May

6, 2008

RESOURCE

COMMITTEE

The Committee met at approximately 5:15 in the House of Assembly Chamber

MR. HARDING: We are ready to start as soon as Yvonne gets back here now.

Okay, now we are ready to begin.

The first order of business, since this is our first meeting of the

Committee, is to elect the Chairman. So I ask the Clerk now to

CLERK: Is there a nomination for Chairman?

AN HON. MEMBER: I would like to nominate the Member for Bonavista North

as Chair.

CLERK: All those in favour?

SOME HON. MEMBERS: Aye.

CLERK: Contrary?

Carried.

On motion, Harry Harding elected Chair of the Resource Committee, carried.

CHAIR: Thank you.

The next order of business now is to elect the Vice-Chair; so, nomination for

Vice-Chair?

AN HON. MEMBER: My understanding, Mr. Chair, is that we could refer to

people by their names in Committee, could we? I would like to nominate Kelvin

Parsons for the position of Vice-Chair.

CHAIR: Kelvin Parsons has been nominated as Vice-Chair.

All those in favour?

SOME HON. MEMBERS: Aye.

CHAIR: Against?

Motion carried.

On motion, Kelvin Parsons elected Vice-Chair of the Resource Committee,

carried.

CHAIR: The first thing, I think, I would like to welcome everyone here;

Minister Rideout, his departmental officials and the members of the committee.

First of all, I would like to ask the Committee members to introduce

themselves, their name and their district. We can begin up here, I guess.

MR. BAKER: I am Jim Baker, the Member for Labrador West.

MR. DALLEY: Derrick Dalley, the Member for The Isles of Notre Dame.

MS JONES: Yvonne Jones, the Member for Cartwright-L'Anse au Clair.

MS MICHAEL: Lorraine Michael, Signal Hill-Quidi Vidi.

MR. VERGE: Wade Verge, Lewisporte District.

MR. HUNTER: Ray Hunter, Member for Grand Falls-Windsor-Green Bay South.

CHAIR: Just for the record, we also have a staff member from the

Opposition party, so you can identify yourself.

MR. LOVELESS: My name is Elvis Loveless, I am with the Liberal Opposition

office.

CHAIR: I think we will probably follow the same procedure that we have in

previous years. After the Clerk calls the first subhead, the Minister will have

up to fifteen minutes to, first of all, introduce his officials, and then to

give a brief overview of his department's estimates for the year. Following

that, the critic will have up to fifteen minutes. Then we can rotate ten minutes

each, and you can speak as often as you wish to ask questions.

For the information of the officials, this is being recorded by Hansard, so

before you speak, if you are asked to speak by the minister, then you would have

to identify yourself.

We are ready to begin and I ask the Clerk now to call the first subhead.

CLERK: 1.1.01.

CHAIR: 1.1.01. Does that carry?

Minister Rideout.

MR. RIDEOUT: Thank you, Mr. Chairman.

I would like to begin by identifying the officials who are with me. On my

right is Alastair O'Rielly, my deputy minister, on my left is David Lewis,

Assistant Deputy Minister of Fisheries, and next to David is Danny Pond, our

Communications Specialist.

Mr. Chair, I want to thank you and the committee for your consideration of

our Estimates this evening. We are delighted to be back before the Resource

Committee and to defend our Estimates that are contained in the Budget for this

fiscal year, which came down a few days ago.

I will give a brief overview. I do not know if I will use all of the fifteen

minutes or not, but I will certainly give a brief overview of our spending plans

for the year. Then, once we have heard from the critic for the Official

Opposition, we can get into any questions that members may have.

The first thing I would like to say, Mr. Chairman, is that in the past three

years the departmental budget exceeded $10 million each year. These are the

three largest budgets approved for this Department of Fisheries and Aquaculture

since 1999. In 2007-2008 and 2008-2009 the budgets were $25 million and $28

million respectively. These amounts are approximately three times the 1999-2000

Budget, which was $8.8 million in that fiscal year.

In 2008-2009 and 2007-2008 our capital expenditures were approximately $5.5

million and $10.2 million respectively as compared with 2003-2004 when our

capital expenditures were $100,000. There has been a big jump.

In 2008-2009, Fisheries and Aquaculture development expenditures totalled

$15.7 million, which was double the 2003-2004 Budget when the development

expenditures totalled $6.5 million.

In each of the past years the departmental budget has been at least 150 per

cent greater than the 1999-2000 Budget.

In continuing its commitment to growing the Province's aquaculture

industry, the provincial government is investing an additional $4 million in the

Aquaculture Capital Equity Investment Program in Budget 2008 for a total

allocation of $13.5 million over two years.

In order to ensure appropriate stewardship of the Province's aquaculture

industry the provincial government is also creating a Division of Aquatic Animal

Health within the Department of Fisheries and Aquaculture. Funding of $98,000

annually was allocated to create a Director of Aquaculture Health position. That

position will be funded for half a year in this Budget, and, of course, for a

full year on a go forward basis from there.

A total of $4.3 million was allocated to build our new aquatic health

facility in St. Alban's in 2007. The facility is scheduled to be completed in

2009 and the revised cost has gone up to $4.7 million.

In the interest of developing a sustainable aquaculture industry the

provincial government will invest $500,000 in this Budget for the development of

a strategy to address the infrastructure requirements of the Province's fast

growing aquaculture industry. We need wharves and infrastructure of that type to

be able to facilitate the continued growth of the industry, so we will be doing

that assessment in this Budget year.

The provincial government will also continue with the implementation of its

fishing industry renewal strategy in this Budget with $5 million in allocations

for this year, of which $2 million is for the Fisheries Technology and New

Opportunities Program. The additional $3 million will be invested this year in

the strategy to implement a fish auction, a seafood marketing council and a

fishing industry safety council along with workforce adjustment. This is part of

a total allocation of $15 million to implement the multi-year strategy. The

provincial government's total renewal undertaking is estimated to be about

$140 million.

As well, Mr. Chairman, Budget 2008 allocates $330,000 for international trade

incentives or initiatives. To date, the provincial government has achieved great

success, in our view, in pursuing trade initiatives such as the atomist tariff

reduction quota, commonly known as the ATRQ, which allows Canadian shrimp

products to enter the European union at a reduced tariff.

Budget 2008 allocates $100,000 for sealing industry communications in the

national and international markets. This is the same level of investment that we

made in communications for this industry in the previous two budgets.

Budget 2008 will also see an additional $150,000 invested annually for the

implementation of the cod recovery strategy. This funding will support

independent research, Dr. Rowe's research primarily, and bring the total cod

recovery budget for the year to $450,000. This is the third year of spending a

total allocation of $1.95 million for a five-year period.

An additional $150,000 has been allocated to extend the terms of fifteen

seasonal inspection staff from six months to nine months annually. They had to

be laid off in previous years at the end of the six-month period but now they

will be able to work nine months. This will increase our investigative capacity

and it will allow us to engage in more accelerated training programs for our

inspectors. Seventy-two thousand, four hundred dollars has been allocated

annually for five years for the Aquatic Veterinary College Centre at the Centre

for Aquatic Health Sciences Sentinel Salmon Program.

The provincial government will invest $250,000 for the reconstruction of a

wharf that was burned at Williams Harbour in Labrador and a community stage that

burned in Nippers Harbour on the Baie Verte Peninsula. A $1 million commitment

has been made to replace these important fisheries infrastructures over the

period that it takes to replace them and we anticipate a $250,000 cash flow for

that purpose this year.

Mr. Chair, that is a brief overview of where we are, where we have come from

in the last three or four years as a department. We are certainly excited about

our budgetary allotments and the growth in our budget has been significant, like

I said in the neighbourhood of 150 per cent, and we believe that we are well on

the way to having Fisheries as a department be an important department with

important resources to be able to make continued contributions to the economy of

the Province, particularly the rural economy.

I am pleased to introduce the Estimates and hear from my colleagues.

Thank you.

CHAIR: Thank you, Sir.

Ms Jones.

MS JONES: Thank you, Mr. Chairman.

I certainly thank the minister for the presentation that he just gave us.

I know that he indicated where a lot of the spending figures are and where it

is going to go, so some of the questions I ask may be a little bit repetitive

because I did not get to follow all the way through in terms of where these were

in the Estimates.

First of all, I want to say that I am pleased with the amount of money that

has been budgeted for this department. I think it does reflect the dependency

that we have come to have on the industry and certainly the volatility that it

has faced over the last number of years and the need to be able to do things

differently from a departmental perspective.

I guess one of the questions I have starting off is: although last year it

was budgeted at a record level high in the Budget as we have seen, more so than

we have seen in any other year, there was still over $9 million that was not

spent within the department. I am just wondering, is there any particular reason

why there would have been that big of a shortfall? Normally we would see a

couple of million dollars' slippage, but in relation to the amount budgeted

this would reflect one-third of the entire budget of the department that was not

spent last year.

MR. RIDEOUT: Thank you, Mr. Chairman.

A lot of the programs that were funded last year were funded for the first

time for the first year, as my friend opposite would know. There have been some

growing pains in getting these programs up and running; however, members who

were members of the committee last year will recall that last year I made a

commitment that if there were unspent funds in our budget at the end of this

fiscal year we would use every means available to roll them over and top them up

so that we did not lose them.

As members know, if you do not spend funds by the end of the fiscal year, the

end of March, they magically disappear and you start off with a clean slate and

a new budget. That did not happen. We were able to hold on to the unspent funds,

and add them to any increases that we were able to get this year and hopefully

have a better program as a result of that.

There were some programs that were difficult to get up and running. For

example, the fish auction program, we ran into a lot of difficulty; we had to

consult widely with the industry, with the union. I think we have probably

reached a stage where we think we are able to proceed, at least perhaps with an

area of the Province that can be used as a pilot.

We engaged Sandy Roche, who would be familiar to members of the House from

his past experience with National Sea and FPI in particular, to give us some

advice on setting up a marketing council. Mr. Roche's report came in, I think,

around the end of the I don't know if it is actually dealt with yet, but I

saw it for the first time, certainly, close to the end of the fiscal year. We

had a certain amount of money in the budget to set up a marketing council; we

have carried it over into this budget to set up a marketing council. Whether we

will be successful in setting that council up or not at this stage, I do not

know. I hope we are, but I am not prepared to tell people that they have to do

certain things and try to force them to do it.

If the industry does not want to be willing participants, I doubt very much

if I and the government are going to be prepared to make it compulsory for them

to be part of it. I would hope they would. The marketing council in Alaska, for

example, was set up on a trial basis for three years, and at the end of the

three years the industry voted, having unwillingly allowed it to be set up, at

the end of the three years the industry voted to keep it in place permanently. I

think that would be the experience here, if we were to get there, but it is not

something I can predict. Those funds are included for this year.

The Workplace Safety Council, the same way, we are hoping to get it up and

running and off the ground this fiscal year. The Capital Equity Program for

aquaculture, we had proposals from Barry and Gray aquaculture in particular that

we were working through the system towards the end of the fiscal year. They did

not get dealt with in time to be paid out before March 31 so there has been a

carry-over there. I believe we got $7.2 million or $7.5 million of the Cooke

commitment of $10 million paid out, so there is still a carry-over from Cooke

remaining in the budget to be paid out this fiscal year. Suffice it to say, in a

long way around, hopefully not too windy but giving a reasonable explanation,

the carry-over, the funds have been protected and carried over to fund those

programs on a go-forward basis this year with additional funding that we have

been able to procure.

Is there anything to add to that, Alastair?

MR. O'RIELLY: Alastair O'Rielly, Deputy Minister.

As the minister points out, on the capital program for assistance to the

industry in aquaculture there were some shortfalls for the reasons he gave. In

addition to that, of course, we had expected to spend more money, hoped to spend

more money, on the aquaculture health facility this year. That has been delayed.

Also, as the minister pointed out, earlier there is some increase in the cost of

that for the coming year, so that is another factor that contributed to it.

Just a little elaboration on the programs, all of the fishing industry

renewal programs, as you may recall, were announced on April 12 of last year. We

were just at the beginning of the fishing season, we were at the beginning of

the fiscal year, so the whole business of developing the program criteria,

getting it in place, and doing the consultations with the industry, all carried

on again, as the minister noted, into the fall and into the winter. The

opportunity to flow these monies in the past fiscal year was just not there, so

that contributed to the shortfall in spending based on the Estimates.

CHAIR: Ms Jones.

MS JONES: Thank you, Mr. Chairman.

The aquaculture health centre, that is the facility for St. Alban's, is it,

the facility you are putting in St. Alban's?

MR. RIDEOUT: Yes.

MS JONES: Has that been started yet?

MR. RIDEOUT: The land has been acquired, the design has been approved.

Have tenders actually been called?

MR. O'RIELLY: No.

MR. RIDEOUT: Tenders have not actually been called.

MR. O'RIELLY: The planning and engineering work (inaudible).

MR. RIDEOUT: The planning and engineering work is completed. The site has

been selected. There were a couple of sites under consideration. There were some

issues, I think, in terms of water supply and that kind of thing, but that has

all been worked through and the site has been selected and it will be built in

St. Alban's. I believe we are about ready to go to tender, aren't we?

MR. O'RIELLY: Yes.

MR. RIDEOUT: The cost has gone up a bit, but we have some new money to

take care of the additional costs and we are anticipating construction will

begin this year with completion in 2009.

MS JONES: What contributed to the increase in cost? Was there a

redevelopment of the facility from its original concept, or was it just the

construction costs, inflation, or what?

MR. RIDEOUT: Primarily increased construction costs. There were some

water issues in a couple of the sites that we had identified as being our

preferable sites. That may have contributed some to the cost, but I think the

additional cost is somewhere in the area of $300,000 or $400,000. Primarily it

would be additional construction costs.

MS JONES: Okay.

Minister, I was glad to hear you say that you were not prepared to implement

a strategy or a council or something that the industry was not prepared to buy

into, because I think we saw the result of that kind of a concept with Raw

Material Sharing, and without the buy-in obviously it is not going to work, and

I think that was the experience there, but on the marketing strategy itself, or

the marketing council I should say, that your department is looking at, and I

think you know this, I feel very strongly that this is something that we should

do in the Province; however, my experience in the industry is very limited, as

you will know as well, in comparison to, I guess, people who are in the

processing industry or in the harvesting sector and so on. I am just wondering,

is there some opposition out there in the Province today to a marketing council,

and where would that opposition be coming from?

MR. RIDEOUT: Well, I am sure my friend will understand that I do not want

to make a comment. This Committee proceeding is open to the public, and what I

say will be recorded and theoretically, I suppose, could be reported if anybody

is covering the Committee, but let me say this: There is support in the industry

for the establishment of a marketing council. Is there majority support? As of

this moment I believe the truthful answer would be no, there is not.

There are those in the industry who feel that the industry has a lot of

other, in their view, more pressing problems, like the structure of the industry

and so on, that they believe ought to be addressed before you address the

marketing issue, and that they believe will go a long way to solving the overall

ills of the industry more than a marketing council would.

It has been our experience, by looking at the Norwegian model, the Alaskan

model, and there was another model we looked at

OFFICIAL: In Oregon.

MR. RIDEOUT: in Oregon, yes, which is smaller where marketing

councils funded in partnership by the industry and governments have been very,

very successful in promoting the generic fishing industries, and growing the

industries, and the value of the industry in their respective jurisdictions.

We are convinced that can happen in Newfoundland and Labrador. We will use

whatever persuasive skills the Lord has given us to try to convince the industry

of that. If we can get a sense that there is not unanimity, we are not

looking for unanimity - but if I can get a sense that a majority is willing to

give it a shot, give it a try, and I am prepared to go, say, with a three-year

pilot, for example, and then have the industry have a right to shut it down,

kill it, at the end of three years if they have not been convinced and I

believe that is the model that was used in, I am not sure if it was Norway or

Alaska, or both -

OFFICIAL: Alaska.

MR. RIDEOUT: - in Alaska. I am prepared to give them a killer pill at the

end of the process, that no, this has not worked, it has not done anything for

us, it has cost us money but it has not returned anything, but I would like them

to try and I am prepared to point out what we believe are the benefits for the

industry, for them as an industry, and for the Province. However, if there is

vigorous and huge opposition to it then it cannot work, and I am not sure than

legislating I could legislate it. We could bring legislation to the House,

and I am sure the House would pass it, but we had the experience with RMS when

another sector of the industry did not buy in, and it is my experience that it

is much easier you have a lesser of a hill to climb - if you can get buy-in

on making those things work, if people put their shoulder to the wheel and

dedicate themselves to make it work.

So I am optimistic, I say to my friend, but we are not out of the woods yet

in terms of having buy-in and a successful launch, but we are working on it.

MS JONES: The other examples you referred to were offshore examples. What

about in Canada, like in Atlantic Canada, do they have similar concepts in any

of the other Atlantic Provinces or Quebec?

MR. RIDEOUT: No, there is nothing similar in terms of fish anywhere else

in Canada, to my knowledge. The only models around are the three that I have

mentioned. I think there are some agriculture models around the country where

they have agriculture marketing councils, and we have certainly looked at those,

but from a fish perspective there isn't one in any jurisdiction in Canada.

MS JONES: Okay.

I have a couple of questions around the fish auction piece. Where are you

guys with that right now? First of all, is there receptiveness by the industry

to look at that kind of practice? What kind of timeline would you be looking at,

to implement a pilot project around the auctioning of it?

MR. RIDEOUT: Well, first of all, we would have to have some understanding

of perhaps an area of the Province where we could do it, and you would want an

area where there is a mixed fishery of offshore, inshore, a small number of

landing ports in the first instance. 3Ps might be an example that would come to

mind, where you have a mixed fishery. The Baie Verte Peninsula, I suppose, could

be said to be another one. Labrador could be another one. You would want a

fairly defined geographic area with a defined number of ports.

One of the problems with an auction system that we have in our jurisdiction

that you do not find in many other jurisdictions, is the number of landing ports

that we have. It is fairly easy to control an auction system in some parts of

Belgium where they land in only three or four ports, or half a dozen ports. It

is fairly easy to do that. In our situation, where we have several hundred,

depending on the species you are talking about, it is more diverse, but there

are ways to do it. You can have electronic hailing at sea, and all of that kind

of thing, and that is what we are working on.

I think more importantly, though, we are trying to have again a buy-in. There

are naysayers who think this cannot work, will not work, and it is a waste of

our time trying to make it work. We are prepared to dedicate some significant

public dollars to try it. I think the union is prepared to buy in, from

everything I see, and we are optimistic that the processors' associations will

agree to participate as well. That is where it is.

Alastair, is there anything that you could add that I have not added?

MR. O'RIELLY: Beyond the minister's comments, we have worked closely

with an adjunctive union, Fish Harvesters' Resource Centres, and they brought

forward a proposal last year which they had intended to proceed with, but for a

variety of operational and logistical reasons did not activate that initiative

so they have revisited it. As we speak, they are looking at a revision to that

proposal and some further innovation to it. So we are currently considering that

and hopefully have an opportunity to test drive it this year.

MS JONES: How much money have you budgeted for that fish auction piece?

How much money is in the Budget for that?

MR. RIDEOUT: Half a million a year for three years, so $1.5 million.

MS JONES: Okay.

CHAIR: Thanks very much.

We will give Ms Michael an opportunity now for up to ten minutes.

MS MICHAEL: Thank you very much, Mr. Chair.

I do have some general questions first, but I would like to come back to

something that you outlined, Mr. Rideout. You talked about a workplace safety

council, something that was there but no money has been spent on it. Could you

talk a bit about that, and where is that located in the Budget? I am just

curious.

MR. RIDEOUT: One of my officials can find the appropriate head and I will

talk about it while they are doing that.

It is in the Fishing Industry Renewal Strategy on page 127. It is $250,000

and it is included in head 1.4.01.10, Grants and Subsidies, that $1 million line

there.

MS MICHAEL: Right.

MR. RIDEOUT: There is $250,000 in that dedicated to the setting up of the

safety council, and the balance is dedicated to workplace adjustment. So, that

is where it is.

In terms of your broader question, Ms Michael, we have had extensive

discussions with the union, obviously. It is the union members who

practically every person that is on a vessel is well, they are all union

members, skippers and all. That is where you will find a lot of the safety

issues that we are hoping to address. Of course, there are issues in plants as

well.

We are trying to reach an understanding at how we could pilot this, because

it is a pilot program that we are planning to set up, funded for a three-year

period again. Hopefully, by that time, we will have seen whether it is a program

that we would like to carry on.

Alastair or David, either one of you, whichever is the most familiar. If you

want to put some meat around that, please, go ahead.

MR. O'RIELLY: This initiative is one that is a new undertaking for our

department in terms of getting involved in health and safety in the industry,

and it came about through the industry renewal process, the impetus for it. The

structure that is contemplated, as the minister points out, is a council that

would deal with both the processing and harvesting sector in terms of safety

issues.

The circumstances, the factors that influence safety in each sector are quite

different. The drivers are different, the structure is different, and the

regulatory environment is different. In the case of the processing sector, I

would think that it is fair to say that motivation is cost issues, mostly. The

fees are very high. The workers' compensation premium costs are high. The

claim rate is high. So, there is an intently desire to have some sort of a

collaborative undertaking with the workforce to try and deal with those issues

and create a safer work environment.

On the harvesting side, we are all aware it is a very hazardous environment

anyway and it is a very complicated piece of business. One of the complications

is the jurisdictional challenge that exits in the marine environment as it

relates to federal-provincial jurisdictional issues. You have several major

entities in the federal department between Fisheries and Oceans, Coast Guard,

Transport Canada and there are others, Labour Canada and so on. Provincially

then, there are also issues with the Workers' Compensation Commission itself,

the department responsible for Occupational Health and Safety, Labour and

Environment, and the Professional Fish Harvesters Certification Board.

So, part of the mandate or the challenge for the council is to take all these

disparate interests and try to forge among them some sort of clarity as to

responsibilities and joint undertakings and find ways to get past what appears

to be one of the contributing factors to the poor safety record of the industry,

because one of the things that you find now when you look at all these issues

and speak to the respective jurisdictional entities, everybody can explain their

piece and what they did and how the problem may be with one of the others. So

the council will hopefully be able to forge an alliance between these disparate

interests, from a regulatory and jurisdictional point of view, and create a

better environment.

Again, the impetus for it is really with the industry and there is a high

level of receptivity now, much more than there was in the past, to try and come

to ground and deal with some of those real serious, safety issues.

MS MICHAEL: You said the word once, so I am assuming that it also covers

health, not just safety, so that issues like the plant issues around, for

example, crab asthma, would be issues that would be part of this.

MR. RIDEOUT: That is correct.

MS MICHAEL: Great.

I do not want to ask questions about the marketing council, I just want to

say that I really am encouraged by the commitment to really putting real money

into that and really trying to get it to work because I think that kind of

initiative is really important.

Another general question I have has to do with in two or three places,

for example, in head 1.2.02 and then again in 2.2.01, under both, there is an

inclusion of cost relating to aquaculture. I am wondering why, because I think

it is important to see the expenditures around aquaculture as separate from the

rest of the fisheries industry. So I am wondering why, in those two heads, the

expenditure around aquaculture is not included under aquaculture rather than

being included there?

MR. RIDEOUT: I am not an accountant but I find it strange, in some ways,

the way budgets are constructed. To me there is a current account and there is a

capital account but for the people, who are the professionals in this, they

split it out in capital and current, and there is an aquaculture piece in all of

that.

If you look on page 125 in Administrative Support, for example, Property,

Furnishings and Equipment of $1.485 million, almost $1.5 million. That is where

funds are located for the construction of the St. Alban's facility, for the

fish health lab and equipment, and for the stage in Nippers Harbour and the

wharf in Williams Harbour. All of that is listed in there. Some are aquaculture

related, some are fisheries development related, some are fisheries

infrastructure related, but that is how I do not want to use the word bean

counters, but that is how the accountants end up that is why we have to have

notes to tell us what all of this is and what it means.

The other head that my friend mentioned was?

MS MICHAEL: 2.2.01.

MR. RIDEOUT: 2.2.01, Administrative Support. What head?

MS MICHAEL: Seafood Marketing and Support Services.

MR. RIDEOUT: Yes, marketing for fisheries and aquaculture. Again, it is a

combination of all of those events and they lump it under one general head of

Seafood Marketing and Support Services. That is where we would be funding the

Boston Seafood Show and if we are going to I do not know, where do we do

marketing and aquaculture?

OFFICIAL: In Boston and in Brussels.

MR. RIDEOUT: Boston and Brussels. In those areas we are doing a

combination. Some are related to aquaculture and some are related to other

species.

MS MICHAEL: That one makes sense to me, especially because under

aquaculture there are both current and capital there. It does not make sense to

me that capital construction around aquaculture is over here. The other one, it

is so mixed together that I can see it. I accept that perhaps it is an

accountant's way of doing it, but it just seems to me that one should be over

there. I accept the answer.

Under head 2.1.01, Administration and Support Services and this is more

just for my own information, but it is important information I have an idea

of some, but I would like to have a better idea of government-owned fisheries

facilities. What would be government-owned fisheries facilities in the Province?

MR. RIDEOUT: I will have that in a second here now. Which tab is it?

OFFICIAL: (Inaudible).

MR. RIDEOUT: Tab 10.

Of course, you know, previous administrations, going back a long time, have

been in a disposition mode, and a lot of our marine service centres and stages

and all that kind of thing were either privatized or turned over to fisheries

cooperatives or fisheries harbour authorities and that kind of thing. Presently

there are a number of fisheries and aquaculture facilities how many?

OFFICIAL: About 120.

MR. RIDEOUT: About 120 in various communities around the Province. I can

give the member some examples; like in Black Island in Nain there is a community

stage right?

OFFICIAL: Yes.

MR. RIDEOUT: In Makkovik there is a processing facility which is under

lease to Torngat Fisheries, I guess. In Williams Harbour there is a fish plant

well that one burned down, it is not there anymore and the wharf, the

same thing happened to that, but that is going to be rebuilt. There is a fish

plant in Nain. In Bide Arm we own some land. That is in White Bay in the

Straits. In Englee there is land owned by the department. There is a Baited

Trawl Holding Unit that we own in LaPoile. In Margaree there is a Baited Trawl

Unit. In Ramea we own Baited Trawl units; in St. Anthony Bight a community

stage; St. Julien's, a fish plant; Three Rock Cove, a community stage; and

Trout River we own a slipway-haulway. Those are the kinds of things that might

give you some idea of what is left.

MS MICHAEL: Great. It does, thank you very much. I think my time is up

for the moment.

CHAIR: Thanks very much.

Now let us give the opportunity to the government members, if they have any

questions at this time that you want to ask?

None.

We go back to Ms Jones again for ten minutes.

MS JONES: Minister, while you are still under that heading, 2.1.01, the

revenue that you collect there, last year you projected you were going to take

in $44,500, you took in $6,000. What would you be collecting money on there? Do

they pay a lease or rental fee on any of these units?

MR. RIDEOUT: Some do.

I am going to ask Mr. Lewis to identify himself and provide the answer to

that question, please.

MR. LEWIS: There are a number of facilities that we are still leasing. I

believe there are about three marine service centres left that have not been

sold yet. They are being divested through lease purchase arrangements, so there

are lease fees to be collected while that lease purchase contract is being

fulfilled. The fees vary depending on the facility. There are still a number of

facilities where we do collect miscellaneous revenues such as lease fees, mainly

three marine service centres and the plants in Labrador. The fee there is $1.00

but there are a number of facilities where there are some revenues.

MS JONES: I am just wondering why, because obviously you had projected

$44,500 based on, I am assuming, agreements that would have been signed with

these lessees and you only collected $6,000. Is that because of delinquent

accounts, or a change in the contract throughout the year? What would that

account for?

MR. RIDEOUT: The real answer is mostly delinquent accounts. There are a

couple of those marine service centres that have been pretty marginal, I guess,

to be kind to - the operators thought there was a good business there but they

have been struggling. We have tried to be fair to them. Rather than going in,

foreclosing and taking it back, we have tried to give them every opportunity. I

can think about a couple of fish plants that were leased in the Province that we

do not have any, perhaps, lease payments on even though there are lease

arrangements in place. We are not going to go into a community where there is a

leased fish plant halfway through the fishing season and say, well, you haven't

paid your rent so we are going to close you down.

As the member knows, having been there herself, they are precarious

situations. We budget what we think we are going to get but we very seldom, I

believe, meet the target of what our expectations are. Then, if there is a

chance at all we will go and try to renegotiate the lease, extend the pay period

out over a longer period of time to give the operators an opportunity. They are

providing a service to fishermen and that is the primary function, for us, from

our perspective. Their primary function, of course, is to make a dollar.

MS JONES: Under the same head, Grants and Subsidies, the $300,000: what

kind of grant or subsidy would that be?

MR. RIDEOUT: That is the infrastructure program, the small grant program

that we have. A lot of it we used to top up make-work programs, for example, you

know the Community Enhancement Program. If somebody has a project to do a

slipway and they do not have enough money for materials, we will give them a

grant of perhaps $3,000 or $5,000 in the odd case. That is what the program is.

We have spent that amount of money. I think we increased it last year from

$200,000 to $300,000. It is still the same this year. We use it to top up a bit

of repair work on wharfs and slipways and breakwaters. We cannot do big work

with it obviously but we can help leverage funds through make-work programs. It

used to be through JCPs, and I suppose there are still some of those around.

That is the kind of thing that we have been doing with it over the years.

I can give you some examples if you want me to.

MS JONES: Like the slipway in Mary's Harbour, right?

MR. RIDEOUT: In Cartwright-L'Anse au Clair we spent $11,900 last year.

Capstan Island received $900, L'Anse-au-Loup received $3,000, L'Anse au

Clair received $3,000, Williams Harbour, $5,000, and you have about 4 per cent

of the total allocation for the Province. That is the kind of thing we do.

MS JONES: It is a good program and I guess I raised it because I want an

opportunity to put in a pitch for that program. I know that there is always a

good take up on it and I also know that there is always a wait list of others

that are waiting to get some work done. If at any time throughout your

department you find a little bit of slippage throughout the year I would

certainly encourage trying to top up the program whenever you can.

I know from personal experience that it might be small amounts of money but

they have gone a long way to try and enhance the bit of infrastructure that is

out there in a lot of the small communities around the Province, because they

have not had anywhere else to look. In lots of cases the fishermen are prepared

to give their own time and their own labour but they do not always have access

to the materials. I have always found it to be a very good program and I am glad

that you have continued to increase it this year by another $100,000.

Under the Fish Processing Licensing Board: can you tell me this year if there

were any new licenses approved for the processing sector by that board?

MR. RIDEOUT: It would depend on what you are talking about. There were no

new ground fish licenses approved, no new shrimp licenses, no new crab licenses.

There were very likely secondary processing applications approved, but I do not

think there have been any -

MR. LEWIS: A couple of retail.

MR. RIDEOUT: A couple of retail licenses. Do you have any specifics?

MR. LEWIS: I should have brought that with me and I just forgot it. I

believe there were about eight or ten applications to the licensing board last

year, a scattered one for species additions. I can recall that there was a

scallop species added to the license in St. Anthony. There were a number of

those. There were no new plants. There were no licenses for a new facility or

anything, but on occasion there were additional species where the board felt

that it was appropriate to make a positive recommendation to the minister and

the minister approved.

All of that information is available on the departmental Web site. In fact, all

the history since the licensing board was put in place, all of the applications

and what happened to each application is available publicly on the site.

MR. RIDEOUT: Mr. Chairman, this may add somewhat to the question. In 2006

there were 119 primary processing facilities in the Province and in 2007 there

were 113, so there were six less primary processing facilities.

In secondary processing in 2006 there were five and in 2007 there were ten.

There were obviously five new secondary processing licenses issued from one year

to the other. We would obviously pretty much issue a secondary processing

license to anybody who has an idea for value-added secondary processing.

In retail, it went from twelve in 2006 to fifteen in 2007, so there were

three new retail operations that were licensed.

Aquaculture went from four to five. There was one new one.

Overall for the number of licensed facilities in the Province from 2006 to

2007, there was a net increase of three licenses in total, but none in the areas

where there is over capacity in primary processing, shrimp and crab, that kind

of stuff.

MS JONES: On the fish price setting panel that is set-up to work with the

industry - I know we hit a bit of a hiccup this year on crab prices but overall

- you have been around the business for a long time, what is your overall

feeling on how that panel works and is it an effective means by which we need to

look at price-setting on a go-forward basis?

MR. RIDEOUT: Well, you know, I suppose it depends which chair you are

sitting in, if you answer that question. If you win the argument and the panel

rules in your favour, the process is a wonderful process. The other side that

lost is not so impressed. On balance, though, if you look at the decisions of

the panel over a two or three-year period, I think you will find that it is

pretty balanced. There is pretty much a balance in its decision-making. Is there

a better way? Well, you know, I would like nothing better than there be no

reason to engage the pricing panel.

We have a collective bargaining process by law in this Province for fish

harvesters and processors, one of the only jurisdictions in Canada to have it,

as far as I know. So, if processors and harvesters can bargain collectively and

reach an agreement on price, God love them. That would be my preference.

However, there are many times in the fishing industry when that just does not

happen, for a whole range of reasons. A fishery, as such, is not like mineral.

If you are not mining it, it stays in the ground, it is there until you start to

mine it again. It is not like cows. You can keep them on the pasture; they still

have value. If you do not catch your crab between the 1 st or 2 nd

of April and the end of June, then soft shell has set in, market conditions

change and price deteriorates. There is a finite period of time to do it.

It is like that with a lot of other species. If you have a tie-up in one of

those species fisheries, like crab - and we have had it in the past, when we had

a tie-up with price wars raging until some time well into June. Harvesters lose,

processors lose and plant workers lose. You have gotten yourself out of the

marketplace and you have to now build back confidence again that you can be a

dependent supplier and all that.

I do not know. There are times I say to myself, having been around as

minister for a while, I wish I had the wisdom of Solomon, but we do not. We can

only try what we have. FOS can work and it does work. The processing side, now,

is taking the whole issue to court and if a court were to throw it all out, I do

not know where we would land. I suspect we would land in a lot of trouble.

It is not perfect by any means but it works. Whether the solution is always

the best solution, I am sure it isn't, but at the end of the day there is a

price. I have said many, many times, in my time in this department, at the end

of the day we cannot force harvesters to fish, nor can we force processors to

buy and process, but we can force a price. What you do after the price is

forced, I guess, collectively, is going to have to depend upon you as an

individual. Fishermen cannot go out and organize not to fish; that is illegal.

Processors cannot organize not to buy; that is illegal, but if you cannot fish

and pay your bills, well, you cannot fish. If you cannot process and pay your

bills, well, you cannot buy and process. The marketplace kicks in at the end of

the day.

MS JONES: Maybe, Minister, while you are on that topic, you could give us

an update as well on what is happening with the crab prices, and if we can see

some resolution soon on that, or some agreement.

MR. RIDEOUT: I think the present situation will be a prime example of

what I just said.

MS JONES: That is right.

MR. RIDEOUT: I understand that the board has, in fact, made a ruling. The

union made an application to the board for reconsideration under

section 19 to

stabilize the price. The board has, as I understand it, ruled that the price of

crab will be $1.50 a pound on a go-forward basis without any change, no matter

what happens in the marketplace from here until the rest of the season, I guess.

OFFICIAL: It can go up. It is a minimum.

MR. RIDEOUT: It is a minimum price. It can go up but it cannot go down.

When I met with the fishermen and the processors last Thursday night for

several hours, certainly that was an area where I think the harvesters indicated

if they could get some guarantee - they know there are fluctuations - but if

they could get some guarantee that the price would not go below where it is now,

and it was $1.50 at that point, then they would have some confidence that they

could continue to operate.

The board has made that ruling. I understand it has been released, and that

is the situation. Now, is everybody happy with that? I am sure they are not.

MS JONES: We will know tomorrow morning.

MR. RIDEOUT: We will know tomorrow morning.

CHAIR: Ms Michael.

MS MICHAEL: Thank you very much, Mr. Chair.

I am going to do the boring thing now and do some line-by-line stuff, the

first being head 1.2.01., and it is Salaries. I know I could go to the detail

book with the salaries and look all of this up, but I am afraid I do not have

time to do that. There is quite a difference between what is estimated for this

budget and what was the revised in 2007-2008.

MR. RIDEOUT: Yes, it is.

In 2008-2009, which is the present fiscal year we are into, are you looking

at line $822,800?

MS MICHAEL: Yes, I am.

MR. RIDEOUT: I want to make sure we are on the same line.

MS MICHAEL: Yes, we are on the same line, 1.2.01., Salaries.

MR. RIDEOUT: Okay.

Our estimates are up in this area due to additional funding for a new ADM in

Policy and Planning, so that is an additional $96,000 in that particular end of

the department that we did not have before. There is a miscellaneous forecast

adjustment of $8,600 as well as removal for funding for policy and planning

program specialists of $59,500 and that has been transferred from Aquaculture so

there should be some reduction on the Aquaculture side to reflect -

OFFICIAL: (Inaudible).

MR. RIDEOUT: Okay, but in that particular case that would be transferred

over here.

I do not know if it accounts for all of the adjustment, but I think it is a

significant portion.

MS MICHAEL: It is pretty close. I am adding up while you are saying that.

It is pretty close from what you said. Is that an additional ADM?

MR. RIDEOUT: Yes, we just appointed - I believe there was an announcement

a couple or three months ago now - Brian Delaney had been appointed. Brian had

been a director prior to that. We had done a realignment of responsibilities in

the department and appointed Brian Delaney to a new ADM position and that

reflects the salary for that new position.

MS MICHAEL: Thank you.

I think this one is obvious but I want to ask it anyway. Under 1.2.02., I am

assuming that the jump up to the $1,485,000 is because of the fisheries

aquaculture facility. Is that correct?

MR. RIDEOUT: Yes, that is correct. There is $600,000 in there. There is a

St. Alban's construction, there is a fish health lab and equipment, and then

there is Nippers Harbour and Williams Harbour.

MS MICHAEL: Thank you.

If we could turn, then, to the next page, to 126, head 1.3.02.10. I may ask

this all the way through, or you could give me a general answer on this. In so

many areas we have Grants and Subsidies, so maybe you could give a general

answer on what are the grants and subsidies rather than going through every

single head and subdivision.

MR. RIDEOUT: This particular one is by and large for the cod recovery,

and $450,000, I believe, is dedicated to that.

OFFICIAL: It is not all grants, but mostly grants.

MR. RIDEOUT: Mostly grants.

We put it in Grants and Subsidies because I guess Dr. Rose and his where

he operates out of MUN, we would be paying this out as a grant to whatever part

of MUN he does his work through. I don't know whether it is the Marine

Institute or what. Dave, you can comment on it in a second, but we would be

paying out in the form of a grant for Dr. Rose to do his work in terms of

surveys and so on that he does as part of a cod recovery strategy.

Do you want to add to that, or is that it?

MR. LEWIS: No, you already covered everything.

MS MICHAEL: Okay.

Well, then, let's come over to the next head, 1.4.01., and I will ask the

same thing about Grants and Subsidies there.

MR. RIDEOUT: That is the Fishing Industry Safety Council. We have

$250,000 budgeted for that, and there is $750,000 budgeted for the workforce

adjustment.

MS MICHAEL: Okay, thank you.

Turning the page, I have asked that one. It just takes me a minute to go

through this.

MR. RIDEOUT: That is okay.

MS MICHAEL: Subhead 2.2.03., on page 129, Purchased Services, that is

section 06., under that head. The budget was quite low and the revision was to

$97,000 and it is back down, so what happened? What was it that had to be

purchased that had not been anticipated?

MR. RIDEOUT: This was the inspector training program that we contracted

out to CONA to do for our inspectors. They develop a plan to train our people in

modules, I believe, wasn't it, Dave? Each module, we pay so many thousand

dollars for so many inspectors. These are the people that I highlighted in my

opening remarks as the people who were going to increase their employment from

six months a year to nine months a year.

MS MICHAEL: To nine, yes.

MR. RIDEOUT: We were able to find some additional funding to transfer

into that program and take advantage of the training that CONA was able to

develop for us.

MS MICHAEL: Great. Thank you.

Under head 2.2.04., and again it is 06., Purchased Services, a big difference

there between what had been budgeted in 2007-2008 and the revised which was much

lower. Now, for 2008-2009, it is back up again to the $1,273,600.

MR. RIDEOUT: This is an example of the carry-over, where we talked about

programs being funded under Fishing Industry Renewal, particularly in science,

technology, and the new Opportunities Program, and in the fisheries development

program, where we made a commitment that if we were not able to spend the

funding - because it did not get announced until April last year and fishermen,

in particular, are fishing until late in the fall, and by the time they wrap

their mind around this new program and what does it mean for me, then a lot of

time, a lot of opportunity, has passed. So we did not get to spend a lot last

year but we were able to keep the money and roll it over into this year's

budget rather than lose it, and hopefully we will be more successful at

expending more of it this year than we were last year.

MS MICHAEL: Would that be the same for the Grants and Subsidies? It looks

like it is a direct rollover for the same reason.

MR. RIDEOUT: Yes.

MS MICHAEL: Can I ask what plan you have to try to push this forward so

that more of the money will get spent?

MR. RIDEOUT: Well, we are trying to be proactive about the program, and I

think the fact that people in the industry know now that the program is

available and have had some time to consider it and work with it, we are

optimistic that we will find more of a take-up this year.

On the industry side, I have made a number of announcements just recently

about some support for Allen's over in the Bay of Islands who have introduced

new mussel harvesting equipment. There have been some announcements I have made

recently, I think, regarding marketing support for aquaculture. Badger Bay

Mussel is one. Mussels out in Green Bay, that is one that comes to mind.

MR. POND: (Inaudible) over $600,000.

MR. RIDEOUT: There is over $600,000, Danny was saying, that has just

recently gone through the approval process, so the program is there. We think

there will be a better take-up this year than there was last year, but we have

sent it out to processing organizations, to individual processors, to fishermen

that we know of who might be putting new technology on fishing vessels. This is

something that can fit into this program.

We just announced a couple of pilot projects up in Southern Labrador for

hook-and-line turbot - I think they were forty-odd thousand dollars apiece - to

a couple of individual fishermen who reacted to our proposal call. That is the

kind of thing we are trying to promote.

Alastair, can you add anything?

MR. O'RIELLY: I think you have covered most of it, Minister, but one of

the other things that has slowed us down a bit, I think, is that this initiative

is part of the Fishing Industry Renewal exercise. There were a number of

elements to it. The key element for the harvesting side was the federal policy

for licence acquisition and for consolidation and for the construction of new

vessels. There was a relaxation of the vessel replacement rules so that people

could acquire larger size vessels.

All of these rules took quite a long while to emplace, and the vessel

replacement rules were only announced, I am going to say, maybe two months ago,

and the financing issues are still not quite yet finalized in terms of the terms

and conditions under which harvesters are going to be able to access commercial

financing and so on.

Those are really huge factors for harvesters, because they do not know quite

what they are going to do yet. Are they going to keep their vessels? Are they

going to diversify? Are they going to acquire larger vessels? Are they going to

combine their licences and so on? They really need to know what the rules of the

road are, which hopefully will become much clearer in the next month or so -

that is our expectation - and that should also help people to be better

positioned to decide on what kind of investments they want to make on

diversification.

MS MICHAEL: I am glad to see that the money was carried over and would

hope that this kind of expenditure is going to stay around for a while, because

I think again this is an area where we need to keep putting money in, so I am

glad to see that.

Thank you, Mr. Chair.

CHAIR: Thanks.

Does any government member want to ask a question?

Ms Jones.

MS JONES: Thank you.

Under that same head, Minister, 2.2.04., Grants and Subsidies, does that also

apply to fishing vessels that might want to put those water coolant tanks or

units in their vessels to improve the quality of the product that they are

landing? Would they also be eligible under that program to apply?

MR. RIDEOUT: Go ahead, Alastair.

MR. O'RIELLY: That is an eligible area of expenditure. What we are

trying to achieve, though, is, how do we fund the adoption or adaptation of

technology and the introduction of it?

The key point here is that we are not just trying to provide a subsidy, so if

there is a good piece of technology such as holding systems on board vessels,

the idea would be to fund some of those so you demonstrate that would work well

as opposed to having a program where you just pay a portion of the cost.

In terms of eligibility, that is

MS JONES: How does the grant program work? Do you look at a particular

initiative and fund a portion or a contribution towards it, or are you looking

at funding in whole these particular ventures? Does it depend upon the proposal?

I am not sure what the criteria are.

MR. O'RIELLY: The guidelines we are working from is, the maximum

funding for any particular initiative is $100,000 which can be no more than 60

per cent of the total cost.

MS JONES: Okay.

MR. O'RIELLY: So we are looking for other participation by the

applicant, or maybe other sources of funding as well, in order to achieve that.

MS JONES: I asked that because I actually had a call on it a few days ago

and I was not sure how it worked.

A couple of other pieces now, working from the back going front, I guess this

time. Under

section 2.2.02., you guys collected revenue of $1 million last year.

You projected to collect $1.7 million. I am assuming now this is in licence fees

from processors. Why would it be down so much? Why would you have collected

$700,000 less from licence fees?

MR. RIDEOUT: Dave?

MR. LEWIS: The licence fees our licensing year is April 1 to March

31. So invoices go out to processors for the coming licensing year, usually

around early March or so, and the fees are then they come in as people renew

their licences. Licences have expired on March 31 but sometimes processors do

not start processing until late April, May, June. Some pay their fees before the

end of March for the coming year if they are already planning to be in

production in early April. Others wait, particularly if cash is a bit tight,

they wait until around the time that they are going to start processing and then

they pay their fees.

So, it is difficult to predict how the cash flow is going to come in because

it straddles the two fiscal years. We had predicted that the proportion that

would come in would give us revenues of $1.7 million by the end of the old

fiscal year, but as it turned out, significantly more of the collections

happened after April 1. Therefore, the revenues that we missed last fiscal year,

we will pick up in the current fiscal year. They have not been built in to show

an additional collection in the current fiscal year because we are assuming the

pattern that happened this year will happen again next year. So the total

revenues for the year are around $1.7 million, but how they get collected across

the two fiscal years is the issue.

MS JONES: Okay.

MR. RIDEOUT: If I could just add to that. One instance that comes to

mind, for example I know one particular plant that I am familiar with did

not operate at all last year, and they may operate this year. Now, if they do

not operate for two consecutive years, then there is another issue, but that

particular plant did not operate last year. A lot of it was due to ice

conditions on the Northeast Coast. They are located on an island. By the time

the ice conditions improved so that they could access raw material and resource

and so on like that, it was, in their view, too late in the year, and it was

nearing the end of the crab season, in this case. So, there are circumstances

that lead to that result.

MS JONES: Under

section 1.4.01. Coordination and Support Services. You

said that in the grants and subsidies portion there, $750,000 of that is being

used for workforce adjustment program. Is that like the make-work program that

is being provided to displaced plant workers, or how does that work?

MR. RIDEOUT: This is the enhanced program in places where permanent

closures take place. Like, I think we have expended funds out of that program in

Trouty, Port aux Basques, I guess, and Fortune, and I believe Marystown, too, in

a previous fiscal year.

So, in places where there has been an announcement or I think we have kind of

stretched an announcement to mean that the operator has indicated that while

they may not have informed us formally and in writing, they have used the

broadcast or they have somehow informed their employees that they do not intend

to operate and this is the end of it. If we confirm that with them, then we have

this adjustment program to go in and do the suite of programs, part of which is

a make-work program at higher than the minimum wage; I believe it is $14.75, it

was.

We have other programs though in terms of training, doing an inventory of

skill adjustments and where people see themselves in the overall scheme of that

particular plant having announced that they are not going to operate again. So

that is what that money is for, and what it has been used for in the past.

MS JONES: Those three communities that you referenced, will they be able

to take up this program again this year? Is it a one-time thing?

MR. RIDEOUT: No. It is a one-time rotation, and when the now the

program takes about a year to run itself through the cycle, but once they run

through the cycle then this program is finished. So, that is the answer to your

question. It is a one cycle.

MS JONES: But you are projecting to spend -

MR. RIDEOUT: Of course, that is delivered - I should add, that is

delivered jointly. The program is actually delivered by Municipal Affairs. We

make a contribution to it because it is really a fisheries - it is dedicated to

people attached to the fishery.

MS JONES: Minister, has this program been made available in emergency

cases as well, where there has not been a complete shutdown of a plant but due

to circumstances they may have had interruptions in processing? I know last year

we had problems with ice conditions with a number of processing facilities. Is

this the pot of money that would have been used for intervention in the

workplace then?

MR. RIDEOUT: No, the only time I can think of well, of course, the

program has only been there since I have been there. So, I guess, what I am

about to say applies to the program since it has been in existence. The only

time where the program has been used to assist in a situation where there has

not been an announced permanent closure, was Marystown. Marystown had not been

operational for just about a year, I guess.

OFFICIAL: Over a year.

MR. RIDEOUT: Over a year. We did not know when Marystown would operate or

if in fact - we felt it would but we could not be sure when that might be. So

there was representation by the FFAW in particular that led us to conclude -

even though it was not strictly within the confines of the program, it led us to

conclude that perhaps we should treat Marystown, because there was not an

obvious solution to getting Marystown up and running, we should treat it as if

it were permanently closed for the purpose of this program and offer the program

to Marystown, and we did, but it is not a program that we would use to intercede

for a week or two or three because of ice conditions or things of that nature,

no.

MS JONES: Did you have more questions?

MS MICHAEL: Yes, if I may.

CHAIR: Ms Michael.

MS MICHAEL: Just a couple more of the Grants and Subsidies, that is all.

2.2.01, the Grants and Subsidies there: What does that go towards? Seafood

Marketing or did I ask about that one already? That one I did, I am sorry.

2.2.04.

MR. RIDEOUT: 2.2.04.

MS JONES: No, I did ask those ones. That is fine. I am finished then, Mr.

Chair. Sorry.

CHAIR: Ms Jones.

MS JONES: Yes, I just have a couple more questions, not particularly

pertaining to numbers.

One issue I wanted to ask you about is the issue around - that is being

launched, I guess, by a number of fisherpeople in the Province who would have

sold back their licenses back in 2004, between 2001, 2003 and 2004, I think was

the years. Some of them were subject to tax reductions; others were not subject

to tax reductions. A number of people that fall within a group where they had to

pay certain taxes within a year after they sold back their licence feel they

certainly were not treated appropriately by the federal government and by the

tax laws that were in place in the country at that particular time. I have

gotten, I would say, at least 250 letters right now from different people who

have been impacted, and I have been led to believe that there could be well over

600 people in the Province who falls within that particular situation.

I am just wondering if you have been briefed on this particular issue and if

you have had any discussions at all with the federal government, and if you

sense that there might be some level of understanding in Ottawa around this or

not?

MR. RIDEOUT: Yes, Mr. Chairman, I certainly can speak to the issue and I

am very much familiar with it. This matter was brought to my attention, I guess

by Elizabeth Harvey first, the lady over in

MS MICHAEL: The Southwest Coast -

MR. RIDEOUT: Yes, but I don't know the name of the community now. It

escapes me for the minute. Burnt Islands, I believe. Anyway, it was over on the

South Coast. I talked to her, listened to her and read correspondence that she

sent me which led me to the conclusion that Revenue Canada - in my view wrongly

- had treated a set of taxpayers who were in a similar circumstance,

differently. Well, that is fundamentally wrong when it comes to tax law and tax

policy. Whether we like the tax or do not like it, everybody should and ought to

be treated in a similar fashion.

As a result of having reviewed that information from Elizabeth, I made

representation, back at that time, to the then federal Minister of National

Revenue. I engaged our own federal minister, regional minister from Newfoundland

as well. After a considerable lapse of time I was informed by the federal

government that what is, is, and there were no mea culpas or that we were wrong.

It is just that this is the way it has unfolded and that is the way it is going

to be. Now, there is some court action on the go on the issue as well. I am sure

the member is aware of that. We have been keeping abreast of that, too.

Interestingly enough, our regional minister was in Port aux Basques, I guess

a week or so ago, and Ms Harvey and others had an opportunity to confront him on

it. He gave the impression that she had a lot of new information that he was not

aware of, and he has undertaken to follow up on that information with his

colleagues in Ottawa. We will see where it goes.

The bottom line is that we have - as a Province and I, as minister - been

very, very supportive of Elizabeth Harvey and a group that she is fighting for.

I have made that known to fishermen who have written me or called me. I have

made it known on the broadcast and in any forum that has been available to me,

that we think it is wrong and the bottom line is that taxpayers who find

themselves in similar circumstances should be treated the same, and those

fishermen were not. Some had to pay the tax, some did not. That is not fair.

When tax policy and tax law is not fair there is only one reasonable thing to

do, and that is correct it and correct it to the benefit of the taxpayer that

has been aggrieved.

MS JONES: Minister, I am pleased to hear you say what you are saying

because it is a very serious issue I think.

We have had an opportunity to be briefed by Elizabeth Harvey, by a number of

the fisherpeople who were affected and by the legal counsel that they have

retained. From what I understand now, it was also the way that the tax laws were

being interpreted through the Department of Fisheries and Oceans at the time and

the direction that they were given to fisherpeople in our Province. The

direction, as I understand, they were given was that you must remit a portion of

these taxes based upon the

interpretations of DFO. If that is to be true, then

it is quite obvious they were interfering as well in areas where they should not

be.

I am just wondering if there is any benefit, I guess, to us in the House of

Assembly putting together an al -party group or an all party committee that

would basically take up the advocacy role for these 600 or 800 families that are

affected in the Province. Because I think if you do the calculations, you will

find out that they are owed probably between $25 million and $35 million. That

is a lot of money to be cheated out of under tax laws. If that is the case,

maybe there is something more that we could do in terms of a group of people who

represent these individuals throughout Newfoundland and Labrador to try and put

more pressure on the federal government to take a longer look at what has

happened here, to reopen the files and look at the

interpretation of it. Maybe

we might be able to avoid a long, drawn out court case or something of that

nature, because I agree with you, I think these people have been cheated out of

money by the federal government at this stage. If it was the other way around,

they would have Revenue Canada officials knocking at their door, taking their

belongings and deducting this money from their salaries. You would see a

completely different approach than what you are seeing now. So, maybe it is a

way we can garner more attention and be able to further the cause for this

particular issue.

MR. RIDEOUT: Mr. Chairman, I thank the hon. member for her suggestion. I

am certainly prepared to be open-minded on that, and to give consideration to

taking that approach.

Perhaps if we were to strike some kind of group that would be representative

of the House in its entirety we could at least raise the profile of the issue,

and that might have some benefit to the people who have been aggrieved.

We will take that under advisement, and we will give it some consideration.

We are prepared to be reasonable and to take

part in that kind of a proactive

search for an equitable solution.

MS JONES: Thank you, Mr. Chairman.

Those are all the questions that I have, and I want to thank the minister and

his officials for the detailed answers that they have provided to us tonight.

I guess on more of a district note, I would also like to thank the minister

for the money that he approved for the dock in Williams Harbour. I think anyone

who watched with horror, going back a year ago less than a year ago when

that dock burned in the community, a community that was totally dependent upon

the fishery, and on an island with no access by road, they really needed that

facility in order to continue to function. Obviously they lived in hope, but

lots of times in doubt, in terms of whether the money would come forward to do

this.

There is certainly tremendous recognition in that community for this

contribution, and as the member I would certainly like to thank the minister for

his support in working with me to try and resolve that issue.

Thank you.

CHAIR: Thank you.

Ms Michael, do you have anything to say?

MS MICHAEL: I just want to say thank you, also.

I did find this informative and was very pleased with some of the

expenditures that are there in the Estimates that I was not aware of, and I am

very pleased to see them.

Thank you very much. It has been a very good session.

MR. RIDEOUT: Mr. Chairman?

CHAIR: Any further questions?

MR. RIDEOUT: If there are no questions.

CHAIR: No questions.

Do you want to make another comment?

MR. RIDEOUT: Just a brief comment.

CHAIR: Okay.

MR. RIDEOUT: Thank you, Mr. Chairman.

I want to thank my colleagues, all colleagues on the Committee, but

particularly the members of the opposition, for their contribution and their

suggestions, and your interest in fisheries and fisheries activity in the

Province. It is still, and hopefully this year still will be, an industry that

will contribute in excess of $1 billion to the rural economy of Newfoundland and

Labrador. That is a big industry, any way you cut it, and it is important to our

rural communities.

I thank the Leader of the Opposition in particular for her kind words on

Williams Harbour, but it does not matter what district it is in, we all have a

role to play and I was pleased to have an opportunity to work with her in making

this happen.

I thank the Committee for their benevolence, and we will see you again next

year.

CHAIR: I ask the Clerk now to call the subheads.

CLERK: Subheads 1.1.01. to 3.1.02. inclusive.

CHAIR: Subheads 1.1.01. to 3.1.02.

Shall the subheads carry?

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, 'nay'.

Carried.

On motion, subheads 1.1.01. through 3.1.02. carried.

CLERK: The total.

CHAIR: Shall the total carry?

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, 'nay'.

Carried.

On motion, Department of Fisheries and Aquaculture, total heads, carried.

CHAIR: Shall I report the Estimates of the Department of Fisheries and

Aquaculture for 2008-2009 carried without amendment?

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, 'nay'.

Carried.

On motion, Estimates of the Department of Fisheries and Aquaculture carried

without amendment.

CHAIR: I would just like to thank Minister Rideout and his officials as

well, and members of the committee, and members of the House of Assembly staff.

I just want to mention that our next meeting will be tomorrow afternoon,

immediately after the House closes, and we will be debating the Estimates of the

Department of Tourism, Culture and Recreation, here in the House.

I want to make note of one change that was made today. Our last meeting,

actually, that was supposed to be Innovation, Trade and Rural Development, on

Wednesday, May 14, that has been changed now to Tuesday, May 20, in the

afternoon. I just wanted to make mention of that.

The only other thing, I guess, now is the motion to adjourn.

Will someone make a motion to adjourn?

MR. HUNTER: So moved.

CHAIR: The motion is made by Mr. Hunter.

This meeting now stands adjourned.