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April 26, 2018

RESOURCE COMMITTEE

Pursuant to Standing Order 68, Carol Anne Haley, MHA for Burin - Grand Bank,

substitutes for Pam Parsons, MHA for Harbour Grace - Port de Grave.

Pursuant to Standing Order 68, Graham Letto, MHA for Labrador West, substitutes

for Derrick Bragg, MHA for Fogo Island - Cape Freels.

Pursuant to Standing Order 68, Gerry Rogers, MHA for St. John's Centre,

substitutes for Lorraine Michael, MHA for St. John's East - Quidi Vidi.

The

Committee met at 5 p.m. in the Assembly Chamber.

CHAIR (Warr):

Welcome to Estimates of Tourism, Culture, Industry and Innovation.

I want

to welcome everybody. Again, thank you for changing your times and allowing us

to get started a little earlier.

My name

is Brian Warr and I'll be your Chair this evening.

First

of all, before we get into the minister's remarks and an opportunity to meet his

department, I'd like for the Committee to introduce themselves, please, starting

with Tracey Perry.

MS. PERRY:

Tracey Perry, MHA for

Fortune Bay - Cape La Hune.

MS. DRODGE:

Megan Drodge, Researcher with the Official Opposition caucus.

MS. ROGERS:

Gerry Rogers. I work with

the good people of St. John's Centre.

Thank

you for coming this evening.

MR. MORGAN:

Ivan Morgan, Researcher, NDP

caucus.

MS. HALEY:

Carol Anne Haley, MHA, Burin

- Grand Bank.

MR. DEAN:

Jerry Dean, MHA, Exploits.

MR. LETTO:

Graham Leo, MHA, Labrador

West.

CHAIR:

I'll ask the Clerk to call

the first subhead, please.

CLERK (Barnes):

1.1.01.

CHAIR:

Shall 1.1.01 carry?

Minister Mitchelmore.

MR. MITCHELMORE:

Thank you, Mr. Chair, for

the opportunity to present the Estimates of Tourism, Culture, Industry and

Innovation. It's such a pleasure to be here as minister with my team of

officials. Would they be introducing themselves as well after?

parliamentary secretary will be a little delayed for the Estimates meeting. He's

doing some duties on my behalf right now at the grand opening of the Best

Western Plus in St. John's, a new business that's opened and is creating jobs

and providing service to the people near the airport. We're quite excited by

this business as well.

I want

to thank my staff for all the hard work they've put into preparing and working

on the budget. Being the lead minister for economic development, culture and

tourism is a great honour. We have a number of initiatives through

The Way Forward so that we can

advance economic and social development for the benefit of the people of

Newfoundland and Labrador.

I won't

take up any more time in terms of bringing initial remarks because I'm sure

there are a lot of questions. There will be opportunity to engage in dialogue

through the Estimates and I want everybody to have as much opportunity to ask

particular questions. I'll conclude my remarks and maybe we can have my staff

introduce themselves.

CHAIR:

Thank you.

MR. LOMOND:

Ted Lomond, Deputy Minister.

MS. HAYES:

Robyn Hayes, Departmental Controller.

MS. MURPHY :

Carmela Murphy, Assistant Deputy Minister, Tourism and Culture.

MS. HEARN:

Judith Hearn, Assistant Deputy Minister, Business.

MS. SKINNER:

Gillian Skinner, Assistant Deputy Minister, Regional Development and

Diversification.

MS. MUNDON:

Tansy Mundon, Director of Communications.

MS. DICKS:

Andrea Dicks, Director, Corporate Services.

MR. GEORGE :

Bradley George, Executive Assistant.

CHAIR:

Okay. Thank you very much.

Just a

reminder – and, actually, it looks like you're all pros – if you're recognized

to speak, either by the Chair or by your minister, just wait for your tally

light to come on. Just say your name, your tally light will come on and proceed.

Ms.

Perry.

MS. PERRY:

Thank you, Mr. Chair.

start, Minister, if we could get a copy of your Estimates binder tonight at the

end as well, please?

MR. MITCHELMORE :

We will certainly provide copies of our Estimates books. We don't actually have

copies here tonight but we will provide them shortly thereafter the Estimates,

yes.

MS. PERRY:

Okay. Thank you.

I'll

start with 1.1.01. On the first line item, in the Minister's Office under

travel, can you explain why travel went over budget in 2017-2018 by $2,400?

MR. MITCHELMORE :

Yes.

Recognizing being Minister of Tourism, Culture, Industry and Innovation, I also

have the responsibilities bestowed upon me of being Minister Responsible for

Francophone affairs. This travel budget item would fall under my ministerial

travel.

During

that time, we had made travel to Saint Pierre and Miquelon. We had also gone to

the Port au Port Peninsula as part of a Quebec and Newfoundland and Labrador

agreement to engage with the Francophone community in Port au Port.

Also,

recognizing – and you would certainly understand as the Member for

Fortune Bay - Cape La Hune the long distance one has to travel. For me to travel

back and forth to my district it's quite costly with airfare, hotels and

expenditures, but I certainly do everything that I can to minimize cost.

This is a very diverse department that has a number of federal, provincial and

territorial meetings for culture, for tourism and for parks. This was something

else that was added to the portfolio. There are more things associated with

travel. Those would be the reasons why travel was a little bit higher than

budgeted, but not significant.

MS. PERRY:

Okay. Thank you, Minister.

Can you explain why salaries went over budget by $221,000, under 1.2.01,

Executive Support?

MR. MITCHELMORE:

Under Executive Support, okay.

The Executive Support, the salary increase in 2017-2018 Revised reflects salary

continuance paid to three departing employees. There was $32,000 in salary for a

communications director during a transition with paternity leave. This was

partially offset by $47,000 in savings due to pay scale variances and delayed

recruitment of new ADMs.

MS. PERRY:

Okay.

Can you please explain the variance in the Transportation and Communications

line? In particular, explain where the savings were found, from $65,000 to

$42,000.

MR. MITCHELMORE:

Yes, the decrease of $23,000 basically reflects less travel for deputy ministers

and assistant deputy ministers during that fiscal. We had a change in ADMs.

There were fiscal restraint measures, specific departmental requirements that

either didn't require travel or there were means of which assistant deputy

ministers or deputy ministers were able to take calls via telephone to reduce

their costs.

Some of these matters are driven by federal, provincial and territorial meetings

with their colleagues that are planned in their Work Plan. Through Budget

2018-2019, we feel that with the

ADM complement that we have,

the deputy minister complement and the work plan, that $62,400 will be

sufficient.

MS. PERRY:

Okay. Thank you.

Can the

minister indicate where the ATIPP office for the department is in the Estimates?

MR. MITCHELMORE:

The ATIPP office would fall

under the Corporate Services Division, which would be 1.2.02.

MS. PERRY:

Okay. That's the next

section that I'm ready to move into, so I'll ask my questions there.

understand the former ATIPP coordinator was let go in recent months, late last

year. Can the minister explain why the ATIPP coordinator was let go?

MR. MITCHELMORE:

Well, I wouldn't want to get

into any specific HR particular matters, they would be dealt with through that

process, but an employee who served in the capacity of ATIPP and other

particular duties was a contract employee and was not a permanent employee of

government. That contract role was terminated and it followed all policies

within government through that process.

certainly do have a full-time ATIPP coordinator fulfilling our role. We have

been receiving a number of ATIPPs for our particular department, but we work

very hard to proactively disclose information to the public.

MS. PERRY:

Okay.

Where

there any severance and benefits paid out?

MR. MITCHELMORE:

There would have been

continuance and other benefits associated with any departing employee that would

have been entitled and they would have received those benefits.

MS. PERRY:

Okay.

Under

1.2.02, Salaries. In 2017-18, they were over budget by $115,000. Can you explain

why they were over budget?

MR. MITCHELMORE:

The increase of $115,000 is

basically a salary continuance and retirement cost of $336,000 that would have

been paid to departing employees.

The

cost of research and development positions that would have came from the former

RDC would have been merged into TCII. That would have been associated there,

partially offset by savings of $274,000 from delayed recruitment for policy

analyst positions as well as information management positions in that particular

division.

MS. PERRY:

Okay, thank you.

Under

Purchased Services, the restated budget for 2017, $358,400, that figure, it

doesn't match what was in last year's Estimates book because in the document

from last year this number was cited as $381,800. Can you explain why it's

different?

MR. MITCHELMORE:

Yeah, there are some changes to the budget. This would be things that need to be

restated based on office leases that we have, so there would've been $23,400 for

a particular office lease.

Office

leases were transferred to the Department of Transportation and Works.

Government has been very proactive in The

Way Forward setting targets to release its footprint. There have been

savings of $2 million, annually, based on reducing the footprint of government

where we've been able to either move people into the Confederation Building or

other government-owned space, or rightsizing the amount – the footprint that

would exist because some offices would've been far larger than the employees

associated based on government policy.

those would've been changes and there are some changes throughout our particular

budget, a total of $678,500; $536,100 would be for leases.

MS. PERRY:

Okay.

Can you

explain the variance in the Purchased Services line? There was savings last year

and a budgeted decrease this year.

MR. MITCHELMORE:

Under Purchased Services, the $100,000 is a reduction in print advertising,

campaign-related material for local, national and international events and

partnerships throughout the fiscal year.

We feel

that the current budget of $169,200, which is a further reduction in print and

advertising campaign because we've entered into new partnerships determining

through our zero-based budgeting process, we've found ways of which we can

ensure that we can do the necessary advertising at minimal cost and that we're

being strategic with where we're spending advertising dollars to best benefit

for our department.

These

costs also include copying costs, shredders, storage fees, different things like

that with the West Block. So we're really managing our supplies and how we

operate.

MS. PERRY:

So can you explain how you're changing your marketing?

MR. MITCHELMORE:

Well, we have marketing

specific to Tourism and then we have marketing and sponsorships and specific

partnerships that we would enter, whether it would be for international trade or

whether it would be part of particular trade missions that we would do. Some of

those are in partnership with industry associations. We've had a number of

successes by partnering with specific industry associations to reduce our cost.

One

prime example is in the past we used to, individually as a province, spend, I

believe, it was $40,000 on hosting the wholesale craft show. We've partnered

with the Craft Council. They've been able to utilize less money from the

department in partnership and leverage other money. So we're actually being

smarter with the dollars that we have so that more partnerships can happen and

things can be industry led versus departmental led. So there are things that

we're doing.

First

when I took office this department had five branches and five ADMs. Now there

are three ADMs. There were 26 directors. We've added in additional divisions,

parks and other initiatives, but we have fewer, far fewer directors and managers

that are aligned.

we've shaped the department in business, in regional development and

diversification and tourism and culture, we feel that there's greater alignment,

greater synergies. We're taking very much a whole-of-government approach when we

look at finding better ways of delivering our programs and services, being more

efficient and more responsive to the needs of the people of the province because

there's no question that there is a significant fiscal challenge when it comes

to the revenue that's coming into the province, but the expenditures as well.

We have

the most revenue per capita anywhere in the country, but we also have a very

high spending limit. So we have to do and find better ways of being strategic to

deliver programs and services. I think we've found that by partnering more with

industry associations.

MS. PERRY:

Okay.

terms of the revenue line there, provincial, where did that $5,500 come from?

MR. MITCHELMORE:

That reflects a

reimbursement of prior-year travel advances and other prior-year (inaudible).

It's just a catch up, I guess, of advances that would have been made for travel

and it's the revenues coming back.

MS. PERRY:

Okay.

1.2.03,

Administrative Support. Property, Furnishings and Equipment had nothing budgeted

for 2017-18, but $8,000 was spent. Can you explain what that was spent on?

MR. MITCHELMORE:

Yes, it's the capitalized

cost for the installation of two replacement generators purchased for park

operations during fiscal '16-'17. But the delivery time and the weather

prevented installation for fiscal 2016-2017.

We did

see where some of our parks even had delayed openings last year. It was very

unprecedented in Labrador and on the Northern Peninsula that in June they had to

be further delayed, but things are looking very positive this year. We've opened

up our camp reservation system. We've expanded seasonal sites so that more

locals, at specific campgrounds that have a higher usage of local visitation,

will have opportunity to have a season pass and enjoy camping at our parks.

It's

important that we maintain our capital at our provincial parks. That's basically

what the Property, Furnishings and Equipment are. The $5,000 also reflects the

capitalization costs for the installation of one replacement generator as well.

That's being installed right now at the beginning of the season. It was

purchased basically late in the fiscal year and it will be installed this year.

MS. PERRY:

Thank you, Minister.

Moving

on to 2.1.01, can you explain the variance in Salaries? The budget for 2018-19

is $319,000 less than 2017-18. Is this attrition or reduction of positions? Can

you explain why this number is significantly lower?

MR. MITCHELMORE:

The decrease reflects

right-sizing of salary costs as per our salary plan. If you look at the

$1,577,400 when it comes to the Revised, that decrease was an overstatement of

the salary by over $684,000 following a restructuring. It was offset by

continuance and severance payouts.

There's

an addition of four RDC positions and pay scale variance for an acting director

at that particular time. Right now, the Salaries fit the area for the Business

Department under the Accelerated Growth. There was a period of transition that

was happening through our overall restructuring.

MS. PERRY:

Okay.

Can I

just ask one supplemental to that? You said there were some positions reduced.

How many?

MR. MITCHELMORE:

There were four positions

actually added in 2017-18, with four RDC positions coming in at that time. Some

of these positions would have been moved to other areas based on the alignment

of work that was being done.

Some of

the innovation supports went to Accelerated Growth. Some positions went to the

Sector Diversification section. As we keep going through the Estimates you will

see a salary variance, but we can certainly provide you with an organizational

chart of the structure of the department.

MS. PERRY:

Thank you.

CHAIR:

Thank you, Minister.

Thank

you, Ms. Perry.

Ms.

Rogers.

MS. ROGERS:

Thank you.

The

movement around of different positions; how many positions, though, have we lost

altogether? Or have there been ones lost?

MR. MITCHELMORE:

The department, in July of

last year, had brought in the former Research & Development Corporation which

had close to 40 employees. We retained 12 employees with the Research &

Development Corporation because the integration allowed – there were a

significant amount of management positions that could be done within the current

department. These would have been contract employees; they would have had their

own contracts in particular, and not part of the provincial government

collective agreements, et cetera.

In the

course of last year, I believe there was a total of nearly 50 positions that

would have left the organization. Some of these positions would have been hired

as well. There would have been 12 new hires associated with the Research &

Development Corporation and then there would have been other positions that

would have been filled.

MS. ROGERS:

When you say 50 positions

left the organization, the organization is RDC?

MR. MITCHELMORE :

RDC would have had 40 positions. There would have been 12 that would have been

retained.

MS. ROGERS:

Fifty positions left the

organization. What organization is that?

MR. MITCHELMORE:

In terms of governance,

overall my department has a total of 219 positions that we currently have

filled. There are 429 employees within the department and there are 154 seasonal

employees. They're primarily with our parks, our Visitor Information Centres and

our Provincial Historic Sites.

We have

some vacancies within the department that we're seeking to fill though, because

of people that would have either left the division through a resignation or

retirement. We're also very cognizant of attrition targets that would have been

set by the department.

MS. ROGERS:

How many vacancies do you

have then? I haven't …

MR. MITCHELMORE:

We have 30 vacant positions.

MS. ROGERS:

Thirty vacant positions.

MR. MITCHELMORE:

Yes.

MS. ROGERS:

Is the plan to fill those

then? Some you're going to hold because of your attrition targets. Can you give

us a sense of the plan?

MR. MITCHELMORE:

Yeah, as people retire we

have to look at and evaluate each position. Some positions are absolutely

critical and must be filled; for example, at a Visitor Information Centre you

need to have somebody there.

MS. ROGERS:

You do.

MR. MITCHELMORE:

If the person retires, you

need to fill that position. The same way if there's a specific technician or a

specific skill at the Arts and Culture Centres or the parks. There are wardens

that need to be filled, there's a specific staff complement.

situations where the workload either can be combined or there's some ability to

look at the type of work that's being done, if it can be done within the

division or if the position can be no longer filled, then we will use attrition.

Otherwise, we have to look ensuring that we're meeting our attrition targets and

ensuring our salary plan through government.

MS. ROGERS:

Thank you.

Professional Services; can you tell us a little bit about what types of

Professional Services are purchased there? We see a big bump there from '17-'18

to '18-'19.

MR. MITCHELMORE:

Which line are you …?

MS. ROGERS:

Under 2.1.01, under

Salaries, under Professional Services. I'm just continuing where Tracey left

off.

MR. MITCHELMORE:

Okay.

Basically, in 2017-18 we have a revised amount under Professional Services of

$148,500. It's a reduction of $40,000. It's savings due to reducing in-market

consulting costs and some projects that would have been covered under

federal-provincial agreements.

This

year, when it comes to our Professional Services, we're really seeing an

increase of $100,000. It's

rightsizing, though, that was identified through our budget process because we

are required to support the Atlantic Trade and Investment Growth strategy –

ATIGA. And these are projects that are led by Newfoundland and Labrador

as part of the provincial agreement. Any in-market research and business, the

business innovation agenda supports and expenditures that directly impact

revenue.

MS. ROGERS:

Thank you.

Purchased Services, there's an increase of about $100,000

in this year's budget?

MR. MITCHELMORE:

For Purchased Services?

MS. ROGERS:

Yes.

MR. MITCHELMORE:

The increase of $116,300 is also rightsizing identified through our

zero-based budgeting process because we have funds required to support the ATIGA

projects that are led by Newfoundland and Labrador. So, costs of hosting trade

shows, missions, including all the logistics, but there would be reimbursements

that can be recouped for missions that are led by our province, if you look down

at federal revenue of $300,000 associated. So missions that we lead and

participate in, there is ability to recoup costs through the agreement.

MS. ROGERS:

Great, thank you very much.

And then moving down to 2.1.02, Investment Attraction Fund,

we see that about $1.8 million wasn't spent. Also, can we get a list of the

loans, advances and investments as well from your department?

MR. MITCHELMORE:

Yes.

MS. ROGERS:

Great, thank you.

MR. MITCHELMORE:

I believe we posted recently our loans and advances.

MS. ROGERS:

Posted online, yes?

MR. MITCHELMORE:

I believe so and we can provide that.

Investment attraction is really important to our province.

It's one of the initiatives that have been highlighted in

The Way Forward under Phase 3 that

was launched just recently, in particular, which is about attracting investment

in priority areas.

If you look at one of the key areas of mining, forestry,

oil and gas, tourism, agriculture, aquaculture and technology, we've taken some

very serious steps in terms of sector work plans, connecting with the industry

associations, with business. Some of the initiatives that have happened, like

the agricultural sector in Minister Byrne's department: 64,000 hectares of new

Crown land would be made available for farming, and that's going to provide some

strategic opportunities for investment, focusing on farmers that are currently

here, operational, and new farmers, and then there's the

the ability to look at foreign and direct investment. There have been requests

for proposals to lease the Bull Arm site that will lead to investment

attraction.

Some of

the great deals that were done in Newfoundland and Labrador last year through

investment attraction, one of those that kick-started the Tech Sector Work Plan

would have been the PAL Aerospace investment in the Force Multiplier. That led

to a number of new technologies. It led to De Havilland Dash 8 basically to have

multiple components of the ability to do radar, to do surveillance and have

really an integrated system.

I had

the ability to travel to the Dubai air show last year and also participate in

the oil and gas show at the same time in Abu Dhabi. That ability had significant

interaction with officials from the Government of the UAE and a number of key

stakeholders. It is one of the largest air shows in the world and led to

significant leads for provincial Aerospace which has about 600 employees in Abu

Dhabi and can lead to support for other companies that are looking at doing

business in the Middle East. They've highlighted that they can support and

provide assistance, because it's all about relationship building in the Middle

East.

It took

several dozen trips before PAL got their initial contract and they've been doing

significant work employing Newfoundlanders and Labradorians in the Middle East,

as well as people in the UAE and others. That was a very positive investment.

There

were investments in Verafin that would have been disbursed last year. Verafin

was where we launched our Tech Sector Work Plan. They have over 300 employees.

Certainly a success story for a very long time here in this province.

The MHA

for

Fortune Bay – Cape La Hune would certainly be aware of this and this particular

investment as well because it's a fairly long-standing investment I think, an

agreement that would have been in place a number of years ago.

I remember in 2006 working for the Department of TCII as a work-term student and

we promoted Verafin at that time because it was focusing on anti-fraud software

for banking and there are some really big things, some really cool companies

that are operating here. Verafin is a

pillar of success, how we

can certainly do things right and how we can lead in the international stage, so

these are some very successful companies.

Our

venture capital funds would have been invested from here: the

made-in-Newfoundland-and-Labrador fund; the Atlantic Canada venture capital fund

as well would have fit there. The decrease of $1.8 million was less than

anticipated requirement from the portfolio during that time, but $1.4 million of

that funding was approved by the Treasury Board to be transferred to the

Newfoundland and Labrador Film Development Corporation for investment in the

television series Caught .

As a

former documentary-filmmaker in your past role before becoming MHA, we're very

proud of the work of the film industry and its development and growth and the

jobs that it has created. There was a significant amount of production work that

happened last year –

MS. ROGERS:

Uh-huh.

MR. MITCHELMORE:

– a significant strain on

the equity program and the Film Development Corporation, so that's why in last

year's budget we doubled that amount from $2 million to $4 million, and it's

been retained at $4 million this year –

MS. ROGERS:

Good.

MR. MITCHELMORE:

The $1.4 million would have

been transferred from Investment Attraction. A significant amount of this work

would have happened in Newfoundland and Labrador in bringing in people to this

province and attracting, I believe it was around $23 million in total

investment, this $1.4 million – quite significant, and tells a story that could

lead to further investment in the film industry, because we were able to make

sure that that could happen and not be held up because there weren't funds

available.

We have

to, at times, utilize the resources that we have to make the most strategic

investments when the business deals and the business offerings present

themselves. We chose, as a government, to invest $1.4 million into film,

recognizing the cultural and the significant impact; it's 650 full-time

equivalent jobs in our province and leads to service supply and other supports,

so quite significant.

anticipate this year that there will be a million dollars that will go to

complete the PAL Aerospace project; that there will be $2 million made to the

made-in-Newfoundland-and-Labrador venture capital fund; $1.7 million into the

Atlantic venture capital fund, because that can leverage a number of other funds

and resources; and that we have several million dollars as well for remaining

new applicants, and we have had a number of leads.

Our

business division is very active on files. There's a significant amount of

interest when it comes to technology when we look at our scale-up companies. We

have a number of supports within our department, and collectively we can work

with the appropriate entities. We've partnered a lot with the CBDC, we've

partnered with BDC, with EDC as part of our regional trade network and a number

of other initiatives that we do.

We want

to make sure the right level of investment attraction is happening, and the onus

is not always on the Department of TCII to make those investments. Sometimes

it's with the Department of AESL, depending on if it's a skills or training or

that type of component. Sometimes it will be Natural Resources making those

types of investments through its operations and supports that it has, or the

Department of Fisheries and Land Resources. Those primarily would be the key of

flagship economic development department.

CHAIR:

Thank you, Minister.

Thank

you, Ms. Rogers.

Ms.

Perry.

MS. PERRY:

Thank you, Mr. Chair.

I'm

going to go back to 2.1.01, item 10. Under Grants and Subsidies, there was

$27,000 not spent last year. Can you tell us why?

MR. MITCHELMORE:

Okay.

MS. PERRY:

$229,000 was allocated and $202,000 was spent.

MR. MITCHELMORE:

In 2017-2018 there was a $27,000 decrease in our Grants and Subsidies, and

that's a reduction in international business development activities during that

fiscal year.

MS. PERRY:

Okay. Can you provide a list of who received grants last year and the amount for

each?

MR. MITCHELMORE:

Yes, we can provide a list.

MS. PERRY:

Okay, thank you.

As well

under Grants and Subsidies there's an increase of $50,000 planned. Can you

explain what that $50,000 is for and which program?

MR. MITCHELMORE:

It's basically around the new agreement with ATIGA that we were talking about,

the Atlantic Trade and Investment Growth Agreement. In 2017-2018 was the final

end of a former agreement. So it was the cluing up of the former IBDA, the

International Business Development Agreement. Now we have the new agreement

which is a larger agreement with the Atlantic provinces of which we can post,

lead trade missions, participate, and that's where we're involved in those types

of missions.

There

was a mission last year in particular to the UK and the Netherlands by the

Atlantic Canadian provinces. Very important markets to Newfoundland and

Labrador. We do almost $2 billion in the EU, and those are our two largest

markets, the UK and the Netherlands. There's, I believe, almost $1 billion

dollars of that would be in those particular two markets in 2016.

quite significant, quite an opportunity, quite a relationship for Canada and the

Netherlands. We have international shipping links direct through Rotterdam,

through Eimskip operating out of St. Anthony, and I believe as well through

their service at the port of Argentia.

So when

it comes to economic development, these are great opportunities as we explore

CETA and as we explore the benefits of either shipping fish product, forest

product, other oil and gas, mineral developments into the EU. We're looking at

the EU as an important market. We've also looked at other island countries, such

as the Caribbean, and have found success for our companies there.

We look

at new markets; Minister Coady has been working with the oil and gas sector,

through the Oil and Gas Council and through

Advance 2030 as we really expand our

oil and gas sector and really take the supply and service and that knowledge

internationally – we're looking at other jurisdictions such as Guyana and others

who are really looking to develop their oil and gas sector – and how we can

apply that knowledge and create those jobs and work with them so they can get

maximum benefits from their resources as well.

MS. PERRY:

Okay. Thank you, Minister.

Moving

on to 2.2.01, Business Analysis. Salaries are budgeted to increase by $253,600

this year. Can you explain why?

MR. MITCHELMORE:

Yes. It's basically the

right-sizing of salary costs as per the salary plan. We had a change last year,

but there's an addition of two positions from the RDC that would have come in to

this particular division as well. That would be part of those costs.

MS. PERRY:

Okay.

MR. MITCHELMORE:

And in the previous year

there were some savings as a part of delayed recruitment, and some of that was

offset by severance, continuance, et cetera, payout during that particular time,

but the salaries associated with $1.735 million is the staff complement that is

required to do the work in our Business Analysis division.

MS. PERRY:

Okay .

The restated budget for 2017 cites $23,900 and it doesn't match – again, we

have the same situation – it doesn't match last year's Estimates book which was

$102,900. Can you explain?

MR. MITCHELMORE:

Yes. The $79,000 change is

basically an office lease through Purchased Services that would have been

transferred to TW.

MS. PERRY:

Oh, right.

MR. MITCHELMORE:

Because TW is dealing with

office leases now as part of a strategic process to negotiate and ensure that

the footprint of government is operating as efficiently as possible. We still

have the portfolio management office that will be operating in Marystown and the

employees associated with it. It's just the lease cost would be transferred to

TW.

MS. PERRY:

Okay.

Thank

you, Minister.

MR. MITCHELMORE:

And if I could say, back to

the salary point, is when the Research and Development Corporation had its

management of accounts and that process, that work is being done by staff and

there would be salaries associated with doing the additional work of payment and

disbursement and managing those accounts with all the research and development

projects that would be happening.

MS. PERRY:

Okay. Thank you, Minister.

Can you

explain the variance in the Purchased Services line? A savings last year and you

had a budgeted decrease this year.

MR. MITCHELMORE:

You're talking about going

from $15,000 to $7,000?

MS. PERRY:

$23,000 to $13,000.

MR. MITCHELMORE:

$23,000 to $13,000, the

Purchased Services. Okay.

MS. PERRY:

Yes, $23,900.

MR. MITCHELMORE:

Yes. That's basically –

$12,900 reduction is less expenditures for meeting costs, advertising, printing,

equipment rentals and other purchased services. There was less cost for printing

of annual reports and less required equipment leases.

This

year we see $13,200, and that overall decrease of $10,700 is just looking at the

reduction of how we conduct meetings, room rentals, equipment rentals as per

zero-based budgeting, right-sizing our lease costs to reflect any equipment that

we will be leasing and include copying costs and shredding.

There

would be some meetings that would take place for directors, and all those costs

would be there. If we find efficient ways of hosting meetings then that's quite

important if you can reduce overall travel costs or find more efficient ways of

conducting meetings. Well, that's where we're finding some savings.

It's a

small contribution of just over $10,000 but we feel we were able to conduct the

business last year with $11,000. That $13,200, if we can do it with less we

certainly will, and there'll be a drop balance.

MS. PERRY:

Okay.

Thank

you, Minister.

Under

Grants and Subsidies, can you please detail where the $4,066,000 was spent?

MR. MITCHELMORE:

The Grants and Subsidies line of $4 million; that would've basically been any

funding associated with the EDGE Program payments that would've been made at

that time, and part of our Business Development Support Program. These would be

investments that would be made to improve productivity, competitiveness,

technology upgrades to various companies throughout Newfoundland and Labrador.

Certainly, we can make a list available.

MS. PERRY:

Okay. That would be great, Minister.

Thank

you so much.

well, you have decreased your budget here by $550,000 this year. Can you explain

where that $500,000 decrease is coming from?

MR. MITCHELMORE:

Well, when we look at the suite of programs that we have throughout the

department, whether it would be through Research and Development, whether it be

through our business attraction program, other initiatives that we have and

working with clients, and also looking at the number of clients that would be

involved with forestry and fishery, aquaculture, and the fact there's a

$100-million Atlantic Fisheries Fund, there's an economic development and

innovation program through Natural Resources that's happening as well.

We feel

there are ample supports for businesses in Newfoundland and Labrador, and that

we can fully subscribe and meet our obligations to our clients at $3.5 million.

CHAIR:

Thank you, Minister.

Thank

you, Ms. Perry.

Ms.

Rogers.

MS. ROGERS:

Thank you very much.

Moving

on to 2.3.01, Commercialization, Research and Development, the Grants and

Subsidies. We see there was $1.5 million that was not allotted in '17-'18.

MR. MITCHELMORE:

The decrease of $1.5 million

basically reflects a reduction in operating requirement during 2017-2018. As per

our budget decision, they're basically savings that would have been attributed

to the merger of RDC activities to TCII. In July of 2017, we had merged and

began a transition process to bring the former Research and Development

Corporation into the Department of TCII. So there would have been associated

savings.

The

program dollars that would have been associated and earmarked for companies, for

research and development and for academic work, that wasn't touched. These are

investments that were made, that were committed to. We continued the projects

that have been committed by the former Research and Development Corporation and

have been working through the transitionary period.

This

year, the line reflects just Grants and Subsidies. There is no operations, there

is no staff complement. This is the pure program dollars for grants and

investments in pre-commercial activity, research and development, to academia,

but also to commercial clients. Previously, this would have been an amount that

would have been earmarked for programming. If we were to look at our savings,

that's where the savings would have come from.

The

decrease of $5.15 million is basically there was $3,369,500 that would have been

savings throughout this process. There was money that would have, as well, been

reprofiled throughout government, salary support to TCII.

That's

why when you're asking questions, some of the staff that would have been with

the former RDC would now fall under either: Sector Diversification, Accelerated

Growth or Regional Development, depending on if they're working in commercial,

non-commercial and their expertise.

really create that whole of government approach, somebody who comes in with an

idea from pre-commercial can take it to commercial, can get to market, and can

get international, depending on the type of product. Before there was a gap and

we want to see accelerated growth with our companies. We want things to see more

commercial activity.

This

was something through our launch of the Business Innovation Agenda and our

consultation that the business community wanted, the industry association

wanted, they had asked for. They had certainly endorsed this process of bringing

in the Research and Development Corporation, and it's been a good transition.

We also

saved money in office lease. There was over $460,000 paid for the lease space I

believe at that particular entity. There's an admin cost support, ATIGA support

so that we can help with the internationalization of companies that are really

scaling up. Office leases, vehicle costs, salary support.

There

is $1.78 million basically that's not showing up here in the $13,750,000. That

is reallocated throughout the divisions to provide the appropriate supports, but

there were savings. The $3.3 million basically would have came from operations,

savings from staff, managerial staff primarily, and through the office

operations, the lease cost building, and various other equipment and travel

associated costs.

MS. ROGERS:

We didn't lose any money at

all in terms of grants and subsidies, the programming for the –

MR. MITCHELMORE:

We fully retained our

funding when it comes to pre-commercial and commercial activities for grants

that can be provided to companies.

The

Research and Development Corporation has had a number of contracts in place.

There are milestones. There has been funds that had been committed over multiple

years, and as milestones are met, these projects – but there are funds that have

been earmarked and allocated and budgeted for to support all of these projects

that were committed to in the past. We also have a number on the intake and

projects that we're committing and supporting to the Research and Development

Corporation.

As we

use InnovateNL and our new board and our innovation council that's made up of a

team of leaders and esteemed individuals throughout our community that's

providing advice, very talented people. That's been helping in a big way. They

really give their time very freely to provide direction and advice to government

as to how we can really accelerate growth, utilize innovation and ensure that we

achieve success. I'm very pleased to see the process as it has unfolded and I

think the best is yet to come when it comes to InnovateNL and what can be

achieved.

MS. ROGERS:

Great.

Also,

any of the requests that either of us make, we'll just assume that it's for both

of us as well.

MR. MITCHELMORE:

Of course.

MS. ROGERS:

Great. Thank you.

We move

on to 3.1.01, Sector Diversification. There were additional Salaries in '17-'18

of $422,000.

MR. MITCHELMORE:

The additional Salaries; last year the net increase of $422,000 is salary in

continuance and retirement costs.

MS. ROGERS:

The same thing. Okay.

MR. MITCHELMORE:

That would have been paid out to departing employees. It would have been the

cost of the Research & Development positions.

Some of

these were partially offset by savings from delayed recruitment; there are pay

scale variances and restructuring budget overage. All of these things had an

impact in last year's budget because of the change and the transformation that's

actually happened in the department.

Right

now, the new budget allocation for the salary plan is the right size that fits

our current salary plan for 2018-2019.

MS. ROGERS:

Okay.

Do you

have any vacant positions?

MR. MITCHELMORE:

The vacant positions – we have a total of, as I said, 30 vacant positions.

MS. ROGERS:

For the whole department, right.

MR. MITCHELMORE:

To be filled within the overall department. There is a process ongoing through

the Public Service Commission to fill vacant positions.

MS. ROGERS:

Okay, great.

MR. MITCHELMORE:

They are posted as they work themselves through that PSC process.

MS. ROGERS:

Great. Thank you very much.

We see

an increase in travel in Transportation and Communications from '17-'18 to

'18-'19. What kinds of extra travel or communications do you see there?

MR. MITCHELMORE:

For this particular year we've allocated $20,000 to the Newfoundland and

Labrador Innovation Council.

MS. ROGERS:

Okay.

MR. MITCHELMORE:

That would account for a significant amount of that particular increase. That's

where any of their particular board meetings may take place, or any associated

travel as part of them doing the business they would have to do throughout

Newfoundland and Labrador to engage their stakeholders, et cetera.

MS. ROGERS:

Great.

MR. MITCHELMORE:

There are a number of people on that particular board, and we're certainly

cognizant of costs. But because the Research and Development line is in

Commercialization, that is strictly program dollars. Any associated cost would

have to fall under another department line. That's where this particular one is.

$18,400

additional amount is for additional anticipated travel for this particular

division. This division would have our craft industry specialist; they would

have food and beverage. We're seeing a number of craft breweries start up

throughout Newfoundland and Labrador. I know you had visited one recently and

had been promoting it.

MS. ROGERS:

I've tried most of them.

MR. MITCHELMORE:

That's very positive to see.

We're

working very closely with industry stakeholders as to how we can further develop

those types of niche markets, those industries and those specific sectors to

grow. In order to deal with specific sectors there is associated travel. We have

specific targets to help grow the economy when it comes to our regional

innovation systems and a number of other initiatives that we're pursuing

throughout our department.

The

travel is an appropriate amount that we feel is reasonable. Should we not need

any particular travel, we just certainly won't use it and it will be a drop

balance. We budgeted $129,600 last year and only utilized $100,000. We try to be

as frugal as we can be, but we do have a number of plans that we're undertaking

as we engage our stakeholders, like our tourism product development. Our product

development officers had a number of opportunities and management sessions. They

partnered with our Destination Management Organizations. They may need to give

presentations and travel as well.

We have

a collective goal of reaching $1.6 billion in tourism and a number of other

initiatives that certainly require some travel.

CHAIR:

Thank you, Minister.

Thank

you, Ms. Rogers.

Ms.

Perry.

MS. PERRY:

Thank you, Mr. Chair.

I'm

going to pick up on 3.1.01 as well. I just wanted to ask a supplemental question

regarding Salaries.

Can you

provide a list of what positions were redundant or eliminated last year?

MR. MITCHELMORE:

We can certainly provide the organizational chart that we currently have within

the department.

MS. PERRY:

Could you provide the previous one as well, so we can see where the changes

were?

MR. MITCHELMORE:

We can provide you with changes based on the RDC positions that would have come

in and provide some clarification around the staffing that's allocated in budget

2018-2019.

MS. PERRY:

Okay. Thank you.

What's

your attrition target for the department this year?

MR. MITCHELMORE:

We have an attrition target

based on the 2015-16 Attrition Management Plan that would have been put forward

previously. In 2015-16 there was nearly $400,000 that would have been the

allocation amount. In this year's budget, our anticipated reduction is a

position target of reduction of six positions.

MS. PERRY:

Okay. Thank you, Minister.

2017-2018, the Purchased Services went over budget by $70,600. Can you explain

the cause of this?

MR. MITCHELMORE:

Could you repeat the

question?

MS. PERRY:

Purchased Services were over

budget but $70,600. Can you explain that increase?

MR. MITCHELMORE:

Purchased Services; the

$70,600 reflects a cost of $73,000 for the Atlantic Cable Facility. There is

repair cost that is associated with – every time a cable basically breaks we're

responsible for one-twelfth of the cost. That would have been the Atlantic Cable

agreement, the fibre optic cable that would have been done previously.

We've

debated and had discussion on this in the House of Assembly Estimates – and even

while this was being done – to create some redundancy in our fibre optic cable;

this would have been something that would have been done under the former

administration to enter into this agreement. Newfoundland and Labrador is

responsible for those costs. Every time there's a break, we have to pay

one-twelfth of the costs. That is part of the agreement that would have been

entered by the former administration.

MS. PERRY:

Okay. Thank you, Minister.

Under

Grants and Subsidies can you outline where the $155,000 was spent last year? Who

received the funding and how much was allocated to each?

MR. MITCHELMORE:

The Grants and Subsidy line,

that's the $155,000 you're referring to?

MS. PERRY:

Yes.

MR. MITCHELMORE:

We certainly can provide

that. Under that subsidy the East Coast Trail receives $100,000; the tourism

Market Readiness program would receive $15,000, such as GMIST training; craft

industry activities, $40,000; there would be start-up innovation activities,

$75,000. This could be things like pitch events.

This

year, as well, there's a Canadian safety and security project, that's $337,800

that will go to C-CORE. As you can see, the federal government is to reimburse

and that's reflected in the Revenue line. So even though the Grants and

Subsidies line is up, the amount is fully reimbursable through a federal

government agreement to C-CORE to recoup those costs. Those are the associated

amounts when it comes to Grants and Subsidies.

MS. PERRY:

Okay. Thank you, Minister.

I guess

this next question is a little broader. What new sectors will be explored and

what specific markets will you be targeting in the upcoming year?

MR. MITCHELMORE:

Well, as I just talked

about, there are a number of initiatives that fall under this particular Sector

Diversification. There's the craft sector and there are things we have done to

explore craft development, whether it be in partnership with the Craft Council,

initiatives to explore Indigenous craft.

There

was the Atlantic Craft wholesale show, which is held and hosted in Halifax every

year but led by each provincial department. This year, Newfoundland and Labrador

hosted that particular initiative. We had a number of buyers and a number of

people selling their product in Halifax this year. There were two craft award

recipients from that particular show: College of the North Atlantic; Anna

Templeton Centre had received an award, the instructor there. As well as the

Black Hen Studio as an emerging artist.

We have

agricultural initiatives that we work very closely with Fisheries and Land

Resources, such as making Crown land available. There was a new

federal-provincial agreement to look at initiatives to help in primary and

secondary processing, value-added when it comes to agriculture. So that's a very

interesting sector for us.

engage with the federation and the opportunities that we would have, whether it

would be in apiculture or other initiatives in the agricultural sector and how

they can partner, too, to develop more of an industry, such as the test crops,

the R and D. Canola was a big success.

You see

a company like the Newfoundland Distillery in Clarke's Beach, how they use 100

per cent Newfoundland and Labrador product. They have water that comes from

Springdale, Mr. Chair, from your particular district, supporting a company

there. The barley and other product would come from the West Coast. They even

procure bakeapples from the Northern Peninsula, I say to the Member for Labrador

West – even though Labrador is known for being an abundance of bakeapples – a

partnership with the Dark Tickle Company on the Northern Peninsula, and a number

of other partnerships that's really growing and helping a local market.

Our

Tourism Product Development Plan is very key. There are a number of initiatives.

This was done with the Tourism Board, the Destination Management Organizations.

This was really pan-provincial. We launched that last year and now we're rolling

out the initiatives like on the Northern Peninsula and Southern Labrador. The

three UNESCOs are a big focus.

Culinary food experiences are big for the City of St. John's. There's also music

and entertainment, big for the capital region. So there are a number of

initiatives that's being worked on. Food and beverage, aerospace and defence,

green tech. Ocean tech is huge with the supercluster initiative.

I could

sit here all night and we could talk about the tech sector, we could talk about

our work plans, what's listed in The Way

Forward and I could use up three hours and far more than that. If you have

something specific, I'm more than happy to engage in that conversation.

MS. PERRY:

No that will suffice,

Minister. Thank you.

Is this

section here, where rural broadband is covered, and can you tell us which

communities still do not have rural broadband?

MR. MITCHELMORE:

The rural broadband dollars

would come a little further up. This would fall under the Comprehensive Economic

Development fund. That would be

section 3.3.01.

MS. PERRY:

Okay.

MR. MITCHELMORE:

That would be where

broadband would be.

In last

year's budget there was $1.7 million for broadband, because previously we had

invested $300,000 in a major investment with the Nunatsiavut Government and

other federal partners for the North Coast, the six communities that would be

covered under the Nunatsiavut Government there in 2016-2017. Through all of that

we had a significant investment when it comes to broadband last year in

partnership with the federal government.

There

was a total of, our leverage invested – $26.9 million from the federal

government and $11.5 million from private companies and other organizations for

almost a $40 million investment. It's highly critical that communities have

connectivity. There's been great progress made, great strides made.

The

previous administration had invested in broadband programs. The only

disappointment for me was when the federal government had the Connecting

Canadians program with $225 million of federal leverage, all that money was left

on the table. Not a dollar spent in Newfoundland and Labrador to expand

broadband. During that time we had to utilize 75 per cent provincial dollars –

that would have been done under the former administration.

We're

being very strategic with the dollars that are being invested in broadband,

getting great leverage from the federal government, improving the backbone,

which is very important, and expanding speeds because just having 1.5 megabits

per second is a very low speed. There are challenges and there are gaps when

you're doing fixed-wire line for broadband and servicing large geographic areas

and small populations. There are wireless solutions as well. There are satellite

options for broadband.

The

United Nations recognize broadband as a basic human right. Certainly, I've been

in the House of Assembly highlighting that advanced telecommunications and

advanced transportation networks are critical to advancing the economy, urban

and rural economies of Newfoundland and Labrador.

Once

all these projects get complete, the statistic is that 99 per cent coverage

would happen. Most districts would have a high amount covered. I know there was

a list that would have been supplied previously, either to the Opposition or

through an ATIPP, that highlighted, I believe, districts and their coverage.

Most

districts would have had 98, 99 per cent. I believe your particular district

would be very up in that amount. I believe the Ferryland District is up around

98 per cent, and every other district in the St. John's and Metro area would be

100 per cent coverage, I believe, is for other particular districts. Some of the

rural districts, we can certainly provide some information on coverage that

exists, further information.

We're

going to keep working on ways in which we can partner with the federal

government through their $300 million program that they had for Connecting

Canadians. They announced – I believe it was in the federal budget, I may be

corrected on that, but I believe it was $125 million for broadband initiatives.

The providers and the communities, they can continue to work on expanding and

improving their broadband.

One

priority that we've listed in our budget this year is a $1 million investment

for a cell service pilot project. We're quite excited to be able to, for the

first time – I don't believe any other jurisdiction in the country or any other

government has pursued this initiative, but it's very important to Newfoundland

and Labrador as you travel through communities.

I've

travelled all around this province. There are very few communities that I have

not been in as the Minister of Tourism, Culture, Industry and Innovation and

realized the gaps when it comes to cellular service. This is a first step to try

and address some of those gaps.

CHAIR:

Thank you, Minister. Thank

you, Ms. Perry.

Ms.

Rogers.

MS. ROGERS:

Great leaps and bounds.

What

exactly is the cell service pilot project? What does it involve?

MR. MITCHELMORE:

Well, we have allocated $1

million, if you look at the Rural Broadband Initiatives that have been

partnered. Right now, we will work with community groups, we'll work with

municipalities, private initiatives and basically work with the providers as

well that would be into the cell business to find means of which the economic

case can be made to expand cellular coverage in communities that are unserviced

or have limited service – so ways of which we can improve that.

This

may be any number of forums that would take place because this may be a

partnership with multiple communities. This may be partnership that exists

through a co-op. It may bring on any number of partners to fully utilize a cell

service pilot project. I'm very excited about this and we will be releasing

details of how one can apply. It will be application-driven and we'll be

releasing the details on the call for application and the application process in

the very, very near future – in the coming days, really.

MS. ROGERS:

Okay, thank you.

MR. MITCHELMORE:

It will be publicly

available. Applications will be publicly available. Contacts as to who in the

department somebody could reach out to will be specifically identified there, as

well as economic development officers in the field that they can reach out to

and engage in this process.

We look

forward to people participating, asking questions, engaging and finding ways of

which we can expand cellular coverage to the benefit of Newfoundlanders and

Labradorians all across Newfoundland and Labrador. We think it's a very

important initiative, critical initiative. It's going to require partnerships.

It's going to require support from community and the providers to really make

this work. We feel this is an initial step. We hope that we can achieve success

with it and that it can lead to more and further investment to benefit the

people of the province.

MS. ROGERS:

Great. Thank you very much.

If we

continue down to 3.1.01 under 10, Grants and Subsidies, we see a nice, big, fat,

juicy increase there from $155,000 to $567,800.

MR. MITCHELMORE:

3.3. –?

MS. ROGERS:

3.1.01.10, Grants and

Subsidies, under Sector Diversification.

I don't

think, Tracey, you got there yet, did you?

MS. PERRY:

No.

MS. ROGERS:

Yes, okay.

Thank

you.

MR. MITCHELMORE:

Under Grants and Subsidies?

MS. ROGERS:

Mm-hmm, a nice big increase

there.

MR. MITCHELMORE:

Yes, this was a project I

had talked about with Ms. Perry that there is investment for a Canadian Safety

and Security project; $337,800 is going to C-CORE. But if you look at the

revenue side from the federal government, there's $337,800. We are basically

providing a grant and subsidy to C-CORE, but we're getting 100 per cent of the

money recouped through the federal government.

MS. ROGERS:

That's a great way to do it.

MR. MITCHELMORE:

It's a very good deal, a

great way of doing business and it's going to be a good project. C-CORE is part

of Memorial University and an entity that is set up to do research and

development, various contracts and initiatives. They go out and seek out

specific work. This is something that we've been able to facilitate with them

and recoup all the funds for the federal government.

MS. ROGERS:

Great.

If we

could move on to 3.2.01, Regional Economic and Business Development. The

Salaries again, that bump of $463,000 in '17-'18. I could probably guess what

that is.

MR. MITCHELMORE:

You're talking about 3.2.01,

Regional Economic and Business Development and the Salaries?

MS. ROGERS:

01, yep.

MR. MITCHELMORE:

The salary increase for

2017-2018, there's a net increase of $335,600. That's salary continuance and

retirement costs paid to departing employees. There was a restructuring shortage

of $185,000 and that was partially offset by $349,400 in delayed recruitment.

The decrease in this year's budget reflects rightsizing of salary costs as per

the salary plan as the appropriate number of employees are allocated throughout

Newfoundland and Labrador through various regional development offices.

would have 18 offices under this division in Labrador City, Goose Bay,

Charlottetown, Forteau, St. Anthony, Port Saunders, Deer Lake, Corner Brook,

Stephenville, Port aux Basques, Grand Falls-Windsor, Gander, St. Alban's,

Marystown, Clarenville, Placentia, Carbonear, and Ferryland as a means to have a

provincial reach and service to clients and various regions throughout the

province that are engaged in regional economic and business development. We also

deploy our staff to travel throughout the province, and also sector specialists

as they're needed.

There

are a number of initiatives that are being undertaken.

MS. ROGERS:

Okay.

I'd

really be interested in some of those initiatives, but I think it might be

interesting to maybe make a meeting with you, Minister, and have a briefing and

talk about some of the directions that some of that are going in. I'm just aware

of time here.

MR. MITCHELMORE:

Sure.

MS. ROGERS:

But I do have just one quick

question in that area. Social Enterprise, is there a specific pot of money that

has been allocated specifically for Social Enterprise?

MR. MITCHELMORE:

We support Social Enterprise and we have done so significantly in the past. If

you look at the fund that Ms. Perry would've been talking about, the

Comprehensive Economic Development Fund, it allows non-commercial entities to

apply for funding. We would've supported, for example, the Centre for Social

Enterprise at Memorial University through these particular funds. We do a number

of community capacity-building initiatives with Social Enterprise, we do

co-operative development as well, we work with the Community Sector Council,

we've done a number of initiatives like buy the books, allowing non-profit,

Social Enterprise, and other entities to improve their financial accounting and

accountability and those processes because these are things that have been asked

for.

allocated specifically $75,000 for capacity-building initiatives for Social

Enterprise. That is a new allocation of funds that have been targeted and

earmarked.

We fund

significant projects and we work with social enterprise. We saw just yesterday

the Minister of Children, Seniors and Social Development announced – with the

Premier – multi-year funding for community organizations. And a couple of

organizations that are very notable, that would be social enterprise, would be

Choices For Youth and Stella's Circle that we have all talked about in this

House. They have received multi-year funding, a significant amount, that will

help them focus on continuing to do the good work that they do.

They

still can look at specific project-based funding. We will look at them and the

initiatives they provide. We continue to work with the Centre for Social

Enterprise and, also, through student employment positions that exist. We're

looking at various ways of which we can help social enterprise through our

Social Enterprise Action Plan and, also, a number of initiatives that we do and

continue to engage with throughout that particular process.

MS. ROGERS:

Great. Thank you very much.

Then if

we move on to 3.3.01, Economic Development – I think we looked at that a little

bit already with Tracey, I think, when you were moving around a bit. Social

Sector Research, 3.4.01, I won't ask about that – well, I will because it's

almost doubled, the Revised for Salaries for '17-'18.

MR. MITCHELMORE:

Yeah, the salary is the fact

that we've added two industry development officers and one senior policy analyst

here. Initially, we had a director of Tourism Research specifically and small

staff allocated. But looking very strategically, a lot of the research that

would be done through the tourism market research on that specific sector

interlinks with food and beverage and interlinks with other sectors of the

economy, culture –

MS. ROGERS:

Of course.

MR. MITCHELMORE:

– and other specific

research that we would like to do when it comes to aerospace and defence, and

working with Canadian manufacturers and exporters.

So what

we've done is we've allocated what we feel would have been staff within the

department who have expertise around research that would like to be more focused

when it comes to the whole of government, of more sectors rather than a specific

sector. So that there can be a breaking down of silos, basically, within the

department, greater synergies and a number of things that would be looked at

through our overall Work Plan.

Things

that would be dealt with here would be the resident survey that would happen;

there would be various projects such as Atlantic Growth sector research that

would happen. Then there would be things with Destination Canada, Global Tourism

and Stats Canada; there would be various membership fees in here.

It's

very much the departmental Sector Research Division that focuses on all of our

sectors now, rather than just the tourism sector.

MS. ROGERS:

Great. Thank you.

CHAIR:

Thank you, Ms. Rogers.

Ms.

Perry.

MS. PERRY:

Okay.

Last

year, under Professional Services, $173,500 was budgeted but less than half of

that was spent. Now, this year, nothing is budgeted. Is the department making

any operational changes there or is there a project there?

MR. MITCHELMORE:

Yeah.

The

Professional Services, the decrease of $173,000 is the right-sizing of division

departmental access and partnerships, purchase for services, focus groups,

subscriptions to database and research and analysis to really more accurately

reflect where the nature of the expenditure is. There's a decrease – if you look

at 11, the Purchased Services is the increase of $176,800. So that is basically

the purchased services for focus group projects, subscriptions, databases and

research and analysis.

It's

really a correction of the type of purchase. Rather than Professional Services,

this would fall under Purchased Services. In 2017-18 there would have been

$80,000 plus $95,000 which would have been around $175,000 purchased. This year

it all falls under Purchased Services because that's really the type of service

that it is.

So it's

just an Estimates line correction to reflect the nature of the purchase, but the

activities will still be ongoing to ensure that we have the right intelligence

when it comes to database, subscriptions, any research and analysis requirements

and those processes. I listed a little bit earlier around partnerships with

Destination Canada, Global Tourism Watch, et cetera, so that we know the

particular trends, we know things that we can do to target and make best and

informed decisions.

MS. PERRY:

Okay. Thank you, Minister.

Why was

the $20,000 under Grants and Subsidies not spent? Is this money being rolled

over into next year?

MR. MITCHELMORE:

That $20,000 is for industry

research. It's to be determined right now in the 2018-2019 Work Plan.

Discussions are happening with industry associations to determine what is a

specific initiative to make best use.

Last

year, no initiative would have been undertaken so no funds were spent. $20,000

has been budgeted this year. If, based on our Work Plan and dialogue with our

industry associations, we do not find the appropriate use of those funds, they

will become a drop balance and there will be no disbursement of funds. But we

are actively engaged with the industry associations to determine a partnered

research-specific project.

MS. PERRY:

Okay. Thank you, Minister.

I'm

going to move ahead now to 4.1.01. Under Salaries in this section, can you

explain why Salaries have increased to $2,173,700?

MR. MITCHELMORE:

The net increase of $135,200

results from the reclassification of a manager of a Visitor Information Centre

for $23,000 and there's been some restructuring due to a budget shortfall. So

the current allocation of Salaries for $2,173,700 is an accurate reflection of

where salary expenditures would be for 2018-2019 under Tourism.

MS. PERRY:

Okay.

Under

Purchased Services, can you please outline what purchased services made up the

$12 million?

MR. MITCHELMORE:

The $12 million under

Purchased Services would be our marketing budget that we would have; this would

be the main departmental marketing campaign that would be included here. There

would also be advertising, marketing costs and promotional material. Things of

that nature would fall under that line of $12 million.

MS. PERRY:

Thank you, Minister.

Are

there any new tourism commercials in the works and any new marketing strategies

that you will be rolling out this year? If you can outline what changes have

occurred over the province's marketing strategy this year, and as well – I know

I got a lot of questions here together, so I can slow them down. What specific

markets will be targeted to capitalize on exchange rates this year?

MR. MITCHELMORE:

We're very excited about some of the initiatives we've undertaken in tourism

marketing since I've became minister of the department, and we're quite proud of

the tourism marketing dollars that we have associated with the budget. We

relayed that to the hospitality industry when the Premier was the keynote

speaker and launched a series of new ads that would exist that's, for the first

time, focused on sound.

The

Newfoundland Symphony Orchestra has been involved. There's some very brilliant

video associated with that, because we focused a lot on colour and our

storytelling, but this is the first time we've actually looked at the sounds of

Newfoundland and Labrador, from the wind to the capelin rolling on the beach, to

a number of specific sounds with that ad.

We're

leading the country again based on the fact that we entered into an agreement

with Air Canada to have our own TV channel, and, in so, we have a number of

videos there that if you fly Air Canada and click TV, there's a new ‘Find

Yourself' campaign series. These are things that would have been undertaken as

part of our budget and our partnership with Target Marketing.

We have

also rebuilt out website and launched a new website. That was one of the

components we did when we weren't making new advertisements. So there's a

balance when you're dealing with your strategy.

We have

a significant amount of content when it comes to Newfoundland and Labrador. Some

great assets of photography, digital assets. We're always being strategic in if

off the charts in the interactions we've been having. We've seen increases at

newfoundlandlabrador.com.

These

types of things – when we look at our Exit Survey, that would've been complete

in 2016, we saw non-resident spending was $563 million, and it totalled $1.13

billion. Last year, non-resident spending in the province was $575 million; the

most in the province's history. It really shows that advertising is one of the

key elements that's driving people here. There are very critical elements: you

need access, you need good advertising, you also need good product, and good

product stems from the partnerships with industry, the quality of accommodations

and the services that are provided by the tourism industry. It's really a

collective effort to grow tourism.

We're

quite excited to see that the last time the Exit Survey was done there were

18,000 jobs in tourism and now there are almost 20,000 jobs associated with

tourism. So there is significant growth. There's significant growth in tourism

expenditure and there's growth in visitation. Those are all important things.

Key

markets for us; Newfoundland and Labrador has a very strong local market. We

will always have a strong maritime market because of vicinity. The Ontario

market is very important to Newfoundland and Labrador, and we invest in that

market. We also invest in the western market, Alberta and British Columbia.

As I

was travelling about the province, I was seeing a number of people from Ontario,

in particular, whether they be from Waterloo, Ottawa, Toronto, and they always

remark about seeing our ads and actually stopping to watch them. It is a great

campaign. It's working. It's achieving success. We received a number of awards

and accolades and recognition by the industry and endorsement, almost 300 awards

now.

One

thing that I did see which was really exciting – and it was actually in your

particular district when I was visiting – was I met a couple who are from

Australia. They came and they had already spent six weeks. They said they were

going to travel, I believe it was – I'm not sure if it was 10,000 or 20,000

kilometres they would have on their map. They were everywhere in Labrador, they

were travelling the Northern Peninsula, they were travelling the Avalon

Peninsula, the South Coast. They weren't missing a beat. These are the types of

travellers we want, the long-stay. The people were staying at high-quality

accommodations, expending a significant amount of money into our economy.

We have

great opportunity when it comes to the UK market, the German market. These are

key targets for us. This year is also the Canada-China tourism year. The

assistant deputy minister has been engaged in that process and travelled to

Ottawa as part of a Chinese inward delegation that has been there. There's

opportunity to look at Asia and look at that consumer marketplace. We have to

develop product. We have to be ready for that particular market. It is a small

market right now, the Asian market, but it is a future opportunity for

Newfoundland and Labrador. We have to build those relationships. We have to work

in those markets.

The

best opportunity for growth are those closest to us, the American marketplace

because of the success of Come From Away .

The millions of dollars in free advertising and endorsement that that has given

Newfoundland and Labrador is really important.

Florida, when it comes to the connectivity, because we already have that air

access with the market of US. Those are important to us and we'll continue to

reach out into those markets. We do a lot of partnerships when we go into

specific US cities because depending on the type of campaign, it can be very

expensive. It can be very expensive to buy a page in

The New York Times or

The Wall Street Journal or an ad on

TV. So you can easily exasperate a budget. That's why we have to be very

creative with how we use our budget, how we invest, what markets and how we go

in.

We do a

lot to engage the motorcoach bus tour traffic. We've seen significant growth

there. We're into key shows. We have a very talented team when we go into those

markets.

travelled to New York on personal, but I also did a little bit of departmental

business with our travel and trade team as they reached out to key travel

partners in motorcoach but also in air access as well as we promoted New York

and all of that area to sell Newfoundland and Labrador. Because we really want

the travel agencies and the partners, whether they're in Newfoundland and

Labrador in doing that attraction to bring people here or people that are

outside to come to Newfoundland and Labrador. So we're doing a lot of outreach.

There

are various mechanisms, and as the Leader of the Third Party and the MHA for St.

John's Centre talked about, maybe there's more dialogue that we can have on our

marketing campaign initiatives that we're talking about. Even outside, I don't

mind setting up a meeting and having more discussion with you because I don't

want you to not get to your specific questions in the line by line of the

Estimates.

CHAIR:

Thank you.

MS. PERRY:

Right, and that's perhaps

something we could do together.

MS. ROGERS:

Yes, sure.

CHAIR:

Thank you, Minister.

Thank

you, Ms. Perry.

Ms.

Rogers.

MS. ROGERS:

I'm wondering, Mr. Chair, if

we could take a few minutes break. A very quick, short break.

CHAIR:

We can certainly do that. It

is 6:38, we'll take 10 minutes.

MS. ROGERS:

Five even.

CHAIR:

There you go.

If we

could be back by 6:45 or so?

MS. ROGERS:

Sure.

Recess

CHAIR: T hank

you.

If we

can continue, Ms. Rogers, I think you're up.

MS. ROGERS:

If we go back to 4.1.01,

Tourism, just a quick question. What is now considered the tourism season? What

are the shoulders? It's just a question out of curiosity.

MR. MITCHELMORE:

We have been working with

industry. The season and the shoulder season will vary depending on which region

of Newfoundland and Labrador one lives.

MS. ROGERS:

Uh-huh.

MR. MITCHELMORE:

The primary target, and the

busiest months – which we've seen at airports recently break records and have

very strong years – would be July and August. That's always going to be the

busiest months for tourism.

September is also becoming a more popular month. We've seen things, like in

Bonavista, how operators are staying open longer. We generally have very good

falls; we need to get that message out. The Bonavista Biennale helped in a big

way support a number of small businesses and operators through 23 or 24

locations.

MS. ROGERS:

That was in July, wasn't it?

MR. MITCHELMORE:

I had the opportunity –

maybe the Member had also gone –

MS. ROGERS:

I went to everything.

MR. MITCHELMORE:

– and toured all of the art.

I certainly enjoyed myself. I was there at the opening and travelled all around.

There

are a number of things that we have done through season extension programs and

through various festivals to help engage people to come earlier. The St. Anthony

area and Viking Trail Tourism Association has held the Iceberg Festival and

that's helped operators. The Viking Trail Tourism Association has said they've

seen an increase of 15 per cent for their members.

June is

basically the new July, so that's very exciting when you're looking at markets.

Last year, the L'Anse aux Meadows site saw over a 30 per cent increase, the Port

au Choix site had over a 60 per cent increase and there was also a big increase

at Red Bay. So when you look at the three UNESCOs in the Product Development

Plan, and the potential for growth, we're certainly looking at all of those

initiatives as ways to build capacity.

Roots,

Rants and Roars has been a good festival in the fall; you've got the Burlington

festival, The Gathering, that takes place. Trails, Tales and Tunes really kicks

off the Gros Morne area in Norris Point and has had significant success. So

these are really good initiatives. Bay Roberts has done their Songs, Stages, and

Seafood Festival that I've had the ability to attend as well. There are things

that you do at certain times of year.

The

Member for Lab West is sitting here as well in Committee right now. Cain's Quest

was a really big economic generator. It's a really positive initiative that's

done biennially that has attracted international tourism, as well, and

participants. It's really put us on the map. It's the world's largest endurance

race for winter activity in the world.

MS. ROGERS:

Great.

MR. MITCHELMORE:

These types of things that

can set us apart can really help. But in short, a lot of the tourism season

right now, the primary season for most operators would be around mid-May to

mid-September. We need to continue to expand on the shoulders. That will give us

our greatest opportunity for growth. And there are some strategic things we can

do throughout the year as well.

We're

always working with our airports, our partners, to find ways of which we can add

airport seat capacity. If we can expand and explore in specific markets, we do

so based on the business activity that exists. With mining prospects on the

horizon and more oil and gas, those types of things help drive prospectivity to

look at flight access.

One of

the reasons why the New York flight was lost was because of the downturn in

business travel that would have been happening through oil and gas at that time.

We're seeing a bit of an uptick right now and more confidence in the markets

when it comes to oil and gas, business investment and development here in our

province. So those are all positive indicators.

Leisure

traffic can help certainly support, but it won't necessarily be the key reason

why a flight is added, depending on the particular market. Some flights go

specifically for leisure market. If you're going to the Caribbean, it's

primarily leisure market, leisure demand if it's an all-inclusive Sunwing

destination. Maybe this would be a conversation of which we can further discuss

when we set up a meeting.

MS. ROGERS:

Great. Thank you very much.

4.1.02,

Marble Mountain Development Corporation; the Revised for '17-'18 was an increase

of $400,000 for Grants and Subsidies to Marble Mountain. What's happening there?

MR. MITCHELMORE:

Yes, there was increase of $400,000 to Marble Mountain. That is additional

operating funding required for fiscal 2017-2018. The primary contributing factor

was the West Coast flood event; a very difficult start to the season with

weather events that were happening.

The

other ski resort on the Island had experienced very similar challenges when it

came to trying to keep snow operating in Clarenville and keep snow on the

ground. They incurred higher costs. It was publically reported that White Hills,

a smaller operation, had to receive a $75,000 loan from the Town of Clarenville,

which would be its basic operating arm. The staff at Marble Mountain worked very

diligently to have the operational days. The COO, in over a 30-year career, has

said that this was the most challenging operating season based on weather and

based on the flooding events.

They

have identified and have undertaken a lot of change at Marble Mountain. There's

been a new pricing structure that was put in place, a number of new events and

new food services that were offered, vegan, vegetarian: things that consumers

are requesting and expecting. The type of service for food and beverage had

undergone some change. There was direct table service. There were events that

were highly successful, such as the ski – the snowmobile races that happened at

the end of the season had provided over $60,000 to the corporation just from

that particular event.

There

are events they had done like the Slush Cup and the Downhill Dummy Race. They've

partnered with the community groups to raise awareness for cancer by doing a

balloon release and other events of lighting up the hill. The Marble Mountain

Development Corporation has a number of planned events as well for fall and

throughout the season; Foam Fest will be one of those. We're certainly working

with the corporation around sustainability, around the revenue options that it

can pursue, as well as find new revenue stream, new investment and always

exploring options when it comes to Marble Mountain Development Corporation.

The

staff certainly stepped up. We received very positive feedback from customers

and from skiers that things are certainly moving in the right direction with the

Marble Mountain Development Corporation based on consumer feedback.

I just

also will give a shout-out – since the Member for Lab West is here – that the

ski hill in Smokey in Lab West had a very strong season. It was good to see the

weather conditions were much more favourable in Lab West. We're certainly

cognizant of climate change and the impact that it is having. We're seeing more

and more weather events. We saw weather events on the T'Railway, of which we had

to do $1 million worth of repair work.

These

types of weather events can happen and they have happened in the past where

there was over $4 million required to be invested based on lightening striking

the hill at Marble Mountain. Some things are out of the control of management,

but they have done the best possible job that they can do in terms of operating

their ski hill. They have undertaken change and they're going to continue to

undertake change to make sure that customers get an incredible skiing and

snowboarding experience at Marble Mountain, plus all the other activities and

revenue generation options are being explored.

MS. ROGERS:

Thank you.

CHAIR:

Thank you.

Mr.

Finn, did you want to just jump in for a second.

MR. FINN:

Yes (inaudible).

CHAIR:

Mr. John Finn.

MR. FINN:

I just wanted to make a

quick comment and then just a small question. I just wanted to say a huge thank

you, Minister, to you and your staff. I live all of 55 minutes away from Marble

Mountain. I got there 10 times this season. Last season, I got there almost 18

trips in. What I can tell you is despite the weather, the energy at Marble

Mountain this winter was off the charts, from the staff turnaround to the

changes in the pricing, to the folks coming out, the new public relations,

Richard Wells – just phenomenal.

I've

been going there now for about seven years, but I certainly want to say a huge

shout-out to you and your staff. I know I had met with you personally on the

matter, as well as your deputy, Mr. Lomond.

terms of moving forward, I'm just wondering is there any more new events – the

last snowmobile event there, just two or three weekends ago, actually was, I

think, the most well-attended event that they've ever held, and in terms of

revenue generation with folks coming in town from all over the province to

compete in that event. So I'm just wondering if there are any events moving

forward to help continue the promotion of Marble Mountain.

MR. MITCHELMORE:

So one of the things that

the staff, the management and the board at Marble Mountain had identified is

putting up a plan early, informing people of policy, of changes, when it comes

to pricing, when it comes to what's actually taking place at Marble Mountain.

They have done that, and it's great to see your feedback, your response, in

terms of being a skier, or a snowboarder yourself and participating on the hill.

Marble Mountain has activities that will take place in the fall, that are

strategically planned, like Foam Fest, and that is set up around the orientation

week with the universities, and allowing people to attend.

They

also looked at partnerships with airlines; they also engaged and are looking to

work with the White Hills Ski Resort, and also they can reach out and work with

the Smokey ski hill as well to see if there are ways in which we can partner on

passes, on different costs – looking at options. I think one of the things that

the board at Marble Mountain and the management is, is that they're open to

engagement, they're open to partnerships and they're open to change.

They

decided to put the snowmobile races at the end of the season rather than have

them and then go back to skiing because there would have been a cost associated

with grooming and all the other activities. That was something that was done to

accommodate for being open for Easter, and doing that upfront so that people

could make their plans appropriately. There is a cost associated with running

the ski hill, to the taxpayers of the province, and that's something that is

cognizant by the management and the board.

would love to be able to continue operating the ski hill for an extended period

and the management and the board would look at, based on where are their funds,

where their operations are, and what would allow them, if they could operate

maybe on Friday and Saturday nights on an extended season and not on the

weekdays. Those are things that they would have to negotiate with through

collective agreements and all those processes would have to be explored.

Those

are options, and it comes to a point when people do look at moving on to other

activities, given what's happening in the province. I would say that we're

almost living in two different worlds, even on the Island of Newfoundland and

Labrador. Here we have bolstering, very warm temperatures right now outside –

sunny days. In my home district on the Great Northern Peninsula, we had a polar

bear just a couple of days ago through the Town of St. Anthony, and I probably

still have about six feet of snow in my yard.

I run

the ad – I have in the past – the district is where winter begins and ends on

the Island of this province. But yes, we will continue to be open to ideas,

customer feedback and want that engagement at Marble Mountain.

CHAIR:

Thank you.

Ms.

Perry.

MS. PERRY:

I'm going to move now to

section 4.2.04, The Rooms Corporation. Why has the grant to the Rooms decreased

by $260,000?

MR. MITCHELMORE:

So the decrease of $260,000

reflects a reduction in the operating grant. Core operations will be $133,000

reduction; attrition would be $60,000; and there would be a department reduction

of $67,000.

This

overall process of the Rooms to their operating grant will have no impact on

programs or services to the public. Visitation during the 2017 tourism season

was extremely strong, and it was on par with 2016, which included the

Beaumont-Hamel anniversary events and the launch of the exhibit, which is the

largest, permanent World War I exhibit in the country, and really tells the

story that impacts all Newfoundlanders and Labradorians in some way, shape or

form.

They

saw nearly 125,000 visits, and seeing that momentum continuing to 2017 is

extremely positive. They engaged in a cultural Ambassador's program, doing a lot

more programming and activity that engages the artist community, engages others

in the community as well to come out and participate and share their knowledge,

whether it would be the book clubs, whether it would the dinners with local

comedians, whether it would be music or the cocktails and culture events that

would take place – very proud of the immersive experience of Newfoundland and

Labrador culture that was very popular. I want to recognize that we have the CEO

of The Rooms Corporation that has joined us, Mr. Dean Brinton, and also Donna

Marie Humphries who is the director of Finance with The Rooms. If there are

questions that I am unable to answer, they certainly will step in and answer any

specific questions.

We did

recognize recently The Rooms winning a national award from Canadian Museum

Association for their publication of artwork of the Labrador

Inuit, the

SakKijâjuk ,

based on the

exhibition by the same name at the Winnipeg Art Gallery; it's going to open in

late May. They also won two international Gold Quill Awards for Excellence in

Marketing, Advertising and Brand Communication for the Remember Them at The

Rooms campaign First World War commemoration. The Rooms has received 23 awards

since their opening, more than any other cultural institution in Canada.

We love

to really boast and we're very proud of that crown jewel; it's our cultural gem.

I know we all are very proud of the work that's done by the CEO, staff and the

board at The Rooms. We just recently have a new chair, Margaret Allan, who's

chairing The Rooms board and a number of new appointments.

Ms.

Allan is very well equipped and has a background in – a master's, I believe, in

history and art. I'd have to go back and look, but she's very well qualified and

has a business background as well. It's a great complement, a great geographic

representation, Indigenous representation and a high number of females that are

serving on The Rooms board. They're clearly outnumbering the male contingent

that are serving in that corporation.

terms of your question around the impact of reduction of $260,000, The Rooms

commercial revenue increased by almost 12 per cent. The paid visitation

increased by 5 per cent. Website visits were up by 65 per cent. The revenue from

parking and other commercial activities that The Rooms engages in will allow it

to continue all of its program and services that it provides and it will have no

impact on the quality experiences at The Rooms because as an agency, board and

commission of government we challenge all of our agencies, boards and

commissions to look at raising revenue where they have that ability to do so and

they've been raising their own earned revenue more so, and they've also earned

additional revenue outside of that $260,000. So they have ample opportunity to

continue to do their programs and services for the people of the province.

The

Canada Council funding had increased by 74 per cent under the leadership of Anne

Chafe, the director of arts at the gallery there, $330,000 over two years, and

their whole team, we're very proud of what's being achieved there. They have new

Friday evening opening hours. They're open Friday evenings until 10, so they've

been able to adjust as they've looked at their budgets and where their

opportunities are. They're exploring that, and that's being done by the

leadership team and the board at The Rooms.

provide them with a direct grant of over $6 million and they earn additional

revenue outside of that, which would be provided in their financial statements

(inaudible).

MS. PERRY:

Okay, thank you, Minister.

I just

want to ask a quick supplemental to that one. If they're unable to raise

$260,000 through their revenue-generating efforts, would you be prepared to

reinstate any shortfall?

MR. MITCHELMORE:

The Rooms itself, based on all of its operations and its commercial and

non-commercial activities would have ample money based on the appropriations

that we're providing because there is some of that money that would be done

through attrition as there are retirements, so there would be people that would

attrition out.

There

would be no impact on the $60,000 of attrition from a revenue requirement

because the retirement would occur and the $60,000 would no longer be required.

So you're really looking at $200,000 from a line-by-line review, and The Rooms

can, through looking at its operations, find some efficiencies, reductions in

travel and other initiatives based on other entities that have undergone

line-by-line reductions.

The

Rooms itself has ample opportunity to raise revenue through gift shop sales,

they've seen increased revenue year over year, they have from the implementation

of their parking, they have also other commercial contracts through their

catering business and other initiatives that they can pursue.

I have

every confidence that there would be no further requirement from The Rooms, and

that they could pursue all of their activities and even new initiatives, based

on the allotment of funding that we have provided them. The CEO gives me every

assurance and they can continue their operations with the current budget.

MS. PERRY:

Okay, thank you Minister.

Moving

on now to 4.2.05, Newfoundland and Labrador Film Development Corporation; why

has their grant been cut by $70,000?

MR. MITCHELMORE:

The $70,000 to the Film Development Corporation, this is their grant for

operation; this is not their equity for the Film Development Corporation, the

one of which was $2 million that we doubled last year and actually invested

another $1.4 million for Caught ,

which I talked about earlier. So last year in the equity program, it was $5.4

million. This year, we've maintained the doubling of the $2 million equity to $4

million.

This

specific line that was $681,000 that is now $611,000 reflects a reduction

because there was attrition, basically, at the Film Development Corporation.

There was a retirement that took place and now is the responsibility of the film

commissioner, and the management position has been the responsibility of one

individual. So there are savings there that the Newfoundland and Labrador Film

Development Corporation could achieve through attrition.

MS. PERRY:

Okay, thank you, Minister.

Under

4.2.06, Historic Sites Development, the Purchased Services are expected to

decline by $189,600. What impact do you think this will have on our historic

sites?

MR. MITCHELMORE:

It won't have any impact on

historic sites. We had a multi-year plan for site repair and maintenance to do

work at the Point Amour Lighthouse. A significant amount of work was done in

Heart's Content and Mockbeggar. We had work done a Commissariat House and other

provincial historic sites that was earmarked and, each year, there was money

allocated.

This is

the sunsetting of a multi-year renovation project, we've recapitalized these

assets and we have a small amount of money this year to do site repairs and

maintenance at provincial historic sites, as required. One of the exciting

things with our provincial historic sites is the Heart's Content world UNESCO,

joint UNESCO bid and being shortlisted as part of a Canadian list is very

interesting. Then if Valentia can add that site to a short list, then we could

have a joint submission where the old world and the new world connect.

Being a

Provincial Historic Site since 1974, we have a very well-maintained property.

We've just recently reinvested. The 150th anniversary was in 2016 so we've

really helped them capitalize that asset. I recently toured it. There's going to

be a focus at that particular site on coding and discovery because that's where

the old world and the new world got all of its information. Eight words per

minute could basically be decoded at this site.

We have

great assets and we're working in partnership with the Government of Ireland to

advance this initiative.

MS. PERRY:

What site?

MR. MITCHELMORE:

Heart's Content.

MS. PERRY:

Heart's Content. Okay.

CHAIR:

Thank you, Ms. Perry.

Ms.

Rogers.

MS. ROGERS:

Yes, thank you very much,

Mr. Chair.

The

Colonial Building: Does that come under Historic Sites Development?

MR. MITCHELMORE:

The Colonial Building is within the Department of Tourism, Culture, Industry and

Innovation.

We have

a steering committee that is in place. There is project management that's being

undertaken with TW and The Rooms Corporation to ensure that the Colonial

Building is being restored. We had taken the media to provide an update on what

was happening inside the Colonial Building as the tenders were being moved

forward and advanced. We have a significant amount of the non-historical

finishes – that tender had been awarded and advanced.

We had

done a mock room when it came to looking at the cost of bringing it back to a

certain level in the 1800s. There was a $22.73-million budget that was at The

Rooms. And as funds are expended, based on tenders, that's where they would be

disbursed and paid out.

We're

fully committed to the Colonial Building restoration. I believe the fourth

tender package has gone out and we're working on the fifth and final tender to

complete the historical finishing for the building. It's taken a significant

amount longer than originally anticipated. It was something that was started by

the previous administration, but when you're dealing with any old historical

building you never know what you're going to find as you're starting to go into

the building.

What

was found at that time is that the roofs were really collapsing on themselves.

They had to be stabilized. That took some time and, then, as you're revealing

and finding different aspects. The exterior is fully restored. We're working

through that process and look forward to having the Colonial Building open for

public use, as it should be, in Newfoundland and Labrador.

If I

could, I need to make a correction for the Member – either Member – when they

asked about attrition targets and a value. I had misstated a number around

$380,000; the number is actually $483,600.

MS. ROGERS:

So back to the Colonial

Building. What is the anticipated budget for completion and an anticipated

ballpark for completion in terms of time?

MR. MITCHELMORE:

$22.73 million to complete

the Colonial Building. That's the budget that was allocated, that's the budget

that we're working within. We have to work through that tendering process so

that we ensure the building gets completed.

The

interpretation and the plan for its interior use, we had stated at our public

consultation at The Rooms that we would have further consultation around other

dialogue. There was a site plan that was developed around uses for the Colonial

Building and around the political history of the province, telling that story.

There are some really fascinating things, I believe, that could be on display

and how it could be used and how things could be purposed.

There's

been some discussion around a public library given that it's in the downtown.

But given a recent visit to the Halifax downtown public library, and seeing how

purpose built that was and that initiative, this particular historic building

would not be most appropriately used as a public library.

There

may be some element of which you could have some historical books or you could

have some space that could be used by the public, but the building itself would

not have the connectivity necessary, the electrical aspects there. There are

some limitations. If you go to the building and tour it you would really

understand.

We are

making the building accessible though. We are meeting those guidelines. We've

had to cut through particular walls to make sure that it is accessible for

wheelchair and mobility matters. We're certainly taking that into account.

MS. ROGERS:

So the $22.73 million, is

that for the whole project? What is budgeted this year? Again, what's your

targeted completion date?

MR. MITCHELMORE:

That is the global budget

that has been in existence for the Colonial Building: $22.73 million.

MS. ROGERS:

Yeah.

MR. MITCHELMORE:

There's been an amount that

has been expended. I believe there is still a certain amount that exists.

There's a challenge with releasing the specific amounts that would exist,

remaining that has been unpaid, while there are still ongoing tenders to be

called. If the amount is revealed that there is this much left in the budget and

there's only one tender, the likelihood that a company will go very close to

that particular amount could end up costing the taxpayers more in that process.

We want

it to be a very competitive process so that any funds that are available, we can

fully utilize that $22.73 million into the Colonial Building and ensure that

there is appropriate

interpretation and experience at the Colonial Building when

it is complete.

MS. ROGERS:

So the money to complete it

is budgeted in this year somewhere?

MR. MITCHELMORE:

That amount is in The Rooms

Corporation. They have that in their bank account and they are project managing

it. They are cash flowing any funds associated with the Colonial Building, so it

is not showing up in the Estimates here.

As I

talked to earlier, there are commitments that have been made – for example, with

the former RDC for research and development projects – that would be multi-year.

There would be associated for spending this year that would not be in the

particular line-by-line items of the budget, but they are fully accounted for in

the Public Accounts.

MS. ROGERS:

So the money that's set

aside for the Colonial Building is not in the current budget for The Rooms.

MR. MITCHELMORE:

No.

MS. ROGERS:

I know I'm sounding like I'm

pushing you, but are we looking at two years? Are we looking at five years? Are

we looking at one year? What are we looking at?

MR. MITCHELMORE:

We're certainly working very

much with TW, we're working with The Rooms and we're working with our partners

in heritage as well, in the steering committee, to ensure that the Colonial

Building is advanced. We've seen significant progress on the interior.

We need

to get the next tender out. Once that tender goes out – that call – and gets

awarded, we would have a much better indication then as to a completion date, to

be able to update and advise the public as to when the Colonial Building will be

open.

We want

this building open as soon as possible. If the building could be open in 2019,

that would be very positive, given the fact that it would be a celebratory year

in terms of our place in history, of when we joined Canada. This is a very

significant building; it's a place of when we were self-government, when we were

our own country. There are a lot of stories about the Colonial Building and

things that we want to tell, but it's a bit too early at this stage to

predetermine and to give a date.

There

have been a number of years that have lapsed; this has been ongoing for a very

long time. It's a great asset to the people of the province. It has an important

story to tell and it needs public use. I'm working very closely with my team to

find ways to make sure that happens as expeditiously as possible. But we are

talking about an historical building and it has to be done right.

MS. ROGERS:

Okay. Thank you.

Special Celebrations and Events we see a reduction of $202,500. We're not

celebrating as much this year, I guess. Is that it?

Sorry,

I'm a little bit tired.

MR. MITCHELMORE:

No, the Special Celebrations

and Events are primarily focused on a four-year program of World War I and the

100th anniversary. Our biggest year would have been the 100th anniversary

commemorating Beaumont-Hamel. In the particular year, there's a $202,000

reduction because of scheduled events and the clueing up of the program that was

set through a previous budget decision that this is a four-year program. This is

where we would be sending the Regiment and others to do the Trail of the

Caribou, where youth can participate.

There

were a number of special events that happened. The Peace by Piece exhibit is one

by the Cabot Quilters' Guild. They did a fantastic job. There were, I believe, a

number of other commemorations that would have happened with theatre groups.

MS. ROGERS:

So what are we celebrating

this year with our $185,000, anything specific? I just don't want to miss it.

MR. MITCHELMORE:

We're doing the

Beaumont-Hamel and the Trail of the Caribou. We have our youth, our cultural

ambassadors that will go. There's a delegation. There are events for Gallipoli.

It ends in November of 2018, so this is not something that's going to be a full

budgetary year as well. That's why the amount is seeing a reduction.

We have

fully accounted for our commitments and what we plan to spend money for on the

special celebrations and commemorations. We've done a number of events. The

airport has a new exhibit that they've put focus in partners. Lots of things

have taken place over the last four years that we're very proud of and the

legacy of the Honour 100 initiative.

MS. ROGERS:

Thank you.

believe my time is up.

CHAIR:

Your time is up.

MS. ROGERS:

Thank you.

CHAIR:

Ms. Perry.

MS. PERRY:

Thank you, Mr. Chair, and

thank you, Ms. Rogers.

Which

line item contains the Cultural Events Fund?

MR. MITCHELMORE:

The Cultural Events Fund

would fall under the Arts section, Grants and Subsidies, 4.2.01.

MS. PERRY:

4.2.01. Okay.

Thank

you, Minister.

What is

the department's role with respect to Mistaken Point?

MR. MITCHELMORE:

The department provides

CEDP, Cultural Economic Development support funding, to Mistaken Point Cape Race

Heritage Inc. as we support heritage organizations throughout Newfoundland and

Labrador. There are more than 100 of them that we support and we have $880,000

in our budget for that.

provide Mistaken Point with $15,360 under that operational programming. We've

also supported Mistaken Point in the past with a concert series. We've done

opportunities management sessions with them. Our department played a very

critical role in helping with the dossier and providing support. I believe we've

provided support in the past when it came to the

Interpretation Centre and

regional development investment to partner with the federal government to ensure

that the centre takes place.

Our

Provincial Tourism Product Development officers are available to provide advice

to any heritage organization or group. But when it comes to Mistaken Point – and

I need to make this very clear – Mistaken Point is a provincially owned reserve.

It is an ecological reserve that has UNESCO status that is owned and operated by

the Province of Newfoundland and Labrador.

The

Department of Fisheries and Land Resources has $400,000 in its budget. It hires

nine staff and four students. It also appropriates $26,100 rent to the

non-profit group because they operate at the

Interpretation Centre. These

provincial staff provide all the tours and all the operational costs associated

with the tours. They also provide

interpretation around Mistaken Point at the

centre.

This

non-profit group does very valuable work. I attended their annual general

meeting as Tourism Minister. I was asked to be their guest speaker. I spoke

there and commended the volunteers. They operate the gift shop there. Because

10,000 people come to this particular site – and the numbers have been

increasing – they have even more opportunity now to raise more revenue through

their gift shop sales. As well, they don't charge a fee at their

Interpretation

Centre, they opt for a donation. And that's what they're charging: a donation.

It's by donation only.

There

are ample opportunities for this organization, like other heritage

organizations, to apply for students, wage subsidies, JCPs and other entities

that operate in that non-profit. We have, as I said, over 100 heritage

organizations that are in a very similar position.

This

group also operates the Myrick Wireless station which is at Cape Race. That

would have been the station that received the signal from the

Titanic , which also had

commemorations and received significant investment in the past for upgrades when

it comes to my department through our Regional Development Fund in partnership

with ACOA. This operation I had visited as well.

I'm

very pleased to see the federal government investing in road infrastructure to

the site and have done paving there to support the attractiveness. There is a

real ability to partner with groups. I want to say that the Myrick Wireless

station does charge a fee at admission. So there are opportunities of which our

Product Development officers can meet with groups to talk about pricing, to talk

about opportunities of how they can raise commercial revenue and how they can

look at pursuing other grants should they need to do so. We're more than happy

to meet with particular groups on this matter. Our staff have been engaged with

the Mistaken Point Cape Race Heritage society, as we have with many heritage

organizations throughout the province.

I was

at Sunny Cottage in your particular district this summer. We've made an

investment to do upgrades at Sunny Cottage, which was very positive to do

improvements to the widow's walk and to other necessary attractions, because

this is important.

These

are the types of things we either do through a project basis, or we provide them

with operational support through CEDP. We do that to a hundred different

organizations throughout the province. They are all worthy of receiving funding,

and our envelope is set at $880,000. Nobody has received a decrease in funding.

This

organization, the Cape Race organization that operates the

interpretation centre

and the Myrick Wireless Station, have been operating with that level of funding

since 2013. In 2004, they only received $750 from the department. So there has

been an increase in their operational funding to support them. They've never

raised an issue, to my knowledge, in 2013, 2014 or 2015 about funding that is

required in terms of their operations.

always review any funding requests and if funds are available we look at those

options, but our CEDP program is allocated. We don't have additional funds to

allocate to this particular organization, nor would we have funds to allocate to

providing increases to other organizations currently under that plan.

MS. PERRY:

Okay. Thank you, Minister.

Can you

tell me if there's any specific marketing undertaken by your department for this

World Heritage Site?

MR. MITCHELMORE:

On our tourism website, actually, we have information specifically around key

assets, and we promote Mistaken Point. We promote through our itinerary planner.

We have

imagery that highlights Mistaken Point. There are some really nice stories that

out through content. We want to have professional writers come here that are

going to tell stories about Mistaken Point and encourage more people to come and

visit that particular attraction.

Some of

the other things our department has done to support this particular area is that

since I've been minister there's been $652,000 that has gone into regional

development and investment projects in the Ferryland to Trepassey area in the

last two years that would support business and tourism development activity in

that region.

We've

been very active in wanting to see growth in the Irish Loop. I've met with and

visited the craft guild that is there. I've been engaged with a number of

businesses and operators on the Irish Loop. Seeing the Edge of the Avalon Inn,

touring that, being there dining and seeing the experience they have –

phenomenal. Great opportunity. There may be further opportunities to look at how

tours are done, how we can package, how we can partner with the private sector.

There

is lots of opportunity for Mistaken Point as a UNESCO Heritage Site. As I would

say to any organization, the Red Bay World UNESCO Heritage Site has seen growth

in numbers. It will take time to see the business development and all the

opportunities. Gros Morne National Park is I believe 40 years, or close to 40

years as a UNESCO Heritage Site and it has taken time for them to see and

realize all the opportunities that come. It's going to take time to get to where

we want to fully be able to realize all the potential of Mistaken Point, as we

have seen with other World UNESCO Heritage Sites.

I've

seen the benefit of a UNESCO Heritage Site, of L'Anse aux Meadows in my very own

district, and it's quite exciting. There are certainly ongoing conversations

regularly with the operator for investment, for reinvestment, and that certainly

is encouraged. We'll meet and work with any group or any organization, but when

it comes to the UNESCO Heritage Site itself, it is the responsibility of the

provincial government. We own the site and we will live up to our obligations

(inaudible).

CHAIR:

Thank you, Ms. Perry.

Ms.

Rogers.

MS. ROGERS:

Thank you very much.

Newfoundland and Labrador Film Development Corporation, 4.2.09. We have the

story on that. I saw it. That was caught, right?

CHAIR:

Yes.

MS. ROGERS:

The Arts and Culture

Centres, I can see the revenue from the feds plus a bump up in Property,

Furnishings and Equipment. Some of our Arts and Culture Centres – well, I know

for sure the one in St. John's is still kind of in rough shape.

there anything budgeted there to help with that?

MR. MITCHELMORE:

The Arts and Culture Centres?

MS. ROGERS:

Mm-hmm.

MR. MITCHELMORE:

We were very excited that in – just last year, basically, Minister O'Regan and I

had announced joint federal-provincial funding to do upgrades to the St. John's

Arts and Culture Centre; replace flooring, replace seating.

The

tender is actually up on the government website for replacement of the seats at

the Arts and Culture Centre. There's been a lot of action taken to move forward

on all these matters, to purchase the equipment at the various centres – all

centres in Lab city; the Stephenville centre, I see the Member for Port au Port

here; the Arts and Culture Centre in Corner Brook, Grand Falls-Windsor, and

Gander. As well, we'll see upgrades to equipment that will help.

received very positive feedback on this particular –

MS. ROGERS:

So the work is still in the

process, then. Is that –?

MR. MITCHELMORE:

The work is in process.

MS. ROGERS:

Okay.

MR. MITCHELMORE:

We plan and it's our intent

to have the old chairs, in particular, replaced over summer. Because the

activity of the Arts and Culture Centre is – as a member of the film and

artistic community, you would certainly know that the best time, when it comes

to doing these types of renovations and repairs and cause least disruption,

would be during the summer months when most opera houses or cultural centres

have no activity.

doing so, we'll still be able to provide the services to the artistic community,

not have disruption to all the users of our Arts and Culture Centre from those

professionals to those that would be dance studios, the convocations and other

users of our ACCs. We're being very strategic as to when things get done, but as

we can do repairs, as we can purchase the supplies and equipment, we are doing

so.

All six

ACCs are seeing $1.6 million for audio and lighting. That happened last year,

and the installations are taking place.

talked to one producer recently who said this is going to save them money,

because currently they have to go out and buy the lighting or rent the lighting.

So by having that there, they said they can either increase their honorariums or

their payment to their producers, or even lead to a better break-even or profit.

these are all initiatives and means to help improve venues for the people of the

province. The artistic community is very important, the cultural community. It's

5,000 jobs. It's a significant contributor to GDP, and the balance that's

remaining there will go towards the Barrett access – the Barbara Barrett Theatre

and getting better access there. And that's an important issue as well that has

been raised.

MS. ROGERS:

Okay, thank you very much.

Park

Operations, we see a $1.155 million reduction in the Parks' budget. How will

that affect the operations of our parks?

MR. MITCHELMORE:

The reduction, primarily, if

you look at the Purchased Services line there's a significant reduction in that

amount, and there's a decrease of $907,000 and that's for the one-time cost to

repairs to the T'Railway due to the Thanksgiving rain event repairs.

MS. ROGERS:

Okay.

And

that was budgeted in '17-'18, was it?

MR. MITCHELMORE:

That was budgeted in

'17-'18. The work was tendered. There was a significant amount of work done. As

work was being completed, we were issuing public advisories. I really commend

the team at Parks and our Deputy Minister of Tourism and Culture for really

being on top of this issue, ensuring that tenders were getting out and that the

work was being done.

Recognizing that there are many users of the T'Railway in and around regions,

that there are activities planned; that there are people who walk the T'Railway;

there are people who use it for motorized activity, ATVs, snowmobiling through

the Federation. There's also commercial activity that happens on our T'Railway

and other residential that would use it for access to cottages or various other

means for transportation. It's a major piece of infrastructure that we have to

maintain, and when weather events happen it can certainly have a big impact.

Just like the weather event at Marble Mountain.

MS. ROGERS:

Okay, well I tell you I'm an

avid user of the T'Railways and it's so great to see the staff in our parks who

are so very, very proud of our parks and they're real provincial treasures.

believe I'm done there, Mr. Chair. I think I've asked everything I could

possibly ask.

MR. MITCHELMORE:

I will say that I visited a number of parks throughout the province and

certainly some of the parks had recognized that you are a user and an advocate