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May 1,

RESOURCE COMMITTEE

Pursuant to Standing Order 68, Steve Kent, MHA for Mount Pearl North,

substitutes for Kevin Parsons, MHA for Cape St. Francis.

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

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

The Committee met at 6:02 p.m. in the Assembly Chamber.

CHAIR (Warr):

Good evening one and all. Welcome to the Estimates on Tourism, Culture, Industry

and Innovation.

Before we get underway, just a few housekeeping issues. This is the Resource

Committee. Mr. Kent is substituting tonight for Mr. Parsons and Ms. Rogers is

substituting for Ms. Michael.

Before we get underway, the Chair would entertain a motion to approve the

minutes of the Resource Committee for the Department of Fisheries and Land

Resources.

CLERK (Hammond):

You have to circulate the minutes.

CHAIR:

Oh, I'm sorry. Okay.

Now that you have copies of the minutes, the Chair will entertain a motion to

move the Resource Committee minutes for April 11, 2017 for the Department of

Fisheries and Land Resources.

MR. FINN:

So moved.

CHAIR:

Moved by John Finn.

Seconder?

MR. BRAGG:

Second.

CHAIR:

Derrick Bragg.

All those in favour?

Passed.

On motion, minutes adopted as circulated.

CHAIR:

I just remind the staff and any of our people asking questions tonight to state

your name and recognize that your tally light is on and proceed.

With the acceptance of everybody, we're going to start off with 4.2.04.

I'd ask the Clerk to call the first heading, please.

CLERK:

4.2.04.

CHAIR:

Minister, if you'd like to have a few opening remarks and introduce your staff.

MR. MITCHELMORE:

I'll just introduce myself as Christopher Mitchelmore, the Minister of Tourism,

Culture, Industry and Innovation and Minister Responsible for the Research &

Development

Corporation.

I think

to give maximum time to everybody in the Opposition this department covers a

lot, so if they have questions I want to give them the maximum three hours that

we have allocated for Estimates.

I'll

pass it over for my staff to introduce themselves.

MR. LOMOND:

Ted Lomond, Deputy Minister.

MS. MURPHY:

Carmela Murphy, Assistant Deputy Minister.

MR. GARDNER:

Ben Gardner, Assistant Deputy Minister.

MR. PLOUGHMAN:

Mark Ploughman, Acting CEO of the Research & Development Corporation.

MR. MAY:

Levi May, Chief Financial Officer, Research & Development Corporation.

MR. KIELLEY:

Marc Kielley, Assistant Deputy Minister.

MS. HAYES:

Robyn Hayes, Department Controller.

MS. DICKS:

Andrea Dicks, Director of Corporate Services.

MS. HUNT-GROUCHY:

Michelle Hunt-Grouchy, Director of Communications.

MR. HOLLOWAY:

Colin Holloway, Parliamentary Secretary to the minister and the MHA for the

District of Terra Nova.

MR. GEORGE:

Bradley George, Executive Assistant to the minister.

MS. HUMPHRIES:

Donna Marie Humphries, Director of Finance, The Rooms.

CHAIR:

Thank you.

We'll

turn it over to Mr. Kent.

MR. KENT:

Thank you.

Good

evening. It's nice to see a few familiar faces and some new ones as well.

Mr.

Chair, I understand we're going to ask our few questions about The Rooms

Corporation to get started. I have some broader questions about the department

overall that we'll get to later. I'm going to get right into the specifics

related to The Rooms and my colleague probably has some questions as well.

We're

looking at 4.2.04, which is the entire amount of funding that goes to support

The Rooms Corporation. There's only a slight change to the budget. I think it's

down by close to $83,000. I was just wondering if the minister could comment on

that and tell us why the slight reduction. What does that mean?

MR. MITCHELMORE:

I certainly can.

I want

to say that The Rooms has proven itself in terms of being able to raise

additional revenue and not have as much dependency on government grants to do

more. The Rooms visitation increased by 21,000 people in 2016 raising commercial

increasing by over 500 per cent.

They

won significant awards, 16 different awards at national, even the local level,

primarily from around the World War I exhibit relating to Beaumont-Hamel. We

have Canada's largest permanent World War I exhibit and that drew a lot of

interest. It also generated $12 million in private sector funding to develop the

amphitheatre and to do the exhibit. Plus, The Rooms is taking an approach of a

cultural immersion program where they're going to be adding more programming and

experience which is going to draw upon not only local visitors but the

international visitor as well.

To get

into some specifics of the line-by-line decrease, what makes that up is

generally from a zero-based budgeting point of view what The Rooms did is they

looked at how they could reduce their operating expenses of whether it's

purchasing less paper, doing less travel, be a reduction of $200,000 in a

line-by-line review of what was over a $6.6 million budget, beyond all the other

revenues that they gained from earned revenues such as admission, gift shop

sales and a variety of other things that The Rooms does.

Also,

there was an increase in funding for the final phase of the job evaluation

survey cost of about $67,400. There was a reduction in salaries for two

positions as was tabled here in the House of Assembly for the two management

positions as part of a Flatter, Leaner Management process of $150,200.

MR. KENT:

Thank you, Minister.

Just a

couple of follow-up questions related to that and I have maybe a couple of other

questions related to The Rooms following that. Could you tell me what that

revenue number was? You mentioned that there was a revenue increase. Maybe you

did say it, but can you tell me what the revenue increase was because that

obviously would explain some of the lessened dependence on the government grant.

MR. MITCHELMORE:

Yeah.

There

was $185,000 in commercial revenue.

MR. KENT:

Okay.

MR. MITCHELMORE:

When you look at a

line-by-line review of reducing by $200,000, these were expenses that were

deemed as a means of finding savings. So you're not going to have those recur,

whether you're purchasing less paper, less supplies, doing less travel, doing

things in a more efficient way, maybe cutting down on the number of telephone

lines that you would have and things like that. They found a total of $200,000,

but they also have additional commercial revenue beyond the earned revenues. So

the $185,000 places The Rooms in a good position.

MR. KENT:

Okay.

Revenue

is up by $185,000 in the commercial revenue.

MR. MITCHELMORE:

Yeah.

MR. KENT:

There are two positions that

have been cut. As a result of the zero-based budgeting exercise, as it's being

called, there were some minor cuts to various line items, savings for phone

lines and paper and whatever the case may be.

If you

factor all those things in, wouldn't that potentially lead to a greater

reduction in the Grants and Subsidies than $82,800? I mean two positions coming

out, plus a revenue increase, plus the $200,000 in cuts on the overall budget;

it just seems to me that $82,800 could potentially be bigger then, if my math is

correct.

MR. MITCHELMORE:

There were funds added back

to the Job Evaluation System cost.

MR. KENT:

Oh, that led to an increase.

MR. MITCHELMORE:

That led to an increase.

MR. KENT:

Okay.

MR. MITCHELMORE:

And government provided an

increase to cover that cost as it would for any of its employees in either

bargaining, non-bargaining. There are annual JES increases that were committed,

as you would have been aware as a former minister.

MR. KENT:

Right.

Okay.

Thank you for that.

Two

questions before I'll pass things over to my colleague. The Grants and Subsidies

line as it's shown here, my understanding is that includes in totality the

provincial government funding that is provided to The Rooms. Is that correct? Is

that what that number represents?

there anything else that's part of that Grants and Subsidies line, or anything

that goes to The Rooms that's not covered here, I guess, would be the other part

of the question?

MR. MITCHELMORE:

There could be some

additional funding throughout the department that will go to The Rooms or across

other departments depending on what The Rooms is doing. One thing in particular,

as we go through our line by lines, it would probably explain the reinstatement

of the Art Bank Program that was cut a couple of years ago under the previous

administration.

MR. KENT:

Okay.

This

year, as a result of the budget review, as a result of the budget that's now

been approved for The Rooms Corporation, have there been any reductions to staff

or hours of operation at The Rooms?

MR. MITCHELMORE:

The impact to staffing were

the two positions as noted.

MR. KENT:

Right, but beyond that.

MR. MITCHELMORE:

Beyond that, there has not

been. The Rooms right now, as of today, they started their cultural experience

program. As music Monday, they had the Shallaway choir there today to kick off

their opening on Mondays. So they are open every day of the week during the

summer.

Hopefully, the visitation and through this program that's being launched, more

revenues will be raised that would allow them to stay open longer and be

available to the public. That's every intent of The Rooms, The Rooms management

and the board of directors. They want to have The Rooms as a place for people to

go, for people to access and enjoy all that it has to offer. It's truly our

cultural gem here in the province.

MR. KENT:

Yeah, it's an amazing

facility and it would be great to see even more people access it. I'm encouraged

to hear there was an increase of 21,000 people, so that's good news.

Will

you be singing or dancing at The Rooms at any point this summer?

MR. MITCHELMORE:

There will be no singing for

me, Sir.

MR. KENT:

Okay.

That's

a relief to the people of the province.

MR. MITCHELMORE:

I do want to say as well,

though, that The Rooms does plan on being open on Friday and possibly Saturday

evenings during the summer tourism season as well to cater towards that

clientele. That's something that's obviously being reviewed by the management

and the board to determine that. They anticipate that it should be a busy year

for them. They had a great year last year, and with a Cultural Ambassadors and

immersion program that they're kicking off, it should lead to more interest.

They've

done things in the past such as culture and cocktails. They've done different

things around their theatre. They've done special one-offs that have happened

throughout the year, truly testing the market.

They

were at the Downhome Expo at the Glacier in Mount Pearl promoting their

volunteer ambassadors program. So if you know of anybody who is interested in

volunteering at The Rooms being a Cultural Ambassador, certainly, we encourage

people to get the message out there.

MR. KENT:

I said I only had two, but I

have another.

You

just mentioned some of the outreach that The Rooms is doing. I recall there was

some kind of program that connected The Rooms to rural parts of the province,

parts of the province outside of the Avalon region. Are there any programs

continuing that allow The Rooms to bring its programming across the province?

Has that been impacted in any way by structural changes or budget changes?

MR. MITCHELMORE:

The Rooms has regional

museums. They would have the Mary March museum in Grand Falls-Windsor and they

have the Grand Bank museum. They also have the Labrador

Interpretation Centre,

basically The Rooms branch in North West River. So there are three entities

which give The Rooms a regional presence, and to the extent possible The Rooms

provides support and outreach to these entities.

There

certainly is a possibility this would be something that the management and

through the board, as they're looking at these cultural programs, maybe be able

to deliver programming as well on a regional level which would be good. The

Rooms has, in the past, done a touring program.

MR. KENT:

Yeah.

MR. MITCHELMORE:

They're not just exclusive

to the St. John's, capital city region. They have undergone a digitizing project

with the International Grenfell Association to digitize documents. They partner,

they work with other entities and they've travelled on and did a roadshow as

well for World War I exhibits.

There

are a lot of things that The Rooms does and can do, but obviously there are

limitations. They do have a budget; they have to live within their budget. They

are doing a lot of creative things and outreach to the community as well.

MR. KENT:

Will the touring program be

reduced this year compared to previous years?

MR. MITCHELMORE:

Well, the touring program

wasn't intended to actually collect artifacts and things relating to the

permanent exhibit. It was part of developing the Honour 100, their World War I,

Where Once They Stood, We Stand campaign. There is no intent to reduce their

programming.

Their

focus right now is around cultural immersion and programing and ways to enhance

the experience. Actually, they secured funds through Scotiabank to deliver their

cultural programming and supports. So that's one avenue and one entity.

They've

worked through The Rooms Foundation, their charity. They also work with a lot of

donors and a lot of partners. They've been soliciting feedback from their

members as to how they operate and find better ways to do business, to deliver

programs and services that are relevant to their clientele.

MR. KENT:

And my final question on The

Rooms, I promise: Is there a direct connection between the programs and services

offered through The Rooms Corporation and the K to 12 school system? Are there

programs where The Rooms works with our schools across the province to promote

our history, our culture, arts, et cetera?

MR. MITCHELMORE:

The Rooms partners in a

number of situations. The Arts and Letters competition awards gala gets held at

The Rooms where people's art from all over schools across the province and

people of all ages, basically, get on display at the gallery. It's quite a

welcoming venue.

There's

a tots program that comes into play. There are a lot of school groups that would

be going to The Rooms and travelling. They have educational programs there.

If you

go into The Rooms, there were hundreds of people that would have designed the

forget-me-nots that are on the ceiling. So there are a lot of beautiful projects

that happen that The Rooms is connected with.

It's a

great venue. It's a public space. It's available to people. A significant amount

of group tours take place at The Rooms.

MR. KENT:

Thank you.

MS. ROGERS:

Good job.

MR. KENT:

Thanks.

Did I

leave anything for you?

MS. ROGERS:

A few things, but you did a

good job.

CHAIR:

Ms. Rogers.

MS. ROGERS:

Thank you very much.

I'm

Gerry Rogers; I work for the good people of St. John's Centre. Thank you very

much for coming this evening.

I know

after a very long day of work this is not always the easiest thing to do when

you want to go home. Thank you very much for doing this.

The

Rooms; I want to send my congratulations to the staff for a stellar year, and

sometimes under very difficult circumstances with some uncertainty about

funding, uncertainty about reorganization and that. I think there's a lot for

staff to be proud of. If you could relay that message, thank you so very much.

Steve

really dug in there deep. I don't have a whole lot more to ask.

I'm

wondering: What is the situation now where there was a lot of controversy about

the three different departments? Where is that now? How is that going forward?

What's the plan?

MR. MITCHELMORE:

Well, The Rooms recently

undertook some targeted stakeholder engagement sessions. Just recently actually,

where they would have had the Visual Artists Newfoundland and Labrador, VANL;

there would have been the Museum Association of Newfoundland and Labrador; the

archive, ANLA; the archeology association here in the province; as well as the

Craft Council and partners and members that would be interested to engage around

the strategic plan. Also, there's an online survey at The Rooms available for

people to have input around programming and different things, the customer

experience at The Rooms.

terms of the structure at The Rooms, there remains three directors at The Rooms:

a director of the art gallery, a director of the archives and a director of the

museum. There are also people that are involved in the role of finance, as Donna

Marie is here this evening, and the CEO. It's a fairly lean management structure

after going through the zero-based budgeting, but there are avenues and

opportunities which, when you look at the expertise that exists in The Rooms, as

we've said, to find ways to create the best synergy.

I think

it really hits home when you look at the volunteer program, what the potential

is for Cultural Ambassadors and to deliver programming. Whether it be looking at

the archives and unique documents or looking at artifacts that we would have in

the vaults that never get on display. Or the ability to have that level of

engagement and to have that team approach can only be positive; can only drive

further revenues, visitation and further opportunities at The Rooms Corporation.

We saw

that when people came together and all supported, developed and created

something very beautiful in the World War I exhibit that's there. It wasn't just

done by one entity; it took the whole team effort to really be able to produce

that. I think the more of that we can do to reduce where people are doing very

similar tasks and find ways to collaborate will only do The Rooms well into the

future.

MS. ROGERS:

Okay.

there any plan to increase membership or increase the cost of single entry or

family entry?

MR. MITCHELMORE:

There were no changes to any

fee in Budget 2016 or 2017. There is

a real push, though, in The Rooms wanting to promote its memberships and the

value of being a member, and that members get extra additional benefits such as,

whether it would be a discount at The Rooms Caf, the Red Oak there. You go

there and enjoy a nice lunch. The same thing with the gift shop, you get a

discount for a purchase. There may be ways of which you get preferential

invites.

MS. ROGERS:

That always happens.

MR. MITCHELMORE:

There are lots of things

that can be done around memberships. It's so important that you do and that's

why they've been talking to and engaging their membership, to find out how they

can get maximum value. It's no different than looking at Marble Mountain

Development Corporation in terms of having season pass holders.

The

Rooms members are the most valued people in that organization because they

commit. They're regular attendees. They're going to the exhibits.

They're

going to be hosting a Gerry Squires retrospective exhibition opening later this

month and running throughout the summer season. That should draw a lot of local

and also Canadian and international interest. I mean Gerry Squires was such a

talent.

We're

quite pleased to see this type of activity take place. It's important. The

memberships are critical. I think if you have ideas or suggestions as to how we

can enhance and grow memberships I'd be certainly open to hearing that.

MS. ROGERS:

So there's no plan to

increase the membership fees or the single entry fees at this point?

MR. MITCHELMORE:

Well, anything that is

related to The Rooms, this would be a decision of the management to put before

their board in terms of operations.

MS. ROGERS:

Okay.

MR. MITCHELMORE:

In terms of our budget

2017-2018, there were no fee increases.

MS. ROGERS:

Okay, great.

Parking; is there a plan to charge for parking?

MR. MITCHELMORE:

There has been a plan, I

think, by the board to look at a parking fee, in particular around people who

park at night and use that facility and take up parking spaces. Parking downtown

is at a premium, so when there's maybe a concert taking place at a close school

or somewhere in the area, if the spaces are all filled, then we can't have

customers coming Saturday night or Friday night at The Rooms.

It does

pose to be a problem, but I do think there are solutions, of which those who are

paying customers at The Rooms do not necessarily need to pay more, that it could

be included. The cost of parking could be included if they buy admission to The

Rooms to use the services at the facility. There are avenues of which there

would not be an increased cost. The same thing with members; parking may be

included with an annual membership to The Rooms.

MS. ROGERS:

Okay.

MR. MITCHELMORE:

The intent of parking is to

deter those who are parking long term in the evenings in the hours and taking

away much-needed earned revenue that The Rooms must have. There are also tenants

at The Rooms, like the caterer that is there. We want people to be using that

service so that they can create the private sector jobs that are there at The

Rooms as well through the contracted service.

MS. ROGERS:

The plan for Friday and

Saturday night, is there an expanded service that's going to happen? What's the

plan there for Friday and Saturday night?

MR. MITCHELMORE:

Yeah. The Rooms has been

doing a pilot around culture and cocktails where they've been bringing in an

artist, a singer. They've had drinks there.

MS. ROGERS:

Yeah.

MR. MITCHELMORE:

It's usually been between 7

o'clock to 9 o'clock, so it's a prequel to going somewhere else, going to

another venue. It's a starter between maybe going to a restaurant in the

downtown or maybe going to an entertainment venue in the downtown. It's not

meant to be competitive, it's meant to support the arts community and also get

more people coming into The Rooms for something new and something different, as

well as supporting the downtown business community indirectly.

MS. ROGERS:

Yeah.

MR. MITCHELMORE:

That's the overall intent

and that's part of the Cultural Ambassador program which is being planned to be

rolled out. Certainly, the more support from volunteers and people interested,

then the more successful The Rooms can be around some of these evening

activities.

MS. ROGERS:

One last question.

Thank

you very much. That's a lot of information.

The

revenue increase that is $185,000 commercial; what is that? What would be

commercial revenue for The Rooms?

OFFICIAL:

Fees.

MS. ROGERS:

Fees?

OFFICIAL:

Fees that people pay, yeah.

MR. MITCHELMORE:

General entry fees.

MS. ROGERS:

Okay.

MR. MITCHELMORE:

But I don't know, Donna Marie. Is it any more than that or is just ?

MS. ROGERS:

Or rentals?

MS. HUMPHRIES:

(Inaudible.)

MR. MITCHELMORE:

Okay, so it's all the

commercial revenue that The Rooms would have from gift shop sales, the

admissions that would come in and also room rentals. They do have a boardroom

and they rent out the theatre or other things to third parties that want to host

events.

MS. ROGERS:

Okay. Thank you.

I'm

good. Thank you very much.

CHAIR:

Thank you.

Can I

ask the Clerk to recall the subhead, please?

CLERK:

4.2.04.

CHAIR:

4.2.04.

Shall

the subhead carry?

All

those in favour?

SOME HON. MEMBERS:

Aye.

CHAIR:

Those against?

Carried.

motion, subhead 4.2.04 carried.

CHAIR:

I ask the Clerk to call the

next subhead.

CLERK:

2.3.01.

CHAIR:

2.3.01.

Ms.

Rogers, you can start this session.

MS. ROGERS:

Sorry, where are we going

now?

CHAIR:

2.3.01.

MS. ROGERS:

2.3.01, okay.

MR. MITCHELMORE:

The Research & Development

Corporation.

MR. KENT:

I can go if you need time.

MS. ROGERS:

Yeah, you go ahead.

MR. KENT:

Are you sure?

MS. ROGERS:

Yeah.

CHAIR:

Go ahead, Mr. Kent.

MR. KENT:

Thank you.

I'll

start while Mr. Rogers gathers her notes.

I'm a

big proponent of the Research & Development Corporation. I'll start by asking

the minister: Are there any changes at all to the structure or mandate of the

Research & Development Corporation, over the last 18 months I guess, but

particularly since we last went through this process.

MR. MITCHELMORE:

There still remains an

acting CEO of the Research & Development Corporation. The structure; I don't

believe there have been any changes to the organizational structure at the

Research & Development Corporation over the last budgetary cycle. The Estimates

remain the same.

MR. KENT:

Okay.

Have

there been any recent staffing changes at the Research & Development Corporation

as a result of the budget? I noticed the budget is exactly the same, but have

there been any changes to positions or structure or staffing at RDC?

MR. MITCHELMORE:

There are still 39 staff

members at the Research & Development Corporation. That would account for $3.3

million in salaries and $17,666 in benefits. The benefits would be the 18 per

cent, CPP, EI, medical group, performance, pension, EAP, HAPSET and WorkplaceNL,

I guess the compensation around that.

I guess

at any given time there may be a vacancy or there may be somebody that you're

going to hire

MR. KENT:

Sure.

MR. MITCHELMORE:

but as part of the budgetary cycle as an agency, board and commission, this is

an entity that received some reductions in the past when it comes to staffing

and last year's budget of a reduction. It wasn't part of the Flatter, Leaner

Management Structure during the review at this point in time.

MR. KENT:

Related to that, it wasn't

part of the Flatter, Leaner, meaner management structure exercise that's gone

on, but I also note that so I'm curious as to why that was, maybe it's just

because of the impact of last year's cuts. I'd appreciate you commenting on

that. I'm also curious whether the government's zero-based budgeting exercise

happened at RDC as well.

MR. MITCHELMORE:

I take somewhat of an

exception when you talk about people and staff that are in management that have

expertise as flatter, meaner, you know, that whole process.

MR. KENT:

Well, it's your process.

MR. MITCHELMORE:

The impact of research and

development research and development is very important to Newfoundland and

Labrador and the economy. RDC has performance evaluations. They have certain

mechanisms that can be put into play to look at the leverage that exists when

they do a particular project, such as from a pre-commercial point of view.

RDC

only plays in the sphere of pre-commercial. Anything that goes to commercial is

dealt with through other mechanisms, whether it would be through the Department

of TCII or other financial lenders or whatever the case may be. The Research &

Development Corporation's mandate is to deal in that pre-commercial space.

MR. KENT:

Was there a conscious

decision made by you or Cabinet to exclude RDC from your Flatter, Leaner

Management exercise?

MR. MITCHELMORE:

Well, the RDC is part of one

of the many agencies, boards and commissions that exist within government. The

Marble Mountain Development Corporation would be another agency, board and

commission. You will be going through eight or 10 others as we go through the

Estimates, whether it's the Film Development Corporation or the Heritage

Foundation or the ArtsNL, Arts Council of Newfoundland and Labrador. The Rooms,

through its budgetary cycle, did because they're going through a strategic

planning session, went through and undertook zero-based budgeting.

The

Research & Development Corporation right now, based on their commitments of

having a number of projects ongoing, they also have expenditures that are in

excess of their revenues. Certainly further review needs to take place at the

Research & Development Corporation.

MR. KENT:

Okay, so there will be

further review.

The

regional health authorities, for instance, were directed to go through this

government zero-based budgeting exercise and also the Flatter, Leaner Management

exercise. Why was RDC not included in either?

MR. MITCHELMORE:

The Way Forward

highlighted that agencies, boards and commissions will go through a review.

MR. KENT:

So it will go through a

review on both fronts.

MR. MITCHELMORE:

Not all agencies, boards and

commissions have undertaken a review

MR. KENT:

Fair, yeah.

MR. MITCHELMORE:

and went through

zero-based budgeting and looked at a process of their management structure. Some

agencies, boards and commissions, as we'll go through my Estimates, have gone

through that process, such as the Heritage Foundation and others. We can

certainly talk about them. Some agencies, boards and commissions have embraced

zero-based budgeting and taken on that process to champion it, understanding the

economic conditions that we face in the province.

Not all

agencies, boards and commissions have embraced the zero-based budgeting process.

We saw that with Memorial University, for example. But there are avenues of

which a review will certainly take place.

MR. KENT:

Can we anticipate that

happening in this current fiscal year?

MR. MITCHELMORE:

I would think that a review

will take place with RDC within this fiscal year, yes.

MR. KENT:

Okay.

Switching to perhaps a more positive tone, it's really difficult, as you can

appreciate, from the one line of Grants and Subsidies going to RDC, to get an

appreciation for the work that's ongoing. I was wondering if, following tonight,

we could get a high-level overview of the current projects and initiatives

related to RDC.

believe there are a lot of good things happening within the corporation that

people don't know about. It would be helpful to have a better sense of currently

what's happening, and also what might be on the horizon in terms of future

vision and plans so we could get a better idea of how that considerable amount

of money is being spent.

MR. MITCHELMORE:

Yeah. There's $13.8 million

in programming, primarily broken up between academic and commercial, so about

$6.9 for each of the entities. There are 112 R & D projects that were

contracted.

MR. KENT:

How many, sorry?

MR. MITCHELMORE:

One hundred and twelve

projects last fiscal year.

MR. KENT:

Okay.

MR. MITCHELMORE:

The investment was $16

million. Some of that is because RDC commits to multi-year projects.

MR. KENT:

Right. Yeah.

MR. MITCHELMORE:

Because you commit to a

project and there are performance indicators, and you might not meet your

milestone, well, then the funds don't get disbursed, you still have time. It is

good business practice. It is good due diligence not to just cut a cheque and

get it out the door.

That

makes sense in that process that there will be $16 million, basically, last year

expended. That's because when RDC was set up, when they had larger budgets, they

held a lot of cash in the initial stages because they weren't necessarily

approving the projects. They weren't coming in as quickly; it took some time to

build up. But now they've committed their projects to move forward in a

multi-funded process. That $16 million led to a $29 million leverage.

All

lists of all of the projects that RDC funds are available publicly on their

website. Unless you want my office staff or the RDC to go through and print

those I mean, they are available on the website.

MR. KENT:

No, if you're saying the

entire breakdown on that $13.8 million of programming is available on the

website, then we can obviously access it there.

MR. MITCHELMORE:

Yeah.

MR. KENT:

I just figured there was

more than that available that's not it's not all available on the website, the

full detail on that $13.8 million, I wouldn't have thought.

MR. MITCHELMORE:

If there's something there

that you see would not be like we did a launch of our SensorTECH program and

the companies that received grants there. The funding to student research

projects, we did a public announcement on that. There was an announcement last

year that Minister Coady had completed as well on behalf of the Research &

Development Corporation.

The way

it is structured is that there's a lot of focus on oil and gas, mining and also

the ocean tech sector. That would basically account for two-thirds of the R & D

expenditures. The remaining one-third would then be for other investments in the

economy. That's kind of the focus of RDC.

Whereas the Department of TCII would

be focusing on all aspects, whether it be life sciences and I know you've been

a big proponent of life sciences such as Sequence Bio and other entities.

CHAIR:

Mr. Kent, if I may, your

speaking time has expired. I'm going to go to Ms. Rogers and I'll come back to

you again.

MR. KENT:

Okay.

CHAIR:

Ms. Rogers.

MS. ROGERS:

Great, thank you very much.

When we

were speaking earlier this evening, I believe that perhaps this department, this

program, this agency is more crucial right now than ever in our history. Thank

you for your great work.

I'm

just wondering, what are some of the really cool and groovy projects that you're

proud of right now?

MR. MITCHELMORE:

I think when you look at

building a knowledge-based economy we have a great ecosystem here in

Newfoundland and Labrador. I was at an event with members of the Research &

Development Corporation, as well as TCII. We were at a Pitch & Pick event, the

evolution program at Genesis Centre at the Fifth Ticket. There were tons of

young, enthusiastic people looking at wanting to get in the start-up community

here, wanting to win that prize for their innovation. A number of apps were

being created on that aspect.

terms of some of the really cool things that Research & Development Corporation

does is around sensor technology. We had the opportunity to visit a place like

Kraken Sonar and to see what Kraken does around operating out of CBS and

downtown St. John's and having a number of young people employed. They're

basically using cameras, optical and sensor technology to play in that ocean

defence space. They have international contracts.

This is

the type of innovation that we want to see happen here in Newfoundland and

Labrador. There are some other great companies, like radient360 that offers

solutions to the oil and gas sector dealing with major companies around the

world. You talk about eSonar and fishing solutions for vessels around their

nets. Making sure that you know where the fish is and what to stay away from is

an important piece.

Also,

there are ways of which there's been productivity enhancements done in the oil

fields through research and development, where the life has been extended

because there's enhanced technology in place of getting more oil out of the

Hibernia wells. In doing so, that's maintaining those jobs for a longer period

of time. It's becoming more competitive and more efficient.

well, if we look at Anaconda on the Baie Verte Peninsula or Rambler Metals and

Mining of using different technology that takes place. Using something that

would have been used maybe in the diamond industry versus a copper mine or other

metals is a way of which the life of the mine has been extended by years. So

that's years of employment for local people. It's quite significant. Those types

of initiatives are extremely important.

MS. ROGERS:

Thank you.

CHAIR:

Mr. Kent.

MR. KENT:

Yeah, just one follow-up

question. A comment first and then my follow-up question.

We did

have a look at the website previously; I just had a very quick look now. I'm not

easily finding the breakdown of how that $13.8 million is spent.

MR. MITCHELMORE:

Okay.

MR. KENT:

So I would appreciate it if

your office would provide it.

MR. MITCHELMORE:

Sure. We can

MR. KENT:

Or send me the link, because

it's just not obvious from the website. There's lots of information there but

the breakdown I'm looking for is not, at least from what I can tell.

MR. MITCHELMORE:

We can provide a list of the

projects.

MR. KENT:

That would be great. Thanks.

And

MS. ROGERS:

And we would like

(inaudible).

MR. KENT:

I assume that anything we

ask for will be provided to both parties.

MR. MITCHELMORE:

Yes.

MR. KENT:

Okay, great.

Thank

you, the standard Estimates questions.

final question on RDC; I know in the past there was a desire to increase the

amount of commercial activity. You mentioned that the split continues to be

fairly even between academic and commercial. I'm just wondering in terms of your

plans and priorities, is there still a desire to increase activity on the

commercial side so that the scale tips? Has there been any progress in that

regard?

MR. MITCHELMORE:

There has been progress

made, but I would like to certainly see more towards the commercial.

MR. KENT:

Yeah.

MR. MITCHELMORE:

The commercial level will

lead to greater leverage. I think you would agree as well. There are avenues of

which maybe there can be more diversified investments made through research and

development.

If you

look at the fact, as I said, around life sciences, the potential of genetics,

the potential of where that sphere is, there's been limited investment through

the Research & Development Corporation.

Whereas the Department of TCII has

supported entities like the EXCITE Corporation and Dr. Terry-Lynn Young with

their audiology and looking at hearing and the 'impairness' around populations

here in Newfoundland and Labrador to find real life solutions so that we can

improve hearing in our population and around the world. As well, looking at the

genome and looking at from that point of view. We've had several discussions

here in this House of Assembly on that type of aspect.

There

may be ability to broaden some of the work that takes place at the RDC to find

ways of which we can leverage more dollars, whether it would be through private

sector investment to get more commercial activity. It may need to be beyond the

initial targets that are focused so that we can really create that innovative

sphere and have accelerated growth here in Newfoundland and Labrador and create

a better pipeline; I think that's really key. So that as you move from

pre-commercial to commercial, there's a seamless transition so we're not leaving

people hanging in the lurch and that there are ways of which there's a greater

connectivity to the financing sources or the internationalization and ways of

which we can really grow Newfoundland and Labrador.

don't have significant time to waste. We need entrepreneurs that have these good

ideas to get where they need to go in an accelerated way. I think you would

agree with that as well.

MR. KENT:

I do agree with that.

Sometimes I agree with you.

MR. MITCHELMORE:

I know. That's surprising,

but we do agree here and there.

MR. KENT:

Yeah. On more than people

realize, probably.

That's

it for me, Mr. Chair.

CHAIR:

Thank you.

Can I

ask the Clerk to recall the subhead, please?

CLERK:

2.3.01.

CHAIR:

2.3.01.

Shall

the subhead carry?

All

those in favour?

SOME HON. MEMBERS:

Aye.

CHAIR:

Those opposed?

Carried.

motion, subhead 2.3.01 carried.

CHAIR:

Can I ask the Clerk to

recall the next set of subheads, please?

CLERK:

1.1.01.

CHAIR:

1.1.01.

Mr.

Kent.

MR. KENT:

Thank you.

I have

a question to ask that relates to, I guess, multiple subheads that we're about

to go through. I'll ask it now and not repeatedly ask it. To try and approach

this efficiently, maybe we can address it off the top and it will probably save

some of my questions as we go through.

Obviously, there's been significant restructuring in the department. I guess, in

order to understand what's happening with this year's budget versus last year's

budget, I'm wondering if the minister can provide clarity as to how the deleted

divisions or budget lines from last year have been absorbed by the current

framework.

There

are a number of headings that were used in 2016 and in previous budgets that are

no longer used in 2017, which makes it really hard to see where the money has

come or gone; for instance, headings that are no longer there that we'd like to

understand where the money is now located, which would then help us understand

what's actually been added or taken away. Policy and Strategic Planning,

Administration Support, Capital, International Business Development, Marketing

and Enterprise Outreach, Investment Portfolio Management, Innovation, Research

and Technology, Sector Development and a number of others that I have more

specific questions on, no longer exist.

I was

wondering, Minister, if you could give us some insight, first of all, which will

probably provide some clarity as we go through this, too. For those topics that

I just mentioned, where do we find those funds now in the 2017 budget?

MR. MITCHELMORE:

I'm certainly prepared to

answer any of your questions on a line-by-line basis. I certainly can address

all of those as we go through the subheads.

MR. KENT:

So you won't provide us with

a breakdown of how that's been moved around?

MR. MITCHELMORE:

You're providing me with a

long list and asking me exactly where they are upfront. I'd prefer we go through

on a line-by-line basis.

MR. KENT:

Okay.

The

challenge is they've disappeared. I will ask line by line, I have no problem

doing that.

MR. MITCHELMORE:

You can provide me with your

list and I will

MR. KENT:

Sure, gladly.

The

Policy and Strategic Planning component of last year's budget is gone. Has it

been wiped out completely or is it moved somewhere else in your department?

MR. MITCHELMORE:

No. The policy aspect would

be under our Corporate Services.

MR. KENT:

Corporate Services. Thank

you.

The

Administrative Support, which I think was Capital, is also gone. Is it now

Current versus Capital? Is that the change?

I'm

sorry; I know I'm not referring to a specific line because they're gone. The

reason why I can't refer to a specific subhead, Mr. Chair, is that they're gone.

They were in last year's; they're not there this year.

MR. MITCHELMORE:

You're talking about the

Administrative Support, Capital, which would be 1.2.03, the $84,000? It may be

more helpful if we went through on a line-by-line basis and you asked your

questions, or else we'll find that we're going to be repeating ourselves.

MR. KENT:

Okay.

What

about International Business Development? Where would that now be located?

Because to ask you the questions related to those topics not knowing where they

now are is really difficult, as I'm sure you can appreciate.

MR. MITCHELMORE:

The internationalization

component of the department now would fall under Growth and Investment.

MR. KENT:

Growth.

Thank

you for your patience. That's exactly what we're trying to understand, is where

these things now reside so we can ask questions appropriately. What about

Marketing and Enterprise Outreach?

MR. MITCHELMORE:

The Marketing and Enterprise

Outreach program, the majority of that had actually moved to the Communications

Division that was listed in The Way

Forward when the update was provided.

MR. KENT:

Okay.

So it's

moved

MR. MITCHELMORE:

There are still some funds,

actually, that would have been associated with our trade shows and different

sponsorships that is a budgetary line. I can relay that when we get to that

particular budgetary line

MR. KENT:

Fair enough.

MR. MITCHELMORE:

because there are several

subheads here.

MR. KENT:

Yeah, I appreciate that.

Once we understand where things have moved, it will allow us to ask the

questions in a more orderly fashion.

Investment Portfolio Management has also vanished. Where would that now be

located?

MR. MITCHELMORE:

That's under Business

Analysis.

MR. KENT:

Would the same be true for

Innovation, Research and Technology?

MR. MITCHELMORE:

Innovation, Research and

Technology?

MR. KENT:

Yeah, there was a heading

used last year called Innovation, Research and Technology which has gone away.

MR. MITCHELMORE:

Well, there are a number of

things that some of these things would have fallen under. Some things are under

Sector Diversification and then some things fall under other portfolios based on

the structure of the department, given that there are three assistant deputy

ministers and that the importance of the process through our management change

was to reduce silos and to best appropriate our programming dollars that we

have.

MR. KENT:

Okay.

Sector

Development is another one that has gone away. Is that now located in another

subhead?

MR. MITCHELMORE:

Sector Diversification is

there as 3.1.01. But as with all of these, there could be components that would

be in other sections as well. It's not as clear to me to say that we just took

what was in

MR. KENT:

Yeah. Right, some have

spread.

MR. MITCHELMORE:

a complete

section and

just moved it over in another section. Some things would be HR that would have

been moved, in terms of staffing, to make best fit with that particular branch

now.

MR. KENT:

Right.

MR. MITCHELMORE:

Or some of it would actually

be program dollars that would be moved to a certain area. It's not as simple as

saying this is in here and that's in here. Any question you would have into the

particular running of the department or the line-by-line items, I'm more than

happy to respond to.

MR. KENT:

Okay. Thank you for that.

There

are six others that have disappeared, but I'll hold them and try and address

them in what appears to be the logical subhead.

There's

a chance, Mr. Chair, at the end that we may not have covered them because they

were in last year's, they're not in this year's. I'm hoping we can have a couple

of minutes at the end just in case we don't cover it as we go through, but I'll

save them for the appropriate subhead as best I can, if that's okay.

CHAIR:

Sure.

MR. KENT:

All right.

So I'll

get to specific questions on 1.1.01; the obvious questions first, I guess.

Can you

explain the variance related to Salaries? I realize it's minor.

MR. MITCHELMORE:

There was a decrease of

$19,300 under the budget which was originally scheduled to be $207,100. That

reflects the ministerial salary reduction that was voluntarily voted on in last

year's budget, pay level variance of the EA salary and less vehicle travel cost.

Then

this year's salaries are basically a rightsizing of the salary cost as per the

salary plan of 2017-2018.

MR. KENT:

Okay.

Given

the restructuring that's occurred within the department, would you be able to

provide us with current updated organizational charts, including the branches

and divisions, and give us an overview of the responsibilities now associated

with each?

MR. MITCHELMORE:

Yes, we should be able to

provide you with an updated organizational chart with the position that would be

associated. We can provide that to you when it's available, yes.

MR. KENT:

Okay. Thank you.

How

many people are employed in 2017 in the department versus 2016?

MR. MITCHELMORE:

Well, it's difficult to

state that because we have 420 positions right now in the department. Because

Park Operations were added, that added 114 new positions. There were some

elements such as trade policy and the Marketing Division that was removed. I can

certainly speak to the positions that exist within the department as we go

through and provide you with those details, but there are 420 total positions

for the salary allocations right now for budget 2017-2018.

MR. KENT:

Thank you, Minister.

Would

that 420 include all contractual positions as well?

MR. MITCHELMORE:

Yes.

MR. KENT:

Are temporary positions, the

ones that are often referred to as 13-week positions, are they included as well?

MR. MITCHELMORE:

All temporary positions are

also counted in that.

MR. KENT:

Are there

MR. MITCHELMORE:

They're not necessarily all

13 positions.

MR. KENT:

Right.

Would

you happen to know how many temporary positions there are at present of the 420?

MR. MITCHELMORE:

There are 65 temporary

positions that are allocated as our position complement.

MR. KENT:

Okay.

Would

we be able to get a list of the positions that were eliminated as a result of

the recent restructuring in the department?

MR. MITCHELMORE:

The positions? We should be

able to provide that, yes.

MR. KENT:

Obviously, we're not looking

for people's names; we're just interested in the positions. We're also curious

if the PCNs were actually eliminated or if they've just been parked. With the

positions that were eliminated in the restructuring, have the PCNs gone away or

are they simply remaining on the books for the time being?

MR. MITCHELMORE:

All the positions that were

part of the departmental restructuring would have been eliminated through that

process.

MR. KENT:

Okay.

MR. MITCHELMORE:

There were some new

positions that would have been created based on the organizational structure.

But positions that are no longer there, we had some positions, directors that

were directors that had no staff. So these positions were eliminated.

MR. KENT:

The PCN went away and a new

PCN was created for the new positions. Okay.

I'm out

of time so I'll come back to you again.

CHAIR:

Ms. Rogers.

MS. ROGERS:

Thank you very much.

Going

forward, then, to 1.2.01 Steve, did you finish with 1.1.01?

MR. KENT:

No, I still have questions

on it. I only have maybe one more on 1.1.01.

MS. ROGERS:

Do you want to do that?

CHAIR:

We're on 1.1.01.

MS. ROGERS:

Yeah.

CHAIR:

Yeah.

MR. KENT:

You're ready to move on to

the next one?

MS. ROGERS:

Sure, yeah, if you want to

do that.

MR. KENT:

Mr. Chair, if that's okay,

I'll ask my final question on 1.1.01 and then we can move along.

CHAIR:

Thank you.

MR. KENT:

I'll let Ms. Rogers go first

on 1.2.01.

On the

first subhead, has the 2015 attrition plan been followed within your department

this year? If so, how many positions? Have they been included in your layoff

number?

MR. LOMOND:

Sorry, could you just repeat

the question again? I'm sorry.

MR. KENT:

There was an attrition plan

that was put in place in 2015. I'm wondering if it's still in place and if it

was followed by the department. If so, were there positions that were eliminated

as a result of the attrition plan that was in place previously?

MR. LOMOND:

Yes, we're still following

the attrition plan. I think next year it should be, I believe, the last year of

the attrition plan moving forward. So we have met our attrition requirements for

this year.

MR. KENT:

Okay. They've been included

in any numbers that have been quoted about reductions of positions, those

would be

MR. LOMOND:

They were not reported as part of the reduction or restructuring of management.

No, that was incremental to that.

MR. KENT:

Okay.

Do you

have any idea how many there were this year?

MR. LOMOND:

I'd have to go back and check because the way the savings were achieved in some

cases is through freezing positions. There were six on the books that we've

eliminated that were vacant.

MR. KENT:

Three.

MR. LOMOND:

Six.

MR. KENT:

Oh, six. Sorry, it's been a

long day.

Six,

thank you.

thought that was the final question, just one more general Estimates question as

well: Can we obtain a copy of whatever briefing materials that have been

prepared for you for tonight's Estimates?

OFFICIAL:

Okay.

MR. KENT:

Great, thank you.

For the

purpose of Hansard , I see the deputy

nodding yes. Thank you for that.

Thank

you, Mr. Chair.

MS. ROGERS:

Thank you.

1.2.01,

Executive Support; we see a drop in Salaries, a variance in 2016-'17, the

revised and budgeted, a $152,000 reduction. Can someone explain that for us?

MR. MITCHELMORE:

The Salaries line?

MS. ROGERS:

Uh-huh.

MR. MITCHELMORE:

The budget was $1.22 million

basically. The reduction reflects, basically, a reduction in assistant deputy

ministers partially offset by pay scale variances, retirement cost and an ADM

secretary in this particular line.

The

current line 01 of $857,100, which is a significant reduction; the decrease

reflects the rightsizing of the salary cost as per the salary plan for fiscal

2017-2018.

MS. ROGERS:

The reduction of $363,000 is

rightsizing? There are no positions lost there?

MR. MITCHELMORE:

There were reductions in

assistant deputy ministers.

MS. ROGERS:

Yeah.

MR. MITCHELMORE:

There used to be five

assistant deputy ministers in the department. Now there are three.

MS. ROGERS:

Yes, so we lost ADMs,

though, in '16-'17?

MR. MITCHELMORE:

Yes, and the impact

MS. ROGERS:

Okay, and so now in '17-'18?

MR. MITCHELMORE:

Those positions weren't

rehired so the salary savings carried forward.

MS. ROGERS:

Right, so it was only

partial.

MR. MITCHELMORE:

Some of the increase of the

over a million dollars last year was the retirement cost for an ADM secretary as

well. It would be included in that.

MS. ROGERS:

Okay.

Transportation and Communications, we see a reduction there under spending in

'16-'17. Do you know how that came about?

MR. MITCHELMORE:

Some of that came about

because of the reduction in assistant deputy ministers. So if you have less

executive support, there would be fewer people who would be travelling.

MS. ROGERS:

Okay.

MR. MITCHELMORE:

We're very happy and very

pleased to see that we've reduced our transportation and our communications

whether it be cellphones and the bills that would be associated from $90,200

all the way down to $66,900 last year. We further anticipate that we can bring

that number down to $65,000 for our executive team. We're going to be as lean as

we can be when it comes to our travel and communications, and do things more

online and connect with people in the most efficient way possible.

MS. ROGERS:

Okay.

I have

no further questions for that section.

MR. KENT:

I have nothing further on

that subhead 1.2.01.

CHAIR:

1.2.02.

MS. ROGERS:

Okay, I'll go to 1.2.02,

Corporate Services. Again, we see a variance there of $37,000 in '16-'17. Can

you just explain that variance, the $37,700?

MR. MITCHELMORE:

Yeah, that's due to delayed

recruitment which was partially offset by the cost of students and retirement

costs of one employee.

MS. ROGERS:

Okay. And then a more

significant reduction of $161,000, almost $162,000 in '17-'18.

MR. MITCHELMORE:

That's the impact basically

through management change where one full director position would have been

covered under this salary as well.

MS. ROGERS:

So that's the elimination of

that position?

MR. MITCHELMORE:

Yes, the concept of bringing

together the Policy and the Information Management Division under one Corporate

Services allowed to have a director and a manager serve in these roles, and

capacity to be able to deliver our Information Management programs and policies

and procedures. It was also a manager in that role as well through the

management structure changes.

MS. ROGERS:

So you went from how many

directors and how many managers to how many you have now?

MR. MITCHELMORE:

There were two directors and

two managers.

MS. ROGERS:

And now?

MR. MITCHELMORE:

Now we have one director and

one manager.

MS. ROGERS:

Okay.

Thank

you.

MR. MITCHELMORE:

If we look at the amount of

legislation and things that the department is responsible for, there are very

few pieces of legislation that the department does in terms of bringing forward

to the House of Assembly and some of the changes that take place from the

Marketing branch. This certainly makes sense to be able to deliver in a more

succinct way our Corporate Services.

MS. ROGERS:

Okay.

If we

did go down to Purchased Services; a reduction in spending in the revised amount

for '16-'17 was $213,000.

MR. MITCHELMORE:

The decrease of $213,000 in

Purchased Services is basically a reduction in our print and advertising

campaigns, reduction in signage work and departmental rebranding delayed during

the fiscal year. That resulted in over $200,000 in savings by being very

responsive to the type of advertising and the type of work that we're doing out

there, when we do particular advertising that it reaches that direct audience

that it's needed to do so.

MS. ROGERS:

And it's advertising for ?

MR. MITCHELMORE:

This could be a focus group;

this could be anything around the brands, like the different signs that we would

have, pop-up banners throughout our various branches or entities. It could be

any number of materials, from a research perspective, that would be a

one-sheeter that would be used for clients. It could be any type of advertising

really.

MS. ROGERS:

Okay.

Then we

see a reduction in the overall budgeted amount for '17-'18.

MR. MITCHELMORE:

Yes.

The

'17-'18, $381,800 is an overall decrease of $134,900. It's a net savings

consisting of re-profiling $100,500 to Executive Council for the restructuring

of Marketing and Communications, a $39,900 reduction in the print advertising

campaign as determined through zero-based budgeting process and a $5,500

increase for forecast adjustments. That would be the breakdown of that process.

Each

division was tasked with finding savings and building its budget from the ground

up. They were able, when they were doing this fiscal year, to find $39,900 in

print advertising savings that did not need to happen.

MS. ROGERS:

Okay. Thank you very much.

Then on

to 1.2.03: $84,000 for Property, Furnishings and Equipment.

MR. MITCHELMORE:

Yeah, last year there was a

cost of capital to replace a vehicle for one of our Regional and Business

Development Branches in the Central office at $30,000. There were also

replacements for generators for the parks operations of $54,000.

Because

we incurred that cost last year we won't be needing to incur this cost this

year. If we look at our inventory fleet, we don't anticipate having to replace a

vehicle. But given that anything can happen to a vehicle, if there's an accident

or whatever the case may be, given where we are, we would have to go through the

Treasury Board process and look at the contingency fund for capital projects of

this nature because we're not budgeting anything in this fiscal year for capital

support.

MS. ROGERS:

Okay. I'm good now for 1.2.

CHAIR:

Thank you.

Mr.

Kent, 1.2.02 and 1.2.03, please.

MR. KENT:

Thank you, Mr. Chair.

I think

just a couple of questions. Minister, under 1.2.02, Corporate Services,

Transportation and Communications; would it be correct to assume that the

reduction relates to the reduction in staff?

MR. MITCHELMORE:

No, the decrease actually

reflects land lines and telephone costs which were actually rightsized to the

related divisions. So you'll see as you go through that some areas may have

increased communication costs.

MR. KENT:

Okay.

MR. MITCHELMORE:

That's primarily because

they were all being billed out through Corporate Services previously.

MR. KENT:

Right, now it's being

divided.

MR. MITCHELMORE:

The user is paying for the

service at this point. That's why you're seeing the significant savings of

communications and transportations in Corporate Services down to $50,300.

MR. KENT:

Okay. That makes sense.

Finally, on Professional Services there's been a significant reduction. I'm just

wondering what happened last year that won't happen this year?

MR. MITCHELMORE:

Professional Services; last

year there was $20,000 expended and we had budgeted $85,500. The $65,500

reflects the cancellation of the retention

schedule project and some consulting

work for planning sessions that also wasn't required.

This

year there's a decrease of $80,500. It basically reflects net reductions from

re-profiling of $20,000 to Executive Council for the restructuring of Marketing

and Communications, a $40,600 reduction in projects planned for this fiscal and

a $19,900 reduction through zero-based budgeting.

MR. KENT:

What was the retention

schedule project?

MR. MITCHELMORE:

The retention

schedule was

about retaining documentation.

MR. KENT:

Oh, so like a document

management

MR. MITCHELMORE:

Yeah.

MR. KENT:

project of some kind.

Okay.

All

right, I'll leave it there, Mr. Chair.

CHAIR:

Okay.

Mr.

Kent, I'm going to ask you to start off the questioning on 2.1.01 and 2.1.02.

MR. KENT:

Thank you.

Sorry,

Mr. Chair, do we need to vote on

CHAIR:

No, we're going to do it

MR. KENT:

We're going to do that at

the end.

CHAIR:

We're going to do it

inclusively.

MR. KENT:

Okay, great.

Thank

you.

2.1.01,

Accelerated Growth; Minister, could you start by explaining the variance related

to Salaries.

MR. MITCHELMORE:

Well, there's a decrease in

$27,800 reflects savings from delayed recruitment. That would have been the

changes last year. This year, the decrease reflects rightsizing of salary costs

as per the salary plan in 2017-18, and I want to state that this is where the

former International Business and innovation and oceans branch, a portion of it

would be found.

MR. KENT:

What do you mean by

rightsizing the salary plan? What do you mean when you say that?

MR. MITCHELMORE:

That the salary plan fits

the number of positions that are currently allocated to that division. That

there isn't an unfunded position there or there isn't something that doesn't fit

with the overall plan for that division; that all the salary dollars are

accounted for,

whereas that hasn't always been the case.

MR. KENT:

Okay, thank you for that.

Professional Services in the revised 2016-2017 budget, a significant amount of

money was removed and now it's been put back in. Can you just explain what's

going on under Professional Services?

MR. MITCHELMORE:

Yes. The decrease in

$186,700 reflects the cancellation of supplier development mining capacity

building study and reduction in legal costs for client files under the

commercialization and the innovation strategy.

This

year, there's actually an increase of $900. That reflects the funding identified

through the budgetary process to look at all the initiatives that we need to do

this year; when we look at the supplier development, that's really key.

We just

advanced a new procurement act here in the province through GPA, the minister

did. We all debated that. As well, the Premier announced the Canadian Free Trade

Agreement, where I was in Toronto and signed the document with my colleagues.

From a Canadian context, there are a lot of opportunities for local businesses

to bid from a Canadian perspective.

Then we

have CETA as well, to look at supplier development, to capitalize on the

European marketplace. So it makes sense to focus our efforts where we can get

greatest returns. We will be focusing on procurement, whether it be at the

local, national or international level when we talk about the new dollars that

are associated with the budget.

We've

actually seen through the Research & Development Corporation, through the

Department of Natural Resources, and the activities and investments that have

happened around mining and new initiatives, that this actually makes sense. This

would be best use of dollars right now going forward when it comes to looking at

our Professional Services.

MR. KENT:

So have any contracts been

awarded, or have any consultants been engaged to spend that $188,000?

MR. MITCHELMORE:

When it comes to certain

initiatives, we partner with Canadian Manufacturers & Exporters. We are talking

to a number of entities that we would look for when it comes to accelerated

growth. We can provide a list of consultants that would have been engaged in

last year's budgetary process. Now, there was only $900 in fees associated.

I don't

believe we've entered into any particular contract in this budgetary cycle

within the last 30 days, but if there is my staff can certainly correct me.

MR. KENT:

No, okay.

Related

to Purchased Services, there's been a major reduction over last year's. It was

revised and now it's down over $300,000 from last year's budget. Would you be

able to comment on that?

MR. MITCHELMORE:

Yes. Last year we saw a

reduction of $177,600 and that comes from less expenditures pertaining to

meeting costs, equipment rentals, other purchased services. We did less trade

missions attended than we anticipated which resulted in less logistical cost.

terms of this year, the decrease reflects a reduction in the number of trade

shows and missions hosted next fiscal, a reduction in logistical cost, meeting

requirements, and promotional materials as determined through zero-based

budgeting and other adjustments.

We also

anticipate that we have greater opportunity through our international

agreements, whether it be through the IBDA or others, to do greater leverage

where if we do missions through an Atlantic Canadian perspective we can reduce

our costs significantly.

Whereas in the past, I guess previously to me coming

into this portfolio, there have been a number of cases where the department has

used 100 per cent dollars from the province to fund trade missions. We believe

in greater federal leverage and we will use it to the full advantage to save the

taxpayers of Newfoundland and Labrador more.

MR. KENT:

I think that's all I need to

know on Purchased Services.

Related

to Grants and Subsidies, would we be able to get a breakdown of what's included

in Grants and Subsidies?

MR. MITCHELMORE:

Well, the Grants and

Subsidies, the reduction of $121,600 is really the number of trade missions

selected and attendance was reduced. This year we're going to see a decrease,

which is just of $2,300, based on what was budgeted last year. That's the

reduction in IBDA and in marketing mission logistics to support our fiscal year,

but we can certainly provide a breakdown of what those Grants and Subsides are,

yes.

MR. KENT:

That would be greatly

appreciated. Thank you.

Where

is broadband now budgeted in the new department structure?

MR. MITCHELMORE:

Broadband is under our

comprehensive Economic Development Programs through the Regional Development

Fund, I believe.

The

question you asked me in the House of Assembly, I was correct in stating that

the $1.227 million was the sun-setting of the former committed projects under

the rural broadband that was carried over and have now basically been completed

through last fiscal.

MR. KENT:

I'll save my next question

on broadband until we get to that

section then.

I don't

know if this is the appropriate place to ask the question or not but it feels

like it might fit here in light of the conversation we just had around Purchased

and Professional Services and what goes on in this new accelerated growth area.

terms of CETA, can you comment on what the province received in return for

giving up minimum processing requirements?

MR. MITCHELMORE:

The CETA fund in particular

you look at the benefits of the Canadian Economic and Trade Agreement with

Europe, there are tremendous tariff removals; there are benefits to Canadian

business. Right now, minimum processing requirements are not removed when CETA

comes into force until a period of three years and they are only for the

European Union. Minimum processing requirements still exist in the Canadian

context and internationally anywhere else you ship products.

You may

be best to ask Minister Crocker around minimum processing requirements, as they

are a fisheries policy, and the trade policy falls under Executive Council and

not in the Department of Tourism, Culture, Industry and Innovation. We are

focused on the implementation of CETA, which benefits local businesses, and

that's what I had talked about around supplier development.

So your

question around the actual minimum processing requirements would be best

directed toward Minister Crocker, who's responsible in that portfolio, and from

a trade policy point of view would be in Executive Council.

MR. KENT:

Thank you. So just a quick

comment on that and I'll ask one more question and then move on to the next

section, and my colleague can ask her questions.

Regarding MPRs, you list some of the CETA benefits, but those benefits apply to

all provinces. We're the only province that had to give up MPRs; hence my

question. Nonetheless, we can deal with it in the House and with the Fisheries

Minister as well. Where is the Ocean Technology and Arctic Opportunities

division funding? What was that division? Where is that now located in the

department's budget?

MR. MITCHELMORE:

Some of those aspects would

be covered under the Accelerated Growth. We see ocean technology as a very

important sector when it comes to opportunities in Newfoundland and Labrador. We

have several hundred companies that deal in that particular space. A lot of them

scale up; have hired a number of young talent.

If you

look at from a point of view of accelerated growth, you look at

internationalization and export and what they're looking for, a number of ocean

technology aspects would fit really well under the Accelerated Growth. That's

where our staff and our team of people are there to support those particular

initiatives, whether it be the MOU with Nunavut and I've been meeting

regularly with my colleagues and having discussions on Nunavut and all the

opportunities that exist within that particular jurisdiction.

We're

very open to continuing to have those dialogues. We've been having significant

dialogues with other jurisdictions as well around the oceans. Like Ireland I

just met with the ambassador of Ireland, given their continental shelf and the

connection to the fisheries and marine institutes on both sides of the ocean.

Through research and development, there's a lot of connectivity with the oceans,

as I talked about earlier. So we're supporting the oceans quite significantly

and the tech sector too.

MR. KENT:

Okay.

Mr.

Chair, just a follow-up question related to the ocean technology question, and

then I am happy to move along. So in light of that explanation, can you tell us

what position is now in charge of Ocean Technology and Arctic Opportunities in

your new structure? And also, 2015 there was over $659,000 budgeted in that

area, last year it was down to $472,800, how much this year because it's no

longer obvious? So who's now in charge and how much is budgeted for this year?

MR. MITCHELMORE:

Last year was primarily a

change in the reduction in assistant deputy ministers that would have come out

of the Ocean Technology Sector, the difference, the variance I would think I'm

not looking at the numbers you're looking at

MR. KENT:

Yeah.

MR. MITCHELMORE:

But in terms of the

responsibility, there is a team of people that deal with the sectors, that deal

with ocean technology and the supports. Depending on which particular client and

what they're looking for, one of the primary touch points would be in

Accelerated Growth, which would fall under our Business division.

primarily it would be the assistant deputy minister of business.

MR. KENT:

Can you comment on the

budget for this year related to Ocean Technology and Arctic Opportunities?

MR. MITCHELMORE:

Well, the budget for the

department is quite extensive. There's over $100 million to support economic

development and diversification

MR. KENT:

Overall, sure.

MR. MITCHELMORE:

in Newfoundland and

Labrador. If you look at all of the supports that are available to ocean

technology companies, I would state that the support that was available

previously, there is equivalent or more support available now to companies that

deal in that ocean technology space. Whether we look at the Research &

Development Corporation, we look at our international programs, we look at our

business development support, we look at the sector programs that exist, the

research capacity and the team approach to better utilize some of our programs

through our Business Investment Corporation and other entities.

So to

think that we're doing anything less for oceans, I would say that's completely

not the case, if that's what you're insinuating.

MR. KENT:

I'm not insinuating

anything. There's a $472,000 budget that's disappeared. So if you can give us a

breakdown of where those funds are and give us a commitment on how much money is

being spent in that sector this year that would be greatly appreciated. But your

answer suggests that those funds are specifically allocated for Ocean Technology

and Arctic Opportunities.

MR. MITCHELMORE:

There are significant

resources within our Department of TCII to support the Ocean Tech Sector and

there are staff that support that sector, and will continue to do so.

CHAIR:

I'm going to have to stop it

there.

Ms.

Rogers, 2.1.01 and 2.1.02.

MS. ROGERS:

Thank you very much.

If we

go back to Professional Services, $187,600 I don't know if you already

mentioned this, but why is it that work wasn't done?

MR. MITCHELMORE:

We decided we would cancel

the supplier development mining capacity building study and we reduced our legal

costs for client files under the commercialization and innovation strategy.

Given

all of the negotiations that were taking place with the Canadian Free Trade

Agreement, the Canada-European Comprehensive Economic and Trade Agreement and

the new procurement act, that it would be best to focus our supplier developer

efforts where we would get the greatest leverage. That is why we've increased

the budget by $900 to focus where we're going to get best value from an economic

point of view through accelerated growth.

We've

already seen significant investments in mining and different work through the

Research & Development Corporation and also investments through Natural

Resources and what they do to support mining activity. Given the growth in

mining that's taken place already on the Baie Verte Peninsula, different changes

that has happened around Lab West, Voisey's Bay and in other areas of the

province, we feel that earmarking these funds is the right approach to help

expedite and accelerate growth in Newfoundland and Labrador.

MS. ROGERS:

So the $188,000 is different

work that would have been covered by the $187,000.

MR. LOMOND:

I think the numbers are a little bit misleading.

As the

minister said with CETA and CFTA, the department refocused. The trade policy

division has been moved over to Intergovernmental Affairs. So when you look at

the Intergovernmental Affairs budget, you'll see $120,000 allocated under

Professional Services for legal costs. They also took $240,000 in expenses that

were paid by our department. So I think that might be part of the confusion;

$900 to $187,000 looks like a fairly big jump, but the department would have

paid $240,000 in legal expenses around the CETA agreements, but those expenses

are showing up under IGA where our department went through a fairly significant

restructuring.

MS. ROGERS:

I was asking about the

Professional Services line.

MR. LOMOND:

Right. Professional Services, so those legal fees that you would see a variance

of $900 showing up in 2016-2017, there was actually $240,000 additional to that,

and that $240,000 is reflected in the Intergovernmental Affairs budget because

they now host trade policy. Trade policy used the rest with our department up

until the restructuring.

The

numbers may look a little bit misleading. It looks like a fairly significant

drop, but there was actually that much money and more spent.

MS. ROGERS:

Okay.

When we

go down into Purchased Services from $412,000, then to $234,000 and now to

$111,000 I know we've covered that with Steve Kent, but can you just for an

area that's accelerated growth, we see a lot of reductions and one would think

that we might go in the opposite direction. If you could just give me a bit of

an overview as to why it seems to be diminishing.

MR. LOMOND:

Some of that money would have been for things like trade booths at exhibits and

floor space, those sorts of things.

MS. ROGERS:

Yes, right.

MR. LOMOND:

Under the Atlantic Growth Strategy we've entered into an arrangement with other

provinces, and we have increased the size of the funding pot that's available

through that arrangement. So activities, as the minister mentioned, that we

would have been paying 100-cent dollars for

MS. ROGERS:

Yes.

MR. LOMOND:

we're now paying five-cent dollars for, because it's our share of the

agreement

MS. ROGERS:

Because you're co-operating

together.

MR. LOMOND:

Right, it costs about 5 per cent.

So we

would be sharing activities. Sometimes our department might lead; sometimes it

might be a local industry association. Sometimes it might be a group in Nova

Scotia or ESANS. Some environmental group could be leading in another province

and we would participate, but our share is much smaller.

MS. ROGERS:

Okay.

Thank

you.

CHAIR:

2.2.01 and 2.

MR. KENT:

Sorry, Mr. Chair, I have

questions on 2.1.02.

MS. ROGERS:

Yes, and so did I.

CHAIR:

Okay. I thought I had those

inclusive, but

MR. KENT:

You did, but I haven't

spoken to that one.

CHAIR:

Okay.

ahead, Mr. Kent.

MS. ROGERS:

Can we have a list of all

the loans, advances and investments made in 2.1.02?

MR. MITCHELMORE:

Anything we can provide

that's not commercially sensitive we can certainly provide under 2.1.02.

Some of

the funding would have been I talked about previously, is around our Venture

Capital funding, would be provided here, our Made in Newfoundland and Labrador

Fund, and the Atlantic Canada Venture Capital Fund as to what would be provided.

Then there would be some funds associated with particular clients that would be

involved through investment attraction. There were some public announcements

made on a couple of those in particular.

MS. ROGERS:

Okay.

Also,

is there a specific direction that this program is going in? Are there specific

areas that you are focusing on?

MR. MITCHELMORE:

There are always components

that you're looking at, whether it's export or if there's a way of bringing in

inward investment here. There are a numbers of areas of criteria where there are

sectors that are growing in our economy. So there are some areas where you'd

want to target an investment in particular to have a positive impact to the

economy, and that's the focus of this $8 million.

MS. ROGERS:

Yeah. So my question was

because I know that.

MR. MITCHELMORE:

Yes.

MS. ROGERS:

My question was: What are

those for the department?

MR. MITCHELMORE:

So they could be, in

particular, technology companies. They could be those that would deal in life

science; those that would deal in innovation. It could be aerospace; it could be

any sector really in the economy that could show a potential for growth, really.

That's the strategic direction.

There

really isn't a hard limitation as to what would not quantify as an investment,

if it makes sense.

MS. ROGERS:

Right. So I guess my

question is: In terms of where we are in the province right now and what we know

to be true for the province right now and what we know to be true happening

globally, are there particular areas of interest for the province right now in

terms of we all know innovation, et cetera, but are there areas that are

targeted or that the province, in terms of your plans, what areas are you going

and what areas do you feel are real possible growth areas for the province?

MR. MITCHELMORE:

Yes, I think if you wanted

to take some time to review some of the 50 initiatives in

The Way Forward document, it clearly

outlines some of the sectors of the economy that we will be focusing on and some

of them would be looking at innovation, looking at the Technology sector, but

also looking at some of the traditional sectors as well.

If you

look at some of the initiatives that the department is doing such as the

Regional Innovation Systems pilots where we're focusing on ocean tech for the

Avalon Peninsula, we're focusing on industrial activity when it comes to the

Clarenville-Burin Peninsula, we're focusing on defence and aerospace when it

comes to the Central part of Newfoundland and Labrador and then, as well, we

have agriculture and forestry in the Corner Brook and area and then tourism and

fisheries systems pilots when it comes to Southern Labrador and the Northern

Peninsula. So you're looking at strength in regions and you're looking at

opportunities.

When

the team looks at investment attraction, whether they're on a trade mission or

whether they're working with embassies or working with the export development

corporation or just advancing a business lead, they follow a process and do due

diligence to try and find the greatest opportunities that can benefit

Newfoundland and Labrador; whether that's in the form of high-value jobs or

significant investment in capital in the economy for the longer term to develop

and grow industries.

We've

seen some really positive investments from this particular fund in the past. I

can highlight an example like Verafin which would be a company that has really

grown to about 300 employees that would have been a beneficiary of investment

attraction.

MS. ROGERS:

Thank you.

CHAIR:

Mr. Kent.

MR. KENT:

Thank you.

Minister, is there any money allocated through the Investment Attraction Fund

for NewGreen Technology in the proposed $185 million bio-fuel plant to be built

in Botwood?

MR. MITCHELMORE:

The Cleantech sector is an

interesting area. We're seeing from the Canadian contacts through infrastructure

or other initiatives that there's a direction to look at being more

environmentally friendly, to be looking at clean technology, to be looking at

different types of initiatives. But in terms of any particular investment I'm

not aware of any earmarking of this $8 million for the particular project that

you have mentioned.

MR. KENT:

So just to be clear, you're

not aware of any funds being allocated for NewGreen Technology at this point?

MR. MITCHELMORE:

You had stated a number of

$180 million for a particular company. Any company that would like to see

investment from the department, in particular to receive public funds, would

have to submit a business plan, would have to submit documentations, go through

a due diligence process, our business analysis division would be involved in

that role and provide documentation on any particular case a client would be

putting forward.

In last

year's budget, we had talked about a particular investment which was a strategic

investment. At that time, we had removed the dollars from strategic investments.

I made the statement that if there was an investment that exceeded funds

allocated then there would be a process to go through Treasury Board, basically,

through the contingency fund mechanism to look at economic opportunities.

MR. KENT:

So has NewGreen Technology

applied for funding and what stage of the process if the project at?

MR. MITCHELMORE:

Do you want to answer that?

MR. LOMOND:

There's no active

application as such. The company has written to basically feel out the programs

that we might have, but there's no active application at this point and time.

MR. KENT:

Okay. At this point, there's

no commitment from the province to invest in the project?

MR. LOMOND:

We would require a full

business plan. We would have to subject it to due diligence, full financial

review. No, we're not there.

MR. KENT:

Okay.

I'll

leave it there for 2.1.02.

CHAIR:

Okay, Mr. Kent, we'll ask

you to start again now on 2.2.01 and 2.2.02.

MR. KENT:

Okay.

2.2.01, Minister, the variances related to Salaries and Purchased Services are

relatively minor, but I was just wondering if you could make a quick comment on

both.

MR. MITCHELMORE:

It's basically a change in

one director and one new manager was added. It's a small change but it's a

reduction in a director position but the addition of a manager position.

MR. KENT:

Okay.

Under

the same heading, in estimates 2016, Salaries were $741,000 I believe. You did

mention earlier that investment portfolio management has moved into this area.

Is there anything else that explains that difference? Is it just the

consolidation of those two areas, so to speak, or are there other areas of the

department that have now been rolled in to Business Analysis?

MR. LOMOND:

No, I think those are the

two pieces. There is also a new element as outlined in

The Way Forward the major projects

unit is reflected in that, but that's basically been done through re-profiling

of existing positions to put some focus on that.

MR. KENT:

Right. Okay, thank you.

The

Grants and Subsidies number is over $4 million. Would we be able to receive a

breakdown of those grants and subsidies and who receives them?

MR. MITCHELMORE:

The Grants and Subsidies are

basically our Business Development Support Program. If they can be made

available, we'll certainly make them available, if there's nothing commercially

sensitive about them. I'm sure we can provide a list and the dollar values.

MR. KENT:

Okay, great. Thank you.

So, Mr.

Chair, I'll ask my couple of questions on 2.2.02 as well. You called them both,

correct?

CHAIR:

Yes.

MR. KENT:

Okay.

Can you

explain the $17 million in the revised Estimates for 2016 under Loans, Advances

and Investments, and tell us who received those funds?

MR. MITCHELMORE:

Well, as we discussed last

year under this Strategic Enterprise Development program of capital, $17 million

reflects a loan to Canada Fluorspar Inc. The loan was approved by Treasury Board

to support the St. Lawrence fluorspar mine and milling operation project.

Given

we didn't have a budget for that, that would have been approved through the

contingency. Given that there's $637,400 in revenue, this would have been

payment from a previous loan that would have been provided. That would have been

for $17 million. That would have been for a wharf.

MR. KENT:

Okay.

final question on 2.2.02: Could you comment on government's investment in

Venture Capital and how it compares to last year?

MR. MITCHELMORE:

Well, the investment under

Venture Capital would have fallen under 2.1.02 under our Investment Attraction

Fund.

MR. KENT:

Okay, yes.

MR. MITCHELMORE:

The Made in Newfoundland and

Labrador Fund, the total for 2017-2018 that's being anticipated is a total of

$5.1 million.

MR. KENT:

How does that compare to

last year, Minister?

MR. MITCHELMORE:

The remaining disbursements

that would have been in both funds well, the amount that would have been

provided last year for remaining disbursement would have been $4.9 million total

in 2016-2017 that would have been expected in the funds. The funds are adding, I

guess, as there are investors, providing private equity. People like the BDC

Capital and others would be adding to create basically two $10 million funds for

a total of $20 million.

MR. KENT:

Okay.

Sorry,

you mentioned that the Major Projects unit now falls in one of these areas. Has

there been any progress with that at this point that you could share with us?

MR. MITCHELMORE:

The Major Projects unit

falls under Business Analysis, and that's a good fit for this division because

of the research, development, coordination, administration, everything that gets

assessed from a diligence point of view. We'll provide that one window, that

entry point, to provide a better connectivity to our experts within our

horizontal department, reduce barriers and improve the timeline when it comes to

dealing with clients.

We've

published our service standards already on our website as part of

The Way Forward initiative. There

have been some meetings with potential clients to look at potential investment

in the project, and they'll continue to do their work. We encourage people if

they have a major project or anybody who is interested in making significant

investment into the province to reach out to the manager of Major Projects.

MR. KENT:

Okay. I'll leave it there

for that subhead, Mr. Chair.

CHAIR:

Ms. Rogers, 2.2.01 and

2.2.02.

MS. ROGERS:

I'm quite content, thank

you, Mr. Chair. My colleague has a done an exemplary job.

CHAIR:

Okay.

Ms.

Rogers, I'll get to start off then on 3.1.01.

MS. ROGERS:

Thank you very much.

3.1.01,

Sector Diversification, so if we go to Salaries we see a variance there from the

revised amount, a reduction of $205,800

MR. MITCHELMORE:

The Salaries?

MS. ROGERS:

Yes, Sir.

MR. MITCHELMORE:

The decrease of $205,000

reflects savings due to delayed recruitment, and the decrease this year reflects

the changes as per the salary plan of bringing in, I guess, some of the

divisions and changes that happened in the department.

MS. ROGERS:

So how many positions would

that be; and if it's a reorganization of the department, are those positions

gone or have they moved somewhere else?

MR. MITCHELMORE:

In Sector Diversification,

we have total of 33 positions.

MS. ROGERS:

33 positions lost?

MR. MITCHELMORE:

No, that's the total

positions that are currently in Sector Diversification that account for the

$1,615,200 in Salaries. There are 21 permanent employees and 12 temporary.

MS. ROGERS:

So the reduction of $545,000

reflects the loss of how many positions?

MR. LOMOND:

Just so you're clear, when

you look back at Accelerated Growth, the heading we looked at some time ago

MS. ROGERS:

Yes.

MR. LOMOND:

that one covers the firm

facing elements of the various divisions, so actually working with companies.

This particular activity looks at the ecosystem. So things like clusters, your

incubators, your accelerators. The positions are all reflected here, the savings

are reflected here but a little bit of those duties could actually be attributed

back to Accelerated Growth but where we went through such a substantive

basically, we eliminated across those two activities four director positions, a

manager and two senior policy positions, and then created a new director and a

new manager.

MS. ROGERS:

Okay. Four directors and how

many managers?

MR. LOMOND:

One manager

MS. ROGERS:

Yes.

MR. LOMOND:

and two senior policy

analysts. So those are basically non-bargaining unit positions but who wouldn't

have had direct reports.

MS. ROGERS:

And did those positions

disappear entirely or have they been moved elsewhere?

MR. LOMOND:

Those positions have been

merged

MS. ROGERS:

Eliminated?

MR. LOMOND:

Eliminated and are reflected

either in this activity or in the Accelerated Growth.

MS. ROGERS:

Okay.

I'll

ask it a different way. I just want to get a handle on so we've lost four

directors. Of those four directors, did any of them go into another area?

MR. MITCHELMORE:

No.

MS. ROGERS:

No. So those have been

eliminated. One manager

MR. LOMOND:

I'm sorry.

MS. ROGERS:

And so the two policy

analysts

MR. LOMOND:

Yes.

MS. ROGERS:

So those positions have been

eliminated altogether. It's not somebody has moved to Accelerated Growth.

MR. LOMOND:

Right. Now that doesn't

necessarily mean the person is out of work because in some cases people might

have had a bargaining unit position and might have been acting in a senior

policy analyst. So they might have bumped back into the

MS. ROGERS:

Yes, but the positions of

the policy analyst, those jobs, those two are gone.

MR. LOMOND:

That's correct.

MS. ROGERS:

They weren't moved, like, to

Accelerated Growth.

Okay;

all right. Thank you. That clarification, that's helpful. Thank you very much.

A small

amount here, Employee Benefits, that would reflect in the movements.

Transportation and Communications; we see a reduction of $45,000 in the revised

amount for '16-'17 and then a reduction once again in '17-'18.

MR. MITCHELMORE:

Yes.

The

decrease of $45,000 reflected the participation in and travel to

non-discretionary trade shows. So there was a reduction there. There was some

travel reduced for trade shows again this year through the zero-based budgeting

process. There was a reduction in telephone lines and travel for staff to bring

that number down to $12,600 this year, given that this is a merge of a couple of

former divisions as well.

MS. ROGERS:

In Professional Services, in

the revised, it's a reduction of $17,000. What kinds of professional services

would you have engaged and then not engaged?

MR. MITCHELMORE:

Professional services

typically would have been the hiring of a consultant or any research costs that

would have been attributed to a particular year. The decrease this year reflects

the funding required for research studies for this upcoming fiscal year.

MS. ROGERS:

Okay. Thank you.

Grants

and Subsidies; we see a huge change in that. Can you explain that, please?

MR. MITCHELMORE:

Yeah, the decrease is the

conclusion of the Rural Broadband project, as I talked about earlier when Mr.

Kent had asked about broadband. There was $1,277,500 partially offset by some

re-profiled funds for the industry associations related to craft and trade

shows. That's where the overall decrease is, $1,187,500

still have funds in the broadband project. This would have been funds that were

previously committed that didn't get complete that were basically rolled over.

That program is now concluded and the funds have 'sunsetted' because the

projects have.

MS. ROGERS:

Are there still areas of the

province that do not have broadband?

MR. MITCHELMORE:

We have 99 per cent

coverage, basically, right now.

MS. ROGERS:

That's pretty good.

MR. MITCHELMORE:

There is a program with the

federal government, through Connecting Canadians, for a $500 million program,

which we will use the $2 million that we had allocated over two years to help

leverage and work with the private sector providers to improve broadband

services.

There

are some areas of the province that have broadband that have congestion issues.

We continue to work to find the most cost-effective means with providers to

ensure that they're upgrading their services and that broadband capacity is as

diverse as can be. Last year, we supported funds for 16 new communities across

the province to either see broadband for the first time or have enhanced

services.

MS. ROGERS:

Okay, great.

ahead, Mr. Kent.

MR. KENT:

Thank you.

Ms.

Rogers did an exemplary job of asking some of the questions that I had planned

to ask, but I still have a few more.

Just to

pick up on the rural broadband. Minister, are there any funds this year

specifically allocated for rural broadband?

MR. MITCHELMORE:

Yes. In last year's budget

there was a total of $2 million over two years. So we have funds that can be

earmarked through our Regional Development Program, I believe, if I look

forward. Is it the regional diversification fund?

OFFICIAL:

Comprehensive Economic

Development.

MR. MITCHELMORE:

Comprehensive Economic

Development, if we go to 3.3.01, the $10,360,600; there are funds allocated in

this program here for broadband.

MR. KENT:

Okay.

That

was $2 million over two years?

MR. MITCHELMORE:

Yes.

MR. KENT:

Okay. Thank you.

Would

it be possible to get a list of those communities that still do not have

broadband? I recognize we've got really good coverage, but there are still a

number of communities that are in that 1 per cent.

MR. MITCHELMORE:

Yeah, it's somewhat

difficult, I guess, to identify what you would deem as a community for broadband

in terms of the pure definition of an actual community. Some of the information

would be company driven or company specific.

Our

department has no issue with releasing any information that we have available.

We actually released information and one of the providers took issue with

releasing some of the information, deeming it as confidential in nature. That

went through the Information Commissioner to make a ruling.

Any

information that can be provided to look at communities that don't have

broadband access, it all depends on what's deemed as coverage. There are

communities that have a fibre connection or DSL; there are communities that have

it through wireless. There are communities that have satellite internet that

would have the definition of broadband. There are a number of entities as to say

which communities.

Ninety-nine per cent of the population is covered through a broadband service in

terms of geographical community of which they live, but there are congestion

issues that exist within communities where people are not getting the true speed

of a minimum of 1.5 megabits per second. This is where, through the $500 million

federal program, through Connecting Canadians, we anticipate that we can improve

by working with the providers, the backbones that exist, that enhancements can

be made and there can be significant investments made into communities to grow

broadband Internet.

This

was a program the former federal government had offered as well, over $225

million for broadband, and the former provincial government got zero dollars and

put forward zero proposals to enhance broadband and used 100 per cent of the

taxpayers' dollars to put forward broadband initiatives instead of leverage.

MR. KENT:

Well, Minister, the former

administration increased the coverage dramatically and got it up to 98 per cent.

MR. MITCHELMORE:

All at the cost of the

Newfoundland taxpayers.

MR. KENT:

I haven't cut you off, so

maybe you shouldn't cut me off.

The

former administration increased broadband coverage rather significantly, up to

98 per cent. Under whatever definition the department is currently using and I

imagine it's the same definition we were using we know where the 99 per cent

of the population is that has coverage. So we know the areas, however you wish

to define them, where there isn't coverage today, by your own definition of the

99 versus the 1 per cent.

If you

can tell us by geographic area or by municipalities and local service districts

the problem with that approach is it doesn't include the unincorporated areas,

but some kind of breakdown would be appreciated because you do know, the

department does know what areas of the province are not covered and what

communities, whether they're unincorporated areas, local service districts or

municipalities, the department does know what those communities are, and all

we're asking for is a list.

MR. MITCHELMORE:

There are some, I guess, as

to what you would determine as a community because there are cabin areas, there

are places that would not meet the definition of a community. So to be able to

provide a comprehensive list of the communities throughout Newfoundland and

Labrador you look at municipalities; you look at the local service districts.

It's certainly a much easier process to provide a list if the community has a

definition of high-speed Internet or not and what form.

When

you start getting in to unincorporated communities and determining which ones

are actually deemed communities, in terms of, is it a cabin area? Does somebody

determine that because they pay fees for garbage collection or whatnot, whether

it be Ocean Pond, for example, to determine that broadband Internet must be

supplied within all areas of the province, then you could look at the fact that

satellite coverage would ensure that there is significant access to very

isolated and rural and remote areas through a satellite service, that they would

meet the definition of having broadband Internet.

MR. KENT:

I'm sorry, Minister, but I

have trouble accepting that explanation. I don't know why you wouldn't be

forthcoming with the information that the department has, in whatever form. Give

us a map. Give us a list of geographic areas. Give us postal codes. Give us a

list of roads. Give us a list of towns and local service districts. Leave out

some of the unincorporated areas, if you must. But I know for a fact that the

department knows. I have trouble with your explanation here this evening.

So why

won't you provide it? Why the hesitation in providing that information?

MR. MITCHELMORE:

When it comes to broadband

Internet services, we will continue to work towards having ubiquitous coverage

across the province and finding a way to close the gap for the 1 per cent.

MR. KENT:

So for someone who's

expressed passion around this issue in the past, your response tonight is both

troubling and surprising, because the department has the information. And you're

basically now on record in Estimates in this Chamber saying you won't provide

the information.

Given

the progress that's been made, given your government's continued commitment to

making more progress, I just don't understand why you wouldn't be transparent.

I'm clearing missing something.

MR. MITCHELMORE:

We have no issue with

identifying where broadband Internet exists. The providers provide that

information as well on their website. They provide a list of the communities

that they service, whether it would be any of the large telecommunication

provides or whether it would be the small-scale companies.

There

are people who are providing microcell and wireless solutions that are covering

communities. It is not government, the Province of Newfoundland and Labrador,

that is responsible for the installation or providing the service of broadband

Internet. It's a highly regulated area within a federal jurisdiction under the

confines of the CRTC.

terms of government having any inventory of every single community and map and

whatnot of which broadband exists, for you to state that we have all of this,

this inventory, I don't believe that's the case.

MR. KENT:

Well, just provide us with

what you have then. I understand the complexities. I do understand and accept

the complexities, but you have data. You do have some understanding of areas of

the province that aren't covered and we're simply asking for you to share that

information, which I presume has been shared in the past.

There's

been progress made. There are still gaps. I understand there's an effort being

made to address them. So in whatever form, to whatever extent you have it, to

whatever extend you can, all we're asking is that you provide the information.

MR. MITCHELMORE:

And if there are no

commercial sensitivities with providing those details based on the contracts

that have been entered into with providers, we will provide documentation around

a list of communities that have broadband Internet here in the province. It may

require us to do a bit of work to be able to provide that information.

personally don't have a document that I've seen that lists every single

community in the province that has access to broadband and a list of ones that

do not.

MR. KENT:

So I'm out of time, but I do

have more questions.

CHAIR:

Okay.

Well,

I'm just going to ask that we recess for probably five to seven minutes, just to

give our personnel at the media centre downstairs an opportunity for a break as

well. So we'll reconvene probably at 10 or 12 minutes after, please.

Recess

CHAIR:

Okay, welcome back. We're

ready to reconvene our session with 3.2.01.

Ms.

Rogers.

MS. ROGERS:

Yes, Sir.

Regional Economic Development, Salaries thank you very much, 3.2.01, Regional

Economic and Business Development. We see a significant reduction in the revised

amount, in the budget amount of $230,000, and then an even more significant

reduction by almost $500,000 for 2017. Maybe someone could explain that?

Thank

you.

MR. MITCHELMORE:

The $230,900 is delayed

recruitment, partially offset by sick leave replacement costs and temporary GRI

seconded position cost absorbed by the department. In this year's budget there's

basically one director versus six directors. Then there were four managers

added, which is the adjustment primarily for those salary changes.

MS. ROGERS:

Okay, so the elimination of

five directors for this specific department, this specific program. The delayed

recruitment; we've had a lot of delayed recruitments. Why were there so many

delayed recruitments?

MR. MITCHELMORE:

There was basically a

process of which only essential positions that were needed would be hired based

on last year's fiscal situation. We did recruit a position in this particular

area, in particular, in Lab West, given that the only economic development

officer had left the position. Given what was going on around Wabush Mines,

around the downturn in iron ore prices and the impact, it was highly pertinent

that we would actually recruit for that particular position.

Not in

all cases did we delay hiring, but we have changed the director positions. We

used to have, basically, five regional directors for each area. Those positions

and the territories have been changed to be served through regional managers

instead.

MS. ROGERS:

Thank you.

Transportation and Communications; I imagine Regional Economic and Business

Development, which is something we so desperately need in order to create

sustainable employment and activities across the province, of the four managers

that were added, are there other managers as well? Were there any reductions in

managers?

We know

there was a reduction of five directors, they're gone and four managers added.

We went from six staff positions to five staff positions. Are some of the

managers, were they former directors?

MR. MITCHELMORE:

Yes.

MS. ROGERS:

Yes.

MR. MITCHELMORE:

Yes.

MS. ROGERS:

Okay.

Transportation and Communications; we see in the revised a reduction of

$136,000. That's kind of significant there, if someone could speak to that.

MR. MITCHELMORE:

Less travel based on whether

vacancies some of the industry events were held locally. There was a real push

to use teleconferencing capabilities with clients. We held sessions where we

reached out to our Regional Economic Development offices via using our Lync

technology to do consultation. That has been successful to help feed into the

business innovation agenda and other avenues of which we've partnered with staff

and the Social Enterprise Action Plan where we've been able to use technology

versus travel. So there was a real cognizant effort to find savings.

This

year we anticipate $215,500 is a sufficient amount based on the activities we

have planned. There were less telephone costs as well. We've reduced, I believe,

the number of telephones by what is it 64 in the overall department and we

reduced cellphones I believe by 20 to have an overall savings of about $31,000

in telecommunications that were not being used. Sometimes there were double

lines, faxes, things like that. So having a real good audit and assessment of

what was being used and what wasn't certainly has an impact, and every dollar

certainly adds up.

MS. ROGERS:

Of the four managers, are

they all situated in St. John's, or are they in different parts of the and so

where would they be?

MR. MITCHELMORE:

There would be a regional

manager that would be based in the Western region and there's one in the Eastern

region. One of the management positions would have been, I believe, the

Marystown office. Another position, pending a Regional Innovations Systems Pilot

Project, is to be confirmed. We haven't filled that position yet but it

certainly could be in one of our regional locations. It's certainly open to that

given the Regional Innovation Systems Pilots are taking place all over

Newfoundland and Labrador.

MS. ROGERS:

Will that position be filled

soon?

MR. MITCHELMORE:

We have an expression of

interest going out to see if there's anyone internally within government that

would like to look at filling that position that meets the qualifications. We

had gone through a process with the Public Service Commission for any of the

changes where there was an interview process, and had gone through that for

staffing for positions based on getting the best qualified candidate.

MS. ROGERS:

In Purchased Services,

there's a significant reduction for 2017-'18. What kinds of things will you no

longer be purchasing and what kinds of things will you be purchasing?

MR. MITCHELMORE:

I'm happy to help Minister

Hawkins, I guess, through meeting his reduction in square footage. This

primarily represents our leased office spaces.

The

cost reduction reflects that we relocated our office in Pippy Place that was

$123,000 annually, to Confederation Building. Our Corner Brook office that was

in the Millbrook Mall has now moved into the Sir Richard Squires Building. We

have change at our Carbonear, the Springdale office where there was no employee.

The Marystown office, there were two leases. So we've consolidated them into one

office and determined through zero-based budgeting as well, we could find

further savings.

MS. ROGERS:

Okay. Thank you very much.

CHAIR:

Mr. Kent.

MR. KENT:

Thank you.

With

regard to regional development planning overall, how will things be different

this year as a result of the restructuring or will they in fact be different?

MR. MITCHELMORE:

I think given

The Way Forward initiatives that have

been put in place, there's going to be a lot of focus on the Regional Innovation

Systems Pilot Project. There will be work that will feed into the Social

Enterprise Action Plan, as well as some of the elements around business

innovation through the community supports that would be provided through

Regional Economic Development.

They

will continue to work through the Business Investment Corporation around lending

and loan opportunities and providing that connectivity from a rural and regional

perspective to connect with the right stakeholder, whether it's through talking

to ACOA, talking to commercial lenders, talking to the community Business

Development Corporations, NLOWE, the Newfoundland and Labrador Organization for

Women Entrepreneurs or others.

I could

list on and on, but the roles and responsibilities of our economic development

officers will be focused on being very strategic around looking at the envelope

of programs we have and connect with The

Way Forward such as looking at agricultural opportunities with the increase

in agricultural land that's been provided, connecting with Fisheries and Land

Resources around the Growing Forward

Program, initiatives around marketing that would exist for our fisheries

innovation and marketing and whatnot.

There

is a lot of work that's done on the ground by our regional economic development

officers and we're very proud of the work they do.

MR. KENT:

Are there any changes to the

Regional Development Fund this year?

MR. MITCHELMORE:

The Regional Development

Fund, which is the comprehensive economic development, it's a combined aspect

which includes the broadband initiative, as well as basically $8 million well,

there's $7,960,600, there's $100,000 less. That decrease reflects a reduction in

operating funds. That was a budget decision of 2015-2016, prior to our

government taking the administration. There is one more reduction of $100,000

planned for the next fiscal '18-'19.

MR. KENT:

Are there any offices going

to be closing as a result of the restructuring that's occurred within the

department?

MR. MITCHELMORE:

Well, we've decreased some

of our leased space, as I mentioned earlier, around Pippy Place and Corner Brook

and Carbonear and Springdale and Marystown.

These

lease costs does not change the service we're able to provide because we either

have alternative office space that would be rent free, that's our preference,

whether we find space in the College of the North Atlantic or other government

space as leases expire, but if there are areas where an office closes, there are

certainly avenues of which our economic development officers will be on the

ground providing services, whether they partner with town halls or community

organizations to have those meetings. There's capacity building money to support

opportunities management and sessions all throughout Newfoundland and Labrador.

So we're more than happy to have a broad economic development and business

development conversation.

MR. KENT:

So the initiative to reduce

leased space is a good one. Are there are any communities that will now not have

a staff presence on the ground as a result of these changes? Are all those folks

being affected by coming out of leased space remaining in those same

communities?

MR. MITCHELMORE:

Any office space that would

have had an employee attached to that office space would continue to have an

employee representation in the community.

MR. KENT:

Okay. That's it for me on

3.2.01, Mr. Chair.

CHAIR:

Okay.

3.3.01.

Mr. Kent, if you'd like to start off on this one.

MR. KENT:

The minister's already

spoken to it, so all I'd ask him for is a breakdown of the Grants and Subsidies.

Would we be able to get a list of what's included in the Grants and Subsidies?

MR. MITCHELMORE:

That shouldn't be a problem.

MR. KENT:

That's it for me on 3.3.01.

CHAIR:

Ms. Rogers.

MS. ROGERS:

I'm fine there, thank you

very hang on now.

CHAIR:

Ms. Rogers, on 3.4.01?

MS. ROGERS:

I hear you, thanks.

I would

like to go back to 3.3.01, Comprehensive Economic Development. I know that my

colleague here has asked for a list of the grants. Can you tell if there are any

specific areas that you are looking at, any specific areas that you are looking

to help develop or push forward that look promising for the province?

MR. MITCHELMORE:

This is a fund that focused

primarily on non-commercial activity that works, in many cases, with

municipalities and non-profits, business associations, community economic

development groups, arts organizations, that have specific focus around

infrastructure, trail development. There's been marina development here. There

has been a number of initiatives that should lead to private sector investment

as part of a spinoff and also leverage the greatest amount of federal and

outside sources.

we're constantly looking at ways to increase that leverage to the maximum

capacity. We did an announcement recently in Bishop's Falls where over Easter

the department put in $250,000, and I believe ACOA put in around $600,000, and

the town put in almost $400,000.

From

that point of view, that $250,000 was a significant leverage to benefit

recreational angling and lead to stimulation of private sector investment such

as restaurant, accommodations and other initiatives that seem to be part of the

town's strategic plan and initiatives.

This is

where the economic development officers are very critical on the ground and

meeting with community groups and organizations to find regions of the province.

Sometimes these initiatives are either outdoor product development, tourism

development. They could be cultural initiatives. They could be a number of other

things. This is a significant amount of money that we have in regional

development of about $8 million. That leverages significantly more.

MS. ROGERS:

Is there anything specific

that you're kind of excited about in terms of some wonderful projects coming up?

MR. MITCHELMORE:

I would say last year one

exciting project here for the city that you probably would have been excited

about as well was the $500 million that went into the St. John's Farmers'

Market, a co-operative that will change the metro bus station where ACOA put in,

I believe, $2 million for that. The co-op raised $100,000 and the city also

contributed.

It was

a significant piece that's going to lead to a lot of vendors; it's going to lead

to a commercial kitchen. It's going to be a good space for visiting artists that

want to perform and all sorts of great things that are planned with that avenue.

This fund leads to other economic activity that's stimulated by making strategic

investments in infrastructure.

Today,

we launched our Provincial Tourism Product Development Plan, so there are

avenues of which we'll look at visitor entry points around ferry services,

around airports and other entities of which this fund can help leverage activity

as well. I'd be more than happy I know we have Estimates lines, but if you

want to have a conversation about this particular fund, we could have a

conversation offside if you prefer.

MS. ROGERS:

We're going to get a list of

the Grants and Subsidies, I understand, yes? I imagine there is an intention to

spend every penny.

MR. MITCHELMORE:

This is one of the funds

that get heavily subscribed to. You have to evaluate your programs where you're

getting best leverage based on Way

Forward initiatives, directions, where we want to go. Sometimes

programming will lead into the concept of multi-year funding. There is some

avenue to make sure that this program gives the greatest comprehensive economic

benefit to the province.

MS. ROGERS:

Great. Thank you very much.

MR. MITCHELMORE:

I don't believe this is one

that ever had program dollars remaining.

MS. ROGERS:

3.4.01, I see a small

adjustment there in Salaries and Professional Services. We see a significant

increase, as a matter of fact, in the revision for 2016-17. Can you talk a

little bit about that?

MR. MITCHELMORE:

Yes. In 2016-2017, we did

our provincial Exit Survey. This is done every five years, I believe. With that,

we allocate those funds and we're concluding our research on all the people, the

entry points at the ferry terminals and at the major airports to gauge visitor

spending; why people came, what activities they participated in, and then we'll

be able to generate that number.

Hopefully, that spending was over the $1 billion mark. We can provide that

updated figure as to how great tourism was in the province last year because we

certainly felt it in almost every nook and cranny that I visited. That's the

answer, Ms. Rogers.

MS. ROGERS:

So that was done during the

summer I imagine, wasn't it, the Exit Survey?

MR. MITCHELMORE:

The Exit Survey is done all

year round at the major entry points. Then at some of the smaller airports it's

done on a seasonal basis, such as Happy Valley-Goose Bay, and Stephenville and

the Gander airport are done all year round.

MS. ROGERS:

Okay.

MR. MITCHELMORE:

Just Gander and Happy

Valley-Goose Bay, yeah.

MS. ROGERS:

Okay, great.

Thank

you.

MR. MITCHELMORE:

Deer Lake and St. John's

would be year round.

CHAIR:

Mr. Kent, 3.4.01.

MR. KENT:

I have nothing further on

3.4.01.

CHAIR:

On 4.1.01.

Mr.

Kent.

MR. KENT:

Thank you.

realize the variance related to Salaries is slight, but could the minister

comment on that?

MR. MITCHELMORE:

The small change was a delay

in recruitment. The new amount is based on the current salary plan for the

department and reflects any of the increases that would be associated with the

staff there. In the tourism department, there are a total of 46 positions.

MR. KENT:

Thank you.

Are

there any changes to the Visitor Information Centres funding this year? Also,

any changes to hours of operation, any staffing changes?

MR. MITCHELMORE:

No, there are no planned

changes.

MR. KENT:

Okay, thank you.

Grants

and Subsidies again, I was just wondering if we could get a list of what's

included in that $221,000.

MR. MITCHELMORE:

The $221,000

MS. MURPHY:

That's two grants: one is

Destination Labrador, $150,000 annually for the DMO, and $71,000 for the Visitor

Information Centres regional grants.

MR. KENT:

Okay, great.

Thank

you.

Minister, can you tell us what the status is of if there is a status yet the

five regional destination development plans that are alluded to in the

Way Forward document?

MR. MITCHELMORE:

Each destinati