as the minister alluded to, many of

those are now incorporated into the various line departments of government which

have taken over the responsibility for implementation in those new opportunity

areas. Thirdly, to oversee the implementation of certain actions in the

Province's Strategic Economic Plan - the most important, probably, two of those

at the moment are continuing work on income supplementation reform and the

implementation of getting these nineteen economic zones up and running. I will

say a few more words about that in a minute. A fourth part of our mandate is

kind of a public education and information mandate - we call it getting the

message out - about the economic transformation process that has to occur in the

Province, particularly emphasizing some of the good news stories sides of what

is going on in our economy.

The major task that we have ahead of us over the

next period of time will be to be the lead agency in partnership with ENL in the

implementation of the report of the task force on community economic

development. As you know, that calls for the establishment of nineteen economic

zones in the Province with nineteen regional economic development boards. We are

now in the initial stages of working with people at the community level to put

that new agency in place. By the fall we hope to be entering into performance

contracts between both layers of government and the different regions of the

Province to outline what their specific strategies are going to be for

developing each of the nineteen zones over the next five to six years. That is a

major undertaking in its own right and will be probably the main focus of our

work over the next period of time. In connection with that I should add, I

guess, that the federal-provincial mechanism for supporting that is a thing

called a strategic regional diversification agreement, and that will be the sort

of mechanism that we will use in negotiating with the different regional boards

to put this process in place.

Thank you.

MR. FUREY: Thank you very much, Dr. House. I

will ask Phil Wall, the President of ENL, now that he has had a year under his

belt, to tell us all about ENL for a few minutes. The last time he appeared

here, Mr. Chairman, he was two weeks old in that job, I think.

MR. WALL: Thank you.

I have been at ENL for just a little over a year to

date, and I guess it is fair to say that ENL's role in terms of economic

development in the Province is to be the Province's lead, direct provider of

financial assistance and advisory services to business and community development

organizations in the Province.

As Dr. House mentioned, one of the challenges

before the ERC as well as ENL over the next while will be to assist in the

implementation of the nineteen economic zones throughout the Province. That ties

in with our mandate to be the main advisory service for economic development in

the Province, community economic development services.

As you are no doubt aware, another portion of our

responsibility relates to providing financial assistance in the terms of loans,

equity investment, venture capital loans, and advisory services to business

start-ups in the Province, business expansions, and we spend quite a bit of our

energy in that area. As well, we have a number of clients who come in just for,

as I mentioned before, advisory services. I guess we have a motto at ENL that

nobody comes into ENL and leaves without some degree of service being provided.

We turn no one away, and while we have a principle of dealing with clients with

respect to not providing financial assistance to clients who are in direct

competition with others, we have attempted to ensure that every client, as I

mentioned a minute ago, receives some degree of assistance, advice, or financial

assistance from ENL such that we help them in terms of their business endeavour

to improve their lot, to improve the operation, and to create more economic

activity. That is about all I can say at this stage. I think everyone is

familiar with our programs, and what we are trying to do.

One of the other initiatives, of course, that we

have, as the minister mentioned, and we have Gordon Kane here with us, in the

budget it was announced that we have responsibility at ENL now for the Fisheries

Loan Board and the Farm Loan Board. All of the activities of those two former

boards will come under Enterprise Newfoundland and Labrador, and major efforts

are underway to ensure that is a smooth transition. I guess one of the benefits

of that is those new clients of ENL will have access to all of the services of

ENL, and those fishermen and farmers will have access, in fact, to a much larger

pool of financing. There is going to be no segregated pool for ENL and fisheries

and farming clients. They are all in the same pool and will get the same level

of priority in terms of access to that, so that is about all I have to say in

that regard.

MR. CHAIRMAN: Thank you, gentlemen. Before I go

to Mr. Woodford, I would just like to welcome Mr. Whelan and ask him to

introduce himself for the record.

MR. WHELAN: I am Don Whelan, MHA for Harbour

Main.

MR. CHAIRMAN: Mr. Woodford.

MR. WOODFORD: Thank you, Mr. Chairman.

One of the things I would like to pick up on from

the outset is the last comment made by Mr. Wall which pertains to the new, I

suppose, transition for the Fisheries Loan Board, and the Crown Development Loan

Board, from the Department of Agriculture into ENL. You say there is a pool of

funding available. If you go and look at the heading 3.4.02, loan fund under

capital, is that the fund you are talking about?

MR. WALL: Yes, Mr. Woodford. The amount in the

pool for the coming year is $14,650,000 and that includes ENL, the fisheries

program and the farming program.

MR. WOODFORD: Last year it was budgeted $14

million. My understanding is that under the revised it was still $14 million,

but I do not know whether or not that was put out in loans. This year it was

budgeted $14,650,000. Am I to assume you are only expecting another $650,000?

MR. WALL: There has been a reduction in the

amount of funds available to ENL. I think I mentioned even at a meeting last

year, that there has been, compared to previous years, a reduction in the amount

of the level of demand that has come for financial assistance to ENL in the last

couple of years. In discussion with Treasury Board there was a decision to

reduce the amount of funding available to ENL but that was boosted up again by

way of the integration with the Fisheries and Farm Loan Boards, so the three are

together.

This amount, of course, refers to cash flow. At ENL

we have authority to approve more than $14,650,000. Government has given us the

ability to approve up to $24 million in any one year as long as we only cash

flow $14,650,000. For instance coming into this year, April 1, we have approvals

from the previous year which we have already approved at the board but which

have not flowed yet. I believe it is in the $5 million range, but that is

consistent. That has been the history. It has been $4 to $5 million most years

that we have carried over from one year to the next, so in the event that $14

million turns out to be not enough we have authority from the government to go

up as far as $24 million as long as we do not actually flow the funds in this

fiscal year, so they can be flowed in the subsequent year.

MR. FUREY: They have always had that authority

to go to $24 million, $2 million per month for twelve months. Historically they

have never flowed anywhere near $24 million, so what Treasury Board has captured

is their historic flow, but they still have that buffer to go up to $24 million.

Even if they had $24 million to spend this year they could not flow it, and

why?... because businesses have to generate other things, there are commitments,

there are contingencies, some of it is premised upon getting banking and other

things in place, and that takes some time for some companies.

MR. WOODFORD: Well, that was on of my concerns

because if you are going to put the Fisheries Loan Board in with - I am not as

familiar with the Fisheries Loan Board, then I would say that the allocations

and the loans that are extended under that are going to be way down this year

anyway in any case.

MR. FUREY: Under fisheries?

MR. WOODFORD: Yes, under fisheries. But in

agriculture, I know last year, according to the Budget anyway, they allocated

$2.5 million and revised it and put out $2.85 million, really. My concern is

that there would not be a cap put on the amount of funding in ENL as it

pertained to the Farm Development Loan Board, because it is a growing industry

and there is room for expansion and that is the only place they can go now.

Another question you could probably answer for me

is: what is the rate of return on collections for Enterprise Newfoundland on

loans.

MR. FUREY: To begin, I will just answer the

first part. Patrick, you will have to give us the actual percentages. I see the

Fish and Farm Loan Boards as gaining by coming to ENL. Prior to that they were

in a fixed pool of capital that they had access to. Now that pool has grown

considerably, because the whole portfolio has been opened up to them. So I see

it as a gain for farmers, farm technology, other business opportunities in

farming, as I do in fishing. It is not restricted anymore to that limited pool

of capital, the $2.85 million I think they had last year. The farmers now have

access to that $24 million rather than the $2.8 million. That is a gain for

them, that is the way I see it.

Your second question was what was the -

MR. WOODFORD: The collection rate, the

repayment percentages.

MR. FUREY: Patrick, would you introduce

yourself and just speak to that?

MR. WOODFORD: Maybe it is better than - ask for

a delinquency rate.

MR. KENNEDY: Pat Kennedy, ENL. The collection

rates on the ENL portfolio for the fiscal year 1994-1995 we budgeted in interest

collection is $3.1 million, and in principal collections we had budgeted for

$8.5 million in our portfolio. The total outstanding portfolio is approximately

$84 million. What we actually collected against those budget numbers was $3.3

million in interest, a little more than what we had budgeted, and $8.6 million

in principal. The delinquency rate on the portfolio is in the order of 33 per

cent on our term loan and interest bearing notes.

MR. WOODFORD: That is something you are not

going to find with the loans that are allocated to the farmers around the

Province. The delinquency rate is very low -

MR. FUREY: Very low.

MR. WOODFORD: I think it is only about 10 per

cent, in fact. My concern is that it doesn't get caught up - if a person who is

in the agriculture business comes in for a loan, he doesn't get caught up with

the same bureaucratic hassles and red tape that other people can get caught up

in and be treated in the same way. Because they usually come in with a lot of

collateral, except for a first-time new operator. Usually those farmers carry a

fair amount of collateral and the government makes sure, whatever it is -

whether it is the Farm Loan Board or Enterprise Newfoundland - that that

collateral is well used by Enterprise Newfoundland or the Farm Loan Board. That

was my fear when I heard this, that going over -

MR. FUREY: I can see that being a fear right

off the bat, but I don't see that as being frightening. In fact, the farmers

have had a terrific record of repayment. They've been diligent in their loans.

That will only augur well for them, as far as I can see. Now, they can go right

into the regional offices up to $150,000. Bang, done.

MR. WOODFORD: Who will be administering those

loans? The same loan officers who are in the office now?

MR. FUREY: Yes.

MR. WOODFORD: Or will it come under a board?

MR. FUREY: It will come under the board that is

currently there, but as you know, at ENL for loans $500,000 and below it is the

corporate transaction committee. We are also having personnel from the Farm Loan

Board and from the Fisheries Loan Board shift over to ENL and they will be

experts at the table administering that

section of the portfolio.

MR. WOODFORD: That is good. So they can go into

the regional office in Corner Brook and do the same thing that anybody else in

the retail, manufacturing or processing business could before.

MR. FUREY: Absolutely, and have a bigger source

of capital to draw on.

MR. WOODFORD: Have a bigger source of capital.

MR. WALL: Maybe I could clarify for Mr.

Woodford in the event he sends some people into ENL's office in Corner Brook. He

can, but at this stage we are maintaining the status quo in terms of loans being

administered by the group which currently administer or have been administering

it at the Farm Development Loan Board. At this stage until we get a handle on

exactly the portfolio and the processes, the approval process will be at a board

committee, but supported by the group that is coming over from the Farm

Development Loan Board and the Fisheries Loan Board. There is not the intent

right now in the early stages to shift the responsibility for providing loans

out to the regional offices, but they would certainly have access -

MR. FUREY: (Inaudible) given the structure in

place now, but certainly up the road that is the intention.

MR. WALL: The access will be there. Our people

are as we speak - in fact, later this week Mr. Kane and Dominic Dicks from the

Farm Development Loan Board will be in Gander to meet with some of our front

line staff from each region so that in the early stages we have people who are

knowledgeable about the program. These people then could talk to the clients and

help them to fill out applications and send them in here to expedite the

process, so they won't have to get in a car and drive to St. John's to talk to

someone about filling out an application. They can do that in Corner Brook with

an ENL representative, or in Lewisporte with an ENL representative, or down in

Grand Bank or wherever.

MR. WOODFORD: Well, most of those applications,

anyway, I would say, will probably still follow the same procedure in going

through the agri rep and the farm management specialist in the area before they

actually go to the loan board.

MR. WALL: Yes, we have discussed it with the

Department of Fisheries, Food and Agriculture and we will continue to have a

process where applications for both of those programs can still come in through

the department if people feel more familiar and comfortable with that. Of

course, they will still have to come in to Gord Kane's group for analysis and

then go to the board committee for ratification.

MR. WOODFORD: I had the understanding, and

correct me if I am wrong, that the Farm Loan Board was disbanded; it was already

disbanded.

MR. WALL: Both boards are disbanded, yes; they

really now come under the Enterprise Newfoundland and Labrador board. I referred

to them really because traditionally that is what we have had, these boards.

There is no such thing as the Farm Development Loan Board now, or the Fisheries

Loan Board.

MR. FUREY: There is no point in having that

duplication there.

MR. WOODFORD: No, as long as there is someone

there with a little bit of expertise to try to make sure that there is a

continuous flow.

MR. WALL: Well, that, Mr. Woodford, is the

whole purpose of what we are trying to do, to try to make sure that this process

is seen as a positive process for the clients, because they are now our clients

and they are just as important to ENL as any of the larger clients that we have,

or smaller clients.

MR. WOODFORD: Very good.

Your lines of credit and so on, for instance for

loggers in the forestry part of it, Enterprise Newfoundland and Labrador, that

was an excellent program. I suspect it is still in place.

MR. WALL: Yes, the sawmill assistance program.

MR. WOODFORD: Yes, the sawmill assistance

program. It used to be up to $50,000. Is it still $50,000?

AN HON. MEMBER: Yes.

MR. WOODFORD: Are there any plans to raise that

$50,000 limit?

MR. WALL: Not at this time, but to be honest, I

have not had any representation, either directly or from any of my offices. Now,

my executive have not come to me saying that they have had representation from

either individuals or from any association representing the logging industry.

MR. WOODFORD: I know there is some movement, in

my particular area anyway - one in particular, a very large new sawmiller about

to be established there, and he is after buying, I think, over 1.2 million board

feet of log so far this year, so obviously, he must have used up his maximum

with Enterprise Newfoundland, and then the rest of it is coming out of his own

lines of credit with the banks and so on.

What it means, and I would like to say this here

and now where the minister is, and especially yourself, because a lot of people

in those offices sometimes just can't see the woods for the trees when it comes

to what it means to local people. You have it in the wintertime whereby Kruger

would only buy so much, Abitibi would only buy so much when it comes to pulp

wood, but if you have a sawmiller in the area who will buy all winter long when

the rest of the economy is down and everything is closed, they will cut and

bring to him, because I know a prime example in my area, and I think you had a

couple down in the bottom end of yours the same way. As I said, I know in our

area, the Cormack, Reidville, Deer Lake area, this winter, there are fellows who

have been going all winter selling logs, and this particular operator now is in

a position where he can start up in May, hopefully the first of May, and he is

going to have about 1.5 or 1.6 million board feet of logs on site ready to go,

and he is going to hire twenty employees. There will be eight over and above

what it was last year, plus the loggers were working all winter cutting logs, so

if you didn't have that program there and so on it would have been very

difficult to try to float that with the banks. Because you know what they are

like. Especially if the individual has a good payment record - I'm not talking

about giving it to every fly-by-night who comes in. A fellow who gets $10,000

and he doesn't pay it back, I have no time - I mean, you don't pay it, you don't

get it, period. But it is an excellent program and I would say you are probably

going to have some requests over the next six months to a year to raise that

ceiling, especially someone who is carrying - a small businessman trying to

carry that inventory, you know, especially if it doesn't move fast. If it is

moved fast - (inaudible) inventory, if you could saw it - you can't saw it in

the wintertime, not here, not in those places.

MR. WALL: We have had excellent results from

that program. It is a good program, and we are flexible. If there is a

representation from the industry then it is something that I would be prepared

to take to the board to change the policy or to increase the limits.

Having said that, as well, because someone avails

of the special sawmill assistance program does not preclude them from asking for

special assistance from our normal - because we have the availability of working

capital loans in some circumstances. If there is a special case where someone

needs $100,000 in working capital funding - because that is really what it is,

for some of the members. The sawmill assistance program allows loggers to buy

inventory for the purpose of processing. It is usually just a one-year process

where they get assistance from us to the tune of $50,000 or whatever they need,

and it is always paid back the subsequent year or the Fall when they produce the

logs and lumber. If any of the companies availing of this don't repay or fail to

live up to their obligations under it then they are precluded from accessing it

in the future. Our success rate in that program has been very good with the

logging industry.

MR. WOODFORD: Good repayment record. Is my time

up, Mr. Chairman?

MR. CHAIRMAN: One second. There is a red Dodge

outside with the headlights on. That is yours, Alvin, is it? Okay.

Okay, Rick, one more.

MR. WOODFORD: Minister, the other day - I don't

know whether it was in questioning in the House or whichever, it was - what was

it on? Anyway, the privatization of Newfoundland Farm Products and Newfoundland

Hardwoods will now be going through your department. Oh yes, I was questioning

some of the Estimates, yesterday, of the Minister of Finance and Treasury Board.

He said that there would be no need for any monies in his department this year,

it is all put in your department to look after the privatization, especially of

Newfoundland Hardwoods and possibly Newfoundland Farm Products. How close are

you to a sale for Newfoundland Hardwoods and Newfoundland Farm Products?

MR. FUREY: Yes, the whole privatization file

moved from Treasury Board to the Department of Industry, Trade and Technology. I

don't think it moved because there was a better minister in Industry, Trade and

Technology. I think it came as baggage with my new deputy. He was very involved

and the cornerstone in negotiations of the privatization of NLCS.

With respect to Farm Products, there were some

proposals. I think the one that is being examined with any modicum of

seriousness is the one from the Co-operative group now. How far we are on that I

don't know, I haven't been brought up to speed on it. I don't know if you have.

In respect to Hardwoods, there was a general call for proposals. I think there

were some twenty-one expressions of interest with six meaningful bids with

deposits placed before us that are being analyzed now. That is fairly close.

MR. WOODFORD: A good chance that will go this

year.

MR. FUREY: Also, I should tell you that the

whole Holiday Inn package as well -

MR. WOODFORD: Is in that, yes, that is right,

he mentioned that.

MR. FUREY: - in fact, the whole privatization

file moved with Mr. Oake into this department. It is probably the appropriate

place for it anyway, but it came with Mr. Oake being transferred from Treasury

Board.

MR. CHAIRMAN: Thank you, Minister.

Mr. Woodford.

MR. FUREY: I don't know if you want to add to

Farm Products. I think that is basically right, isn't it?

MR. OAKE: Yes. The Farm Products thing is a

difficult privatization, as Mr. Woodford has told the minister - as he, who was

the minister responsible, knows there are substantial losses at farm products.

It was a difficult situation with the supply management problems and what

appears to be a breakdown of supply management system in Canada; so that seems

to be what's happening, and you know the competitive pressures that Newfoundland

producers are under with the costs they have, and the situation at farm products

and chicken prices generally are down, I mean, it is just a difficult

combination of circumstances and not an easy one that you can see your way

through without some sort of continued government involvement, and that's the

essential problem.

AN HON. MEMBER: (Inaudible).

MR. OAKE: Hopefully, (inaudible) do that. A

co-operative seems like a good model for the privatization where you only have

one processor in Newfoundland, and to have the processor owned differently from

the producers, it is just likely to end up in a big pile of conflict, so it

seems like a good model to be following. And on Hardwoods, as the minister said,

hopefully, within another month or two we are going to be in a position where we

can close the transaction. At Hardwoods, we have had some very good expressions

of interest from substantial companies.

MR. CHAIRMAN: Thank you, Mr. Oake.

Mr. Whelan.

MR. WHELAN: Did you have a follow-up on that,

Mr. Woodford?

MR. WOODFORD: Just a short one now while we are

on the topic, Newfoundland Farm Products. It would be sort of sad, in a way,

because the national quota - there was an allocation supposed to be done for the

Province this past year and it can't be used; that's the sad thing about it. And

now, there is a problem between Quebec and Ontario pertaining to that, too, but

there is a fairly large quota that should be used by the Province, used by the

producers and possibly some new producers, but it can't be used, and one of the

reasons for it is the possible sale of Newfoundland Farm Products in capacity.

MR. OAKE: I think the situation is that

producers have picked up some of the increased quota; I think they are run in

seven-week cycles - or six-week cycles instead of seven, and that is probably an

unsustainable situation from the producer's standpoint over time; there is risk

of disease and so on but they have been accommodating it. The limiting factor

essentially now is processing capacity, and unless and until the processing

situation is straightened out, it doesn't seem to make much sense for producers

to take on the kind of capital investment that is needed to bring new producers

on stream, until the processing situation is sorted out. And, as you know, I

mean, the losses at farm products on chicken, have been mounting, they haven't

been going in the right direction. There has been a general deterioration of

chicken prices; anybody who goes to the supermarket can see it.

MR. WOODFORD: It is better this year.

MR. OAKE: Yes. It has just been a bad year and

there is a lot of uncertainty, and until we can get past some of that, there is

the combination of factors.

MR. CHAIRMAN: Thank you, Mr. Oake.

Mr. Whelan.

MR. WHELAN: Thank you, Mr. Chairman.

Mr. Minister, under heading 3.1.01, Industrial

Technology and Information Industries.

I wonder if you could explain exactly what it is,

that you say you have an assessment of needs and opportunities for technology

development, diffusion and commercialization in the Province. I wonder if you

could expound on that, and probably incorporate in your explanation of that

heading, the more than doubling, almost trebling, I think, of the allotment for

that particular -

MR. FUREY: Yes, I don't mind at all, and I will

try to be brief because I don't want to get into -

MR. WHELAN: As long as you are thorough.

MR. FUREY: As long as I am thorough.

There are two initiatives that we implemented which

gave rise to that new money flowing through that head. One is, we have taken the

strategy that if we are going to try to position ourselves to attract

telecentres to the Province, we know very little about it inside the

bureaucracy, so what we have done is a private/public partnering. The key

players in this particular instance would be Newfoundland Telephone Company -

NewTel Enterprises. They know the game, they have the infrastructure, they have

just laid down a fibre optic backbone right across the Province, and they have

the personnel, so we are joining forces with them in a small swat team type

arrangement to chase out new industries and try to attract in telecentres and

telecommunications opportunities. That was one area of increase and that will be

cost-shared fifty cent/fifty cents per the dollar, public/private.

The other one was the ONLINE task force. We did a

substantial study which cost in the order of $250,000, whereby we brought all of

the information technology companies into the mainstream. We sat down, took a

look at the assets, the cluster of technologies around the Province, what was

available, what kinds of things we needed, and put together a study to see how

we could grow this industry into the future. One of the things that study called

for, was again, a merging of the public and private partnership.

We put $500,000 on the table, $250,000 from the

private sector and $250,000 from the public to put together a secretariat called

ONLINE, ONLINE being the acronym for Opportunities in Newfoundland and Labrador

in the New Economy. We put together an eighteen-member team, co-chaired by the

Deputy Minister of Industry, Trade and Technology, and the other co-chair from

the private sector is from Coopers & Lybrand, Dennis Young, who is the President

of NATI, the Newfoundland Association of Technical Industries.

They have an eighteen-member board, they were given

this study, and they are to come back to government with specific action items

and an action plan in 180 days. It will be brought to Cabinet, resources will be

put behind it, and we intend to grow the industry using that pathway or

blueprint that was given to us in the form of that study for information

technology.

MR. WHELAN: So basically, it is for information

technology, it is not a really broad - not all types of technology.

MR. FUREY: No, it is information technology. As

you probably know, information technology, as we turn the corner toward the 21st

century, five years away, will be valued in the order of three trillion U.S.

dollars. We don't want a whole loaf, we don't even want a slice, but if we can

get a sliver, that will have quite an impact on this little economy.

MR. WHELAN: Thank you.

On 3.3.04, Hibernia GBS Site Construction -

Offshore Fund. You have $1,704,700 and relatively speaking that is a fairly

small chunk of money when you are talking about the Hibernia project.

MR. FUREY: Which one was it, again, Mr. Whelan?

MR. WHELAN: 3.3.04. Our GBS site construction

offshore fund. What exactly is this?

MR. FUREY: You will recall in the original

Hibernia agreement that site which was being built out at Bull Arm called for

the Province to put in one third, or roughly 30 per cent of the actual capital

cost to develop that site. The original cost was $95 million and that is the

last portion which will flow out of our commitment on a net basis.

By the way, that is a $300 million facility which

reverts to the Province, under the Atlantic Accord, six months after the first

oil is pumped from the Hibernia site, for $1.00, all assets from paper clips

right up to the manufacturing, to the fabrication yard. That is why we have put

in place a team now to start marketing this in an aggressive way, to look for

new opportunities, post 1997.

MR. WHELAN: Is there anything ongoing at the

present time in terms of marketing?

MR. FUREY: Yes, there is. I had some meetings,

as you know, in Korea with Hyundai, the Premier has met with Bellini in Italy,

and I have met with Aker in Norway. These are all the big players in terms of

the offshore and in terms of fabrication. There are other opportunities as well

in the U.S. and other places around the world. We are going to move, though, in

a very targeted way now with international expertise to market the thing in an

aggressive way over the next twenty-four months, so we need skills from outside

to help us.

MR. WHELAN: So, these are companies you are

negotiating with to take over -

MR. FUREY: Not negotiating, but pushing a

market plan at them: Is this of any use in your big corporate picture?

MR. WHELAN: Basically you are trying to sell

the facility.

MR. FUREY: Sell it, lease it, use it. The

bottom line is we want to try to create economic opportunity and jobs. We are

not necessarily going to sell it. We may sell it if the business plan is right

and people - somebody comes to us and says: We have projects for the next twenty

years. We would like to have that for a fixed amount of money and we are going

to employ X number of Newfoundlanders and Labradorians. If that makes sense, yes

we will sell it. But this is quite an asset in quite a strategic location, so we

have to be very careful who we sell it to or lease it to. But it is important

that we get out and market it. That is the key, marketing it.

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

Whelan.

Mr. Hewlett.

MR. HEWLETT: Thank you, Mr. Chairman.

I guess after listening to that, Mr. Minister, it

is safe to say that the Hibernia project, although we are just talking about a

small aspect of it, is somewhat more valuable than two fish plants.

MR. FUREY: Whoever said that?

MR. HEWLETT: Heaven forbid. Let me see. The new

plan to develop these economic zones - I'm going out to my district on Friday.

There is a meeting called by Dr. Greenwood, I think, of the Economic Recovery

Commission to do a briefing for the local development association people and

interested business people and so on and so forth.

One of the concerns that I had at the onset of

this, just in the practical things of getting it set up, sort of reared its head

yesterday I do believe, in that I had a call from someone in some ACOA office, I

do believe, saying: The meeting you enquired about some weeks is going to be in

Baie Verte on Thursday night. That was something that had been planned some time

well in advance. The date hadn't been exactly fixed. I raised some concerns to

the person I was talking to at ACOA at the time because I understand that ACOA

and some provincial agents -

MR. FUREY: ERC.

MR. HEWLETT: - that are jointly doing the

briefing sessions on these things -

MR. FUREY: The Economic Recovery Commission and

ACOA, yes.

MR. HEWLETT: Okay. Given the reality of the

zone that I'm in, basically you've got two communities of interest, one centred

around Springdale, one centred around Baie Verte, there is going to be

tremendous competition as to what if any place is the economic capital of that

zone and so on and so forth. I expressed some objections at the time. I

subsequently ventured into Springdale with a colleague of yours, Mr. Grimes, to

address the Chamber of Commerce, and he readily assured the locals there who

were concerned that there would be a Springdale meeting. That was organized and

I'm going to that one.

But out of the blue, unbeknownst to me, the Baie

Verte one was set up a day before. I got a call on it just yesterday. The

development association in Springdale sort of got a call on it around the same

time I did. They were a bit upset because they had put all their apples into the

basket of getting everybody they could out to the Friday night meeting in

Springdale. I would like a comment on this. It is almost like the left hand

doesn't sort of know what the right hand is doing, assuming that we can refer to

the two governments now as left and right.

MR. FUREY: It is an interesting comment. I can

tell you since the release of the report there have been six formal meetings

around the Province, twenty-two ad hoc meetings, and various development

associations and interested stakeholders throughout the Province have called on

the Economic Recovery Commission and ACOA to come out and debrief, sort of, I

guess is the best way to put it.

There is generally support around the Province for

it. People recognize that the status quo can't work. If you have fears in your

own region I can tell you we have them in my own region. My region is zone six.

It encompasses twenty-four communities going from Deer Lake North all the way to

the St. Barbe ferry which crosses over into Labrador. All of these communities

have their own individual personalities, their own idiosyncrasies, their own

ideas and their own vision, and it is very difficult to pull them all together

under one vision. But I think if we can do it on the Northern Peninsula - and it

is being done very successfully, particularly in tourism, as Mr. Woodford would

know; I mean, fifty-six communities came together under one solid accord and one

vision to move forward tourism, and I think if people can come together and

realize that by pulling together on the same rope in the same direction, we can

make it work...I don't see it from the starting point of looking at it from your

own narrow viewpoint. I think people have to see the bigger picture in each

zone, and in that way I think we can generate opportunity.

In terms of your meetings, I have no idea. I don't

know if Dr. House knows anything particularly about that particular meeting. I

know that anybody who has asked for a meeting with Dr. Greenwood or anybody from

the team that is involved in the debriefing has certainly been responded to. I

arranged, in fact, for our own caucus to be briefed on the report, and for the

Conservative caucus to be briefed on the report. I think I may even have briefed

the NDP; did I, Dr. House?

AN HON. MEMBER: (Inaudible).

MR. FUREY: Yes, but I wanted to make sure that

all politicians, regardless of stripe, knew what was going on, bought into the

vision, and we all worked together on this. It is not something that is

political, certainly.

MR. HEWLETT: Well, I guess it wouldn't be

political in terms of party politics in that both the Baie Verte district and my

own are of the same stripe within that particular zone, but Baie Verte is off on

its own peninsula, and you do have two very distinct economic units there now

that are incorporated in one zone, and there is no neutral ground, for want of a

better phrase. The economic capital of the district in terms of neutral zones

would have to be probably the Baie Verte Junction with the Trans-Canada Highway,

out in the middle of nowhere, which is problematic.

When I dealt with the ACOA guy on setting up this

particular briefing, automatically the meeting had to be in Baie Verte, I found

out afterwards, because they could ski there.

MR. FUREY: You can't trust ACOA for

(inaudible).

MR. HEWLETT: The problem is, you are into the

very formative stages here. You are setting up an interim board which will have

a long-term effect on the outcome, and it is very critical that you have a power

balance to the extent that you can between the two economic entities, i.e.,

Green Bay and Bay Verte, otherwise this thing will get off on a very sour note.

MR. FUREY: Oh, I agree.

MR. HEWLETT: I have my concerns, because

obviously, ACOA went to work and set up its own thing and let me know as a

courtesy a few days in advance, but it set up its meeting literally the day

before Dr. Greenwood's meeting had been set up in Springdale, which had been set

up for a few weeks. But obviously the communication did not appear to be there

that should have been.

MR. FUREY: Mr. Hewlett, I thought Dr. House

wanted to say a few words on that, if you don't mind.

DR. HOUSE: Just a little background, I can look

into the details of the specifics you are talking about - I don't know off-hand

- but I should let you know that originally both Baie Verte and Green Bay were

to be part of the larger central zone, and the people on the Baie Verte

Peninsula kind of asked the task force if they could become a separate zone.

Then we talked with people from Green Bay, people in the development association

there and so on, and their feeling was that if Baie Verte was to become a

separate zone, they felt their identity was closer to being with Baie Verte than

with the bigger region of the central zone. So we went back to the people in

Baie Verte and talked about that, and to make a long story short, they all

agreed to make it a single zone of the Baie Verte plus Green Bay area, and the

population figures looked good and so on. But, at the same time, I am very

sensitive to the issue that you raised.

There is no principle that says there can only be

one centre to be developed in a zone. In some zones there are certainly going to

be more than one, and I am sure that is one of them. But I am sensitive to that

feeling and there is a sense in Springdale now that most of these things seem to

be happening in Baie Verte. All I can say is that we will make sure that things

happen in Springdale and in Green Bay as well. If you find that this meeting

doesn't go ahead, please let me know and we will make sure we arrange one in

Springdale.

MR. HEWLETT: I expect the meeting will go ahead

on Friday night. As a matter of fact, they did adjust the timing of the meeting

in Baie Verte so interested people in Springdale could go to both if they

wanted, although it is (inaudible).

MR. FUREY: The original intention was

Springdale, and people from Baie Verte would come to Springdale? Was that the

idea?

MR. HEWLETT: No.

MR. FUREY: Had they planned two separate

meetings?

MR. HEWLETT: Springdale demanded a meeting from

Roger Grimes and, I suppose, from the officials they were dealing with in the

Provincial Government. ACOA seemed to have been assigned that particular zone

and they went ahead and did their Baie Verte thing on their own. Like I said,

the Baie Verte thing just popped up out of the blue yesterday. I just wanted to

alert you to that.

MR. FUREY: Yes, okay.

MR. HEWLETT: One other point - and this is

probably not fleshed out yet with regard to this whole concept: you have this

economic zone, it has a board of its own. Do I understand that each zone also

has a funding board of some sort? If so, what, if anything, is the relationship

of ENL with regard to funding institutions or whatever that relate to that

board? I gather that is not yet fully fleshed out.

MR. FUREY: I can address that, actually. In the

report they actually have a recommendation. They thought it would be a smart

idea to have an investment arm right in each zone, in each board. The obvious

choice to do that was the so-called business development centres. Now, that is

one of the recommendations that the House-Slade report came forward with, and

this report came from the regions.

The Provincial Government accepted that with one

long-term funding for the business development centres. Then and only then would

we agree to allow these to be the investment arms in each zone. Because if we

didn't ask for that, it would essentially, we believed, turn into a downloading,

i.e., you have nineteen bdc's sitting in nineteen zones with a drained

portfolio, with no federal assistance, with the feds abandoning it, and so they

would turn to the Province for their support, and we don't have the money to

support that.

It has come to my attention, and I've had it

confirmed at the federal level from the federal ministers involved - Mr.

Axworthy, Mr. Dingwall and Mr. Tobin - that there will not be long-term

sustained funding for the bdc's. Therefore, that recommendation is not

acceptable to the Province. Therefore, we revert to plan B, which is, ENL will

have a substantial role in each of the nineteen zones, helping them on the

investment side.

MR. HEWLETT: Does that mean that individual

companies or individual persons with business ideas and whatnot would go to ENL

as before? It is still very fuzzy as to how an economic development idea or

initiative in a given zone would somehow play through the zone and at the same

time play through ENL.

MR. FUREY: Okay. You see, the investment arm

would have been the bdc's and they would have been in there for small loans. I

think the concept was $75,000 and less. But if they don't have the dollars to

match that and give life to it, there is no point in playing smoke and mirrors

here. So we simply said the bdc's will continue to operate on their own.

Whatever they are doing out there, they can continue to do it, but I can tell

you, there won't be long-term sustained funding, new funding, for their

portfolios.

When the Economic Recovery Commission completes its

work and sets up the nineteen zones over the next twelve to twenty-four months,

the interface with government, when the ERC and ACOA back off, will be ENL,

anyway. ENL is going to be government's day-to-day interface with the nineteen

zones. That is why we said ENL must play a very critical role in the birth and

organization and the development of these zones in the nineteen areas of the

Province. That is why we put Mr. Wall, on the agreement of the SRDA agreement

which Dr. House co-chairs. Both of them represent the Province at the table

where the performance contracts will be negotiated by each zone with the

Governments of Canada and Newfoundland. So, yes, ENL will be the ones who are

still dealing in small loans. The thinking was, that the bdc's would step in for

the $75,000 and under, but that commitment wasn't sustained in the real world of

putting money behind it by Ottawa, therefore, we abandoned it.

MR. HEWLETT: Thank you.

MR. CHAIRMAN: Mr. Penney.

MR. PENNEY: Thank you, Mr. Chairman.

Mr. Minister, one of the most impressive pieces of

legislation that passed through the House of Assembly in the six years that I

have been there, has been the EDGE legislation, and I will say to you now, I

appreciated the opportunity to have had input at your office prior to it's

coming to the floor of the House as, of course, everybody in the Province did -

that opportunity.

I wonder if you could give us some indication as to

whether it has been as successful as we anticipated it would be - give us some

idea as to what kinds of responses you have had, how many corporations have been

approved to date, how many jobs you have created, just an overview.

MR. FUREY: Thank you, Mr. Penney.

I can tell you that it is very difficult to say

what the success rate has been to date. Bear in mind, that while there has been

a lot of talk about the EDGE legislation, much of it has been in the form of a

White Paper. That White Paper was circulated through the Province, we took

feedback and substantially changed the bill that we had proposed.

The legislation for EDGE is barely ninety days old

- January, February, March, a little over ninety days old, so it is hard to

measure what has been the impact to date. I can tell you that we have had over

1,000 calls to our 1-800 number; we have had requests for 5,000 packages which

we have sent world-wide. We have had the Premier speak in the major centres of

Canada and the Eastern United States, Washington, New York, Boston twice, and

other areas in the U.S.

I have just completed a nine-day, working day

mission in five countries and attended forty-seven separate meetings. So it is

hard to gauge what will be the effect. I think we will need to be two years out

looking back to see what has been the effect of this legislation. But I concur

with you, I think it is a progressive piece of legislation, it is probably the

most daring piece of legislation of its kind anywhere in North America, that a

government has put forward in terms of surrendering its land base, its tax base

and the other components of that bill.

In January, we approved two companies, Lotek

Engineering, I saw their ads in the newspaper just recently; these are

substantial jobs with substantial salaries. I think their intent was twenty-one

jobs to start off. Canadian Iceberg Vodka Corporation ran into some difficulties

in their negotiations with the St. John's Port Authority and others; their

intention was National Sea, they abandoned that plan and purchased the old

Carling O'Keefe brewery; they are in the process of buying a vessel, they told

me just recently; they will have eleven or twelve people starting off, as they

grow the demand - there will be jobs, as well, at the Newfoundland Liquor

Corporation, these are already in place but these workers will be called back

for additional hours. They have a $75-million marketing agreement through

California and Chicago, through cable distributing, but if they can grow that

demand using that marketing technique of 12,000 years in the making which is

what is on the labels of their bottles; it is very clever marketing - if they

can grow that, obviously, they grow jobs with it. So those two are approved.

We just approved two in February. One is a food

production company; I haven't announced it publicly yet because we are still

ironing out some details with their joint venture partner in Great Britain. The

other is involved in the oil industry and I am a little reluctant to announce it

on the advice of my very clever deputy, who tells me that it might not be

prudent to do that because of the other competitors involved in the game, so we

are still struggling on whether or not we should even talk about that in a

public way - but it has been approved.

I can tell you, the board met this past Tuesday and

considered seven applications, three of which were approved by the board and I

will take to Cabinet tomorrow. There are another seven applications pending

which will be considered in the next couple of weeks, seven new applications,

and there are twenty companies in discussions with the government right now in a

very meaningful way, but there are no applications yet from those twenty

companies.

MR. PENNEY: In keeping with that, that is

certainly good news, Mr. Minister, and we can use all the good news we can get,

I suggest. In keeping with that, but not restricted to EDGE, we have been saying

for the last two or three years - we said it here in this same room when I

chaired these meetings last year, you said, and I think the year before that we

said the same thing again: there are a lot of good news stories in this Province

but they are not getting out. And we attributed some blame to the media, who

seem to be somewhat reluctant to report good news. There is no reluctance at all

to report bad news, like the incidence of HIV down in Conception Bay - the

Harbour Grace area.

The media seems to be very reluctant to report on

the good news stories. And I think, where you said there was enough blame to go

around, and you, your department and your officials shouldered some of it

yourself for not getting the news out - since you said that last year, has that

changed? Are we doing a better job of getting the good news stories out, and if

so, what are we doing differently?

MR. FUREY: I am not so sure it has changed. I

think we are living in very cynical times, and some would argue that with good

reason, people have a lot to be cynical about, politics of the past, the way

some businesses have conducted themselves in the past, and a whole range of

other things have given rise to an incredible cynicism.

It is very difficult to get good news out. I can

tell you that Dr. House and his group deserve magnificent praise for the kinds

of strategies they have developed. There are young people, in the university,

for example, two I can mention from the business school, who took it upon

themselves to travel the Province and talk to our high school people because it

is an attitude change that we need. The media, I'll give you, are locked in a

Watergate of the mind, that everything is crooked, everything is corrupt, and

politicians of all stripes are all bad - and that is just not true.

We are living with the history of Watergate and

Nixon, and everything else, and it all filters down, and they are all in a mood

of what they call investigative journalism, but what I call a destruction in

confidence, really. Because there are some fabulous stories out there, some

great Newfoundland men and women who are doing remarkable things - remarkable

things! They are good news, they are great stories, they are positive, and they

should be held up as examples. There are literally hundreds that I could talk

about tonight.

But these two young people from the business school

went around to the schools and talked. I don't know how many classes they

visited - Dr. House, over 100?

DR. HOUSE: There were two originally and then

two more recently. It is over 100 in terms of schools and they have also been to

community colleges.

MR. FUREY: These are young people talking to

young people. Let me pass it over to you Dr. House and you can just tell them a

little bit about what they have done and the reactions they have received, and

how you are fighting to get the good news message out, too. I can sit here all

day, but I would just as soon not get the credit for Chuck Furey or politicians,

but I would like the media to step in, step up to the plate, and for every ten

bad stories, give us two good ones, give us some semblance that there is a

balance out there somewhere.

MR. HOUSE: I would settle for even just one

once in a while.

MR. FUREY: Well, that is what I said to CBC in

my two hours of interviews on ENL, which they castigated. I gave them 200

companies that we have helped, which were remarkable examples of companies, in

Deer Lake, Corner Brook, in Green Bay, all over the Province. I gave them

examples and they never used one because their intention was that the story was

already done. Now, Furey, how do you fit into it?

MR. PENNEY: The problem with that, Mr.

Minister, and I think you recognize that if you don't get a scattered positive

story, it is very difficult to create a positive attitude.

MR. FUREY: Well, 90 per cent of recovery, I

believe, is confidence, and confidence is generated for the most part on what

people see, what they hear, and the kinds of things they read, and I have no

control over that. But I tell you, the media are only hurting themselves. You

look in our budget here this year. We have $1.4 million in there, to do what? To

try to get out on the world stage and say Newfoundland is a good place: that we

have some remarkable clusters of marine technologies that we've built up over

the years; that we have centres of excellence that are remarkable and

world-class; that we have companies which are exporting innovative technologies

that have come out of the young minds of our men and women who are coming out of

our institutes, 5,000 of them every year; that we did export $350 million worth

of fish last year, even though the groundfishery was closed; that we are moving

with great strides in the agricultural and aquacultural industries, that we are

being innovative; that newsprint shipments were up, iron ore production was up;

tourism grew by 6 per cent; light manufacturing grew; that nominal growth of 7

per cent happened in our economy last year, and in real terms that was 3.4 per

cent. If I could wave a magic wand and bring back the fishery of the late 1960s

we would probably have about 7 per cent unemployment.

These are good news stories, they are great

stories, but I find that CBC just takes the numbers, takes the statistics, rents

an expert, and they condemn the crap out of it. It is too bad, it is

unfortunate, because we pay $1 billion a year for that. Dr. House, I'm sorry. I

(inaudible) a little (inaudible).

DR. HOUSE: Filling in behind here, I guess what

I would like to comment is that there is some change occurring in the media if

you leave the CBC out of it.

MR. FUREY: Notice how he covered himself.

DR. HOUSE: If you look at the Express ,

for example, it may now have an enterprise page and this is something -

AN HON. MEMBER: Leave The Globe and Mail

out of it, too?

DR. HOUSE: Well, this is something that we

initiated behind the scenes and there is now a weekly good news story page,

really. I don't know if you read that. Also, I think some of the other stations

- VOCM and so on, are doing better.

We have recognized that we can't rely on the media

to get the message out and that is why we began this getting the message out

initiative. Getting to the young people in the Province is where we put the

first priority. This presentation, if any of you have not seen it, I recommend

you to see it. It is available. We would present to either caucus or whatever.

It is very uplifting. Everyone who goes to the presentation comes away from it

feeling: There is a lot more going on in our Province than we realize. We've

been doing it to business groups and social service agencies as much as we can,

given the fact that we are a small agency with only so many people who can do

this.

On the national scene we have also the ambassador

program that you may be aware of, and we have a lot of people now in other parts

of the country who are getting a balanced view of what is going on in this

Province directly through our ambassador program, the ambassador newsletter that

comes out every month. It is a small thing. We are hoping to set up a network

now in Toronto of people up there who will start meeting with each other to

think of ways in which they can contribute to improving things in Newfoundland.

There are a number of ways in which we are beginning to do this kind of outside

of the media, recognizing the problem that we have there.

MR. FUREY: You can see, Mr. Penney, that Dr.

House has a much more positive attitude than I do about the media. But, Mr.

Woodford, it would be interesting for your caucus, and if you would like, Dr.

House can arrange for that presentation from these two young people who have

spoken to high schools and colleges around the Province. It really is an

uplifting experience to hear them talk about the young men and women who are out

there creating jobs - not looking for jobs, creating jobs, and creating new

businesses. I was really moved by it, and I'm sure you were too, Melvin - you

saw it.

MR. PENNEY: I was most impressed. As a matter

of fact, I have taken the components of that presentation and I have made the

same presentation back in my district on two separate occasions. The audiences

were most impressed. Thank you, Mr. Chairman.

MR. FUREY: The deputy just wanted to add

something to that whole issue of image and attitude and stuff.

MR. OAKE: Yes. I think one of the mandates that

we have is promotion of the Province from an investment prospect and trade

promotion perspective. We have been talking to government about this for a while

now, and this year, as the minister said, the government has committed just

about $1.5 million towards this new initiative. We've pitched it to government

in the context of a multi-year initiative. We will be hiring in short order an

agency of record that will manage a communications program for us. It will have

several components promoting particular sectors of the Province. Also, we will

be trying to do some things aimed at image enhancement, because there is no

question that we have an image problem, particularly in Canada, but one of the

funniest things that we encounter is if we go outside of Canada, to the U.S., to

the Far East, to Europe, we don't encounter this, but this is a central Canadian

perception problem to a very large degree, and it is true not only about us as a

business location but also from a financial perspective.

If we go and deal in the capital markets of the

United States, we get an entirely different reception, as a borrower, from what

we get in Canada, and Phil Wall has been at that for twenty years. The

difference in which we are received, because I guess we are part of Canada in

foreign markets, they just think of us as being a part of Canada, with all that

means, but our marketing and image issues are largely a phenomena of central

Canadian media, and I don't know how much advertising you would have to do to

get past that. But clearly, one of our tasks, at least in the business

community, is to promote the image of this place as a good place to do business

because, after all, we are the ones making investment decisions. There is a

limit to what you can do with nice ads on Hockey Night in Canada or

something. We really are trying to focus into the investors and say, you can

come here and make a dollar; there is a good labour force; there are good

opportunities. It doesn't have to all be soft. It has to be targeted, and that

is what we are going to try to do.

MR. FUREY: Mr. Penney, Dr. House and Mr. Oake

and myself gave you the short answer. Would you like the long answer?

MR. PENNEY: I think you had better run that

through the Chairman. Thank you, gentlemen.

MR. CHAIRMAN: Mr. Woodford.

MR. WOODFORD: Thank you, Mr. Chairman.

Under the Change & Challenge - A Strategic

Economic Plan for Newfoundland and Labrador , there was some reference made

to trying to consolidate, I suppose - I have heard it in different conversations

in the House with regard to trying to consolidate different government

departments and places, in other words, one-stop shopping when it comes to land

use, building permits, inspection services and so on. How has that progressed?

MR. FUREY: Actually, that came under Municipal

and Provincial Affairs. They took the lead on it. They called it the new entity.

I think they are referred to now, Mr. Woodford, as government service centres.

They are proposing to set up five. They are proposing to give people quick

access to permits, lands, all the kinds of services they need, and I think - are

there two set up now?

AN HON. MEMBER: They are in the process of

trying to rent office space and so on.

MR. WOODFORD: (Inaudible) one.

MR. FUREY: One?

MR. WOODFORD: Yes.

MR. FUREY: There is one just about ready to go

in Gander. It is set up, is it?

MR. WOODFORD: Yes, Gander, and one in here; I

think they are about ready to go, or they have called for tenders for some

office space, anyway.

MR. FUREY: Yes, and there is one on the West

Coast.

MR. WOODFORD: One in Corner Brook?

MR. FUREY: Yes.

MR. WOODFORD: But how are they going to - it

makes me wonder about that, because for building permits alone, first of all you

go to a council. Council has to wait for recommendations from the Department of

Health in development control, and the Department of Works, Services and

Transportation for everything under the sun.

MR. FUREY: It is all in this agency now.

MR. WOODFORD: So they will operate out of that

agency? All those government departments that had jurisdiction over that will go

through that one centre?

MR. FUREY: One stop, one permit.

AN HON. MEMBER: If I could, just by way of

explanation, there have been nearly 200 people - I think it is just about 200

staff - taken out of Crown lands, municipal affairs, transportation, public

health, elevator operator/boiler pressure inspectors, liquor licensing

inspectors, all of those people have been taken from all over the government and

put in one organization, with a mandate so that if you are a business person

coming through the door you only deal there; you can get everything through that

agency. It is their responsibility to look after the organization and sort

things out.

I was trying to find the budget; it is on page 280.

You will see all the funding set up and where it is located. It is in Municipal

and Provincial Affairs. It is on the ground.

MR. FUREY: We were really lucky in Gander, Mr.

Woodford; it is right next to the ENL office, too, so a businessman dealing with

ENL can also get all those permits right in the same building. I don't know if

that is (inaudible) -

MR. WOODFORD: I would like to see it work.

MR. FUREY: You don't think it will work?

MR. WOODFORD: I guarantee you, you are going to

have to - I know you moved offices to different centres and then moved those

same offices into the one centre, but getting back to what some people said

before, it is changing their attitude. I guarantee you, I've dealt with them. I

spent ten years on council dealing with different government departments and I

spent twenty-two years in business, and I tell you, it was no easier the day I

left it in 1985 than it was when I started in 1969 - no easier. The same

obstacles and impediments were there. They are there today. I talk to

constituents daily. They are there today. If you change it, if it is changed, I

guarantee you one thing, I will be the first one on my feet. It should get the

Order of Canada, nothing else.

MR. OAKE: As Mr. Woodford would know, we have

been trying within government for years, to try to get some pathway through the

mess, if you will. This appears to be it. But you have to remember, the other

thing about this, if I can, is that it goes part and parcel with the whole

deregulation initiative. If all goes according to plan, about half, at least, I

would think, of government's regulations are going to be abolished. There

hopefully is going to be a considerable streamlining of the hoops that one has

to go through, in any event. The proof of all of this will be in the pudding, as

you say, but at least the structure has been changed very dramatically from what

it has traditionally been in government. It is now one organization and the

people in charge of that organization have been told: Your job is to get people

through this quickly.

MR. FUREY: But you are right. I tell you, it is

a nightmare out there for business. There is no doubt in my mind. I saw a

company come into my own riding. Just going through the environmental process

they had to have fifty-one separate permits - fifty-one separate permits to

spend $3 million in an attempt to spend $50 million. We lost that investment.

That is too bad - that was a shame.

MR. WOODFORD: You see people in those offices,

in the Department of Health, Development or whatever, they have to make sure

they look after their own jobs, they have to make sure there is an extra piece

of paper over there to shuffle at the end of the day and another one to pick up

the next morning. I mean, they have to justify their existence, and all they

need is a word or two to justify that. At the same time, some business person or

individual trying to build a home or something gets hung up for days, weeks,

months on end.

Anyway, I can talk about this -

MR. FUREY: You make a good point, but as Mr.

Oake said, we are moving to zero-based regulation and Commissioner Noel, who is

a retired justice, will have that mandate to deliver back to government in late

October. And I tell you, he is as tough as nails when it comes to regulation,

and I think what you are going to see are two underpinnings: sensitivity to the

environment, dignity for the worker, and what regulations do we really need?

MR. WOODFORD: Yes, I - (inaudible) -

MR. OAKE: There is efficiency, if I could add

as well. One of the things we have accomplished by bringing all this together is

that we have been able to reduce a fair number of staff in this area. You have

people whose job it was to go out and inspect sewer systems, some other guy's

job was to go out and inspect an electrical system, some other guy's job was to

go out and inspect an elevator. I mean, with a little bit of training and some

proper scheduling the right individual can do all that stuff if you do it

properly. That has been the other benefit of it. There have been some cost

savings as a result of better scheduling and better utilization of people.

MR. WOODFORD: One of the biggest problems you

have with it is not the fact that there is an individual going to be turned down

or such. It is moving them, trying to get them off their butts to get it out.

There is no excuse in the world for people to be hung up who want to do

something for five, six, and seven months waiting for someone. There is nothing

as bad. I always found, especially in politics, that the main thing is to get

back to an individual and give him an answer. It may not be the one he wants to

hear, but give him an answer. The same thing applies with Health, development

control and the whole works.

Now, if they are in the one centre there is no

excuse in the world. If an application comes in for Rick Woodford to put a

business on a certain road, say, Frecker's Drive in Cormack, there is no excuse

- it is all in one office. They can't say: I'm waiting for a report from the

Department of Health now, I'm waiting for one to come in from Fisheries, Food

and Agriculture, I'm waiting for one from development control - it is there.

MR. FUREY: No excuse.

MR. WOODFORD: If you walk into the office and

you are a bit aggressive at all you can put them on the spot. That is one good

thing about it. Hopefully, you will be able to eliminate a lot of those

problems. Because it comes down not only to permits with regard to a building

permit, I'm talking about business. My sonny boys, I tell you, the attitude of

some of those people is just unreal.

Anyway, Mr. Chairman, as I said, it is the type of

thing where you could go on forever and a day. It's rather interesting, too,

because you are talking about business, you are talking about business trying to

make progress, and changes and loans and stuff like that. Some people can get

caught up in it and it is good. Anyway -

MR. FUREY: Mr. Woodford, how is my museum doing

out there, do I own that yet?

MR. WOODFORD: Pardon me?

MR. FUREY: How is my museum doing out in

Cormack?

MR. WOODFORD: Oh it is good. I will talk to you

after about that. (Inaudible) an hour-and-a-half.

Mr. Chairman, I move the heads from 1.1.01 -

MR. CHAIRMAN: One second, Mr. Woodford. We do

have one other person who has a question.

MR. WOODFORD: Oh, I see.

MR. CHAIRMAN: Mr. Hewlett, are you finished?

MR. HEWLETT: (Inaudible).

MR. CHAIRMAN: Okay. Mr. Andersen has a

question.

MR. WILLIAM ANDERSEN III: Thank you, Mr.

Chairman.

I have at least two questions regarding Industry,

Trade and Technology. The first one I will ask of the minister about the

Labrador Inuit Development Corporation: Minister Furey, uKautigunnagajakKama

Labrador Inuit suliatsaup mitsanutkorpavasanga EDGE korparasumut

ikajuttaugunnamangat?

MR. FUREY: Yes - TUK. The Labrador Inuit

Corporation couldn't be involved in respect to a direct EDGE designation. That

is not to say they couldn't aggressively pursue investment to come in to the

area to be designated, but not as a stand-alone. Did I get that right, TUK?

MR. WILLIAM ANDERSEN III: Yes. Taimaimmat

uKautigunnaKama Tungait ujaganniavingita katiKatigenninga EDGE-kut

ikajuttaugunnamangata?

MR. FUREY: In respect to EDGE?

MR. WILLIAM ANDERSEN III: Yes.

MR. FUREY: Yes, they could do that. I can't

verbalize your language but I hear what you are saying. They could do it on a

stand-alone basis as a company coming in from outside to get designation, and

LIDC could do that. TUK.

MR. WILLIAM ANDERSEN III: Naku - well done,

Minister.

MR. FUREY: Thank you.

MR. WILLIAM ANDERSEN III: The other part of the

question I have is with respect to technology. I was speaking with a constituent

yesterday who is setting up an Internet account for the Labrador Inuit

Association.

MR. FUREY: Internet?

MR. WILLIAM ANDERSEN III: Yes. I was made to

understand that technology today has moved from the dial tone to digital and now

is looking into possibly getting into fibre optics, which would be a much more

advanced communications technology. I was told that this person was talking to

someone at Memorial University, and Memorial University is indicating that

because the population in Labrador doesn't justify it, they will never move out

of the dial tone technology, which would leave Labrador way behind with respect

to technological development.

I don't know if Industry, Trade and Technology has

any bearing on that kind of development.

MR. FUREY: That is a difficult question, Mr.

Andersen, for me to answer tonight. That is something that I will have to take

up with both Memorial and Newfoundland Telephone, but I will agree to do that

for you and to pursue it for you.

MR. WILLIAM ANDERSEN III: Okay, thank you.

MR. CHAIRMAN: Thank you, Mr. Andersen.

Mr. Woodford.

MR. WOODFORD: Mr. Chairman, I move the heads

from 1.1.01 through to 4.2.04, which includes the minister's salary - as if he

needs it.

MR. FUREY: Do you catch those vicious attacks

coming at me from the Vice-Chair!

Mr. Chairman, I brought along our latest promotion

packages which we use around the world, for any members who might be interested

in picking one up.

On motion, subheads 1.1.01 through to 4.2.04,

carried.

On motion, Department of Industry, Trade and

Technology, total heads, without amendment, carried.

MR. CHAIRMAN: Thank you very much.

Minister, to you and your officials, thank you very

much for your co-operation, also to the members of the Committee and the staff

who assisted us tonight, Elizabeth Murphy from the Clerk's Office, Elizabeth

Russell, the Page, and Colin Chapman looking after the recording. I will now

entertain a motion to adjourn.

On motion, Committee adjourned.

Document details

Collection	Newfoundland and Labrador — Committees
Citation	1995-04-05
Type	committee
Volume / chapter	committees_standingcommittees_resource_ga42session3_1995-04-05_rc-itt_.htm
Language	en
Format	html
Source	PROVINCIAL
Identifier	bf07b4620286d71aff32abf9f7bcdb4d3cb6e878

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