Resource Committee — Department of Fisheries, Food and Agriculture — 10 April 1995

1995-04-10

Newfoundland and Labrador — Committees

April 10, 1995

RESOURCE ESTIMATES

COMMITTEE

The Committee met at 9:00 a.m.

MR. CHAIRMAN (Smith): Order, please!

Today we are dealing with the Estimates for the

Department of Fisheries, Food and Agriculture. I would like to welcome the

minister and his staff. First of all, to the members of the Committee, we do

have copies of the minutes of the last meeting and we would like to deal with

these first of all. I have had a chance to examine them. There is one correction

the Clerk has pointed out to me. Item 4 in the minutes there should indicate

April 5, Elizabeth, instead of April 15. With that correction I would entertain

a motion that the minutes be adopted as circulated.

On motion, minutes adopted as circulated.

MR. CHAIRMAN: Now I would like to ask the

members of the Committee if they would introduce themselves, and then I will ask

the minister to introduce his staff.

My name is Gerald Smith, I'm the Member for Port au

Port and Chairman of the Committee. Just introduce yourself and your district.

MR. WILLIAM ANDERSEN III: William Andersen III,

MHA for Torngat Mountains.

MR. WHELAN: Don Whelan, MHA for Harbour Main.

MR. W. MATTHEWS: Bill Matthews, MHA for Grand

Bank, not a member of the Committee. Fisheries critic.

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

MR. CHAIRMAN: Thank you. Dr. Hulan, if you

would introduce your staff.

DR. HULAN: Thank you, Mr. Chairman. On my right

is Mr. Leslie Dean, the Deputy Minister for the Department of Fisheries, Food

and Agriculture. On my left is Reg Kingsley, ADM for Fisheries and Aquaculture

Development. To my far right in the rear is Dale Sudom, the ADM for Food and

Agriculture. Next to him is Harold Murphy, ADM for Regional Services. Right

behind me is Garland Mouland, Director of Administration, or administrative

officer. Of course, you know who I am.

MR. CHAIRMAN: Thank you, Mr. Minister. I just

point out that under the procedures you are permitted fifteen minutes for an

opening statement if you so desire, after which time we will move right into the

questioning. With that you may make your opening statement.

DR. HULAN: Mr. Chairman, and Committee members,

it is with considerable pleasure that I present to this Committee the Budget

Estimates of the Department of Fisheries, Food and Agriculture for the fiscal

year of 1995-1996.

We are of course dealing today with the first

budget of an entirely new department, a department which until a few short

months ago existed only in the form of two distinct and unrelated entities

within government. Under our new structure, through the marshalling and

combining of resources and personnel, we can improve upon the level and quality

of service provided the fishing, aquaculture, and agri-food industries and move

more quickly towards achieving the objectives of the strategic economic renewal

of this Province. Gross expenditures in 1995-1996 are projected to be $31.2

million. We will spend $26.1 million on current account and $5.1 million on

capital account. We anticipate revenues of $3.9 million.

The fishery is fundamental to the way of life of

Newfoundland and Labrador; seeking solutions which in part mitigate the collapse

and closure of all major ground fisheries continued to be a major priority of my

department. Since 1992 upward to 30,000 people have lost employment and had

their standards of living substantially altered as a result of the various

groundfish moratoria. This government is working with the federal Department of

Fisheries and Oceans and the Department of Human Resource Development in

responding to the income assistance and adjustment needs of fisherpersons and

plant workers.

Despite closure of the most important groundfish

fishery, 125,000 metric tons of sea fish were landed in 1994, having a landed

value of $200 million and a product value estimated at $425 million. A

significant number of fishers and processors are exploring and exploiting

alternative opportunities in both the harvesting and processing sectors.

In 1994, some thirty-five to forty vessels took

part in a developing scallop fishery on the Grand Banks employing in excess of

400 people directly, resulting in scallop landings worth $15 million. The skate

fishery is also developing in response to initiatives by my department. In 1994,

some thirty-three vessels landed 3,000 tons of skate with a product value of

$2.2 million. A quota of 6,000 tons has been set for 1995 which we anticipate

will be taken.

We are assisting the development of a sea urchin

fishery which should land 300,000 pounds in 1994-'95 season. We believe a landed

value of $3 million to $4 million is certainly attainable in the short term. A

local company has established a state-of-the-art seal oil refining facility

producing a high grade oil for human consumption. Ongoing efforts by food

scientists and biochemists at Memorial University, are continuing with the work

that I had underway at Memorial before entering the political arena, and they

are clearly documenting the nutritional properties of seal meat and oil, as we

move towards the promise of utilizing the full animal and a significant increase

in the percentage of quota taken annually.

Approximately 20,000 tons of frozen, imported,

groundfish were processed in 1994 generating approximately $10 million in

processing labour income. In 1994, two large plants operated practically year

round processing 13,000 tons of surf clams, a fishery developed in the past two

years, again, largely due to the initiatives taken by my department. These and

other initiatives will broaden the resource base of the industry.

The Department of Fisheries, Food and Agriculture

in conjunction with other provincial agencies and federal agencies, and the

industry itself, is developing a comprehensive strategy for the aquaculture

sector. Newfoundland and Labrador have considerable potential with respect to

aquaculture and we have every confidence that we can realize the potential of

this industry. Indeed, when I became minister last August, I indicated to the

department, the industry and the Province, that a chief focus of the new

department would, indeed be, the development of the full potential of the

aquaculture industry.

The Newfoundland aquaculture industry produced 835

tons of various seafood in 1994, valued at approximately $2 million which is

more than ten times the production in 1989. When fully developed, the

aquaculture industry will be a significant contributor to the provincial

economy. The production of blue mussels doubled in 1994 and is expected to

increase by an additional 400 tons in 1995. Tenders have been awarded for

location of a scallop hatchery at the former fish processing plant at Belleoram.

The hatchery will provide giant scallop seed on a consistent basis and remove

the final impediment which has constrained development of the scallop

aquaculture industry.

Earlier this year, it was announced that private

investors had purchased the Province's share in S.C.B Fisheries at Bay d'Espoir.

In six, short years, this government has created an environment whereby private

entrepreneurs are willing to now invest in aquaculture endeavour in this

Province and are indeed doing so. In accordance with the Province's strategic

economic plan to improve government's services, the department has reorganized

and upgraded its regional structure.

The five regions which correspond geographically to

the ENL areas are each headed by a director-level position and are accountable

for regional fisheries development planning in association with other regional

economic plans and developments, and for the delivery of the department's

programs on a regional basis.

The decision to integrate the leading programs of

the two loan boards with ENL is consistent with the recommendations of the

Province's Strategic Economic Plan. This initiative will improve the efficiency

of government through the consolidation of all of its financial assistance

programs within Enterprise Newfoundland and Labrador. Once integration is

completed this initiative will also improve the quality of service provided to

clients of the two loan board through the provision of assistance programs on a

regional basis.

With respect to the Budget at hand, my department

is providing $300,000 in 1995-1996 to Memorial University to fund a chair in

fisheries conservation. Funding is also being provided by the Department of

Fisheries and Oceans and the industry. An amount of $1.7 million is provided as

the department's share of the provincial contribution to the Canada-Newfoundland

Cooperation Agreement for Salmonid Enhancement and Conservation in 1995-1996.

Cash flow was $4.6 million in 1994-1995 and is projected at $7 million in

1995-1996.

In October 1994 the federal government announced

the formation of harvesting adjustment boards for the Province of Newfoundland.

Since then a provincial appointee has been added to the board. The mandate of

the board has been expanded so that it will now consider the issue of capacity

realignment in the processing sector. The Province announced some time ago that

it will not provide funding for the buy out of capacity in the processing

sector.

We have also indicated to the federal government

that its fiscal difficulties do not relieve it of the responsibility to deal

with the economic consequences of its closure of the groundfish fisheries. The

elimination of foreign overfishing off the Nose and Tail of the Grand Banks is

prerequisite to the rebuilding of groundfish stocks off the Province's coast.

The Premier, senior government officials and I continue to address this issue on

a number of fronts at the local, national and international level. The most

recent Canada-EU turbot dispute clearly demonstrates that effective measures

must be taken immediately to conserve all fish stocks, not just turbot.

I want to turn to the other sector for which I am

responsible and that is the agri-foods sector. The agricultural industry

performed well in 1994. Total cash receipts were $62 million, a slight increase

over the year before. Cash receipts are expected to reach $67 million in 1995. I

must emphasize, however, that these figures represent only the unfarmed value of

the agricultural industry. The figures reflect only the total of what farmers

are paid for raw or semi-processed products. The actual annual value generated

by the local agri-food industries is estimated to exceed $300 million.

Approximately 3,500 jobs are directly attributed to the agricultural industry,

with about another fifty employed in support industries such as feed suppliers,

transporters, and manufacturing (inaudible) packaging material.

The food industry in Newfoundland and Labrador is

worth around $1 billion to $1.5 billion in annual sales. A range of

opportunities for the production and marketing of agri-foods and value-added

products have been identified, some of which displace imports while others are

ideally suited and available for export. Only yesterday I had a very large

meeting on the West Coast of Newfoundland looking at this year the export of

turnips from this Province.

My department supports the efforts of individuals

and companies engaged in the value-added production of agri-foods. Earlier this

year my department, in conjunction with the Newfoundland and Labrador Federation

of Agriculture, the Economic Recovery Commission, Agriculture and Agri-Foods

Canada, and the Eastern Community College, held secondary processing seminars in

six locations across the Province. These seminars were aimed at increasing

awareness of the opportunities in this area and identified the resources and

expertise available to help people pursue business opportunities in the area of

value added processing of agri-food products. Some $100,000 in Strategic

Economic Plan funding is available in 1995-'96 to determine the market potential

for such products.

On March 7, I announced the creation of a food

division within the Department of Fisheries, Food and Agriculture to promote the

Province's food industry. Dr. Hugh Whitney has been seconded from his position

as Director of Animal Health for the Province to establish the new division.

Doctor Whitney will review the existing structure of the food industry as well

as consult with producers, processors, wholesalers, retailers and institutions

that support the industry, such as government agencies, educational institutions

and research facilities to determine their need and the role the department

should take in assisting these sectors.

In June of last year the Province announced the

establishment of a new provincial meat inspection program. Under the program,

the responsibility for licensing slaughter facilities was transferred from the

Department of Health to the Department of Fisheries, Food and Agriculture. As

well, the program was expanded to give operators of abattoirs the option of

having animals inspected. This is to ensure minimum slaughter standards and to

provide opportunities for increased access to retail markets. At the end of 1994

there are a total of nineteen licensed abattoirs with five to ten other

facilities being assessed for licensure right at the present time. While meat

inspection is not compulsory at this time, five abattoirs are availing of the

services of the inspectors.

The federal Minister of Finance, on February 27,

1995, announced that the Feed Freight Assistance program, or FFA, will be

terminated as of October 1, 1995, although this has now been pushed back to

December 31, 1995, much as a result of my own intervention. It will impact

dramatically on the cost of production in the livestock industry in this

Province. Prior to the announcement, subsidy rates for grain entering

Newfoundland were between $46 and $57 per ton. The loss of this program is a

very serious blow to the livestock industry in the Province. Industry and

government are working together to pursue issues with the federal government to

correct this problem. We are exploring other options that will lessen our

dependency on western grain, one of which is the development of locally grown

alternative feeds.

The production of grain would be a most important

development for Newfoundland agricultural industry. Results of the last two

years indicate that we can indeed grow grain with good yields and positive

monetary returns. This past summer we have reached over 1.5 tons of oats and

barley per acre, with a strong by-product of two tons per acre. Much more

research work, however, must be done. Variety testing, fertility requirements,

herbicide application and storage systems are but a few of the factors to be

investigated. The Strategic Economic Plan funding in the amount of $200,000 has

been allocated for alternative feeds testing in 1995-'96.

In 1994 government started a process that will

hopefully lead to the privatization of Newfoundland Farm Products Corporation.

At this time negotiations are ongoing with the Newfoundland Broiler Producers

Association towards realizing this objective. As part of our privatization

initiative we are taking steps to enhance the commercial viability of

Newfoundland Farm Products Corporation. As announced in the budget, we have

reduced the annual operating grant to the corporation by $1.5 million.

Discussions are now under way with management and employee representatives on

ways to achieve these reductions. The commercial viability of Newfoundland Farm

Products Corporation must be enhanced. This is the key to the privatization of

the corporation. In addition, there will be a reduction in the amount of

subsidies paid to broiler producers.

An amount of $175,000 has been allocated towards

the School Milk Program for 1995-1996. The amount represents an increase of

$25,000 from 1994-1995, which I might add is a very worthwhile and successful

program and one that I support fully.

In

summary, then Mr. Chairman, my newly integrated

department is faced with many new challenges relative to the economic

development in our province. I am confident that we can meet these challenges

and make a major contribution to the creation of new employment opportunities in

fisheries, agriculture and agri-food sectors, especially in rural Newfoundland

where unemployment is the highest.

Thank you for your attention gentlemen and I look

forward to a productive debate on the estimates which I have tabled.

MR. SMITH: Thank you, Mr. Minister. Perhaps we

should point at the beginning as well that during the question period if you

defer to any of your officials we would ask that they please make sure that they

identify themselves for purposes of the recording.

According to our procedures, the next session would

be fifteen minutes allocated to the vice-chairman of the committee. In his

absence and since we do have the fisheries critic here, by leave of the

committee I suggest that we allow fifteen minutes to the fisheries critic to

make a statement or pose any questions. By leave?

WITNESS: By leave.

MR. W. MATTHEWS: Thank you, I really didn't

expect an opportunity to participate this way this morning to be very honest

with you, so I don't have anything prepared. The minister alluded to the

processing capacity reduction and I missed the point. Would you mind reiterating

for me what you said on that particular issue?

DR. HULAN: Number one, there has been an

initial appointee added to the Harvesting Adjustment Board and the mandate of

that board had been expanded to consider the capacity realignment from the

processing sector.

MR. W. MATTHEWS: You were specific in saying

that the province would not participate financially in -

DR. HULAN: No, I also said that the province

has already stated that it will not entertain a buy-out situation.

MR. W. MATTHEWS: For processors?

DR. HULAN: For processors. I might add Mr.

Chairman, I forgot to mention this at the beginning, my deputy will have to

leave at 10:30 because of a personal situation. So, he will be departing at

10:30.

MR. W. MATTHEWS: Mr. Chairman, with your

permission, can I just ask questions back and forth?

MR. CHAIRMAN: Yes.

MR. W. MATTHEWS: Just in reference to the

turbot dispute, or the overfishing on the nose and tail of the Banks. You made

some reference to that, and the importance of dealing with it immediately. Is

there any truth to the situation or can you comment that, something I read on

Saturday, that they are looking at exempting the Spanish and Portuguese from

arrest if suspected of illegal fishing? Is there any truth to that whatsoever?

When I read it I said: it must be a mistake that can't be right, that you would

look at exempting those two countries or vessels from enforcement action or

arrest or whatever, if such is the case. Does the minister see that or is there

any dialogue with the federal government that indicates that, because that to me

would be absolutely ludicrous. Is that a fact?

DR. HULAN: My deputy who has spent some time in

Brussels with the other officials from Ottawa, in ironing out the major points

of a possible agreement, will make a comment on it.

MR. DEAN: Mr. Chairman, the issue raised by the

honourable member is linked to the scope of the legislation which the government

of Canada approved some time ago. The legislation basically provides for naming

individual countries that would come under the umbrella of the legislation. In

reference to the current negotiations, the issue that is being discussed is:

What is the status of the legislation relative to the EU if there is an

agreement negotiated with the EU?

Simply, what is proposed is that if in fact the EU

is in full compliance the legislation itself would not be withdrawn, but as long

as the EU is in full compliance with any agreement that is reached then the EU

itself, or members of the EU, would be removed from the legislation. But that is

only in the context of full compliance with any agreement that is reached.

MR. W. MATTHEWS: Are you saying then that - I

mean, are they optimistic that Spain and Portugal are going to concur?

MR. DEAN: I would be extremely surprised, Mr.

is full expectation that they would be in full compliance.

MR. W. MATTHEWS: Excuse me, Mr. Chairman. What

has been the latest proposal with regards to sharing of the resource? You hear

different figures bandied about. Could the Deputy Minister tell us what the

latest figures are of the split of the stock?

MR. DEAN: Mr. Chairman, the details of the

draft agreement have not been released by either party. What we have heard of

course in the media is reference to certain sharing possibilities, but in very

general terms Canada's objective clearly is to reach some reasonable sharing

agreement where the interests of Canada are certainly not minimized, I mean

relative to any sharing that would result from the agreement.

MR. W. MATTHEWS: Just a final question on that.

Have there been any estimates or any intelligence reports on what the catch

rates are of those Spanish vessels that are continuing to fish there? I know

they have been under strict surveillance and monitoring. Has there been any idea

just how much fish they've been taking out there?

MR. DEAN: Mr. Chairman, probably the best

reference point for catch rates of individual vessels is that associated with

the Estai itself. We understand that the daily catch rates at or about

the time the vessel was arrested was somewhere in the order of 3.5 tons per day,

which is not a large quantity of fish. But it is surprising that vessels would

continue to fish at these levels. Certainly in terms of the overall catch to

date it is certainly in excess of the position that the European Community and

Spain have taken. They have estimated that the catch to date is somewhere around

5,000 to 6,000 to 7,000 tons. The minimum estimate by Canada probably is in the

order of 10,000 to 11,000 tons at least.

MR. W. MATTHEWS: Mr. Chairman, if I could I

would like to ask another question. With the transfer of most of the activities

of the Fisheries Loan Board to Enterprise Newfoundland and Labrador, how has

that transition gone? Are the activities now taken over completely by ENL as of

this date, and is it functional? Has the transition gone fairly well, or where

is it? Can you give us a status report on that?

DR. HULAN: I'm pleased to. The transition is

proceeding in a proper and careful manner. Both loan boards; the Agriculture

Development Loan Board and the Fisheries Loan Board are still housed in their

former place. The individuals that have been dealing with the loans are still

dealing with the clients. It is expected that by August of this year both loan

boards will be moved to the ENL offices when space is available. Those

individuals will continue as they have in the past, to deal with the clients on

a normal basis and we see no difficulties whatsoever in the transition. So far

we have had no problems, it will be monitored very carefully in view of the

change that has taken place, to ensure that indeed no difficulties are created

for the clients. So that is all I can tell you at this stage.

MR. W. MATTHEWS: Have staff levels been

maintained? Those that were employed say with the Fisheries Loan Board will the

staff levels be the same or will there be some staff fallout as a consequence of

being taken over by ENL.

DR. HULAN: There will be a reduction in staff

levels, I believe by approximately twelve.

MR. W. MATTHEWS: Twelve employees that were

employed with the Fisheries Loan Board, there are twelve less now as a

consequence of the -

DR. HULAN: And the Agriculture Development Loan

Board, both loan boards.

MR. W. MATTHEWS: Twelve in total.

DR. HULAN: Total of twelve.

MR. W. MATTHEWS: How many from the Fisheries

Loan Board. Can you tell us that?

DR. HULAN: In the Fisheries Loan Board, there

will be ten. A reduction of ten and two from the Agriculture Development Loan

Board.

MR. W. MATTHEWS: I think you put out a release

or said something publicly about that, where some activities that were carried

out by the loan board, something to do with the bounties or building or

something.

DR. HULAN: Yes, the repair bounties will be

retained by my department. That portion of the activity will be retained by the

Department of Fisheries, Food and Agriculture.

MR. W. MATTHEWS: Thank you Minister for your

answer. Mr. Minister, the ongoing process now of I guess the license buy-out

program. I think that there has been 1,000 that have offered to sell-out their

licenses and from public information given a week or so ago by Mr. Cashin, it

said the range was somewhere between $100,000 and $300,000, it looked like that

would be the pay-out somewhere between $100,000 and $300,000 for approximately

1000 fisherman.

I asked you this question in the House before,

looking at the possible implications for people who owed money to the Fisheries

Loan Board. Has there been any further consideration given to that? At the time

you said that any fisherman who had made a reasonable effort, I guess over the

years to pay their bills to the loan board and so on, that they probably would

not be touched. Has there been any further consideration or discussion with the

federal department on that or with the federal government. Will someone who has

kept their debts up to date receive the total amount of whatever the final

pay-out is or indeed will the loan board require moneys towards the debt

payments of fisherman?

DR. HULAN: In responding in the house, I

probably expressed my own personal view very much in the fact that I'm a great

believer that those who made a concerted effort to do what they could, do the

best they could to keep their loan payments up to date as much as possible, be

given every possible consideration with regard to the final dispensation of

their loans.

We will deal with every individual - and I think I

indicated this in the House to you - each one will be considered on its own

merit. There is no question about it. Keeping in mind my own philosophy to be

very helpful to those individuals who made an effort.

MR. W. MATTHEWS: Really what you are saying is

government really hasn't made a decision?

DR. HULAN: The only decision that has been made

within the department is that each will be considered on its own merit.

MR. W. MATTHEWS: Anyone who has been

delinquent, then they can expect that payments from the federal government to

them for a licence buy out will be intercepted by the provincial government. Is

that basically what you are saying?

DR. HULAN: I will put it this way. We have to

be fair to all, and those individuals who bust their behind to try to make some

money somewhere to pay their loans through the years indeed I believe, and I

think you would as well agree, that these individuals should be given, in

fairness, more of a consideration than those who said to hell with it over the

years, and let government pay their interest and so on.

MR. W. MATTHEWS: From a district point of view,

I'm wondering if your officials could inform me or someone, perhaps - I know

yourself - I know you were down in the Grand Bank area a couple of months ago.

I'm wondering if you could tell us or give us an update on the activities of the

surf clam operation in Grand Bank, where that is going, where it is gone, and

what your department's impression of that has been.

From my own point it seems like it has done

reasonably well under the circumstances. I'm just wondering if you or one of

your officials could sort of update the members. As I said to a number of them,

the news media, that like last year we had two in my view very positive stories

in my area, in Grand Bank and Fortune, where Fortune had one of the best years,

perhaps the best year in ten or twelve years, in the processing of Russian cod.

Then we had the surf clam operation in Grand Bank. I'm just wondering if you

could tell us what the situation is there. I understand now that they are

gearing up now to do some skate wing production at Grand Bank as well, in

addition to the surf clam operation. We know the impact the Canada-France

dispute has had on scallops. It has really, I guess, changed the whole focus

down there, because the Clearwater operation was basically set up, for the most

part, for scallops. Then the Canada-France dispute of course interrupted that.

Now there is very little scallop production and really little scallop. If they

buy it now it comes in in meat form, so they are not doing any processing at the

plant which is geared up and there is a substantial amount of equipment to do

so. I'm wondering if one of your officials could tell us really what is

happening there.

DR. HULAN: I will respond to that, and maybe

one of the officials will add more to what I will have to say. As I indicated in

my opening remarks, the surf clam development was a very positive development in

the fishery in 1994-1995. We see it as having some further positive developments

this year with increases in harvesting. We will be meeting with Clearwater on

May 2 to discuss the whole issue of the surf clam fishery and where we are going

in 1995-1996. Mr. Dean, go ahead.

MR. DEAN: Mr. Chairman, the Grand Bank

operation, I guess in the context of what has happened relative to the collapse

of the groundfish sector, is certainly one of the brighter spots in the

industry. Especially in terms of those plants that were previously dependent on

the offshore sector.

The surf plant operation is a very, very lucrative

fishery, centred at Arnold's Cove and at Grand Bank and with a relatively equal

sharing of the resource. The market is very, very firm. In fact, I spoke to the

manager of the plant on Friday and he informed me that there is a delegation of

twelve Japanese buyers who will be coming to Grand Bank later in April, so that

sector of the operation is going along quite well. In terms of the scallops, of

course, Canada did, in the final agreement with France, secure about 30 per cent

of the scallop resource and this will have another, you know, further impact, a

positive impact on the two operations at Grand Bank.

In terms of the Fortune operation, as the member

probably is aware, Fishery Products International made the corporate decision

this year, well really it was a decision that was made last year and implemented

this year, to consolidate their operations at Marystown in the 1995 season and

there is, as you know, some level of foreign processing activity in terms of

Barents Sea cod taking place so, all in all, you know the Grand Bank operation I

guess, is a clear example of what can be done, not only in terms of capitalizing

on a new species but in terms of the further processing that is associated with

the operations down there.

MR. W. MATTHEWS: Mr. Chairman, I would like to

thank the committee for allotting me this time and I would just like to finish

with your permission, this one question. Perhaps the Deputy Minister could

continue again on the scallop situation. I have to ask the question, really,

where is? There still seems to be some details to be worked out in negotiations

between Canada and France, as I sort of sense now, I am really not sure, there

still seems to be some problem with the settling of that, and fishermen are

really not sure if they can fish or when they are going to be able to fish or

catch their 30 per cent, and I am just wondering, really, where that is, because

I know they are gearing up down there now again and I run into fishermen who ask

me the question, so there still seems to be some problems that are not yet

sorted out in those negotiations. Could the Deputy Minister update us on that

please?

MR. DEAN: I am not aware of any major problems.

The sharing agreement has been agreed upon, if there are any outstanding issues

that have to be resolved, it may be in the conduct of the fishery itself within

the French zone, and I am sure that is just a matter of detail that shouldn't

pose any major problems.

MR. W. MATTHEWS: Thank you.

MR. CHAIRMAN: Mr. Andersen.

MR. WILLIAM ANDERSEN III: Thank you, Mr.

Chairman.

MR. CHAIRMAN: By the way, one second. I would

point out as well, each member of the committee now will have ten minutes each

and I will ask that if you wish to question, that you attract my attention so

that I could make sure you are included in this.

MR. WILLIAM ANDERSEN III: Thank you, Mr.

Chairman.

I have several questions here in relation to

Labrador.

2.2.01 to 2.1.03, in the Estimates. I would like an

explanation of what the differences are between the Marine Service Centre and

General Marine Facilities. Two of the sections come under the Labrador

Development Agreement and the other one, under the Labrador fish plants. Why are

they separated?

DR. HULAN: I think in this case here, one is a

cost-shared agreement and the other is not. Is that right Harold?

MR. H. MURPHY: The Labrador (inaudible) is for

the operation of the plants in Makkovik and Nain. It is under the subsidies and

the operations. 2.1.05 is the Labrador Agreement. It covers programs and various

aspects of research and development and these type of programs, so they are two

separate programs. 2.1.01 is the marine service centres and that covers the cost

of running the marine service centres on a Province-wide basis, including

Labrador. It is a block funding for the whole Province. 2.1.03 is general marine

facilities which is for repair facilities, and again it covers the Province but

internally it is broken down on a regional basis.

MR. ANDERSEN: You say there is block funding

for the operation of marine service centres. Why is the department saying that

they will no longer subsidize the operation of the marine service centres?

Secondly, what percentage of the block funding will go to the service centres? I

know that in Makkovik, for example, the only operator they have to lift boats in

and off the service centre is a volunteer. There is no employee there, so what

kind of financial services does the centre get outside of being put there?

DR. HULAN: Number one, we continue to fund the

service centres but what we are also doing, we are making every effort to

privatize more of these centres right across the Province, and around the

Province. The funding is still there for marine service centres but it is just

that we are encouraging more and more to go into private hands.

MR. ANDERSEN: Thank you.

In relation to the Labrador fish plants I

understood a couple of weeks ago that there would no longer be any subsidies for

the operation of these plants, so what is the huge budget for the Labrador fish

plants if there is not going to be any operational subsidies? Where are you

spending $584,000 on Labrador fish plants if you are not going to be involved in

the operation of them?

DR. HULAN: The department though, is still

providing in the Budget for the losses of those two plants that are ongoing.

Those losses are still being provided and picked up by the department. I might

add that in the case of Makkovik we have an agreement with Torngat Fisheries to

underwrite a major portion of the losses that are incurred.

MR. ANDERSEN: I find that difficult to swallow

because on the one hand Torngat fish producers were reporting record revenues,

and if they can report record revenues on the one hand and the Province has to

underwrite their losses on the other hand where is the money going or coming

from?

DR. HULAN: The losses that I am referring to

reference to the plant itself and not Torngat fisheries, so that is still being

underwritten by my department.

AN HON. MEMBER: Part of it.

DR. HULAN: Part of it, yes.

MR. WILLIAM ANDERSEN III: One question with

respect to the turbot fishery off Makkovik, last year the plant workers in

Makkovik who were brought in from Postville, Rigolet and Hopedale, I believe two

of the sixty or so plant workers, or three, qualified for their U.I. benefits,

and yet the Province allowed approximately 85 per cent of the total catch from

the Makkovik area to be shipped off to the Island for processing. What is going

to be the position this year?

The other thing, too, with respect to that, is the

Mayor of Makkovik, for example, worked there as an observer and said a large

portion of the turbot were jelled - and small, less than twelve inches, a lot of

them. Does that mean our own fishermen are abusing the turbot fishery as well?

If so, what are we doing about it?

DR. HULAN: I must say, I was not aware that the

majority of the turbot that was harvested up there was less than twelve inches

in length, but as far as the arrangement with Beothuck Fisheries, that

arrangement was a 50/50 sharing. Now I am not sure where the 85 per cent figure

came from.

MR. WILLIAM ANDERSEN III: The 85 per cent

figure comes from the fact that there is, off Makkovik, a TAC as well, and of

the TAC about 15 per cent goes to Labrador from the Makkovik, Hopedale, Channel

area.

AN HON. MEMBER: (Inaudible).

DR. HULAN: As the deputy has indicated, we have

no control over what happens outside. The control starts on the landed catch.

MR. WILLIAM ANDERSEN III: Mr. Chairman, I

respect that answer but I think on the other hand we have a long history of a

fishing industry in the area, and I think there should be a greater commitment

on the part of us, the politicians, especially in government, to push the

federal government to allow that area to have a greater opportunity for that

resource than they have in the past number of years.

DR. HULAN: Maybe I could just make one final

comment with regard to Mr. Andersen's last question.

The department has in the past made a

representation for additional quota in addition to what the region now has, so

that is, because of the need to provide work in these plants up there, we are

fully cognisant of it, but I am also reminded of the fact that last year we had

to scrounge around to find a part of the fishing industry that was willing to go

up there and harvest these fish. It is not an easy situation, and I appreciate

it.

You also asked back before: What is the situation

going to be this coming year? At this point I would say that the status quo will

remain, and we will continue to prohibit the trans-shipment of major lots from

the Labrador area in order to provide fish for the operation of these fish

plants.

MR. CHAIRMAN: Thank you Minister. Mr. Byrne.

MR. E. BYRNE: Thank you, Mr. Chairman. A

question for the minister dealing with the Newfoundland Farm Products. You

alluded to in your opening remarks about the discussions under way and

continuing with Farm Products. At what stage are we with that? There is

obviously a huge reduction in the budget and subsidy due Farm Products this

year. Some have accused you, or the department not necessarily you, but you as

the minister, that the Corner Brook operation may shut down as an operation,

that government actually was just getting the Farm Products lean and mean and

more presentable for the private sector.

The first question is where are we in terms of

discussions with Farm Products and the privatization initiative? Secondly, would

you comment on what impact the reduction in the amount of monies allocated to

Farm Products will have on the operation in the province, particularly on the

West Coast?

DR. HULAN: Thank you, Mr. Byrne. To answer the

first part of the question, a call went out for proposals. There were two

proposals that came in, one only that had any significance to it and that was

from the Broiler Producers Association of Newfoundland and there proposal was

sound. However, a number of things have happened since the proposal was

submitted. Number one, as a result of the North American Free Trade Agreement

and the removal of tariffs, the bottom fell out of the chicken market in Ontario

and that changed the whole picture with regard to their proposal. They have

since then put together a revised proposal that is very, very, very strong, very

sound and I would say it's the step that will provide for a very efficient and

sound poultry industry in the years to come if the final dispensation of

Newfoundland Farm Products is through the private sector and specifically to the

Broiler Producers Association.

The other thing I would have to say is that we did

not reduce the budget of Newfoundland Farm Products by $1.5 million. What

Newfoundland Farm Products Corporation was directed to do was cut their losses -

there is a big difference - cut their losses by $1.5 million. How they achieve

reducing those losses by $4.5 million is something else. I don't know if you are

aware, but this past year the losses on the two processing plants was in the

order of $4.4 million I believe, $4.2 million. The total cost of the chicken

industry in the province is $7.4 million when you throw in the chicken

subsidies. But the Newfoundland Farm Products Corporation has been directed to

reduce their losses by $1.5 million. Therefore, negotiations are now under way

and in fact the forth meeting will be held today with the employee

representatives and my department and treasury board as to how they are going to

proceed to reduce those losses by $1.5 million.

I realize that some of the media have said that the

Newfoundland Farm Products plant in Corner Brook may close. That may indeed be

the recommendation of this committee, but at this stage, I would have to say

that this has not been a conclusion at this stage in the game, it may be, as

they finally proceed with these discussions. I can also say that three separate

detailed studies in the past of the Newfoundland Farm Products Corporation

indicated that if they were going to survive and if they were going to reduce

their losses and wipe their losses out completely, that could only be done by

processing all birds in the Province at one location. I'm not saying where that

location would be, but obviously economics will come into play there. I can go

on in great detail on this one but I won't at this stage. I will leave it for

another question.

MR. E. BYRNE: Sure. With respect to the Farm

Development Loan Board, where the administration I guess has effectively been

moved to Enterprise Newfoundland and Labrador, have you received much commentary

or any advice or any concern noted by those in the industry who partake of the

service provided by the Farm Loan Board, that they may have raised any concern

at any point with yourself or any of your officials about this move?

DR. HULAN: Okay. I can speak from the

minister's point of view. As you know, right at this particular time in the life

of the agricultural year all of the annual meetings are taking place. I have

spoken to the Egg Producers Association (inaudible), Newfoundland and Labrador

Federation of Agriculture, the Milk Marketing Board and so on. I have not had

any negative comment made to me, no comment at all.

MR. E. BYRNE: Were comments or was the advice

of industry sought before such a move took place? Or was it a decision made

wholly within the department? Because the reason I ask the question is that if

it was a move that was not suspected to be coming down from those who are

involved in the industry directly in whatever capacity, or whatever shape or

form, then it may be something they are only becoming aware of since the Budget

was released, and not necessarily sure what the impact is going to be upon them.

DR. HULAN: The decision was made in the

budgetary process and as such it was handled in the development of the budgetary

matters for 1995-1996. Personally, being fairly close to the agricultural

industry, I see no detrimental effect in this move whatsoever. Having said that,

as I have assured the industry and it will be done, we will monitor the

situation very closely. Because as I said in my opening statement, the move to

integrating those two loan boards into ENL was done for efficiency and

improvement of the service to the client. That is what will be monitored. Let

that not be questioned. That will be very closely monitored.

MR. E. BYRNE: As you know, there is a base of

an agricultural industry in my district. Discussions that I've had with some of

the farmers in the area, they've wondered why such a move, taking it out. I

guess it is probably more of a concern based upon what ifs then actually what

will transpire, because we don't know yet of course. I will just note for the

record some of them. That such a move, going to Enterprise Newfoundland and

Labrador, taking it out of a department where officials would have a sensitivity

and a knowledge of the industry, obviously, and putting it into the hands of

another administrative division that may have no awareness and no understanding,

in the specific sense, of what the Farm Development Loan Board was about and has

done. There is just a concern there. I think wherever you get the opportunity as

minister or as officials to highlight that the service to the client, it will be

tantamount in what you are monitoring, I think that you should do it.

DR. HULAN: Yes, you've made a very good point

Ed, and these were some of the things that were in my own mind as we proceeded

with the budgetary process, I will tell you that much.

I will also say that the programs are all the same,

the programs are there. The initial contact in the loan procedure for the

Newfoundland Development Loan Board is still the agriculture representative. His

recommendation, his contact and involvement with the client, are still going to

be there as strong as ever, and his recommendation is still a major

part in the

whole process of whether a loan is going to be looked at favourably or not.

Because the agricultural representative is on site working with the individual.

That is going to stay the same.

The individuals at ENL who will then receive the

loan will be the same individuals who received the loans now over at Brookfield

Road office. Also, the final review committee of loans within ENL will have

agricultural expertise individuals placed on the committee for the final

analysis.

MR. E. BYRNE: Final question, more dealing with

the federal Budget recently announced and I guess ongoing discussions between

the federal department and the initiatives that are jointly funded or fully

funded by the federal government. What impact do you see - down sizing, for lack

of a better term at the moment, in terms of the federal government's Budget

recently announced? What impact will it have on the agricultural industry? Are

we looking at major reductions in terms of what the federal government has

traditionally funded, specifically in the department of agriculture? If there is

some analysis being done, what role do you see the Province eventually taking in

some of these areas? I know it is a general question, and it is meant to be,

but....

DR. HULAN: I will just respond to it. There is

a negative impact as a result of the removal of feed freight assistance on the

animal industries of this Province. Roughly an increase in their production

costs of about 12 per cent, maybe even as high as 15 per cent in the short term,

until we are put in a position to be able to respond to that in a more positive

way. That is a negative effect.

We have also the removal of the Atlantic freight

subsidies program, which will probably more than likely - in fact, I had a big

meeting on the West Coast Sunday afternoon with the agricultural industry. It

will probably have somewhat of a positive effect on the vegetable industry,

because it also will reduce the subsidies of vegetables coming into this

Province, or should. The analysis that was done by my department before this

actually became effective identified and suggested in their final analysis that

it may have a positive effect on the vegetable industry, which is very

important. Because if there is anything we have a tremendous potential for

development in in this Province with few government inputs required, that is the

development of our vegetable industry.

Vegetable producers on the West Coast of

Newfoundland now are looking very seriously at developing a secondary processing

facility out there. One has already started, and that is what the meeting was on

yesterday, to look at the full development of a secondary processing facility

for vegetables. If we can get to that stage then the industry is going to

basically be taking off in the right direction.

MR. E. BYRNE: I would suggest we probably have

to get to that stage.

DR. HULAN: Absolutely.

MR. E. BYRNE: If we don't the type of industry

we will have will be very minimal -

DR. HULAN: Yes.

MR. E. BYRNE: - in terms of the impact of NAFTA

and in terms of the global setting that we find ourselves in. We really have no

choice but to move in that direction.

DR. HULAN: There is no question. Of course,

that is what the task force report on agri-foods recommended six years ago, and

it is certainly starting to gather some momentum.

MR. E. BYRNE: One final quick question, if I

could.

MR. CHAIRMAN: Mr. Byrne, your time is up,

unless you are going to conclude your questioning now.

MR. E. BYRNE: Yes, it is just a quick question.

MR. CHAIRMAN: Okay.

MR. E. BYRNE: As the chairman of the task force

on agri-foods and now as the minister who is responsible for its overall

implementation, would it be fair to say that probably one of your priorities is

to implement as many of those recommendations that you made as an independent

chairperson of the actual writing of the document? It's an opened ended

question, it's not meant to sidetrack you or anything. It's trying to gain an

understanding of where you are headed with that report because there are many

good recommendations that should be implemented that are not at this time.

DR. HULAN: I don't mind answering that and the

quick answer is yes.

MR. E. BYRNE: Fair enough.

MR. CHAIRMAN: Excuse me Mr. Whelan, I neglected

earlier to recognize that two of the members of the committee have arrived since

we started our proceedings. So, I would ask them now just for the records if

they would introduce themselves beginning with Mr. Penney.

MR. PENNEY: Melvin Penney, MHA for Lewisporte.

MR. SHELLEY: Paul Shelley, MHA for Baie

Verte-White Bay.

MR. CHAIRMAN: Thank you, okay Mr. Whelan.

MR. WHELAN: You mentioned earlier about your

meeting on the West Coast with regard to the exporting of turnip. You mentioned

a few minutes ago as well, the development of secondary industry. I would assume

that the root crop that you mentioned would have to go through some sort of a

process before it was exported. Has there been a change in the federal

government policy of exporting root crops from the province?

DR. HULAN: We have always had the opportunity

in this province since 1949 to export root crops from this province. Just that

there has to be certain steps followed: number one the area that the product is

harvested from must be disease free, identified and cleared as a disease free

area, with particular emphasis on the potato canker and that can be easily done.

We know already the areas in this province that are free of potato wort disease.

Once the vegetable, say it's potato or turnip, is harvested, it has to be washed

and sealed in a package for export. It's not to be opened again until it reaches

the consignee. So, in other words it's sealed in a proper bag or other container

and loaded on some transport facility and transported to the assignee. So, there

are four different criteria that you have to meet. You can export root crops no

problem whatsoever.

MR. WHELAN: The provincial government owned a

number of fish plants in the province. Have any or all of those been liquidated,

have they been sold or leased? What is the status on them?

DR. HULAN: No, all of them have not been

released or taken out of our system, but if I remember correctly along with the

many other things, I believe there is something like five plants still within

our inventory, but I am going to ask the ADM, Mr. Murphy, to answer.

MR. MURPHY: In total, I think there are about

fourteen around the province, but these are only smaller plants. The major

plants like in Rose Blanche and St. Lawrence, freezing plants, there is

approximately five around the province at the moment.

MR. WHELAN: What are your immediate plans for

those plants? I suppose what I am getting at is you mentioned the agri-foods

industry. These plants, we call them fish plants but I suppose in essence they

are food plants, they are approved by federal health officials as buildings that

are acceptable and meet all the criteria to process food. Have there been any

consideration given to encouraging associations or individuals who -

DR. HULAN: Yes. That's a good question and I

can tell you there is. Number one, I am very pleased to hear you say food plants

because they are indeed just exactly that, food processing plants. We have

released one of those food processing plants - and I use the term food

processing plants - up in New Perlican that is now being used as an abattoir for

the slaughtering of hogs and for the further processing of hog products, going

very, very, very well.

We have also made arrangements on the Northern

Peninsula with regard to the potential of a group of individuals who are

interested in turkey production, to release one of those plants for the

slaughtering and processing of turkey products. We have another plant here -

Indian Bay Frozen Foods - where is that plant located, that's involved with

blueberry processing?

WITNESS: (Inaudible).

DR. HULAN: It is in Indian Bay yes, where they

are in the process of primary and secondary processing of blueberries, so -

WITNESS: (Inaudible).

DR. HULAN: Yes, that was Parsons Pond up in the

Northern Peninsula for the turkey processing I mentioned earlier. So we are

encouraging that. We have a fantastic thing in Belleoram with the conversion of

an existing fish plant into a scallop hatchery, so each case, proposals on every

individual plant that might come forward is considered again on its own merit

and certainly we are encouraging the use of these plants to their fullest as

food processing plants.

WITNESS: (Inaudible).

DR. HULAN: Yes, and working with their various

community-based organizations to achieve that goal.

MR. WHELAN: So a number of these plants have

gone to associations as well? Is it strictly private individuals and private

companies who have these places?

DR. HULAN: Private individuals, private

companies primarily

MR. WHELAN: It is all private?

DR. HULAN: Right, yes.

MR. WHELAN: With regard to the Green Plan, I

notice the federal government, with regard to administration, kicked in

something to the tune of $75,000. Okay, 6.1.03, Green Plan Administration,

$75,000 total allotment under that. So that's federal government money being

used or passed to the Province to administer the Green Plan.

DR. HULAN: Yes, that's right but I think I will

let the expert ADM for Food and Agriculture, Dale Sudom, speak to that.

MR. SUDOM: The Green Plan Administration funds

are for current account funding for the Green Plan, and those are the types of

grants and subsidies that go out to various proponents in terms of projects that

they submit to the Green Plan. You will see on the next page the capital account

for the Green Plan and those are capital activities under the Green Plan, and so

the funding is broken down between current and capital account items for that

particular plan, and these, of course, are all funding to increase the

environmental sustainability of the agricultural industry.

MR. WHELAN: I wonder, Mr. Sudom or Mr.

Minister, could you expound to some degree on the Green Plan itself? I know we

have the environmental sustainability of agriculture; what exactly does that

mean? Could you go into that in a little bit more detail? There are grants and

subsidies there to the tune of $400,000. Who would these grants and subsidies be

going to?

DR. HULAN: Again, I will answer, or maybe I

should let Mr. Sudom answer it in more detail, but I believe under the Green

Plan a number of projects were funded with regard to the manure facilities and

manure handling which is an issue that we have to be very careful with because

of environmental impact but, having said that, I am not familiar with the

details as to what the projects were, but I know manure handling and so on was a

part of it. Go ahead, Dale.

MR. SUDOM: Yes, that is a very large part of

the agreement, that would be funding directly to farmers to construct manure

storage pits and better manure handling systems on their farms. Also, some of

those monies would be to farmers to make better use of pesticides, better

applications of pesticides, and more efficient use of fertilizer so there are

less nutrients going into the environment.

I might add, on the administrative monies, the

current account monies, large amounts of those monies were made available to the

Federation of Agriculture to put off courses on pesticide usage, and a series of

courses have been conducted across the Province, and I believe nearly all

farmers now have been trained in the proper uses of pesticides, so that was also

a Green Plan initiative.

MR. WHELAN: Thank you.

With regard to the Green Plan, is it a program or a

plan that would be going on ad infinitum as far as we know, or is there a

certain deadline on it? Is it a three-year plan or program, or five-year

program?

DR. HULAN: There is a finite time on it, but

again I am not sure how long it is. Again, Mr. Sudom.

MR. SUDOM: The final year for expenditures

under the Green Plan would be 1996-'97, terminating March 31, 1997, and that is

basically the cleanup year for - essentially after we signed the agreement it

was a four-year agreement. It was originally six years, to terminate in March,

1997, but when we finalized the negotiations with the federal government it was

actually a four-year agreement with no reduction in our funding, of course, and

it is March 31, 1997. Right now there are no further negotiations with the

federal government for a continuation of that Green Plan funding, and that is a

national program which, I believe, all the funding expires at that time, so it

would depend on whether or not the federal government and the other Provinces as

well would get an extension to that type of program.

MR. CHAIRMAN: I am sorry to interrupt, but

since we are near the half-hour, and we do have a couple of other people we have

not heard from, I would suggest now that maybe we will just break for coffee and

try to keep it as short as we can so we can get back and try to conclude the

activities as quickly as possible. Coffee is available in the government caucus

room just across the way.

Recess

MR. CHAIRMAN: Order, please!

I would like to recognize Mr. Shelley.

MR. SHELLEY: Thank you, Mr. Chairman. First of all

I would like to apologize for getting here a few minutes late this morning. I am

here now. Actually the first question I understand has maybe partially been

asked earlier this morning, but in general terms I guess, because there are so

many questions about it pertaining to the loan board, I know I'm getting quite a

few calls lately of people receiving letters about the loan board. As a matter

of fact, one man who had thought he had everything settled away as far as making

payments and so on, and then lo and behold last week he sees his boat up for

tender in the paper. Maybe there is a bit of confusion on that, or that

particular one, but I will raise that with somebody in the minister's office,

the officials.

Basically, what is happening now with the loan board

as we sit here now? Can you give me an update on exactly what has happened with

the loans?

DR. HULAN: (Inaudible).

MR. SHELLEY: With the Fisheries Loan Board.

DR. HULAN: Yes. What do you mean? An update on

where it is with regard to the integration?

MR. SHELLEY: Yes, the integration (inaudible).

DR. HULAN: The integration as I said earlier is

proceeding in a proper manner. All of the officials with the Fisheries Loan

Board are still at the old location and will continue to be there probably until

about August, when there will be space available in the ENL office. Then they

will be transferred, along with the Agricultural Development Loan Board.

The same individuals who have been dealing with

clients up to this point are still dealing with those same clients. The

Fisheries Loan Board programs are exactly the same. There is no change in

programs and there will be none. The only thing that will not transfer to ENL is

the repair bounty program that will be retained by my department in Fisheries.

The same individuals who have been working with the clients all along will still

be there to serve these clients in the future. The telephone number, right now

and until further notice, will be the same as it has always been, so there is no

change there whatsoever.

MR. SHELLEY: Okay. So the same individuals will be

dealing with those applications?

DR. HULAN: Fisheries loan applications, indeed.

MR. SHELLEY: The only thing that won't be coming

out of your department is the bounties.

DR. HULAN: The bounties will be retained by my

department.

MR. SHELLEY: Okay, thank you. Sorry I missed that

earlier. I just wanted to ask the question about the integration.

I'm going to get a little bit more specific now and

bring up this issue for another little bit, because I'm going to continue to

bring it up, as the minister knows, and that is pertaining to the crab licence

in Fleur de Lys. As you know, the company just over the weekend - last week, as

a matter of fact - have said that they are going to rebuild that plant of course

and go after everything from caplin to herring and everything else. Mr.

Minister, though, I would still like to bring to your attention that this is a

long ongoing story with the Fleur de Lys plant. I will still say, and I've

maintained since two days after I was elected saying, because I studied the

whole situation with regards to the Fleur de Lys crab licence, and I will still

say that it was an injustice done in Fleur de Lys. It was done in combination of

your predecessors in both parties, before 1989 and after 1989.

That doesn't make it right. That doesn't make it right

for the people who are in that community. Not only in that community, Mr.

Minister, but I can tell you that that is so - to see it in front of you is what

really bothers me. That little community with that crab plant was the hub of the

whole entire peninsula. People from Springdale came out and worked there, people

from all over that part of the Province. Now to see it without a licence because

of a mix-up of different ministers - but I remind the minister that they were

ministers who made a lot of these decisions, in the previous government and in

your government.

Of course now there was a transfer in licence. I don't

expect, and I think it is a good move, that there are no new licences reinstated

anywhere at this time with the crab industry. I agree with the minister on that.

I've agreed with the previous minister when he said that. I agree with that,

because I really believe that the crab industry has to be controlled and

maintained if we are going to have a sustainable one. I agree with that point.

But when it comes to the transfer of a licence - of course the latest example

being the Englee situation - then, if there was ever a plant in this province

that you can justify as a minister, if there is a transfer possible, I know

there is not going to be a lot of transfers, any movement in places, but I

believe without going into the details of that whole story, and I would like to

do it again with this minister to make sure that he has every detail and it

would take us an hour probably to go through it, but the whole chronological

stage of what happened exactly with that license in Fleur de Lys. I believe that

any government, any minister would see the justification that if there was a

possible transfer in this province anywhere that Fleur de Lys should be

considered very highly for that transfer of license. They were treated unjustly

by different governments.

So, I would like to first of all request that and I am

requesting that for this reason: because I asked for it almost two years ago now

with a delegation here from Fleur de Lys, which has been here five times now,

they have not given up on it and they will not give up on it and I will not give

up on it. The premier then, stood in a meeting with me and five other members

and the previous Minister of Fisheries and promised an investigation into that

transfer of licence. Because I believe, personally, that if there was a full

investigation done right on back through the governments and the different

levels and everything else, they would see that if there is a transfer possible

in this province of a licence than Fleur de Lys is justified in getting it and

you would have no problem justifying a transfer to Fleur de Lys who really

should have that licence.

DR. HULAN: Okay, Mr. Shelley, let me set the

record straight. You implied in your comments that there should be an

investigation done. A thorough investigation was done on this issue. Number one;

a complete and through investigation was done. It was discussed with your people

and a letter to that affect was sent and shared with the town council of Fleur

de Lys and you know very well and I referenced it. You know very well that that

has been done. Now, let me tell you, let me tell the committee what this

gentleman is referring to. On the very last day of the conservative

administration in 1989, the very last day at the eleventh hour, the then

minister, Mr. Peach, granted to Fleur de Lys a crab licence. The licence was on

the last day of the administration 1989, a new licence was granted to Old

Perlican.

MR. SHELLEY: That's right.

DR. HULAN: A new licence was granted to Old

Perlican. Mr. Peach, ignored their own government policy at the time for the

granting of a new licence. There was a freeze on new licences. When my

predecessor, Mr. Carter came on the scene I think it was about August of that

year, I don't remember exactly when, but I think it was about August of that

year, Mr. Carter cancelled the licence at Old Perlican and transferred - because

the licences were owned by the same company - the license form Fleur de Lys to

Old Perlican at the request of the owner of the license, at the request of the

owner and it was quite legitimate at that time to do so because transfers were

still allowed. In October, I believe of that year transfers were frozen. So, the

gentlemen who owned both licenses, the transfer was made at his request to Old

Perlican and that's where if stands now. A through investigation was done at the

request of the premier. Am I right Mr. Kingsley?....and it has been shared with

your people in Fleur de Lys.

Maybe before I go any further I will let you speak to

it Reg if you have anything more to add.

MR. KINGSLEY: Yes, the minister is correct, now

the delegation were not given a copy of the report of the investigation, but the

results of the investigation were shared with them in a meeting which they had

with the Premier - I forget the date now, I think it was last October - and they

were advised of the results of the investigation and, as the minister indicated,

there was further correspondence with the MP for the area, Mr. Tobin, to confirm

that the licence could not be reissued as requested, and the town, as I recall,

were copied with that correspondence, so the town has been notified of the

results.

MR. SHELLEY: Okay.

Well first of all, as far as the town goes, yes, they

did have that meeting. They were never given anything in writing. The

investigation - this so-called investigation - still has not answered a lot of

their questions. Yes, it was legitimate at the time for you to transfer the

licence out of Fleur de Lys into the same company, into Old Perlican, because a

mistake was made by Milton Peach - I agree with you, it was a mistake. That

still does not make it morally right.

What the problem is here is that Fleur de Lys was used

as a scapegoat to make a correctness of one mistake to another. It is as simple

as that, and I was hoping that the minister would give some conscience to that

particular aspect of it. Whether it was legally right at the time, the bottom

line is that this community of Fleur de Lys - not Milton Peach or the

Progressive Conservatives or the Liberals or anybody else - the minister should

look at this from the perspective that Fleur de Lys, in order to correct the

mistake by Milton Peach of reinstating a new licence, which should have never

been done, was used as the scapegoat to correct the wrongs.

The other truth of it is that Quinlan Brothers in Old

Perlican may have used that as their lever - because once they were given that

new licence which they knew they should not have gotten - to damage Fleur de Lys

by transferring theirs out. Now that is the bottom line of it. You can be

legitimate or anything about it, but the bottom line is that Fleur de Lys was

used to get the Quinlans and the government out of a jam which should not have

been done in the first place, and that is the point I will always make about

this.

DR. HULAN: The thing, Mr. Shelley, really is that

at the time of the transfer of the licence from Fleur de Lys to Old Perlican

there was no crab being processed. The licence was essentially and totally and

unequivocally inactive at Fleur de Lys.

MR. SHELLEY: That is not true.

DR. HULAN: That is true.

MR. SHELLEY: No, no, that is not true.

DR. HULAN: That is true, and the results of the

study - anyhow, that is true.

MR. SHELLEY: No, that is not true.

DR. HULAN: Therefore the owner of the licence,

Quinlan Brothers, had requested to transfer it to Old Perlican so that they

could get on with processing crab and providing jobs for Newfoundlanders, so

that is where it stands, Sir.

MR. CHAIRMAN: Mr. Shelley, your time has expired.

You may come back to this again your next go around.

Before introducing the next questioner, I would like

to welcome the Vice-Chairman of the Committee, and I would ask him to just

introduce himself for the record.

MR. WOODFORD: Rick Woodford, MHA for Humber

Valley.

MR. CHAIRMAN: Thank you, Mr. Woodford. Mr. Penney.

MR. PENNEY: Thank you, Mr. Chairman. I am Melvin

Penney, MHA for Lewisporte.

Mr. Minister, I have a couple of general questions,

but before I get to that there are two specific items in the subheads I would

like to bring to your attention, item 2.1.02, page 97, item 07, property

furnishings and equipment. Last year we budgeted $85,000, spent $52,000, and

this year we are budgeting only $7,000. Could you give us some idea of what -

AN HON. MEMBER: (Inaudible).

MR. PENNEY: 2.1.02.

DR. HULAN: Marine Service Centres?

MR. PENNEY: Yes, item 07, property furnishings and

equipment. It is a big savings from $85,000 to $7,000.

AN HON. MEMBER: (Inaudible).

DR. HULAN: I am told by the Director of

Administration that it is an error here, and the money got budgeted somewhere

else through the department, but it is an error in the figure; is that right?

AN HON. MEMBER: Yes.

DR. HULAN: So there is an error in the figure

there.

MR. PENNEY: Okay, so that seven would probably be

closer to last year's figures?

AN HON. MEMBER: (Inaudible).

MR. PENNEY: Okay.

The next page, 2.1.05, Labrador Development Agreement,

item 06, purchased services, last year we budgeted $81,000; the revised figure

shows nothing, no expenditure at all. This year we are budgeting $323,000. Could

you explain those figures for me, please?

DR. HULAN: That specific item I will ask ADM

Murphy to respond to.

MR. MURPHY: Thank you, Mr. Chairman. That just is

a reflection of the cash flow from year to year depending on the activity within

the program. Purchased Services in that case would perhaps be used this year to

cover vessel charters for research purposes.

MR. PENNEY: That didn't happen last year at all?

MR. MURPHY: No. According to this, while there was

some activity there it was probably put out under Grants and Subsidies, grants

to the industry as opposed to a direct charter from the department.

DR. HULAN: Mr. Penney, I'm also aware of the fact

that this agreement is largely proposal-driven and therefore the absolute

figures will change from year to year. It is based on the proposals that are

received.

MR. PENNEY: Very well, Mr. Minister. If I could

come back to a general topic, aquaculture. I've been doing a fair amount of

reading about aquaculture in the last few months and I keep running across the

expression: Aquaculture being the fishery of the future. Let's hope that our

mainstay fishery, the groundfishery, will recover and that we won't be totally

dependent on aquaculture. Nevertheless, I think there is some truth to that,

that aquaculture, fish-farming, is the way of the future.

Could you give us some kind of an overview as to what

the aquaculture industry is doing in Newfoundland, where we are at this point in

time in this Province, and how we compare with the other Atlantic provinces, and

probably how we compare with British Columbia as well? Where do we fit in the

overall scheme of things?

DR. HULAN: Not quite where I would like to see us

fitting at this stage. If I could give you some indication of aquaculture

production in Canada and other countries, Norway for instance. The production in

metric tons - mostly salmon for Norway - 201,000 metric tons. Chile, 85,000

metric tons. These are 1994 figures. Canada, 50,000 metric tons. Newfoundland,

781 metric tons. If we compare ourselves with the Province of New Brunswick, the

industry in New Brunswick, largely salmon again, is worth probably a little in

excess of $150 million to the provincial economy. Newfoundland, we are sitting

at just around $2 million.

Now let me, in defence of Newfoundland versus New

Brunswick - an important thing happened in the Province of New Brunswick way

back, as far as aquaculture is concerned, in 1962, 1963. The federal government

made the research station at St. Andrew's, New Brunswick, chief focus on

aquaculture. They hired scientists, geneticists, and all the necessary

scientists to develop a capability in salmon, salmonid aquaculture in

particular, and as a result of that, that was a stimulation to the province to

really focus on it, and they did. They picked up the ball and ran with it.

Because they had this tremendous infrastructure in New Brunswick there assisting

them, paid for by the federal government.

MR. PENNEY: Mr. Minister, I don't really mean to

interrupt you but, how would we compare with say, Nova Scotia or Prince Edward

Island?

DR. HULAN: Again, I don't know what the exact

dollar figure in Nova Scotia is, but we are behind Nova Scotia.

WITNESS: (Inaudible) Nova Scotia.

DR. HULAN: My ADM tells me in Nova Scotia we are a

little behind. Their industry probably would be worth probably $3 million or $4

million; ours is worth roughly, about $2 million to the provincial economy. Let

me tell you where we are now. In blue mussel production, we are leading Atlantic

Canada. We have doubled that production in the last two years in a row and we

expect to do the same again this year.

MR. PENNEY: And the markets are still strong?

DR. HULAN: As far as the major breakthrough that

was made here in the Province with the research carried out by Dr. Pat. Dabinett

on the giant sea scallop, we are now in the process of developing a hatchery so

that we can have a ready supply of seed or spat for the growers. This has been a

very positive move.

I guess to answer your question, Mr. Penney, in the

last five or six years, the building blocks, the foundation has been laid by

this government to now put it in a place to really start to grow as far as the

aquaculture industry is concerned. This focus will continue and we have

estimated that by the year 2000, the value of the aquaculture industry in this

Province will be in excess of $100 million, that's what the suggestions and the

aim is for; hopefully we will even do better than that, but as far as salmon and

steelhead trout in Bay d'Espoir, the potential is fantastic. Again, we doubled

our tonnage in the last year and the production is increasing. We have an

interest, because of our move, to provide a ready supply of spat for commercial

growers; we have an interest in the Goose Arm area of the Bay of Islands for a

major scallop aquaculture site to be developed there with the idea of producing

some 50,000 animals a year from that site.

Cod aquaculture is also of interest and a focus on it

by the department. Unfortunately, in cod the development at Bay Bulls had a bit

of a setback because of the moratoria placed on Northern cod, because that

facility was based on taking small fish from the trap fishery and that

disappeared with the moratoria that was in place.

We are looking at various options right now and one of

them is to establish a cod hatchery and -

WITNESS: (Inaudible).

DR. HULAN: Yes, a company has already submitted a

proposal to do exactly that, the operation at Bay Bulls. We will be looking at

grow out and release as one of the options here, and we will also be looking at

another technology that was used in Norway over the years, and that was the

release of larva into protected bays such as Trinity Bay and so on and so forth

to develop as well, so the aquaculture industry is very positive. I am hoping

that there will be additional stimulus to the industry and that is all I can say

at this stage and in the very, very near future that will be very important for

this Province.

MR. PENNEY: Mr. Minister, I understand that one of

the more viable sectors of aquaculture in Scandinavia would be halibut, that

they've been very successful in raising halibut to tremendous sizes. Are we

doing anything with that technology here? Are we doing any experimentation with

halibut or any of the other related groundfish, the flatfish, halibut, turbot,

any of those things?

DR. HULAN: There has been a lot of research done

on halibut down at the Marine Lab at Logy Bay. I might say in Norway, they've

been experimenting with this species for many years. This is their first year

that they've launched out into commercial production in an aquaculture

environment. The work being done at Logy Bay is quite hopeful, is quite

positive, and the National Research Council of Canada has been supporting that

work. We have not ourselves been putting, from our provincial budget, money into

that work. The federal vehicle, the National Research Council, has been

contributing fairly significant dollars to the work that is being done by Dr.

Joe Brown at the Marine Lab in Logy Bay. Again, it is certainly an area that we

will, hopefully sooner than later, be launching out into as far as aquaculture

production is concerned.

MR. CHAIRMAN: Thank you, Mr. Penney.

MR. PENNEY: Thank you, Mr. Chairman.

MR. CHAIRMAN: We now recognize Mr. Woodford.

MR. WOODFORD: Thank you, Mr. Chairman. A few

questions for the minister and his staff, first of all as it pertains to

agriculture.

In the headings in your Estimates on Fisheries, Food

and Agriculture, 6.1.02, Limestone Sales. You budgeted $260,000 last year and

you spent $220,000. I notice the budget this year is $181,500. That is a

reduction in limestone subsidies for next year. What were the main reasons?

First of all, I should say, what was the actual cost last year and what will it

be this year per ton to the farmer?

DR. HULAN: The number of tonnage based on the

interest last year and so on has been reduced, but I think I would ask Dale to

respond to this specific item.

MR. SUDOM: First of all, the price for limestone

last year was set at $32 a ton for bulk and $44.50 for the bagged. Unfortunately

the uptake on that was very poor and they offered last year limestone at $10 a

ton towards the latter part of the year. The uptake on that was considerable. I

can't give you the exact tonnage but there were a lot of farmers who availed of

that program. This year the price has been reduced from $32 a ton to $25 a ton

for the bulk limestone. It is being maintained at the same level for bagged

which is imported from the mainland at $44.50 a ton. Based on the fact that the

farmers availed of the $10 a ton limestone last fall we felt that the uptake

would not be as great this year as it was last year, and so we've made available

3,800 tons of limestone this year at $25 a ton. That is I believe a reduction,

but I don't have the figures of the reduction from the tonnage supplied last

year. We feel that is an ample tonnage for the farming industry.

MR. WOODFORD: Yes, the tonnage may be ample, but

one of the reasons why there wasn't such a high uptake was because of the

expenditure. I mean, it went to $32 a ton from $19 over the last couple of

years, it is just too expensive. I say to the minister: I haven't got to instill

in him the importance of limestone to this Province and to agricultural

development. It is one of the basic needs out there, and this limestone did not

cost the government $25 a ton. When Havelock Lime signed that agreement six or

seven years ago, this is lime left over from the Havelock agreement, really.

That limestone was, if not crushed, paid for under agreement and under contract

six or seven years ago, if not more, so why should we be charging so much more

now? Because what is happening, Mr. Minister, it is forcing the farmers to go to

Corner Brook and bring it up for a lot less per ton. That is what is happening

in the gypsum plant, and when the uptake was offered last year at $10 a ton

everybody went for it, naturally, because it was local, it was there, it went

out to the Codroy Valley area, went out all around the Cormack area.

What we had to do the year before and the year before

that, I asked the previous minister to offer it to the pastures or something. I

think a lot of that was taken up by the pastures that were considered viable at

the time, so I think it is very important. I am glad to see that it is gone down

$7 a ton this year. I would like to see it go down further because of the

previous contract with Havelock and because of the excess in tonnage that is

there every year, and most importantly because of how important it is to forage

production in this Province, and crop production.

DR. HULAN: In actual fact, just so that the other

committee members know, probably I could get away with saying that limestone in

this Province is equally as important as fertilizer in many of our fields, and

without the proper pH that is created by the use of limestone you do not get as

much use of the fertilizer that you use; that is the other thing.

I would have liked to have been able to offer it to

the farmers considerably less than what we have been able to do so, but we have

to keep in mind that the transportation costs to get the material here to the

Island is $35 a ton; $35 a ton in transportation costs, is that right?

AN HON. MEMBER: (Inaudible).

DR. HULAN: Within the Island; it is $35 a ton from

Cormack to all the other locations on the Island.

Although I would like to be able to have a lower

price, we have to be cognizant of our whole budgetary program and restrictions,

and the figure that we came up with, I think, although probably not as low as I

would liked to be able to offer it, I was very pleased with what we did arrive

at.

Of course last year at $10 a ton, which was basically

unrealistically low, and I think you would agree with that, then there was a

tremendous uptake of that limestone at that time, but we will keep working on

it, Mr. Woodford. Certainly you and I are cognizant of the importance and

certainly it is at least a move in a positive direction this year to drop it by

$7 a ton.

MR. WOODFORD: As I said, I think the last couple

of years, the year before last it was offered, I don't know when a lot of it got

out, but last year I think quite a bit of it got to the pastures. I notice in

the heads this year - I cannot find it - there is no mention of pastures. It was

always in the estimates. I do not see it, unless I am overlooking something.

DR. HULAN: It is in there, Rick.

MR. WOODFORD: It must be buried under something

else.

DR. HULAN: I think there should be a figure in

there somewhere of $115,000; is that not right?

MR. SUDOM: It is in the grants and subsidy

category, in the extension subhead, and I will find it for you.

MR. CHAIRMAN: Would you kindly identify yourself

whenever you are speaking, for the record?

MR. WOODFORD: I did not see it there, and

therefore I did not go back and get last year's estimates to make a comparison,

because last year you closed out a number of pastures, and one of the reasons

given for that was the non-viability of those pastures, but the department also

said that the money saved from those pastures would be put into the pastures

that are viable and that would be of benefit to a particular area. That is why I

would like to see this heading.

DR. HULAN: Last year Rick, what happened was the

funding to the pastures was reduced by 50 per cent, as you know.

MR. WOODFORD: Right.

DR. HULAN: Certain pastures were told that this

year some of those pastures would not be funded, and that is exactly what is

happening. It is located Rick on page 113, 6.6.01.10, Grants and Subsidies,

$321,000 there. You will notice from last year that is increased by about

$115,000, and that is where the figure came into being. Anyhow, there is a

figure within our own provincial budget of $115,000 or thereabouts for the

pastures that will be funded this coming year. It is there. Those pastures that

were told they would remain open, plus a few others that I have to go back and

have a serious look at, with regard to the overall issue on pastures and so on,

that will be taken care of as well.

MR. WOODFORD: Did the price per animal unit

increase this year, or is that entirely left up to the pasture operator?

DR. HULAN: That is left up to the pasture manager,

the pasture operators, and that is something that has bothered me for many year,

the price per animal unit. Something I would have liked to have seen changed

before now. But we will see how the things iron out next year.

WITNESS: (Inaudible).

DR. HULAN: There has been an indication given to

the pasture operators that this will be the last year for any funding of

pastures. We will follow the report of the task force on agri-foods and go the

privatization route with all the pastures in the Province.

MR. WOODFORD: So this will be the last year of

funding for any pastures in the Province.

DR. HULAN: That is what the plan is now. I think

you should know that. There is very inefficient use of the pasture land of this

Province. It is criminal what has been going on. There are 64,000 acres tied up

in pastures in this Province and there is less than 5,800 acres that are being

used and developed. That cannot be.

MR. WOODFORD: But why throw out the baby with the

bath water?

DR. HULAN: I'm not throwing out the baby with the

bath water sir, I'm sorry, I would have to disagree with you there. What I'm

saying is we have to make efficient use of these lands.

MR. WOODFORD: But could you tell me a for

instance, give me one example how you could make more efficient use of it?

DR. HULAN: What do you mean?

MR. WOODFORD: Give me one example now of how you

could make more efficient use of pasture land.

DR. HULAN: Number one, the (inaudible) -

MR. WOODFORD: How many pasture lands are being

utilized now?

DR. HULAN: Sorry?

MR. WOODFORD: Pasture lands that are being

utilized now, give me one example for the record.

DR. HULAN: I would love to take you out around

Conception Bay and I will give you a very clear example of very damn poor

efficient use of pastures. Number one, going to the privatization of pastures,

what we are suggesting is that these private entrepreneurs will operate part of

the pasture, or probably even all of the pasture, as a pasture for the agri-food

industry, but they may also decide to develop some of that valuable land for

other agricultural enterprises. Okay?

MR. WOODFORD: There is nothing wrong with that,

but a pasture today that is utilized - a piece of pasture land is no different

than any other block of agricultural land in the Province. You only have a

certain portion of that particular pasture -

DR. HULAN: That pasture land will be utilized -

MR. WOODFORD: - which will be utilized.

DR. HULAN: - even more efficiently in private

hands without government subsidies.

MR. WOODFORD: The minister must know something

that the people in the industry don't know.

DR. HULAN: I think the industry will be very

supportive in the end, but anyhow that's where it is today.

MR. WOODFORD: We'll have to see what happens, I

think -

MR. CHAIRMAN: Mr. Woodford, your ten minutes has

expired. I recognize Mr. Shelley.

MR. SHELLEY: Thank you, Mr. Chairman.

Two questions, first of all I want to get the

ministers comments on this because I know he has been talking about this as much

as I have. As a matter of fact he had a meeting with Mr. Tobin just a couple of

days after I did on this particular issue and that's on the TAGs and the

independent board that has been set up now. Of course, prior to that he had the

same problems as many of the members in this house had with people going to the

level two and which I told the federal minister and I think he even agreed on

it, up to that point the appeal process was a farce, nothing short of that. I

mean in the two examples I gave, I could give 100 and I'm sure that the minister

could give 100. I had a gentleman in my district forty-four years in the

fishery, now turned down at the level two appeal while his grandson who was four

summers fishing got it. I mean I don't have to go any further than that, it was

a farce.

So, therefore with recommendations from me, from other

member, from the minister and everybody, and co-operation was needed on that to

speak up for Newfoundland, is that the process was wrong and people were falling

through what I call the crack syndrome, falling through the cracks - legitimate

fisherman. So, Mr. Speaker since then of course with all this lobbying by

everybody, I guess, an independent board has been set in place. Now can the

minister update us on how many boards, I'm hearing two but I would just like to

hear some confirmation. How many people on these boards, who they are and if

they are going to be actually indeed travelling the province or are they just

going to be set up in St. John's and so on?

DR. HULAN: I can't really share the details with

you because they have not been ironed out yet and I still have some difficulties

and concerns and they are being made known to the federal officials, there is no

question there, but as far as the details on the composition of the boards and

so on that has not been finally decided.

MR. SHELLEY: A lot of the level two people that

have already gone through the level two process have not gotten answers and have

been dragged out now for quite awhile. Am I correct in assuming it is because

they are waiting for this independent board to be set in place before they start

turning people down at level two again so they won't have to redo the whole

process again.

DR. HULAN: Indeed, that is the reasoning I would

have to submit to you, and in fact those that were turned down in the other

process and were approved and then rejected by HRDC, all of those will be

reviewed as well.

MR. SHELLEY: All of the documents. That was the

next question because people want to know where they can go from there.

I don't know how to ask this question, I suppose you

can't answer it either maybe at this point, but I am really wondering or waiting

to see how this independent board is going to look at it differently than what

the level two because I also said to the minister, and I am sure you have, that

the truth is that the HRD and that department is determining the faith of these

appeals and not Mr. Tobin and his department at all, which I would like to see

it go to. So, have you made recommendations as regards that, as far as whether

these decisions are back into the Department of Fisheries and Oceans and not in

the HRD?

DR. HULAN: Absolutely that has been made and in

fact we would like to see the whole issue handled by the Department of Fisheries

and Oceans, but that has been certainly discussed with both ministers I might

add.

MR. SHELLEY: Thank you.

I just wanted to make that point here this morning, I

think we are on the same wavelength with that.

Now back to crab licences, not on the Fleur de Lys

crab plant licence but on the individual crab licences this year for new

licences for crab boats thirty five and under, I think it is. Could I just get

an update on how people go about submitting to these for criteria for getting

these new licences?

DR. HULAN: The crab program for this year has not

been finalized yet. There will be a draw for any additional licences that are

finally arrived at for the province. It will go in a draw as it did on the West

Coast last year.

MR. SHELLEY: How many? I'm hearing 135, is that

correct?

DR. HULAN: The final program for the year has not

been finalized. The numbers have not been established yet as to how many new

licences -

MR. SHELLEY: Can you give me a ball park figure,

100 or 500, I mean -

DR. HULAN: I would not want to do that at this

stage. Is there anything you can add -

MR. SHELLEY: I am not asking for a specific

number. In the area of 100 to 200, 300, 400. I mean can you give me at least

that? Just for some indication, I'm not trying to nail the minister down to

anything. I just want to know in what area are we talking about, and how many

licences?

DR. HULAN: We have to be cognizant of our resource

out there and -

MR. SHELLEY: Yes, that is why I'm asking the

question actually.

DR. HULAN: - we are looking at it very carefully.

I'm almost super-paranoid on that. If I could make a guess - and this is just a

guess - 300 to 400 maximum.

MR. SHELLEY: Three hundred to four hundred, okay.

DR. HULAN: Maximum. But that is only a guess.

MR. SHELLEY: That is fine. I don't mind telling

the minister that basically I'm cognizant of the same thing in the industry, and

I would just like to have an idea of what area, and that is fair enough. If it

goes 450 or if it goes 250 then it is still acceptable.

The criteria for these new licences, are they

established and can I have a look at the criteria? For anybody who is applying

for this, what do they have to look for? The boat size, what they had before and

everything else, I mean that the criteria should be established by now. Can I

get that? Can anybody get that?

DR. HULAN: Again, nothing has been finally

established there, but some of things that it is leaning towards is heads of

enterprises as being one, and boats thirty-feet and below, right? Most of them

will be thirty-five feet or below. All of these criteria, Mr. Shelley, have not

been finalized in the crab program for this year yet.

MR. SHELLEY: When do you expect that? In months?

Weeks, it has to be, (inaudible).

DR. HULAN: I would hope within the next two or

three weeks at the latest.

MR. SHELLEY: Interested people in this - is there

a basic application to submit in writing to your department? How do they go

about it? I've been asked the question: How do I go about looking for one of

these licences?

DR. HULAN: Again, not to my department. The

licensing is a DFO responsibility -

MR. SHELLEY: Yes, I realize that.

DR. HULAN: - and the applications would be

submitted to the DFO offices.

MR. SHELLEY: Okay, so it is an application. I know

they would go federal.

DR. HULAN: Is there a specific application form?

MR. SHELLEY: A written submission, is it?

WITNESS: (Inaudible).

DR. HULAN: I guess an indication of intent, the

desire to acquire a licence, and then the name would be put in and it would be

finalized on a draw.

MR. SHELLEY: Okay.

DR. HULAN: Yes.

MR. SHELLEY: That would be soon you say.

DR. HULAN: Hopefully within the next two to three

weeks.

MR. SHELLEY: I'm just going to change in midstream

here because I don't have a lot of time left and I think this is the last set of

questions I'm going to be asking. I'm jumping around a little bit but I want

some more information, and I'm sure the minister likes this one anyway. It is in

agri-foods and that is the blueberries, the potential for blueberries.

I know that because in my district over the last few

weeks I've had some people come forward. Of course you know with the burn overs

and that on the Baie Verte Peninsula that it is a prime location also for

blueberries. As a matter of fact, the last few seasons have been very good

there. Now we have some people interested in our area and they are starting to

talk to me. In all honesty I will admit ignorance to a lot of that, as far as

the commercial blueberry crop, but there are people who come forward with

proposals. I would like to know where you think that is leading. Where would

these people go to get more information from your department and go to the right

people to look at possible sites?

DR. HULAN: In fact, our small fruit area - don't

take anything by my talking about small fruit specialists and so on - they do

the site assessments with regard to the suitability of a particular acreage for

blueberry production. Certainly the word is in my department that if any

individual or group of individuals are interested in developing this particular

industry the department is to assist in every way possible to make that happen.

I'm a great believer not only of blueberries but of the partridge berries and

bakeapples of this Province, that we have to get on with that terrible neglect

over the years when these berries have been ignored. There is tremendous

opportunity there in some areas now.

Having said that, I must say - for instance, St.

George's on the West Coast of the Island has been touted to be the blueberry

capital, as the Chairman knows, and so on and so forth. You know we had a total

area assessment last year and no place out there were the assessors able to find

sufficient productive areas to encourage commercial blueberry production.

MR. SHELLEY: There was nowhere in St. George's?

DR. HULAN: No, not to encourage commercial

production.

MR. SHELLEY: What would it take then, Minister,

why not?

DR. HULAN: Sorry?

MR. SHELLEY: What would it take then? Why not?

DR. HULAN: The blueberry bushes were just not

there in sufficient quantities to encourage commercial production. The yield

would not be there.

MR. SHELLEY: So, do you see anywhere in this

Province, where the yield would be sufficient?

DR. HULAN: Oh, yes. There are all kinds; out

around the Bonavista Peninsula we have tremendous potential and the Conception

Bay area, I wouldn't be a bit surprised if maybe in your area as well. However,

the point that I was making, although we have led ourselves to believe over the

years that there are tremendous blueberry production possibilities in the St.

George's area, when we did a total and proper assessment of the potential, it

just was not there.

MR. SHELLEY: So the first thing that needs to be

done, if anybody is considering this, is to get an assessment of the area?

DR. HULAN: Oh, absolutely. You may have seen in

the news the issue over the Bonavista Peninsula proposal. Our department has

been working with these people and that request is for a lease of land for

blueberry production of 2,500 acres, where we would not and I would not condone

such an approval without having a proper assessment of the area, so we have

approved the project in principle, and now that the snow cover is gone, our

assessors will go out from the branch and assess the area properly as to its

potential for commercial blueberry production; and I hope and I am sure that

good potential is there but we will have to see when a proper assessment is

made.

MR. SHELLEY: Well, that's fair enough. That's what

I would like to see and if it is there, go out and develop it.

Okay, thank you. I am going to jump around again -

MR. CHAIRMAN: Mr. Shelley, do you have any more

questions? Your time has expired but if you are about to clue up, I will -

MR. SHELLEY: Yes, I will clue up with one more

question, if I may?

MR. CHAIRMAN: Okay.

MR. SHELLEY: Sealing. Of course you know I have

been very vocal in that area also and the last reports I am hearing is that you

will be looking to the markets again and hopefully we will get to a market

capacity where we can take a full quota here in Newfoundland because I think the

industry has tremendous potential and is untapped really, and of course down in

my area sealing is very important.

In your trips that are about to come up now, Mr.

Minister, I would like to ask the minister if he has some key interest in

certain parts of the industry and what particular markets they are going to look

for now? Could you update us on what your trips may entail?

DR. HULAN: Well I will be leaving this week to go

to Italy and France to finalize the technology transfer of a new tanning process

to the Province. We have identified an area, a site where we will carry out a

pilot experiment this year of tanning with this new process about 500 seal hides

to demonstrate to Newfoundland that its a doable thing here. The process is a

very exciting development in the tanning process as you know; the big problem

with tanneries all around the world has always been pollution to the

environment, and in actual fact I can tell you that I had played a small

part in

the development of this process while I was at Memorial University, the

technology is largely French technology and somewhat also Italian technology.

The process is totally, totally environmentally

friendly and it produces a quality of leather second to none, so it has great

potential and is suitable for all hides that we know of. Certainly, the French

have tanned rhinoceros hides with it and it has worked very, very well.

Sometimes people accuse certain politicians of having hides like a rhinoceros,

as an indication of the toughness of their hides, but anyway the technology will

be very important, not only for the sealing industry but hopefully for the

developing sheep and lamb industry that seems to have generated some interest in

the last year with regard to the establishment of a sizeable sheep and lamb

operation in the not too distant future. Of course, in the area of a sheep and

lamb operation, a large part of the profit is in the hide, that up to this point

in this Province, we have been throwing out in the garbage, so it is an exciting

development, in particular to the sealing industry, it is absolutely imperative

that we start a tannery.

With the establishment of a tannery, we also have some

of the finest seamstress people in North America right here on the Island, so

the move along with the tannery will be into secondary processing of leather

into garments and clothing. So that is where we are going on it, and I just hope

that it will proceed at our pace.

MR. SHELLEY: Well, I wish the minister luck in

that particular industry. I am very interested and I will be watching very

closely to see how it develops.

Thank you, Mr. Chairman.

MR. CHAIRMAN: Thank you, Mr. Shelley. Thank you,

Mr. Minister. Mr. Woodford.

MR. WOODFORD: Newfoundland Farm Products, what is

the latest on that? Are you still in the process of trying to sell Newfoundland

Farm Products?

DR. HULAN: Newfoundland Farm Products will be,

sooner or later, privatized. The proposal that was submitted, and I have gone

through this before you came in, Mr. Woodford -

MR. WOODFORD: Oh, I am sorry about that.

DR. HULAN: That is okay. That is fine. I will

quickly tell you that the proposal that is before us right now by the Chicken

Producers Association of this Province is still there. It is now being revised

somewhat in view of the bottom falling out of the Ontario chicken prices in the

last eight to ten months as a result of the Canada/U.S. free trade deal, so

their proposal now is a very, very - I won't mention it because it is their

proposal. I think it is where they should have been at the beginning of this

game. There is some great potential in this Province, and I will just add this

for your own imagination. Newfoundland sits in a golden position to produce a

salmonella free bird for the world market, because we are isolated and we can

completely isolate that organism. My friends, who are experts in the field in

North America, and I have been talking in recent months. There is a real

potential here for a salmonella free industry, and that opens up a whole new

ball game as far as the poultry industry in Newfoundland is concerned, but as

far as the broiler industry is concerned their latest proposal is very, very

positive, and I think at the end of the day will establish the poultry industry

in this Province on a very, very, very sound footing.

Of course, we are looking at many aspects of it and

one of the big issues, and not one of the big issues, gentlemen, but the biggest

issue, in small animal production in this Province is getting a control on feed

prices. On that they have developed a proposal that is very, very sound and

interesting. That is still proceeding, Mr. Woodford, and will continue to do so

in the ensuing months.

MR. WOODFORD: Under the heading 6.2.01,

Administration and Support Services, under allowances and assistance -

DR. HULAN: Where is it?

MR. WOODFORD: Page 109 of your Estimates.

DR. HULAN: Okay.

MR. WOODFORD: 6.2.01 down to 09, allowances and

assistance, what would be the reason for that and what would be included?

DR. HULAN: Why the increase?

MR. WOODFORD: Yes.

DR. HULAN: That is SEP funding that we will be

using in the alternate feeds program, developing alternate feed (inaudible).

MR. WOODFORD: Developing alternate feeds.

DR. HULAN: Yes.

MR. WOODFORD: Would that also be the reason for

your increase in salaries in that particular heading?

DR. HULAN: That is a transfer, Mr. Woodford, of

some of the extension positions into Administration and Support Services, no

loss of salaries or any change, just a transfer from one

section to the other.

MR. WOODFORD: The $200,000 for construction and

alterations in 6.4.02, Newfoundland Farm Products -

DR. HULAN: Yes.

MR. WOODFORD: Is that primarily for out here in

St. John's?

DR. HULAN: That is for the corporation in general,

not only for the St. John's plant but also for some changes that were proposed

for the Corner Brook plant as well, so it is for the corporation.

MR. WOODFORD: Under 6.5.01 page 112,

Administration and Support Services. It includes veterinarian support services

provided by the department. Under supplies; on 04, what is included in that,

exactly?

DR. HULAN: Well, that is supplies for

veterinarians, what comes under that; hypodermic syringes et cetera, all the

supplies. Everything that they sell to farmers at the dispensary.

MR. WOODFORD: Why would there be such an increase

in that, especially a projected increase?

DR. HULAN: Well, one of the reasons for it, is the

first of July we had to prepare for the future. The first of July, we are very

fortunate in being able to obtain, I should tell you this, probably the best

poultry diagnostician in all of North America will be on our staff the first of

July. A poultry veterinarian that the poultry industry has been asking for now

for the last fifteen years, Dr. Conrad Van (inaudible), from Ontario, has agreed

to take up the position the first of July. He is without question the top

poultry diagnostician in North America. I know him personally. I didn't even

know that he had competed for the job until I got the three names on my desk and

of course he came out loud and clear in the examining process. He has agreed to

come and take up the position and some of the additional material will be for

pathological examination, that he will be involved in. Some of it is due, as my

ADM has just indicated to me, due to a new slaughter house inspection service -

MR. WOODFORD: Red meat program.

DR. HULAN: And supplies that will be required in

that area as well. That's handled by the veterinarians.

MR. WOODFORD: Getting back to the pastures. What

are your intentions with regards to those pastures? Splitting them up, offering

them to private operators like they are or splitting them up as farm units?

DR. HULAN: The proposals will be called for and

right now the intention is not to split them up. Individual or individuals that

submit a proposal would have to detail in their proposal what they will be doing

with the pasture. Right now we are waiting for proposals. In one particular

pasture we have two very, very, very strong and interesting proposals and in

each case the proposals will be examined by my department officials and a

decision will be made as to what direction it will go in.

MR. WOODFORD: But that's on the pastures that you

were supposed to have closed last year, or are they the ones that are still open

inclusive?

DR. HULAN: No, the ones that are being called for

right now are the ones that were notified last year that funds were withdrawn

and there may be, depending on how the proposals are in the evaluation process,

some need to split up pastures. We are not going to carve it in stone.

MR. WOODFORD: Is it possible, and I will use an

example, if I wanted to come in and apply for the Cormack pasture for a farm

development plan, would I get preference over Mr. Whelan, if he came and applied

for that pasture for private use for the same purpose it is being used for now?

If he wanted to say charge Rick Woodford twenty dollars per animal unit to use

his pasture - who would be given preference?

DR. HULAN: It would be totally dependent on the

strength of the proposal.

MR. WOODFORD: It is possible that I could go in

and make a proposal for Cormack pasture and use it as a farm?

DR. HULAN: It's possible, but what we are

insisting on is that part of the pasture or all of the pasture will still be

used as a private pasture for individuals to come and rent pasture space. That's

still going to be in there.

MR. WOODFORD: Okay.

DR. HULAN: The other thing I didn't mention was

that this will not be done blind and in total removal from the agricultural

industry itself. We will consult with the various producer groups - sheep

producers, beef producers. The Federation of Agriculture will have input into

this as well.

MR. WOODFORD: Yes, because while the intent may be

to, for instance, put it out to somebody who will still use it as a private

enterprise and be able to put your animals on pasture and so on, eventually they

would have to increase the cost per animal unit. If government can't run it like

that then the private entrepreneur can't run it.

DR. HULAN: That is right.

MR. WOODFORD: Eventually it could indirectly lead

to the closing of that particular pasture if the cost per animal unit got beyond

the individual's reach as regards cost and expenses. So that is a danger there.

DR. HULAN: Yes, but again I would suspect that the

operator would be interested in - and certainly part of the proposal will be to

require - that I will be looking into the proposals as to whether the proposal

is going to be for the total development of the pasture for another agricultural

enterprise and no place for the rental of pasture space on a private basis. Part

of the pasture will have to be available - that will have to be a very important

part of the proposal.

MR. WOODFORD: Be very careful with it.

DR. HULAN: Oh yes, absolutely.

MR. WOODFORD: Under your Land Development on the

acquisition of farm lands under the Agricultural Land Consolidation program, I

know there was $100,000 put into that last year and $100,000 spent, $100,000

projected this year and estimated. What land?

DR. HULAN: Where is that again?

MR. WOODFORD: Oh, your heading is on page 108,

6.1.04. What lands and what acreage were bought back this year?

DR. HULAN: That I would leave to the ADM. What

lands and what acreage -

MR. WOODFORD: What lands were taken up under the

Land Consolidation Program? What actual lands and where were the locations. I

understand that is just on the Avalon for now. I've requested for the last

number of years for that to be extended to other areas of the Province, because

the bottom line on this is it is a lot less expensive to cultivate and to do

something with a piece of land that has already been cleared then it is to try

to fund another piece of wilderness, to cut that out and put it into a farm. I

have always used the argument, could never get it through anybody's head, what

it costs to take a piece of wilderness and put it into a farm, and to take a

piece of already cleared farmland and work it.

DR. HULAN: It improved the productivity.

MR. WOODFORD: Yes, that is right. How much acreage

was involved?

MR. SUDOM: The division of those funds in that

particular account, the $100,000 is for the access road program, so that is for

maintenance and upgrading of agricultural access roads. The $400,000 as you

indicated is for the purchase of lands in the St. John's agriculture development

area, the area which is formally zoned for agriculture development, which

restricts other types of development. That is why the funds are directed at the

St. John's area in terms of the purchase of lands.

In terms of your question on how much land was

purchased last year, I have to apologize that I don't have those figures. I

started in my position January 9 and those transactions had already been done

and I'm not sure of the figures. Some of the monies are allocated to the

purchase of lands from years previous where they spread the payment of that over

a number of years. We could certainly get the figures on the acreages purchased

in the program in total and last year and table those for you.

MR. WOODFORD: So there is a possibility that no

acreage could have been bought last year, the payments were spread out.

MR. SUDOM: There was definitely new land purchased

last year. I believe only about $200,000 to $250,000 is attributed to purchases

that are spread out for previous years. Again, I would want to confirm those

exact figures, because I apologize, I just don't have them with me today.

MR. WOODFORD: What about the disposition of land

and the granting of leases? This particular land that was bought, do you have

any that was passed out this year on a Crown land lease, or a lease from the

department?

MR. SUDOM: Yes, there were a number of parcels

that were advertised, and they are in the final stages now of allocation, and

prospective purchasers of those parcels have been notified, so there are a

number of parcels that were advertised. To my knowledge, I believe all of the

parcels that have been bought so far, with the exception of maybe one or two,

are back out to private industry.

MR. WOODFORD: They go out as leases, don't they?

MR. SUDOM: Yes they do, Sir.

MR. WOODFORD: Even if the land that you bought was

granted, do they automatically go back out, all go out as leases after?

MR. SUDOM: Mr. Chair, I do not have to keep

identifying myself each time?

AN HON. MEMBER: Just your name.

MR. SUDOM: Yes, okay; I am sorry.

Could you repeat the question, Sir?

MR. WOODFORD: Say, for instance, if you bought 100

acres of land and there was thirty of that leased when you bought it, a farmer

could quite possibly have the Crown that was leased, and he could have a grant

on the rest. It comes back to the department. Does it all go out as lease after,

or is that particular grant kept?

MR. SUDOM: Yes, after we purchase the land - they

are all grants that we purchase; they are all freehold land - we convert those

lands immediately to Crown lands and then they are reallocated through the Crown

lands system and sold as Crown land leases.

MR. WOODFORD: The same as an agricultural lease if

I went to Crown lands for a piece of wilderness, the same lease would be

applicable to them?

MR. SUDOM: Yes, pretty well the same terms and

conditions, the same rental rate per acre. The only difference is, because there

have been improvements on this we basically sell the lease for the value of the

improvements.

MR. WOODFORD: Are there any plans to change the

lease back to the grant system?

DR. HULAN: Change the lease back to the grant

system?

MR. WOODFORD: Revert back to your grant?

DR. HULAN: That is something that has been a

subject of controversy and discussion, and at this stage I would say absolutely

not.

MR. WOODFORD: Absolutely not. Very good.

Mr. Chairman, I will stop there. I only have a few

minutes left, in any case.

MR. CHAIRMAN: Thank you, Mr. Woodford. Are there

any other questions?

I would now ask the Clerk to call the heads, and with

the agreement of the Committee I would suggest that we deal with heads 1.1.01

through 6.7.03 inclusive.

On motion, subheads 1.1.01 through 6.7.03, carried.

On motion, Department of Fisheries, Food and

Agriculture, total heads, carried without amendment.

MR. CHAIRMAN: That concludes the hearings for the

Estimates of the Department of Fisheries, Food and Agriculture. I would like to

thank the minister and his staff for their co-operation this morning. I would

also like to thank the members of the Committee for their co-operation. I would

also like to recognize and thank our support this morning from Elizabeth Murphy,

our clerk, Paul Kelleher, our page, and Mr. John Oates who is looking after the

recording.

Now I would like to call for a motion to adjourn.

On motion, Committee adjourned.

Document details

Collection	Newfoundland and Labrador — Committees
Citation	1995-04-10
Type	committee
Volume / chapter	committees_standingcommittees_resource_ga42session3_1995-04-10_rc-ffa_.htm
Language	en
Format	html
Source	PROVINCIAL
Identifier	e6193961f435ed05ca6aa3fe4cc1fca83df21795

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