June 18, 2019
RESOURCE COMMITTEE
Pursuant to Standing Order 68, Lisa Dempster, MHA for Cartwright - L'Anse au
Clair, substitutes for Pam Parsons, MHA for Harbour Grace - Port de Grave for
subhead 1.1.01 to 1.2.03.
Pursuant to Standing Order 68, Derek Bennett, MHA for Lewisporte - Twillingate,
substitutes for Pam Parsons, MHA for Harbour Grace - Port de Grave for subhead
2.1.01 to 4.3.02.
Pursuant to Standing Order 68, Paul Dinn, MHA for Topsail - Paradise,
substitutes for Kevin Parsons, MHA for Cape St. Francis for subhead 1.1.01 to
1.2.03.
Pursuant to Standing Order 68, Andrew Parsons, MHA for Burgeo - La Poile,
substitutes for Elvis Loveless, MHA for Fortune Bay - Cape La Hune.
The
Committee met at 6:10 p.m. in the Assembly Chamber.
CHAIR (Reid):
We're going to get started
now.
The
first thing we have to do is we have some minutes from the – introductions
first? Okay.
Okay,
we'll do a round of introductions first. We'll start with the minister.
MR. MITCHELMORE:
Minister Christopher Mitchelmore, Tourism, Culture, Industry and Innovation,
here with my team.
MR. BOWN:
Charles Bown, Deputy Minister.
MS. HAYES:
Robyn Hayes, Departmental Controller.
MS. MURPHY:
Carmela Murphy, Assistant Deputy Minister of Tourism, Culture and Parks.
MS. HEARN:
Judith Hearn, Assistant Deputy Minister of Business.
MS. SKINNER:
Gillian Skinner, Assistant Deputy Minister of Regional Development and
Diversification.
MS. MUNDON:
Tansy Mundon, Director of Communications.
MR. GEORGE:
Bradley George, Executive Assistant to the Minister.
MS. STOODLEY:
Sarah Stoodley, Parliamentary Secretary for Tourism, Culture, Industry and
Innovation.
MS. WILLIAMS:
Renee Williams, Director of Corporate Services, Tourism, Culture, Industry and
Innovation.
MR.
P.
DINN:
Paul Dinn, MHA for Topsail - Paradise. I'll say upfront that I got to beat it
out of here in about 20 minutes, so it's nothing you said, but it gives you a
chance to start the meeting anyway.
MR. COADY:
Malcolm Coady, Researcher, Official Opposition.
MR. PARROTT:
Lloyd Parrott, MHA for Terra Nova, critic for Tourism, Culture, Industry and
Innovation.
MR. LANE:
Paul Lane, MHA for Mount Pearl - Southlands, critic for all departments.
MS. COFFIN:
Alison Coffin, St. John's East - Quidi Vidi.
MR. MORGAN:
Ivan Morgan, Researcher, NDP Caucus.
MS. HILL:
Angelica Hill, Researcher, Government Members' Office.
MR. BRAGG:
Derrick Bragg, MHA, Fogo Island - Cape Feels.
MR. A. PARSONS:
Andrew Parsons, MHA, Burgeo - La Poile.
MS. DEMPSTER:
Lisa Dempster, MHA, Cartwright - L'Anse au Clair.
CHAIR:
I'm Scott Reid, Member for St. George's - Humber. I'm going to chair the meeting
tonight.
We have
some minutes here from the June 13 meeting that we need to have approved.
Can I
have a motion?
MR. BRAGG:
Moved.
CHAIR:
Moved by Derrick Bragg.
All in
favour, ‘aye.'
SOME HON. MEMBERS:
Aye.
CHAIR:
Carried.
On
motion, minutes adopted as circulated.
CHAIR:
We're going to call the
first heading and then we'll have a few opening comments from the minister.
I'm
going to call the head 1.1.01.
CLERK (Barnes):
Executive and Support Services, 1.1.01 through 1.2.03 inclusive.
MR. MITCHELMORE:
Thank you, Mr. Chair.
It's
good to be back here and be joined with my colleagues from the Department of
Tourism, Culture, Industry and Innovation. I typically don't bring opening
remarks in Estimates, but given that there are several new Members here, I just
wanted to give a broad overview of the department and some of the initiatives
that have taken place to provide some context for the Estimates here this
evening.
The
Department of TCII is the lead for innovation, economic development and
diversification; tourism, culture and provincial parks. It's responsible for
strengthening and diversifying the economy on a provincial and regional basis,
supporting economic growth and employment in the tourism industry, cultivating
contemporary arts and persevering the province's cultural heritage. The
department focuses on the creation of a competitive environment to support
private sector investment and business growth through promoting innovation in
industry and business development, research and development,
internationalization, sector diversification, informed by sector search,
business development and community economic development.
Guided
by The Way Forward, TCII offers
programs and services that ensure entrepreneurship and innovation are able to
flourish, supporting economic prosperity and growth in the province. The
department is also the province's largest operator of tourism, culture and
heritage facilities, including arts and culture centres, provincial historic
sites, provincial parks and visitor information centres. TCII provides insight,
intelligence, innovation support and investment services for business,
non-profit enterprises and community groups. The department markets the province
as a designation of choice, working with a wide range of partners and
stakeholders to identify opportunities, provide support and leverage investments
critical for sector, industry and firm growth.
TCII
encompasses three branches: Tourism, Culture and Parks; Business and Regional
Development; and Diversification, and is supported by two corporate divisions:
Communications and Corporate Services. Leadership is provided by Deputy Minister
Charles Bown and our three assistant deputy ministers: Carmela Murphy, Gillian
Skinner and Judith Hearn.
TCII is
regionally responsive with regional outreach throughout 18 field offices
provided by front-line service delivery staff for all TCII economic development
programs and services. Besides St. John's, we have two other corporate offices,
one located in Marystown, which is responsible for portfolio management and the
other in Corner Brook, which is responsible for the provincial parks.
Departmental staff are also located throughout our provincial information
centres, visitor information centres, provincial historic sites, provincial
parks and arts and culture centres throughout the province. I commend staff for
their collaborative efforts and continued commitment to fostering a culture of
innovation, productivity and creativity in Newfoundland and Labrador.
Newfoundland and Labrador is a destination of choice for people around the
world. Travellers are drawn to our people, our culture and our way of life. TCII
continues to grow and support the provincial tourism industry and it's over
20,000 jobs by enhancing market readiness, designation development and marketing
support in partnership with Hospitality Newfoundland and Labrador, the
Newfoundland and Labrador Tourism Board, regional Destination Management
Organizations and tourism operators.
Newfoundland and Labrador's non-resident visitation has grown at an average rate
of 3 per cent a year since 2009. In 2018 residents made 3.6 million trips in the
province spending nearly $570 million. The combined resident and non-resident
tourism spending in Newfoundland and Labrador reached $1.14 billion last year.
Travel
media; nearly 700 articles were written about
Come From Away in 2018 reaching an
impressive audience of over 110 million. Tour operators are also expanding their
tours and packaging offerings in the province and, just recently, we hosted two
promotional events aligned with the opening of
Come From Away in London.
We keep
hearing from visitors who come here that they love what they experience and they
tell us that our province is a unique and special place. We've also maintained
our support for tourism marketing and our tourism campaign Find Yourself.
It continues to be one of the most successful and recognized in the country
receiving 329 awards. This marketing investment has tremendous value in
attracting visitors to Newfoundland and Labrador.
The
role of the provincial tourism marketing is to inspire, to generate awareness
and to motivate travellers to action. The feedback we receive is incredible and
it's pushing people to book their travel here in our province. The outlook is
positive for this year's tourism season.
In 2018
we hosted a record 111 van tours, including media from all over North America
representing 51 outlets and we welcomed 44 travel trade representing over 180
clients from North America, Europe and Asia. When we launched the Provincial
Tourism Product Development Plan in 2017 we did so to increase the number of
high-quality Newfoundland and Labrador tourism experiences to attract more
visitors, to encourage them to stay longer and to experience more.
Through
the destination development implementation process we hosted 24 opportunities,
experienced development sessions with over 900 tourism operators, potential
entrepreneurs, municipalities and other stakeholders in attendance. One of the
key aspects of the provincial Development Plan is to improve the sense of
arrival in our province and throughout key touch points along the visitor
journey. We have already made investment through comprehensive signage and way
finding for the City of St. John's and the Town of Placentia so their
communities can offer clear and concise directional information. VICs we support
throughout the province. The sites also provide advice and direction on local
festivals and events, attractions and experience; the hidden gems that are
throughout our province. Sites are located in Port aux Basques, Notre Dame,
Clarenville, Whitbourne and Argentia, as well as airports at Deer Lake and St.
John's.
Government provides support to the protection, development, promotion and
celebration of Newfoundland and Labrador's vibrant culture. This includes
legislative protection and management under the
Historic Resources Act, the
Rooms Act, the
Arts Council Act and
Status of the Artist Act; is a sector
liaison in development for creation and trade; and maintaining and operating our
Provincial Historic Sites. We operate six Arts and Culture Centres, provide
regulatory protection and oversight of the province's archaeological and
palaeontological resources through the Provincial Archaeological Office.
We
provide support for our non-profit cultural facilities and organizations and
associated activities through funding programs and advisory expertise; funding
support for community cultural activities and events; funding support for
Indigenous cultural heritage; operational funding support to The Rooms, the Art
Procurement Program; support for professional artists and community arts through
ArtsNL; support for the provincial film industry through the Newfoundland and
Labrador Film Development Corporation; protection and oversight of the
province's built heritage; and safeguarding and celebration of the province's
intangible cultural heritage through the Heritage Foundation of Newfoundland and
Labrador.
The new
Cultural Action Plan, launched in April 2019, will guide our investment and
support our culture in the coming years. The department provides $3.656 million
to arts and heritage events and organizations under the Cultural Economic
Development Program. The department certainly recognizes the critical role our
artists play in representing Newfoundland and Labrador on the world stage. That
is why we continue to support what is a vital sector throughout various avenues.
TCII
also provides over $2.9 million to the ArtsNL grant program, thanks to an
additional $1 million investment in
Budget 2019. From contemporary to traditional landscape to seascape, visual
and performing arts are a true reflection of our province's culture, our
heritage and our people.
A $4
million equity investment in the Newfoundland and Labrador Film Development
Corporation; the provincial film and television industry is a generator of
well-paid skilled jobs, leveraging with it new investment from sources outside
our province. Beyond direct hires, it creates economic spinoffs through spending
on construction supplies, car rentals, gas, hotels, food and a wide variety of
items necessary to make a film or television show. The provincial film and
television industry is a generator of well-paid skilled jobs, leveraging with it
new investment from sources outside the province and creating 640 full-time job
equivalencies and $50 million in production work last year, which was an
historic record.
TCII
also provides $398,000 in support to the Heritage Foundation. They're involved
in helping communities map their tangible and intangible cultural heritage
assets in order to preserve them and realize their potential for community
economic development. Our Provincial Historic Sites are found in St. John's,
Cupids, Heart's Content, Bonavista, Trinity, Boyd's Cove and Point Amour. These
sites offer a wide variety of regular and special programming for all ages and
celebrate the culture and heritage of our province. We had a record-breaking
year last year with over 100,000 visitors.
The
Provincial Parks are the lead department for 32 Provincial Parks throughout
Newfoundland and Labrador: 13 camping parks, 10 park reserves, seven-day-use
parks, the T'Railway Provincial Park and the Main River Waterway Provincial
Park. The Provincial Park network across Newfoundland and Labrador really
highlights the natural beauty of our province and is a great way to discover and
explore what we have to offer.
We have
remained committed to initiatives found in
The Way Forward. Part of this is our
lead role in launching the Technology Sector Work Plan. Through the Cabinet
Committee on Jobs we developed collaboratively, with a steering committee
comprised of industry, government and academia stakeholders, to outline a work
plan with 27 recommendations to drive economic growth and development in the
tech sector. Once the plan is launched, in order to ensure effective
coordination of the work plan activities, TCII formed a working group of the
main industry associations and government departments that meet quarterly,
provide updates, share information and set future directions regarding work plan
activities.
Through
the provincial high-growth firms' initiatives, as part of the Technology Sector
Work plan, we are pursuing initiatives and investments focused on dynamic,
high-growth-potential companies with specific targets supporting for 40
established growth-oriented firms. The aim is to ensure that
high-growth-potential companies with complex needs receive the right service at
the right time, supporting crucial transition periods with financing solutions,
advisory services and export and innovation opportunities. Since the inception,
23 Newfoundland and Labrador companies have signed on for tailor-made business
growth supports, with just over $10 million invested to date to accelerate their
growth.
Empowered Homes is a particularly good example of how our support for
high-growth firms are making a difference. This technology company incorporated
in late 2014 to develop a programmable thermostat for lowering residential
energy consumption, known as Mysa. In 2017, a $499,000 working capital loan was
approved to support the development of Mysa to complete final product testing,
CSA certification and initial manufacturing through an Ontario-based company,
Microart. This working capital loan has been fully repaid.
In
2018, following a strong sales performance, a second term loan was approved in
the amount of $454,000. This term loan assisted with working capital for product
inventory to see it manufactured by a newly selected China-based company,
Seveco, a productivity enhancement that realized a 30 per cent improvement to
the company's gross profit margin.
TCII
investments in the company have leveraged significant capital investment;
approximately $2 million from private investors, including Pelorus, Killick
Capital and others, along with investments from ACOA, BDC and the NRC. Just last
week, the company closed a $2.3 million equity funding round, largely funded
from Vancouver and Quebec-based investors, which it plans to use to launch new
products and expand sales. I am proud to say that Empowered Homes currently
employs 40 highly qualified people.
Via the
Business Innovation Agenda, TCII provides robust financial and non-financial
supports to business in critical areas that enable firm-level innovation and
remove barriers to growth. We've made investments, grants, term loans and equity
financing in support of R&D, commercialization, productivity improvement,
innovation enhancement, knowledge development and export market development.
An
initiative in The Way Forward,
identified TCII implement and collaborate five regional innovation systems pilot
projects, and they're guided by industry-led steering committee and include
various levels of academic institutions and government. We've been able to look
at strategic partnerships.
In
addition to regional innovation, we've connected to global opportunities where
we've advanced provincially focused trade development, efforts in markets like
Guyana, an English-speaking Commonwealth country, currently developing its oil
and gas resources. This is aligned with the province's
Advance 2030, The Way Forward on oil
and gas. This has attracted the interest of in-market activity of over 20
Newfoundland and Labrador supply and service sector companies, including Cahill
Instrumentation and Technical Services, NSB Energy, C & W Industrial
Fabrication, Atlantic Maintenance Services, Coastal Safety Management and
Labrador Rewinding.
Last
year, our provincial exports comprised approximately 50 per cent of our GDP. We
know that the value and volume of our province's trade and investment activity.
As it grows, so too does the number of well-paying jobs that are created in our
province, which in turn helps to strengthen our economy and the quality of life.
We lead
Newfoundland and Labrador's participation in the five-year Atlantic Trade and
Investment Growth Agreement, or ATIGA, which began on April 1, 2017 and runs to
2022, a total budget of $20 million. Our contribution is $1 million over the
five-year term, or $200,000 per year. This federal-provincial agreement involves
unprecedented collaboration between our four Atlantic provinces and the
Government of Canada.
Since
ATIGA's inception, 33 Newfoundland and Labrador companies have participated in
30 international business development projects, focused on opportunities in the
Asian, Caribbean, European and American markets. As a result, our firms
identified short-term sales estimates of $28.1 million and longer-term sales of
$49.1 million.
We're
partnering with industry and investing in opportunities that leverage
private-sector growth, driven to strategic trade development plans to grow
exports in knowledge-based and value-added resource industries, including
aerospace and defence, agrifood, seafood, biosciences, clean tech, ICT,
infrastructure, ocean tech and extractive industries. By pooling off these
resources, we can increase a broader range and enter more diverse markets.
I see
that my time is winding down, and there are certainly a number of other areas in
the department that I've not had the opportunity to touch on including Internet,
cellular service, our investment in start-ups, the various MOUs and industry
investment that we've started, our Social Enterprise Action Plan, our co-op
development, the craft industry, productivity improvements and opportunities
management sessions that we've had, but I feel that I've had the opportunity to
highlight a small sample of activity happening within TCII. I look forward to
answering your questions tonight in the Estimates.
Thank
you.
CHAIR:
Okay, before we proceed to questions, I just want to remind all Members and the
officials, as well, to state their name before they ask or answer a question and
speak clearly into the mic.
Okay,
questions?
MR. PARROTT:
Before we get to the line items, can we get a copy of the minister's briefing
binder and a copy of the transcript you just read out?
MR. MITCHELMORE:
Yes.
MR. PARROTT:
Thank you.
From
1.1.01, can the minister explain how the $1,600 in savings was found in
Transportation and Communications and the revised numbers for '18-'19?
MR. MITCHELMORE:
There was a decrease of $1,600 in transportation in the 2018-19 budget. The
2018-2019 budget, revised, reflects lower travel costs required in the fiscal
year. We decreased the amount in this year's budget by $100 from 2018-19 – the
budget that was proposed for 2020. Just less travelling required determined
through the zero-based budgeting process.
In
particular, from the Minister's Office, there are a number of
federal-provincial-territorial meetings that are held in this particular
department. There is one for tourism. There's the culture and heritage. There's
economic development and innovation. There's a parks FPT. Also, Francophone
Affairs would have an FPT.
With a
parliamentary secretary and the immense amount of events, it's a very robust
department for travel. Given the geographic location in which I live, on the
Great Northern Peninsula, it's quite a distance, so we are very cognizant of
ministerial travel and communication and we try and find savings where possible.
MR. PARROTT:
From line 1.2.01, Executive Support, what explains the Salaries going over
budget by $53,200 in '18-'19?
MR. MITCHELMORE:
The 2018-19 revised reflects $957,000, which is a net increase of $53,200 from
the budget. It reflects annual leave paid to one departing employee of $40,100.
As well as $13,100 for step variances. The current budget of 2019-20, reflects
adjustments required for the 2019-2020 salary plan variance and steps for
several staff members that would be in Executive Support.
MR. PARROTT:
So the leave would be accrued leave? Is that correct?
MR. MITCHELMORE:
The leave in last year's budget, revised, it was annual leave paid to a
departing employee –
MR. PARROTT:
Okay.
MR. MITCHELMORE:
– $40,100, which would account for the bulk of the expenditure pertaining to
Salaries.
MR. PARROTT:
Can you just go back and explain the $16,600 increase for '19-'20?
MR. MITCHELMORE:
Well, the increase reflects adjustments required to the salary plan, variances
and steps for several staff members.
MR. PARROTT:
Okay.
1.2.02,
in both the '17 -'18 budget and '18-'19, Salaries were marked to decrease but
went over budget last year by $304,400. How did this occur?
MR. MITCHELMORE:
So the net increase of $304,400 from budget 2018-19 and the 2018-19 revised
reflects a salary continuance and retirement cost of $346,800 paid to departing
employees, partially offset by savings realized during the recruitment period
for various positions during the fiscal year.
MR. PARROTT:
So are there any steps being taken this year to ensure that you're not going
over budget again?
MR. MITCHELMORE:
Well, this year there's actually a net decrease of $81,000 between the 2019
budget and the 2018-19 budget, it's the requirements within the salary plan.
We also
transferred $40,000 from TCII to assist with salary shortfall for a trade
position in Intergovernmental Affairs. The Department of TCII was also
responsible for trade policy during a period of time. So this would be an action
that would be taken to ensure that the IGA has the appropriate level of trade
staff.
MR. PARROTT:
Okay.
Can you
explain how the Employee Benefits went over budget by $16,000 in '18-'19?
MR. MITCHELMORE:
In '18-'19 revised, the
increase of $16,000 from the initial amount of budget 2018-19 reflects workers'
compensation buildings this fiscal.
MR. PARROTT:
And next line item, Transportation and Communications, can you explain how it
went over by $7,300?
MR. MITCHELMORE:
The increase of $7,300 reflects higher than anticipated postage cost for the
year.
MR. PARROTT:
Is there anything being done
about that? This year I see a decrease, actually, in your line item.
MR. MITCHELMORE:
So we've actually taken proactive measures within the department to find ways to
mitigate postage and reduce cost. And we've been implementing EFTs, electronic
fund transfers, so we wouldn't have to do particular mail-outs in this
particular situation, and this can help with some of those savings.
We do
anticipate that we will be able to fall in line of maintaining a budget of
$39,700.
MR. PARROTT:
There's $5,500 in savings in
Supplies seen in '18-'19. Is there any reason why it hasn't been carried over
into '19-'20?
MR. MITCHELMORE:
So the decrease of $5,500
basically reflected a lower requirement for that particular year in terms of
Supplies. We have decreased Supplies this year by $500, through zero-based
budgeting, to $15,000. Primarily, as you can see, the Salaries line is lower in
Corporate Services. So we are looking at finding means to reduce Supplies that
we would not need to be purchasing. We feel that $15,000 is an adequate amount
and if we are able to incur less expenditure, then it will become a dropped
balance and we can look at that in future years under zero-based budgeting.
MR. PARROTT:
Okay.
Under
Purchased Services, there's $12,200 in savings located in '18-'19, and actual
increase in 2019-20. Can you explain?
MR. MITCHELMORE:
Under Purchased Services, there's a decrease of $12,200 from the 2018-19 budget
and the 2018-19 budget revised, and that's lower than anticipated spending on
collateral materials and logistics, as well as fewer events, as determined
through zero-based budgeting. This year, we see that number increase by $4,600,
and that's reflecting higher off-site storage costs in the 2018-19 year,
determined through zero-based budgeting.
MR. PARROTT:
Just under the Property, Furnishings and Equipment, the $2,500?
MR. MITCHELMORE:
That reflects the purchase of an iPad for the deputy minister.
MR. PARROTT:
One iPad?
MR. MITCHELMORE:
Yes. It would have been purchased through standing offer and would have a
keyboard and other material associated with it. That wouldn't just be an iPad.
That is purchased to provide technology for the deputy minister to carry out the
work that he would do.
MR. PARROTT:
And provincial revenue, $8,800. Where does that money come from?
MR. MITCHELMORE:
In terms of provincial revenue, that's repayment of prior-year employee impress,
so floats and petty cash. We have a number of entities where they would
potentially have money – like the provincial historic sites that we operate and
other entities would have small sums of money. So this is the repayment that's
captured throughout the fiscal year.
MR. PARROTT:
Okay.
Subhead
1.2.03, Administrative Support, what accounts for Property, Furnishings and
Equipment going over budget by $26,100?
MR. MITCHELMORE:
This is an area that we used for Property, Furnishings and Equipment, which
typically dealt with tangible purchases, like fleet management and of that
nature, so if we needed a departmental vehicle, all of that spending has been
transferred to the Department of Transportation and Works to administer their
fleet management. We did have an allocation in the budget to purchase generators
in the past for the park, but this particular matter is actually a payment for
the cost of land expropriation in Ferryland for the Colony of Avalon.
MR. PARROTT:
Is there any reason why nothing has been budgeted for '19-'20?
MR. MITCHELMORE:
Well, there's no further determination that there –
MR. PARROTT:
That's what's going to
Transportation and Works?
MR. MITCHELMORE:
– would be any other
expropriation or requirement.
This
really is a matter that $33,087 was made payable to Moores and Collins in trust
for the Costello estate land expropriation in Ferryland.
MR. PARROTT:
I assume we move on to line
item 2.1.01 or do we stay at 1. How does that work?
CHAIR:
You don't have to use your
full time.
MR. LANE:
What did we call?
MR. PARROTT:
The last I called was
1.2.03.
MR. LANE:
Okay.
CHAIR:
Further questions?
MS. COFFIN:
Thank you everyone for
coming and thank you for the hard work and dedication and the time you've put
into putting together the Estimates and the briefing booklets and I look forward
to seeing those. I appreciate you taking your evening. I know many of you have
small children as well, so I really appreciate that. I know at least three of
the children. Thank you.
I think
we've done a very thorough discussion of some of the numbers in here. Let's talk
about a more nebulous concept here. What about attrition plans? How's that going
in the department? I notice that the numbers here, at least in this first
section, don't suggest there's much in the way of attrition. Have you met your
attrition targets?
MR. MITCHELMORE:
Nine positions were
eliminated through attrition since 2015-16, and eight positions have been
abolished through the department.
We are
certainly managing our Attrition Management Plan that we have in place. There
was a set target. But there are some challenges within the department given, how
I highlighted, we operate a number of entities throughout. So if you look at the
Visitor Information Centres, if somebody retires at a Visitor Information Centre
that is certainly a job we must fill. It's a front-line service that is
absolutely critical.
The
same way with the Arts and Culture Centres. If somebody is a technician or a
technical service, then those positions would have to be filled. So not always
would somebody who is retiring be a necessary position in which we must fill.
The same way we have provincial parks where we must have park rangers and the
managers and others to make sure that we have the appropriate allocation of
staff.
So we
do have attrition targets, a total attrition target of $2.3 million, basically,
to have met. We are working through our attrition management plan through the
department and finding ways of which we ensure that we can continue the level of
services that we have without having to – we may leave some positions that we
have to, vacant or positions that are funded, so that we can meet some attrition
targets in the salary details.
MS. COFFIN:
So you haven't met the
attrition targets this year?
MR. MITCHELMORE:
We are meeting our dollar
value. In terms of actual positions that were put in place through the 2015
attrition management plan, we have not reduced the actual positions that
would've been allocated, but we are meeting the salary targets that are
required.
MS. COFFIN:
Okay, thank you.
I think
that's the only question I have for this section.
Thank
you very much.
CHAIR:
Further questions?
MR. LANE:
Mr. Chair, with leave of my
colleagues.
AN HON. MEMBER:
Leave.
MR. LANE:
Thank you.
I won't
be asking any questions about any of the line items, per se. My colleagues are
doing a great job at that. I have some general questions though.
Minister, I'm wondering about national parks; in particular, Gros Morne
specifically right now but I guess it would be any national park. When decisions
are made about changes, enhancements and so on to the national parks – they're
in our province, we're promoting them – is the department advised or is there
any consultation, or does the federal government basically go in and do whatever
they feel like doing without consulting?
MR. MITCHELMORE:
The two national parks – we
have national parks within our province and the one you reference, Gros Morne
National Park, is managed by the federal government through Parks Canada. They
would have other sites that they would manage, as well, throughout the province.
The
federal government does consultation, they do invite stakeholders and community
to be part of their strategic planning process and engagement, but the
Department of Tourism, Culture, Industry and our Parks Division would not be
responsible for the activities, management or oversight of Gros Morne National
Park or Terra Nova National Park. Those investments would be made by the federal
government, as well as Torngat Mountains and Mealy Mountains National Park.
MR. LANE:
Sure. I understand that it's
under their jurisdiction; they manage it, they pay for it and all that stuff. I
guess I was just wondering more of consultation. Specifically, the one I'm
getting at is the issue, of course, in Gros Morne and what a lot of people would
say is the absolute destruction of what was an absolutely beautiful gem of a
trail that went in there. That was, of course, all in the media and now it's
turned into a big, old gravel road.
I'm
just wondering. I understand it may be part of a national park and they're
responsible, but just in general, it just triggered in my mind, when they're
making decisions about some of these things, while it may fall under their
jurisdiction, it's actually physically in our province and we depend on those
sites for tourism and everything else. Making decisions like that, I think we
should've been consulted. I'm just wondering: Would we be consulted when they're
making changes or anything significant?
MR. MITCHELMORE:
The parks would open up a
management plan to allow anybody – yourself included could participate and
provide feedback in their process. They do open up consultation in community for
anybody to contribute to their strategic planning. They do consultation with
communities.
I think
in terms of – there is legislation, there is ownership; when they make
investments in the physical infrastructure, like the roads. They've announced
tens of millions of dollars for road improvements in Gros Morne National Park.
There was additional federal dollars announced recently for improvements to
campsites.
We've
seen in Terra Nova National Park there was significant road infrastructure
improvements made for passing lanes, pull-off areas as well, made by the federal
government. I'd have to seek out some direction to get more information to see
what towns were consulted in this process. Was Charlottetown, for example,
consulted? Did adjacent towns, like Eastport and others in and around that area
of Terra Nova Park, when that investment was made – what consultation would
happen? If it's road infrastructure, the Department of Transportation and Works
would heavily be involved in that particular process.
In this
province, we do have a very strong partnership with the hospitality industry of
Newfoundland and Labrador. We work with Destination Canada. We also have our
Tourism Board, we have our Destination Management Organizations from each area
of the province and government. We all sit together, we work collaboratively.
This is a really positive way of which we can deal with issues and we can engage
with the federal government. As concerns are raised to us, we certainly can
raise them with federal counterparts, as well, and encourage more consultation
in community. That's certainly something that I would say.
In my
own district there's a UNESCO World Heritage site that's owned and managed by
Parks Canada in L'Anse aux Meadows national park. The communities in the region
like to be engaged, they want to participate. There are landowners there. There
are all kinds of concerns and it's important. These are very important economic
enablers to the region, as well as cultural assets and historic assets to the
province. Gros Morne National Park is one of the pillars and the key reasons why
people come to Newfoundland and Labrador. It gets easily more than 150,000
visitors.
MR. LANE:
Thank you, Minister.
I do
agree with you. It is an absolute gem in our province, there's no doubt. That's
why so many people were very upset with what was done there, myself included. I
think they totally destroyed what was an absolute, beautiful tourist attraction.
I
understand what you're saying. They do their strategic plans, I get that.
They're putting in roads, they consult with communities. I get that as well, but
the point I'm trying to make is if they're going to go into a sensitive area
that is very, very important to us as a site – that would be something I would
imagine is probably on our website and in tourist magazines and whatever to
actually go and view that beautiful site.
For
them to go in and totally destroy it and not consult with the province to let
them know what they were planning on doing, I just see a problem with that. I
was just wondering if there was such a process and, if not, I think there should
be.
MR. MITCHELMORE:
The fjord itself and the
viewpoint is certainly something that we promote. It's pristine, the adventure
tourism. It fits with everything that we do as a province to market the unique
landscapes, the area and the region. The particular trail that you're speaking
about would have access to a private boat tour operator, I believe.
I would
encourage you, if you haven't done so already, to either write the department or
Parks Canada to raise your concerns with it. That's certainly something as well
with the Member of Parliament that would represent the Long Range Mountains to
engage and have that dialogue.
MR. LANE:
Thank you, Minister.
MR. MITCHELMORE:
I know there was some
commentary from the Member of Parliament on that particular matter and what
Parks Canada had done and the engagement. I can endeavour to get information for
you to see what level of engagement with the Parks Division. Their headquarters
would be in Corner Brook. I would not have any information on hand about a
general question around something that is a federal responsibility.
MR. LANE:
Sure.
MR. MITCHELMORE:
But I'm more than happy, if you want to meet with me further, to discuss, we
could set up a particular meeting.
MR. LANE:
Well, unfortunately, the damage is done now, so I guess there's not much point
in talking about what's been done. I guess on a go-forward basis, though, we
have many, many beautiful sites and tourist attractions that we promote, I would
hope that in the future, I don't care whose jurisdiction it is, I would think
they would work together and consult before they make any changes that's going
to destroy, like they did up there.
I'm
running out of time, so I will ask one more quick question. I had a meeting with
Bicycle Newfoundland and Labrador, I'm sure other Members may have as well, I
don't know if you have. I'm just wondering, is there any thought around making
any areas of the province more accessible and bicycle-friendly as part of the
tourism experience.
I
understand that we don't have endless pots of money to create biking trails
across the entire province, but one of the things I had suggested, or thought
about, is maybe something on a pilot project. I'm just thinking the Bonavista
area is a real nice spot, or somewhere like that – it doesn't have to be there –
where we could work with that organization to try to promote more biking and
that type of tourism.
I'm
just wondering if there's anything you – did you discuss it with them at all, or
what your thoughts are?
MR. MITCHELMORE:
Well, we've taken steps, as a government, to improve bicycling safety by
implementing a one-metre law in the
Highway Traffic Act that was well received with Bicycle Newfoundland and
Labrador.
We see
opportunity; we've supported initiatives around the White Hills ski resort to
look at a study for fat biking. We've worked with the Pippy Park Commission
around their trails and development to make them more bike-friendly.
When I
travel around the province, it's really exciting when you do see a number of
people bicycling, and they are, certainly, a tourist or visitor that would come.
It is an opportunity for our province, given our unique nature. I see a number
of them come up the Great Northern Peninsula every year.
I know
that in other jurisdictions bicycling is extremely popular, particularly in
Europe, given that outside of Canada and the US, the UK and Germany are big
markets for tourists. So, there will be some opportunities, certainly, to engage
and work with operators.
We see
on the Bonavista Peninsula where there is actually a business that was started
up where they do bicycle tours, and they have picnics as well. So there are
natural avenues there.
Our
highways are built, especially the Trans-Canada Highway, there are large
shoulders on the roads so it's actually quite safer than some other areas of
Europe where people are bicycling along very narrow roadways. I only have to
look at Ireland and other places.
MR. LANE:
Yeah.
MR. MITCHELMORE:
We just have to be very cognisant of the rules of the road and the new
Highway Traffic Act that the
one-metre law does exist and we need to more over. I believe you were a big –
MR. LANE:
Yes. Absolutely.
MR. MITCHELMORE:
– supporter of the move over legislation for other emergency responders, but for
bicyclists as well.
It is
an economic opportunity and a potential for tourism. I'm certainly willing to
have more conversations with Bicycle Newfoundland and Labrador.
MR. LANE:
Thank you.
CHAIR:
Before I call the head, are there any other questions there?
MR. PARROTT:
Can I ask another question?
CHAIR:
Yeah.
MR. PARROTT:
I'd just like to go back to Gros Morne, just based on what he said there, just
something I picked up.
We
obviously advertise, we obviously gain tourist money from it, as does the
federal government. You indicated that a federal MP has spoken out against it.
Has
your department spoken out against that trail or is that something that's left
to Members like MHA Lane?
MR. MITCHELMORE:
No, I said that the MP had made commentary about it. I didn't say she spoke
against the development.
MR. PARROTT:
But have we addressed it as a government? We advertised that and the
advertisement is still a much different picture than what it is right now.
MR. MITCHELMORE:
Well, when the investment was made and the trail development had taken place,
the response has been, after the fact, that this investment was done.
MR. PARROTT:
Okay.
MR. MITCHELMORE:
This was done by Parks
Canada. They had let the contracts. They have the responsibility for all of that
landmass whether it's the roads, the infrastructure and the land around that
area. They did consultation. They had public matters of which people could
provide input, but as the MHA for Mount Pearl - Southlands had highlighted,
Parks have highlighted that there was a significant amount of public feedback
around this particular issue, and it's certainly something that they would have
to take into account as they do more work in and around that area when it comes
to trails.
We have
outdoor product development specialists in our department. We focus on building
trail networks throughout Newfoundland and Labrador. Walking and hiking is – by
our exit survey feedback – one of the number one things that our visitors want
to do and experience.
We look
at the East Coast Trail and the 320 kilometres that it has. It's pristine. It's
natural. It's a walking trail. It has immense beauty on the Avalon Peninsula,
and it's certainly something that we promote as well. It not only leads to
tourism investment, but it's an economic enabler. We've seen – and I've heard
stories where people have come and they've seen that. They love this place. They
fall in love with the natural beauty. They see it as a good place to conduct
business and to invest.
I was
in Eastport, in your district, just a week or so ago, for the ArtsNL awards, and
talking to one of the development committees, because we invested in the trails
and the Roads to the Beaches, and as you're adjacent to a natural park, as our
department, we're looking at working with the communities and the groups to
foster economic development. We work with the community to make sure that trails
are either natural and they're in a way that they're accessible as well, that's
certainly something that is important. The same way as we look at building
destination trails throughout our province and the federal Parks Canada site and
what has been done for access as to what they have said that changed the
landscape.
I have
walked into the site myself on numerous occasions, into the fjord and I've taken
the boat tour there. It is absolutely incredible, and it's truly an experience
for anyone. I would still say that it is a place that everyone who comes to
Newfoundland and Labrador and visits Gros Morne National Park should go and see
– should see that fjord, and have that experience.
Not
everybody is going to get that picture of the fjord unless they're willing to do
the hike or do that overnight experience, but everything that we promote in
Newfoundland and Labrador, we deliver and we offer and we hear that feedback
from our visitors, that this is just like your ads, this is just like the
natural landscape, you're not trying to sell something that you are not. So I
think that's really important.
We're
very focused on what's in our responsibility within our department and what we
have control over in terms of being able to pull those levers and create
economic opportunity there.
CHAIR:
Okay, seeing no further questions, I'm going to call the head.
Shall
the headings 1.1.01 to 1.2.03 inclusive carry?
AN HON. MEMBER:
Aye.
CHAIR:
Carried.
On
motion, subheads 1.1.01 through 1.2.03 carried.
CLERK:
2.1.01 through 2.3.01 inclusive.
CHAIR:
Okay, shall they carry?
MR. PARROTT:
How many cannabis operators
in the province received a licence from Health Canada over the last year?
MR. MITCHELMORE:
The number of companies that have licences from Health Canada, I don't have that
information directly with me right now, but I can certainly provide that. We
have two supply and production agreements right now in this province. We have an
additional company that has a licence and I believe there is another company
that would have a licence as well. I can defer to Judith, if she has some
additional information.
MS. HEARN:
Yes, there are two local firms who have production licences through Health
Canada. We've been also dealing with other firms that are partnering with
producers who have licences from Health Canada, but their main companies are
other places. They're partnering locally.
MR. PARROTT:
Okay.
Government has provided a reduction in tax remittances to cannabis companies.
Have Newfoundlanders and Labradorians been the primary beneficiaries for these
remittances, and what documentation can the minister provide to show this?
MR. MITCHELMORE:
In Newfoundland and Labrador, we were the only jurisdiction in Canada that had
not had a licensed producer. Given that Canada's recreational cannabis was
becoming legal, we had to take action to secure supply. But we made a decision
that not only did we want to secure supply, because we could've looked at the
least-beneficial option for Newfoundland and Labrador and that would be
importation – some other Members suggest it may have been a better option. I
certainly do not believe so. I think it's important that we develop an industry
here that investments be made in our province, that we see jobs that are created
and long-term benefits.
So if
you look at the agreements that we've put in place, one on the West Coast of
this province that's going to lead to significant job creation in St. George's -
Humber, Mr. Chair – in St. George's, in particular, it's quite significant where
the average salary in rural communities would be $54,000 and there's going to be
retail and there's a lot of spin-off that's going to take place by having
construction jobs, there's going to be investment for purchases for materials
and the building, the specialists and the contracting, and then the production
workers and the training. So we're still somewhat in the early days of the
benefits that are accruing because the facilities are being built. They're being
scaled up on the West Coast and in St. John's.
Talking
to the City of St. John's, they had highlighted that there will be significant
benefits for the city, upwards of $1 million in taxation every single year. We
entered into a 20-year agreement. The company is putting tens of millions of
dollars into this capital asset and to get into production. In doing so, there
will be 145 jobs that will be created, the retail jobs as well, so there are
over 460 jobs associated with those two supply and production agreements once
they reach their ability to produce here in this province.
Right
now, we're seeing where we have a network of retail outlets that are being
supplied through the Newfoundland and Labrador Liquor Corporation, and that was
competitively bid through an RFQ where there are a number of suppliers that
would be providing the product and that would be distributed throughout
Newfoundland and Labrador to these retail outlets. Given the fact that we did
not have any producer in this province to supply initially when this became
legal, and given that the consumption reports have shown that sales on a per
capita basis, where Newfoundland and Labrador is, we fared quite well in the
implementation of cannabis retail and supply as this matter progressed across
Canada. Other jurisdictions like New Brunswick and Quebec have either had to see
their stores close for a period of time or reduce their operations.
We've
been able to understand that where this is a new industry, we knew that there
would be supply issues early on and that there would be some challenges, but we
continue to work through those and we're pretty excited about the interest and
the investment that other companies are looking at wanting to partner, as Judith
had just highlighted, that two more local companies have secured production
licences here. We look forward to engaging and having dialogue to provide
performance-based contracts. We've not turned down anybody who's come to us
looking to enter into a supplier-production agreement here, and the important
piece of this is that there has not been any upfront money or grant from
taxpayers.
In
order for a company to receive a benefit, they actually have to sell product in
Newfoundland and Labrador. So the more they sell, the more they can accrue back
on the benefit. But the more they sell, the more Newfoundland and Labrador also
benefits as well. So the answer is yes. We are the primary beneficiary. The
Newfoundland and Labrador Liquor Corporation would receive maximum benefits
through this stream.
Long
term, there will be other benefits in terms of the additional jobs, city
taxation, the taxation from jobs and the spin-offs that will happen through the
payroll that happens. Those people who are paying taxes, they're going to spend
money into the economy and there will be a ripple effect there.
But we
also provided where there needs to be investment in R & D in these particular
contracts so that we can also stimulate growth in being a leader in research and
development, so that we can look at other opportunities. Because that's
something that our province has been focused on: how we diversify and how we'd
be more innovative in the field of research. And given Memorial University or
the College of the North Atlantic, or private companies, there's a potential for
significant research and development to happen.
It's a
relatively new industry, and we've seen where other jurisdictions have been
focused on research as well, and the educational institutions. So whether it's
focusing on things like soils, and the unique soil that Newfoundland and
Labrador would have, or doing further work, those are the types of things that
we'll see unfold. And the edible market would be coming on stream later this
year. The federal regulations were announced earlier this week, I believe, or
late last week. And that will present other opportunities for which R & D would
happen when it comes to the cannabis industry.
MR. PARROTT:
How many total
Newfoundlanders and Labradorians are currently employed – just the number,
please – in the cannabis industry?
MR. MITCHELMORE:
Well, when it comes to the
day-to-day statistics of who are Newfoundlanders and who would be employed in
private business, there are more than 20 retailers that are out there. We would
anticipate that all the people that are in the retail industry would be
Newfoundlanders or Labradorians, or would be those who would want to be
permanent residents or would be working through, depending on how they would be
hired – if they're on an immigration stream, depending on the employer. I mean,
small business exists in every single community and we don't have specific stats
on every single retail store as to, is somebody a Newfoundlander or a
Labradorian or is somebody looking to become a Newfoundlander and Labradorian,
are they on a particular work visa, et cetera.
MR. PARROTT:
How many current people are employed?
MR. MITCHELMORE:
Well, I don't have the specific statistics as to how many people are currently
employed in retail or in the on-site construction. Once the facility is
complete, there would be 145 jobs at that particular facility and there's over
100 in the St. George's facility, but they are building those in phases. We have
performance targets and we will work with the company throughout their
agreements to make sure that they are meeting their targets.
MR. PARROTT:
Has there been any assistance given to BeeHighVE Incorporated?
MR. MITCHELMORE:
No, but I will say that, as I said earlier, any company and any particular
supply and production agreement that we have in Newfoundland and Labrador, we
have provided that information publicly, we've made that available. We have not
said no to any particular company that's looking for a supply or production
agreement.
We
welcome investment, we welcome growth here, we welcome local growers and we see
it as a positive step that there are now locally owned companies, like BeeHighVE
and others, that would have a production licence. That would give us the
ability, should these companies wish to enter into a supply and production
agreement with the Province of Newfoundland and Labrador through CannabisNL and
the department. We would be actively involved in those negotiations and if we
are able to conclude a deal with any particular company, we will make that known
publicly as we have previously.
MR. PARROTT:
Are the local growers getting the same tax breaks as Canopy?
CHAIR:
I'm sorry, the Member's time has expired.
MR. MITCHELMORE:
I have no problem to answer the question though.
CHAIR:
Maybe we can continue on and then come back at the end –
MR. MITCHELMORE:
Okay.
CHAIR:
– for another round.
The
Member for St. John's East - Quidi Vidi.
MS. COFFIN:
Thank you very much.
Let's
carry on with that train of thought now. When you were considering the supplier
– and when the allowances were given to Canopy Growth and Biome and whomever
else has received those – was there any consideration to setting up a
co-operative system whereby the people of Newfoundland and Labrador would be the
owners of that corporation, so any money that we spend in that corporation would
then be returned as profits, much like a credit union.
As I
understand it, Canopy Growth and Biome both have their headquarters elsewhere in
Canada, which means that after people are paid and after they get their wages,
that money will circulate. You are right, that multiplier effect does happen
throughout the economy, but if that's associated with lower paying jobs or if
they're part-time jobs or seasonal positions, that really constrains that
multiplier effect. Then, of course, if the profits are being moved outside of
the province, we're not going to see that money circulating as well. I think the
co-operative approach might be a better approach to that, especially given that
the selling of marijuana is pretty much a profitable industry.
MR. MITCHELMORE:
When it comes to setting up a particular business and the new industry that we
have here, as I said previously, government would not dictate a location or
these types of matters; these would be business decisions that would be made.
Certainly we support the co-operative movement, we support credit unions here in
our province and we support social enterprise. It would be a novel approach, as
you mentioned, if there was a group that wanted to create a co-operative to
start a production facility in Newfoundland and Labrador –
MS. COFFIN:
I was thinking more along the lines of we knew this was coming, we knew we had a
supply issue, we knew we wanted local production. Wouldn't it have been a
reasonable initiative of government to consider that co-operative approach and
keeping that money here in the province?
MR. MITCHELMORE:
There are certain measures that can be done in terms of how you would either
establish a co-op or if a company would incorporate here. We have companies that
have either holding companies or they're registered in Newfoundland and
Labrador, so they file taxes here and they would make payments based on their
performance here in Newfoundland and Labrador.
One of
the conversations that was had in the House of Assembly in the fall was around
giving these particular companies EDGE status, which would give them exceptional
tax breaks at the federal level, the provincial level and the municipal level,
potentially; you would see all sorts of payments. The risk then and that burden
of risk goes towards the provincial government, depending on how well a company
performs. For example, if you attracted Google to come here and set up their
headquarters, and if you gave them EDGE status, you could pay an unlimited
amount of money and there would be no benefit to the economy; it would have a
significant downfall.
I
understand your point of looking at a co-operative model, but we're talking
about a publicly traded company here in one instance and in another instance, as
well, in terms of Biome. These are two companies that saw an opportunity to come
to Newfoundland and Labrador, to make investment here, to put up tens of
millions of dollars to build facilities here. If you look at the type of product
that we're talking about – and we're seeing very large-scale operations in
various jurisdictions where a number of companies or the competitors would just
want to look at importation – there is very little benefit, then, if you're just
importing the product.
MS. COFFIN:
That's why I asked about the
co-operative program.
Do we
know all of the shareholders of the companies to which we offer loans, loan
forgiveness and also tax breaks? Do we know all of the companies involved – or
all of the shareholders involved – in any government spending or a tax
expenditure, which is essentially offering a tax break? Do we know all of the
names of all of the shareholders of those companies?
MR. MITCHELMORE:
In terms of any deal that
government is involved with, if we are providing financial support directly,
then we would be able to provide information of ownership or directors in a
particular company. When it comes to a publicly traded company, though, there
are rules that they would follow as part of the stock exchange and the
regulators that would be involved in that particular matter, because any person
could buy a share and be an owner of a publicly traded company. That changes on
a day-to-day basis if you're looking at particular shareholders –
MS. COFFIN:
Yeah, I am very familiar
with how the stock market works. I'm wondering, though, if we are offering tax
breaks or loan forgiveness or grants to businesses to whom we do not know the
shareholders – or, let's say, for example, the main shareholders, not
necessarily the board of directors, which is a very different beast. I want to
know where the profits are going.
MR. MITCHELMORE:
We would be able to have
access to that information or get it.
MS. COFFIN:
So you do know where all of
the money is going.
MR. MITCHELMORE:
If we are dealing with a
particular company. In the case of what has been discussed in the House of
Assembly around a numbered company that is not doing business with government,
we do not have that information.
MS. COFFIN:
Okay.
Since
we've opened up that box, can you maybe tell me a little bit more about that
numbered company that is not dealing with government? Why is that an issue then
perhaps?
I'm
new, remember.
MR. MITCHELMORE:
Right.
We have
entered into an agreement with Canopy Growth to build a facility here in this
province, and they're going to spend tens of millions of dollars. The City of
St. John's will see an annual benefit in terms of taxation from that. And the
workers that are there, the construction jobs and the investment that's
happening is quite significant.
We have
a contract that's based on performance. So in terms of sales, if the company
sells X here in this province and can provide receipts for eligible cost, they
will get a reduced remittance from the province. But the province will still get
its share of any sales that would've happened in this situation. In terms of any
costs that would be ineligible, if a company is not the landowner and they're
leasing land, then that is not an eligible cost.
We've
stated that and clarified that multiple times in this House of Assembly. We can
only provide a remittance based on our contract and what the obligations to the
contract provide. So when it comes to the company, our role is that this company
is not a related company, so the Canopy Growth Corporation is not receiving a
benefit from this company. And beyond that, they're arm's length of government,
so they are not involved.
MS. COFFIN:
I'm sorry, you're saying that the Canopy Growth is not getting a benefit from
the company, the numbered company from which they are leasing this land. Is that
what you're saying? I'm sorry, the answer was a little wide-ranging.
MR. MITCHELMORE:
I'm saying that they are not a related company. So it is not a Canopy Growth
construction that would be involved. It is not another company that's associated
with them. They are arm's-length in terms of a company of which they would be
doing business.
MS. COFFIN:
Okay.
Let's
go back to the jobs now. You say you anticipate that many of the jobs that are
being generated by the construction of this are being filled by Newfoundlanders
and Labradorians. That's certainly not the case. Have you done any cost-benefit
analysis; or in the loan guarantee or the grants that you've given to these
companies, do you have any requirement that they use local labour?
We are
in a situation where most of our union halls are very full right now, and I know
that there are a lot of people clamouring for work. I'm hearing rumours that
there are drywallers coming in from PEI and Montreal. So if we are using
subcontractors or main contractors that are coming in from the Mainland and they
are bringing in their own workers, then that means those benefits – while they
are getting accommodations and food for a very short period of time while
they're here in the province, the bulk of their salaries will be moved back out
of the province again.
Is that
one of the stipulations of your loan agreements?
MR. MITCHELMORE:
I would say that it's very
serious to say that the majority of people employed at this particular site,
which is a private company that would be contracting, is not hiring
Newfoundlanders and Labradorians, unless you can provide evidence to the
contrary.
MS. COFFIN:
I'm just saying I hear
rumours of that. It's just rumours and speculation at this point. I am asking if
there was a caveat in the agreement, something like a community benefits
agreement that ensures local workers are being used.
MR. MITCHELMORE:
Companies will hire local
workers, where absolutely possible, and that is the case in this situation. As I
said in the House of Assembly – I believe the MHA for Topsail - Paradise had
asked some questions. It is my understanding there was an article that was
posted around a drywall company from Quebec that had done some work there, but
it's my understanding that, based on Canopy Growth's response, they would have
reached out to local companies. If it could be done here in the province, they
would've certainly utilized that work. So they had to go outside the province to
secure work in this particular field.
MS. COFFIN:
My time is up.
CHAIR:
Any questions from other
Members?
MR. PARROTT:
Yeah, I've got a couple of
questions.
Under
Salaries, Salaries in budget '18-'19 was $319,000 less than '17-'18. After
finding a savings of $236,900 for that year, the revised numbers show that,
again, a savings of $476,700 were found last year. However, budget '19-'20 only
shows a salary reduction of $67,300.
How are
these salary levels determined, when they were previously able to identify such
large savings?
MR. MITCHELMORE:
The department had gone
through a reorganization. In the Accelerated Growth Division there was a
significant decrease in salary of $476,700 as you mentioned, and that reflects
some savings during the recruitment period for six positions during the fiscal
year.
We
anticipate and we have worked to fill those positions, so the decrease right now
reflects the adjustments required for our current salary plan. As you hire new
employees that would be in this area, there's a smaller amount in the salary
line, but that may reflect the pay scale as to which they enter because these
would be new employees.
MR. PARROTT:
Okay.
MR. MITCHELMORE:
In 2018-2019 we actually had
a number of new hires within the department and that's certainly important,
because a key part of what we are doing in the department, as I mentioned in the
initial remarks, is around working with companies to scale them up, to have a
firm level of growth. We have an ambitious plan to target 40 companies to ensure
that we are providing them with the right level of supports to create further
jobs.
MR. PARROTT:
Grants and Subsidies, can
you provide us with a list of all the grants and subsidies from last year?
MR. MITCHELMORE:
The Grants and Subsidies,
that's $279,000 that would primarily be funding for ATIGA, I believe.
MR. PARROTT:
Sorry, we couldn't hear you.
MR. MITCHELMORE:
That would be money for
ATIGA, the Atlantic Trade and Investment Growth Agreement.
MR. PARROTT:
What explains the line item
for Loans, Advances and Investments being under budget by $1,648,500 in the
revised '18-'19 numbers? Can you explain how many applicants there were and how
was the $8 million located for '19-'20?
MR. MITCHELMORE:
Where are you?
Can you explain which budget line –?
MR. PARROTT:
Sorry, that's under the
Investment Attraction Fund, 2.1.02.
MR. MITCHELMORE:
The Investment Attraction
Fund, Loans, Advances and Investments – in 2018-19 we used an investment of
$6,351,500 and that would have been funds disbursed to the existing investment
attraction funds through varies clients, such as Eastern Composite, Provincial
Aerospace and Quorum. They would have totalled $1.85 million. Then in the
venture capital funds we would have disbursed over $4 million; $2 million to
each particular fund. We would have an allocation for new projects as well,
total $6,351,471.
MR. PARROTT:
Can we get a list of the companies and how much each company received?
MR. MITCHELMORE:
Yes, we can provide that.
MR. PARROTT:
Under line item 2.2.01, Purchased Services in the budget is to receive an
increase of $500,300 in '19-'20. This represents a significant increase of a
budget that in the past years was only five figures. What explains this
significant increase?
MR. MITCHELMORE:
Under Business Analysis?
MR. PARROTT:
Yeah, Purchased Services.
MR. MITCHELMORE:
This is something that was highlighted through the McKinsey report, as well as
the new budget, to highlight a new investment attraction initiative, which would
be $500,000. There's an additional $300 for photocopier-printer cost that was
determined though zero-based budgeting. That would bring our total to $515,500.
Clearly, to achieve new opportunities, given what we've been doing in various
sectors of technology, of agriculture, of aquaculture, the oil and gas and
mining, there are opportunities. If we target and have that expertise for
investment attraction, then we can leverage more opportunities into the economy
of Newfoundland and Labrador and get best value.
We have
exceptional staff at the Department of Tourism, Culture, Industry and
Innovation, but this investment opportunity would provide an opportunity to
maybe hire some specific experts in the field to do some very targeted level of
investment.
We have
seen in areas such as telecommunication, it may require a specific skill set to
attract that individual to unlock some potential.
MR. PARROTT:
How does this align with the attrition plan?
MR. MITCHELMORE:
Well, this targeted investment would be hire through contract.
MR. PARROTT:
Okay.
Under
2.3.01, this line wasn't included in the past budget and it appears to be an
amalgamation of past categories. Can you explain and provide a breakdown of how
they determined the $16,836,000?
MR. MITCHELMORE:
2.3.01, Innovation and Business Investment, we had spent a fair bit of time in
this House of Assembly creating the Innovation and Business Investment
Corporation, creating a new act, finding a means for the full continuum of
support when it comes to business, in terms of idea, pre-commercial, that R&D
and innovative stage, to get somebody to commercial, to get somebody to
international markets.
So the
Grants and Subsidy lines reflect, basically, revenue that was brought in from
RDC being merged into the department. It's an overall investment of grants and
subsidies to various companies there.
MR. PARROTT:
How many applicants did you have last year?
MR. MITCHELMORE:
In terms of applicants, we had 264 projects last year.
MR. PARROTT:
How many applicants?
MR. MITCHELMORE:
I don't have that specific number in terms of applications.
MR. PARROTT:
So 264, I assume, is approved, right?
MR. MITCHELMORE:
We had 264 projects.
MR. PARROTT:
Yeah.
MR. MITCHELMORE:
That we had approved, yes.
MR. PARROTT:
Okay.
The
revenue of $1.5 million, can you explain where that comes from?
MR. MITCHELMORE:
That came from when we had merged the Research & Development Corporation. It's
basically revenue that would've been allocated as the savings through the
'17-'18 budget that would have to be reported in 2018-2019.
MR. PARROTT:
Just one question back to the Canopy Growth. You indicated about monies –
anyhow, how the whole situation works. Are there any monies given to Canopy
Growth for the building of that facility? Are we loaning them money? They're
doing all that on their own? Okay.
MR. MITCHELMORE:
We have provided them with no funding. The agreement is that they have to
produce sales in this province, and then they would get a reduced remittance. No
different than any other cannabis producer that's supplying through the NLC.
They're getting a remittance.
MR. PARROTT:
Yeah.
MR. MITCHELMORE:
But Canopy Growth and Biome would be getting a reduced remittance, based on
their performance targets of making investment in Newfoundland and Labrador.
MR. PARROTT:
Just one other question.
MR. MITCHELMORE:
It's a performance-based contract that would allow us to build an industry,
because up to that date, we had not had anybody making an investment here in
this province.
MR. PARROTT:
Yes.
MR. MITCHELMORE:
Without having some form of incentive to attract large-industry players and
build capacity here, likely we would not see these players make such significant
investments and create (inaudible).
MR. PARROTT:
Okay, just one question on R&D.
Currently, all of our offshore producers pay royalties in under the Atlantic
Accord to the PRNL. Has the department looked at anything like that for cannabis
growers? It would be a great way to force them to invest into our province,
invest into research and give us a path forward with that, with a guaranteed
income.
MR. MITCHELMORE:
Yes, we did build into the contract that there would be $500,000 from Canopy
Growth that would be invested in research and development projects.
MR. PARROTT:
Over how long? Is that over a long period of time or is it …?
MR. MITCHELMORE:
There would be a period of time, that's part of the contract.
MR. PARROTT:
Okay, thank you.
MR. MITCHELMORE:
Five years?
CHAIR:
Okay, the Members time has expired.
Any
further questions?
The
Member for St. John's East - Quidi Vidi.
MS. COFFIN:
Excellent.
As part
of the research and development at Canopy Growth at $500,000, is there any
specifics around if they're doing it in-house or are they going to partner with
local companies or are they going to partner with local educational
institutions?
MR. MITCHELMORE:
Yeah, this would not be in-house research and development, but we are having
meetings with the company where we would highlight projects; they would
highlight their initiatives as to what they would see would be of a benefit to
the industry.
Canopy
Growth, in particular, they have a craft-grower program that they would support
smaller producers as well. So I certainly see this as being a partnership,
either with academic institutions or those who would be involved in research so
that we can have more development.
When we
decided that we would be developing a cannabis industry here in Newfoundland and
Labrador, it was for full supply chain benefits from R&D, from start-up to
export. Canopy Growth and Biome, they're building very large facilities here.
They're going to be producing far more than what Newfoundlanders and
Labradorians can consume. The benefit that they would get from a reduced
remittance would only be on product that is sold in Newfoundland and Labrador.
So their business model would have to be based on export as well.
Our
geographic location is one that is very strategic. We are certainly close to
Europe and being on the water, we have ability to do shipping. Newfoundland and
Labrador certainly has a good investment climate given that we've been able to
attract these large national companies that are publicly traded.
MS. COFFIN:
Okay.
Two
things that come from that, one of which is: Do we own the intellectual property
rights of any R&D that is done by that?
MR. MITCHELMORE:
If it's done with the university, there's obviously an IP office and those who
are doing research and those who are involved would enter into a particular
agreement around IP.
It is
certainly a conversation that we've been having through our Innovation Council
of Newfoundland and Labrador around IP. It was part of the Technology Sector
Work Plan around who owns intellectual property. That's certainly something that
will be part of the ongoing conversation with the company and with whoever they
enter into an arrangement. Right now, the question is somewhat premature.
MS. COFFIN:
The thing with Memorial
University is they have a creator-owned IP process. We want to be very careful
about that because, of course, that means that anyone engaged in that research
then owns that research. You need to be acutely aware of that for sure.
Let's
talk about the export market now. We've seen numerous companies be unable to
manage in Newfoundland and Labrador because we have exorbitant transportation
costs. While we are on the water, so is Halifax and so are a great many other
places. When we are strategically positioned, I have some questions about how
that might manifest as a booming export market. Can you explain to me what their
export development plan is?
MR. MITCHELMORE:
I wouldn't be able to speak
specifically to any company and what they're doing as an export. They are a
privately traded company and they will have their own plans as to what they
would do, whether they're going to charter flights, whether they're going to be
involved in hiring barges, or however they would ship product.
What I
would say is that Newfoundland and Labrador has international airports, we have
facilities of which we can do shipping. We have the Argentia port which does
international shipping. It's the largest in Newfoundland and Labrador; St.
Anthony has the second-largest international containerized port. We do a
significant amount of seafood right now direct into Europe. What we see in St.
John's is freight-forwarding services that would go to Halifax and then get into
Europe. We actually do have direct links into Europe, very lucrative markets
right now.
MS. COFFIN:
I've worked on them. I've
worked on export development initiatives since the early '90s, so I'm very aware
of what our potential is there. What I'm afraid of is that we are going to be
left with a three-sizes-too-big marijuana growing facility that has some
difficulty with their export and then comes to government starting to look for
subsidizing their routes for export in order for them to continue to operate in
the province. I would hate to have them hold our jobs hostage for additional
supports in trying to access the export markets. That's why I say I'm quite
concerned about the export development there.
Let's
see what else we have here. I think we're good on –
MR. MITCHELMORE:
I could make a small
commentary on that. The companies, obviously, do their due diligence. They look
at their investment, they look at opportunity and they look at what they can
sell in the local market, the Canadian market, the North American and the
international marketplace. They obviously see Newfoundland and Labrador as a
good place to do business or else they would not put up tens of millions of
dollars.
The
only way they can recoup their costs is to make the sales locally in
Newfoundland and Labrador, so they're putting a lot of risk. The risk is not
with the province, it is not with government, it is not with the taxpayers. It
is not like many other agreements and arrangements which one enters into. If the
company is unable to recover their cost, they have taken on the risk and they
own that facility and they own that cost.
Really,
in this circumstance, in this situation, government is well positioned and well
protected. The companies obviously have significant cash, they have significant
equity. They have made their decisions based on where they see their long-term
vision. They've entered into a 20-year agreement. When it comes to a 20-year
agreement, just looking at taxation for one company where the city of St. John's
would benefit $1 million in taxation, it will lead to $20 million over that life
of that particular agreement.
That is
very beneficial when you're trying to look at, from a city point of view,
balancing a budget or making investments into their infrastructure and their
particular projects. It would help significantly. Any municipality that was able
to have $1 million added to its bottom line can then go out and leverage
significant other projects.
MS. COFFIN:
I do appreciate that. What I am looking at is potential pitfalls down the road
because we have been held hostage by such things before and I want to ensure
that we are no longer. I'd like to see that long-term planning piece.
You
said earlier that you haven't turned down any supplier applications. So anyone
who makes an application has, so far, been awarded a contract? Is that correct?
MR. MITCHELMORE:
They would have to have a licence from Health Canada.
MS. COFFIN:
Okay.
So if
they get the licence from Health Canada, then that's all is necessary at this
point. That's reassuring. I know a number of people I can pass that along to as
well.
Innovation and business investment seems to be its own entity onto itself, which
I understand. Can you tell me the relationship between that entity and some of
the other things that we're seeing here like the Accelerated Growth fund, the
Investment Attraction Fund, the Business Analysis fund and then we move over
into the our regional economic development, Sector Diversification.
All of
these things seem to be doing very similar things. I can appreciate why they
need to be compartmentalized in some respects, but I'm very curious to know if
the Innovation And Business Investment Corporation, which is getting $16
million, is duplicating any of the efforts over here. We see grants and
subsidies in several of these places are very small sums, but then they're
associated with higher levels of salary.
It
would be really nice to see if all of these little pots of money, while they can
be allocated out for different purposes, maybe if they were all perhaps
administered in the one spot, like a one-stop shop for small business – and I've
certainly had my share of small businesses come to me saying: How can I get
government to help? I think that might be a reasonable approach to this. Perhaps
you can share with me how there is or is not duplication in this process.
MR. MITCHELMORE:
I want to go back because I didn't have a full opportunity when you had asked
about cannabis production facilities. I would say that a licence from Health
Canada is what is required from a company before we would entertain a
negotiation. We would certainly do our due diligence –
MS. COFFIN:
Good.
MR. MITCHELMORE:
– on any particular
application to make sure that there are benefits to Newfoundland and Labrador
and that it's in the best interests of the province to enter into such an
arrangement. What I have said is that we have turned down no one, at this point,
that has come to us looking to enter into a supply agreement. That would be
local companies or international or national companies that have come to
Newfoundland and Labrador.
What I
will say is that we have – for example, if you take what we've done in this
department, we've gone through a significant restructuring. There were 26
directors in this department in 2016 and now there are 11. We also had the
Research & Development Corporation, which was a separate entity, that we had
realized savings. We had brought the Research & Development Corporation into the
department and realized $3 million in operational savings, but that did come
with some job losses for that entity.
We have
streamlined what we do in the department to make sure that if somebody comes
with an idea, is in the early stage, the research, the development, the
pre-commercial, the commercial, all of that full continuum of wanting to go
international, needing help with the marketing, needing firm-level support, they
can now get in the Department of TCII. We've reduced a barrier by merging the
Research & Development Corporation into the department because before there were
some grey areas. People would come to the Research & Development Corporation and
they would only deal with pre-commercial. Some firms could be in a
pre-commercial state but also in a commercial state and also need other support.
They would be talking to multiple people; it could miss or delay opportunities.
And
we've expanded what we do in InnovateNL and that focused in all sectors of the
economy. Whereas, primarily, the Research and Development Corporation invested
heavily in mining and the oil and gas sectors, and not looking at other areas
like health innovation or looking at various technology sectors, more focused on
the ocean because we have 53 per cent of the ocean economy in Canada, we are a
big player here.
So what
I would say is we've taken a significant approach to streamline what we do to be
able to help people who are coming to look for dollars and look for supports and
look for various avenues to help their company to leverage other opportunities
in our whole suite of programming. And we can do it through InnovateNL, but we
also have areas where it's more regionally focused where we have Regional
Economic Development officers that would be dealing with, primarily, a lot of
non-profits, non-commercial and small business.
As we
look at all of our business financing and business programming that we have
within the department, we are making sure that our economic development officers
and others that are in the field are equipped with being able to deliver these
particular programs or be able relay those programs to the appropriate people,
the specialists that will be in the department. But they would have one point of
contact; it's a one-window approach to be able to get services within the
Department of Tourism, Culture, Industry and Innovation.
That's
the pathway that we see moving forward so we can make sure that were reducing
red tape and barriers for business and for non-commercial entities. Whether they
are municipalities or the university, or the college or others, we have many
stakeholders and many partners that we work with and we want to make sure that
we continue to work with them through all of the various programs that we have
in the department.
MS. COFFIN:
Okay, my time is up.
CHAIR:
Are we ready to call these headings?
MR. LANE:
Minister, I just got a
question about Canopy as well. Before I do, though, I think that it's important
just to note, because you did say in one of your responses, somewhere along the
way, about Members who would prefer to see cannabis imported into the province.
As one Member who has raised concerns about this – and I think I speak for the
other Members as well because we've chatted about it – the issue is not about
local jobs and production versus importing; the issue has always been about
local jobs by local companies and keeping not just jobs here, not just the taxes
that you talked about, but the actual profits so that it would be
Newfoundlanders and Labradorians that own the cannabis growing facilities as
opposed to some Mainland outfit and the profits going to shareholders up on the
Mainland somewhere. So that's the only issue on which we've ever disagreed as
far as I am concerned on that. I just wanted to state that for the record.
On the
question of the local benefits agreements that came up, I've heard the same
rumors, as my colleague to the right, about workers from Quebec and PEI and so
on that are working on that facility. I heard you say in your response, I think
you said something to the effect of: I'm sure Canopy would go for local workers
and ask for local workers and so on. But that wasn't really the question.
So the
question was, or at least my question is: Was there something inked on that
contract that said, in light of the fact that we're going to give you a
$40-million tax break – albeit it's performance based, I understand that. But in
light of that, when you're building this facility, you are going to use local
workers. Not I hope you would and I encourage you to but, as part of the deal,
you're going to use local workers.
Was
that inked on the contract with Canopy? Is it inked on the contract for the new
one in Bay St. George or wherever it's to on the West Coast and so on? Is that
something that is being thought about and placed in these types of arrangements
to ensure that we have local workers?
We've
heard from Trades NL now. Whether they're unionized or non-unionized, there are
all kinds of tradespersons. We hear the Member for Humber - Bay of Islands every
day standing up presenting petitions about local workers not getting jobs on
projects on the West Coast. So I'm wondering is it in the contract, yes or no.
MR. MITCHELMORE:
So I want to go to your initial point that you made because Newfoundland and
Labrador certainly wants to see local companies grow and prosper. Any local
company has that opportunity to enter into a supply-and-production agreement in
Newfoundland and Labrador. No company, nobody local had a licence or had the
ability and there's no production to be able to supply. So from the point of
legalization, if we had waited for a local company, we would not have had a
supply agreement, we would not have had cannabis production and these benefits
accruing.
MR. LANE:
You could've had the supply, just not the production.
MR. MITCHELMORE:
So in moving forward, to be able to have this investment – because we want
investment to come here. It's no different than the offshore in Newfoundland and
Labrador, being able to attract international companies like Exxon, Suncor or
Husky coming to make investment here in our province. No different than hotel
chains that may be international in nature. They may have local investment.
Sometimes they have their private equity firms. They're not all owned by local
people, but they do employ local people that work at these hotels and there are
benefits that would happen throughout the economy by making investments in
various hotels that would happen in the City of St. John's or Mount Pearl or
others.
So I
think one has to reflect on the level of investment. Because we want to have
both local investment and maximum local investment from people who are starting
business, but we also want to attract investment – whether it's Canadian
investment or foreign direct investment – to grow our economy here in this
province. I think that's certainly something that's important.
The
other point that you make around procurement and public procurement. There are
vast differences in government procuring to build public buildings, public
facilities within the Public Procurement
Act, such as a hospital that government will own or a long-term care
facility. This is something that is being paid for by the private sector; it is
being built by the private sector. They are making the investment, not the
taxpayers and not the Government of Newfoundland and Labrador, when it comes to
cannabis production facilities.
I will
make the point of saying that I was with the Member for Humber - St. George's,
and Mr. Callahan, who is local and owns Back Home Medical Cannabis Corporation,
who is the local president, partnered with Biome – and Biome will be making
investment and scaling up. Mr. Callahan is very passionate about making
investment and bringing people back home.
That is
why he called his company Back Home. He wants to bring Newfoundlanders and
Labradorians away, create $54,000 annual salaries in St. George's – a very rural
community – that's going to pay well over $15 an hour. It's going to pay
significantly. And he's going to focus every aspect to hire local people,
because these are the types of people that are involved.
Companies, when they start up in Newfoundland and Labrador – private-sector
companies – we see it in every community where they look to hire local
contractors, they're good corporate citizens and they give back to the
community. Canopy Growth Corporation, for example, made a donation to the
Community Food Sharing Association. We need to look at the corporate community
here in Newfoundland and Labrador and their responsibilities. And those who are
invested here see opportunities to work with other companies to see the
trickle-down spinoff and economy, because it's more expensive if you have to
look at bringing in crews and bringing in people from outside of Newfoundland
and Labrador.
We do
have labour mobility agreements within Canada, and we do have a number of people
that work across Canada, and a number of companies that bid successfully on
private contracts that bring their crews, their Newfoundlanders and Labradorians
to Nova Scotia, to Alberta, elsewhere. There are people that commute and that
has a significant impact on the economy too.
Those
that have worked in the oil and gas industry, for example, in Fort McMurray or
in other places, they commute and they bring a lot of dollars back to
Newfoundland and Labrador, whether it's on the Northern Peninsula, the Burin
Peninsula, in Clarenville or in Grand Falls-Winsor.
There's
certainly an important conversation to be had. I think every community in every
jurisdiction, we want to see where there are maximum benefits and where we can
help companies grow, and our department is part of that. We will be an enabler
and we will work to find ways in which companies can capitalize on every
opportunity.
This is
why we hold supplier development sessions. This is why we reach out to make sure
that local companies can capitalize and be engaged and properly bid and work
with government procurement or make sure that they have the support that they
can attach to get contracts with companies such as Biome or Back Home or Canopy.
MR. LANE:
I thank the minister for the detailed answer.
Minister, I understand the point you're making, and, listen, I know Mr.
Callahan, very well actually, I have no doubt that he will do what he can to
employ local people and so on; no doubt whatsoever. I realize that there are
Newfoundlanders and companies that work all over the world and so on, I get
that, but there is definitely a move around the country and so on to have local
benefits agreements.
In this
particular case, while you may say it is a private company, which I agree it is
a private company, and are they investing tens of millions? Yes, I believe for
Canopy they're investing $45 million, I believe is the number. But they're going
to get $40 million of that back in tax remittance, which would be money into the
public coffers, which now will not be money into the public coffers because
they're giving it a tax break.
I
understand why you did it, I understand the performance base, but, at the end of
the day, they're still benefitting with $40 million in taxpayers' money.
I guess
the question was, based on that arrangement, that they will be able to pay off
their capital through those remittances, is there a local benefits agreement on
the construction of the facility? I take it from your answer that, no, there is
not.
Is that
correct?
MR. MITCHELMORE:
There are local contractors that are working and engaged. There are local people
that are hired.
MR. LANE:
That wasn't the question, Minister. I simply asked is it written on – there's
nothing in the agreement saying they have to use local workers. It's a simple
question. Either there is or there isn't or I can ATIPP the contract.
MR. MITCHELMORE:
The contract is publicly available.
MR. LANE:
I would hope we don't need to get to that stage.
MR. MITCHELMORE:
We've proactively disclosed the contract for Canopy Growth. When it comes to
what you're saying of $40 million, the only way $40 million would be beneficial
and in receipt is if the company has full eligible cost –
MR. LANE:
Yeah.
MR. MITCHELMORE:
– that they can show that they have made those expenditures as per the
agreement. They would have to do that. They would also have to make those sales
within the province.
MR. LANE:
Yeah.
MR. MITCHELMORE:
So if they're making those sales in the province, the province is actually
getting more revenue based on its portion of taxation from cannabis. They would
also be producing, so there's a supply chain. There's R & D that's happening.
There's the taxation that's being achieved by 145 workers at the site, beyond
all the workers that would be at their retail outlets. So there's a multiplier
effect. The City of St. John's is benefiting $1 million a year for 20 years that
it wouldn't.
So if
you look at that they would get $40 million over the life if they're eligible
for the full cost, well, the city is going to get $20 million that it would not
have had otherwise, that's a benefit to the taxpayers of the City of St. John's.
MR. LANE:
If a local Newfoundlander built the same facility, they would still get the same
taxes.
MR. MITCHELMORE:
It is quite possible that a local Newfoundlander or Labradorian will look to
make that investment and do the exact same thing. That opportunity exists.
We have
said no to no one that has come forward to us, so that opportunity is there and
we would encourage it. We would encourage local Newfoundland companies, local
hires, absolutely. Unless there's evidence to the contrary that there's not, I
would refrain from saying that people are not hiring local when there are
significant local hires in this particular projects within the private sector.
MR. LANE:
Well, I wouldn't refrain from saying it.
Thank
you.
CHAIR:
We've had several rounds on these headings now and we're approaching the time
when we would normally take a five-minute break. Are people ready for the vote
on these headings?
MR. PARROTT:
I'd just like to make one more comment, if possible?
CHAIR:
Okay.
MR. PARROTT:
So to your point about local contractors. There's no doubt there are local
contractors working there, but, as a point of fact, there is a company from
Quebec with 50 to 60 employees down here. They have had conversations with the
local building trades. It is a unionized company that does not fall under the
local building trades agreement and they are now paying (inaudible), or whatever
the proper terminology is, but they are paying in.
It is a
fact that they are using a company out of Quebec, 50 to 60 people with a higher
wage, paying for hotels and paying for travel when that work could be carried
out by locals. I would encourage you to contact the building trades if you think
that's not a fact, or visit the site.
MR. MITCHELMORE:
Well, I have reached out to Trades NL for a particular meeting so I welcome
having a conversation with Trades NL. They have not approached me with this
particular issue.
There
is, as has been reported, a subcontractor that has been doing speciality work
that could not be procured in the Province of Newfoundland and Labrador
pertaining to drywall.
MR. PARROTT:
Drywall is not a speciality.
Anyhow,
I'm good.
CHAIR:
Okay, are we ready to vote on these headings?
Seeing
no objections, I'm going to call these.
Shall
heading 2.1.01 to 2.3.01 inclusive carry?
SOME HON. MEMBERS:
Aye.
CHAIR:
Carried.
On
motion, subheads 2.1.01 through 2.3.01 carried.
CHAIR:
Okay, so we'll take a five-minute break now. We'll all be back here 8:06 p.m.
Recess
CHAIR:
We will get started again.
We are
going to call the next heading.
CLERK:
Subheads 3.1.01 through 3.4.01 inclusive.
CHAIR:
Shall these headings carry?
Questions?
MR. PARROTT:
3.1.01, Salaries – in the revised numbers for budget '18-'19 a savings of
$247,600 was identified last year, but budget '19-'20 marks this line item for
decrease of only $137,500. How are these savings located?
MR. MITCHELMORE:
The decrease, primarily, in
2018-2019 reflects saving realized during the recruitment period for various
positions during the fiscal year. This year was adjustments required in the
salary plan for $1,635,300. I believe there was one salaried position that would
have been attrition that would not be filled and that's the petroleum engineer
position.
MR. PARROTT:
Transportation and
Communications, in the revised numbers for budget '18-'19 there are a savings of
$58,000 identified last year. How were these savings located?
MR. MITCHELMORE:
Which line?
MR. PARROTT:
Transportation and
Communications.
MR. MITCHELMORE:
There was a $58,000
reduction in travel to trade show and missions, industry sessions and client
sites; reduction in the number of staff attending any particular trade show and
number of events were actually attended by local staff because of our regional
offices and presence. Because of how we've been enabling our economic
development officers to be that touch point and connected to all of our
programming so we can have better efficiencies within the office, we've been
able to realize those savings.
But we
do anticipate that through this Sector Diversification Division – and this is so
important with all of our plans that we have put in place through Regional
Innovation Systems pilot. So if you look at the agriculture and aquaculture
industries, tourism and fisheries, if you look at aerospace and defence, and
ocean technology as well as industrial benefits in places like Clareville and on
the Burin Peninsula, we want to make sure that we're capitalizing and there may
be a greater requirement this year through those implementations for travel and
various trade shows and doing industry sessions with craft, manufacturing, ocean
and other sectors. And we've determined that there would be an additional $100
through zero-based budgeting.
MR. PARROTT:
Okay.
Increase of $200,000 in Professional Services, can you please explain why that's
going up so significantly?
MR. MITCHELMORE:
Yes. This is a one-time expenditure that we've announced in budget 2019-20. We
had highlighted from the McKinsey report to look at doing an MRO study, so
that's maintenance, repair and overhaul for the aviation industry. That's
something that we will undertake. That's $200,000 of that amount.
MR. PARROTT:
Maintenance, repair and overhaul of assets we own?
MR. MITCHELMORE:
No, the maintenance, repair and overhaul would be an industry speciality for the
aviation industry, so for commercial aircraft. So players that are in the
industry like Provincial Aerospace or EVAS Air or others are currently involved
in maintenance, overall repairs and some do training as well, what they would be
doing is bringing in aircraft, whether it would be from a commercial supplier
like Air Canada or WestJet or international airlines in doing that work here,
adding value and high-paying jobs.
This
was identified in the McKinsey report where there could be an opportunity for
more heavy checks on aircraft and, given the capacity that we have within the
province for aviation and the companies, this is an opportunity that they see
that could create more jobs and grow the economy. So we've allocated $200,000 to
try and capitalize on that.
MR. PARROTT:
So is there any thought given to any of these companies being an AMO? It's been
my background. So in order for them to do any work on these aircraft, any kind
of overhaul based on periodicity, they have to be an AMO specific to that
aircraft and if they currently don't work on that aircraft, they have no ability
to do that.
MR. MITCHELMORE:
There are two things that were in the budget and one comes from the Department
of Advanced Education, Skills and Labour is around the certification and
training that would be happening at the College of the North Atlantic for
various technicians to provide certification. There are also elements of
investment that we've made to the Gander College of the North Atlantic in
partnership with the federal government to enhance equipment.
But we
see opportunity where there could be military aircraft as well that could be
involved in maintenance, repair and overhaul. So this will all be a part of the
study that will go out in this $200,000 to highlight what the opportunity would
be, so the investment is a study that would take place.
MR. PARROTT:
Okay.
Purchased Services, in the revised numbers for budget '18-'19, the money
allocated for Purchased Services last year went over budget by $521,000. What
caused that line item to jump significantly?
MR. MITCHELMORE:
The $521,000 revised reflects four Atlantic Cable Facility repair cost,
approximately $100,000 each, as well as the cost to issue an RFP to divest of
the Atlantic Cable at approximately $130,000.
Just
for context, and I just want to clarify, the Atlantic Cable Facility, Persona
Communications constructed it in 2007 in partnership with Rogers Communications,
MTS Allstream and the Government of Newfoundland and Labrador. The project
constructed fibre facilities between St. John's and Halifax in a ring
configuration involved in terrestrial and submarine routes, and government's
contribution at that time was $15 million. It was proposed to add redundancy in
communication facilities on the Island, and to foster increased competition in
the communications sector. Eastlink currently maintains the fibre portion and
all the signees to the original agreements.
We
have, as a government, to deal with the maintenance cost to the fibre and we
also have to pay for breaks for various reasons. This can be a significant cost,
so we are exploring and taking proactive action from an initiative in 2007 that
has led to these costs to look at opportunities to ensure efficient and
effective management of this provincial asset and identify where revenue
generation or cost savings can be had.
MR. PARROTT:
Okay.
Under
Grants and Subsidies, there's a reduction of $187,500. How was the reduction
determined, and what impact do you expect that's going to have on the economic
diversification agenda and on the tourism sector?
MR. MITCHELMORE:
Under the Grants and Subsidies, what we have here is a reflection of less
federal funding for the Canadian Safety and Security Program. That would be the
windup or the conclusion of a multi-year agreement with C-CORE. They were
engaged with the federal government to design enhanced space-based ice products
for transportation product, so that was something that was done there.
The
other grants that are provided in this field is that $100,000 to the East Coast
Trail, which I was at the Trail Raiser a couple Saturdays ago, where, through
the private sector and through over 500 individuals, donors to the East Coast
Trail, they raised over $90,000 as well to help with the ongoing maintenance,
which is really great.
Market
readiness at $15,000; $40,000 for the craft development industry; innovation
growth space at $75,000; and there's $150,300 for Canadian Safety and Security.
That also reflects the line item for Revenue of $150,300 because if we get
federal revenue, we have to record it as well.
MR. PARROTT:
Just as another point, can
we get a list of the grants and subsidies from last year?
MR. MITCHELMORE:
Sure. It would basically be
what I had just noted and the additional amount would be for the Canadian Safety
and Security Program, and we will provide that.
MR. PARROTT:
Line item 3.2.01, what
support does the department give to communities who want to build a co-operative
model for economic and business development, particularly in the tourism sector?
I refer, specifically, to something similar to the model being used in Bonavista
right now.
So,
anywhere, Trinity or Bonavista, if you go down there – if I go to Blue Whale for
dinner, they recommend that I go to Amherst Cove and eat at the Bonavista Social
Club. Everybody down there is working collaboratively to –
MR. MITCHELMORE:
Okay. Right.
MR. PARROTT:
So is there any incentive?
MR. MITCHELMORE:
I had just drawn the conclusion of formalized co-operative. We have over 90 in
the province and we have MOU, a co-operative agreement. We have been, as I
mentioned in my opening remarks – and Bonavista has really been a champion. It
has taken them some time as well to realize the benefit of referral and
collaboration, and they have seen tremendous success.
I only
want to cite that during Budget 2016,
I went to Bonavista to the Chamber of Commerce and I delivered a speech, and
they had 80 members at that time. Now, if we fast-forward three years later,
they have just under 160 members.
They
have grown the amount of small businesses, the clustering. And we have made
investments because they've been working collaboratively in things like the
Bonavista Biennale where they've been able to add capacity, having 24 locations,
where contemporary art will be placed in multiple communities. Typically
biennales are placed in urban areas.
When I
was travelling in Ibiza, just in January on a personal holiday, I had seen that
they had their 20th anniversary of their biennale. This is the first time – and
it's coming back this year. I encourage you and everyone else to go. They added
over 1,000 new visitors just to see the contemporary art, and then all of those
regions benefited because people went to Keels, Duntara and went to various
communities, not just in Bonavista and Elliston and in Port Rexton, Trinity,
major clusters. We have Provincial Historic Sites, really key assets. There's
the Rising Tide Theatre that's been there for over four years.
If you
look at some of the pioneers like John and Peggy Fisher with Fishers' Loft and
the investment that they've made, but then there's new investment. One of the
exciting areas of sector development where we've seen real growth is in the
craft beer industry, so Port Rexton Brewing, and there are real accolades. We've
made investments where they're now going to open up a manufacturing facility and
do canning on site, creating more jobs.
Bonavista has seen the natural benefit of doing referrals, and all areas and all
regions are seeing benefit from it. Tourism is really a collaborative area of
work, it is not about being competitive with each other in the marketplace. So
over the last time we've done our Exit Survey, there's been 2,000 additional
jobs added and there have been new businesses created in the tourism and
hospitality industry.
We
provide support through our Tourism Product Development Plan, and not all the
support is financial in nature. Sometimes it is what we can provide to
companies, advice or direction, but we encourage that. Places like Clarenville,
from a hub and spoke model, are benefiting as well because bus tours are coming
to the Clarenville Inn, or you also see investments like the St. Jude Hotel that
has just undergone a major renovation and remodel and rebrand because of
economic activity that's happening around tourism but other economic development
within the region. When businesses work together and collaborate, we have a lot
greater success.
I'd be
more than happy to maybe take the conversation off side, rather than use more
time to explain all this here. We could have a good conversation about what's
going on in Bonavista, how our department has made investments, what's been
working and what hasn't, and in the entire region. So I'd be more than happy to
take the conversation off side and have these chats.
MR. PARROTT:
Perfect.
CHAIR:
Further questions?
The
hon. the Member for St. John's East - Quidi Vidi.
MS. COFFIN:
Thank you.
Let
start with, what has been the effect of provincial, interprovincial and
international trade agreements on local businesses?
MR. MITCHELMORE:
We've had significant
benefits achieved given that 50 per cent of our GDP, as I had mentioned, is
based on export. It's quite significant. We've seen just this year an industrial
shrimp benefit agreement based on the CETA negotiation that will see thousands
of metric tons of industrial shrimp landed at Newfoundland and Labrador for
local fish plants to produce and create additional weeks' work for plant workers
and other benefits that would exist from that.
That
would've been shrimp that would've been produced in other jurisdictions, like in
Iceland or Denmark or other European jurisdictions that may have had a higher
cost of labour. But because of a tariff that existed or a trade barrier, it
would not have been landed here.
So we
are seeing some benefits from CETA. We also have the Canadian Free Trade
Agreement that we've entered into, which we're going through a process of
reducing regulatory barriers and reconciliation, and finding ways of which we
can advance matters. There's a chapter on energy and electricity as well that
can create significant opportunities for this province.
When it
comes to trade, it's very important to Newfoundland and Labrador, given the
types of commodities that we deal in terms of mining, in terms of oil and gas,
in terms of the fishery and aquaculture, and given our population base. Why we
have a number of high-value jobs in these sectors in the economy and the supply
and service area is because of such trade agreements, and our ability to export
and be competitive.
MS. COFFIN:
I had a conversation with the procurement agency earlier. During that
conversation, we were talking about social and green procurement, as well as a
number of other initiatives – which are fantastic, but unfortunately one of the
constraints of that was when we were talking about encouraging the use of local
suppliers, they were negatively impacted by some of these trade agreements,
because, of course, they said that intra-provincial trade was paramount. And one
of the stipulations of that was tenders or requests for proposals or procurement
– and I'm not sure what the dollar amount was – had to be opened up to
intra-provincial bidders.
So I'm
just wondering if we've seen any negative effects. Because quite often that's
what happens in trade agreements, is we see benefits in some sectors, but some
other sectors will be negatively impacted. Because that's how trade works. When
you have a comparative advantage in a particular area, you benefit in that area,
but when you do not have a comparative advantage, you lose out.
So I'm
just wondering if there are any negative effects that we've seen.
MR. MITCHELMORE:
Do you have any specific example of which you would want to give? In speaking of
social financing or social enterprises, we have a Social Enterprise Action Plan.
We see the value of which social enterprises locally are able to bid
competitively, and they have been winning contracts. One only has to look at the
Newfoundland and Labrador Housing Corporation and the success of companies like
Choices for Youth with their social enterprises, or Stella's Circle and what
they do in terms of their social enterprises. Because you had opened up with
green and social in your commentary, there are avenues of which social
enterprises can have incredible opportunities for local people and local
benefits, and even work with other companies, too, in part of the procurement
process.
We do a
lot in the Department of TCII around supplier development or working with the
federal government and the entities to make sure that, through our Regional
Trade Network, companies are prepared and they can look at where the
opportunities are for them; they can target, whether it's the Canadian
marketplace, whether it's international. Through ATIGA, that I talked about
earlier, you see a lot of pan-Atlantic missions, and we've gone to places like
the UK, the Netherlands, and in very specific target.
Newfoundland and Labrador has a significant advantage to the Atlantic provinces
when it comes to trade because we have done almost $2 billion worth of export in
the UK and the Netherlands alone. We are far ahead of any of the Atlantic
provinces in their export into these markets, but working together we can
capitalize on opportunities, especially when it comes to the Ocean Supercluster
and where the private sector is unlocking $150 million of their money to do
research, to do various development or innovation, to partner with the federal
government to unlock an equal value.
Given
that we have 53 per cent of the ocean economy in Canada, we see where local
companies are going to be able to even partner with more international players
and get a bigger piece of the pie, and that's really important for us.
MS. COFFIN:
Well, I'm glad to see that
some local producers are benefitting from some of these trade agreements.
Going
back to, perhaps, some of the things that I heard on the doorstep along the way
that would go closer to this procurement agreement issue, I certainly have spoke
to small businesses who would normally fill government contracts, who now have
found that they are not getting that, so I suspect that might be a product of
it, but we'll leave that be for now.
Perhaps
another area we may want to look at there would be secondary processing in the
fishing industry, because that's where a lot of the jobs are and that's where a
lot of the value added is. So I'd be really curious to see, perhaps, how we're
faring in terms of the value-added piece and if we are actually at a comparative
disadvantage, and that might be where we are losing out.
For
now, let's move on to diversification. I noticed that we have diversification in
at least three of the different sections here. Some of it's about planning, some
of it's about helping industries diversify, looking for diversification
initiatives. I'm just kind of trying to get my head around why we spent $1
million on a report to find out where we need to diversify.
MR. MITCHELMORE:
The Department of Tourism,
Culture, Industry and Innovation is involved in working with a number of key
stakeholders who are members of the Cabinet Committee on Jobs. We've
created sector work plans, and we've been leading some of those with the
Technology Sector Work Plan, for example. Others we have worked with, other
departments and key stakeholders, and with it, through the McKinsey report, and
as you can see even within the department, there are a couple of key initiatives
that we've taken from that report to capitalize on the work that we're doing,
that we may not have focused on, such as the MRO opportunity and direct-targeted
investment to look at sector diversification.
I think that's really key in being able to build a certain
expertise, to grow various sectors, whether it would be in aerospace and defence
– because I went to the Dubai Air Show and looking at what Provincial Aerospace
is doing; they've done business in Abu Dhabi and been there for quite some time.
They have relationships and contracts internationally. They can be a lever to
help other companies that are working internationally and want to be in that
space.
As well, they have company contracts with other
international players, whether it would be Thales or CarteNav or others, and
some of that relationship trickles down and brings benefit to Newfoundland and
Labrador in terms of how conferences are held or people setting up offices here
in this province and creating employment, such as what some of these companies
have been doing.
We need to look at and continue to be very nimble, as a
small province, but realize our capabilities. I don't think we've talked enough
about some of the companies that are operating here and what excitement and what
they are actually doing. I highlighted Mysa and Empowered Homes and what they're
doing for energy conservation. You only have to look at what Kraken is doing in
terms of their robotics with AUVs, and how they're getting military contracts
and international dollars and investment being put into them, that's creating
dozens of jobs here in our province that would be high paying. We have a number
of companies that are operating in that space.
Genoa Design, I believe the MHA for Mount Pearl North
mentioned them today in a speech. They have over 100 employees and they're
dealing with steel structure, and very competitive in this space, getting major
contracts and growing; focused on R & D and scaling up. I know the Member for
Mount Pearl - Southlands has talked about this company as well and the owners
have – Leonard Pecore is a pioneer and was awarded by the Marine Institute an
alumni award for major contributions.
We have
this here in our province. I think that we have major companies operating, not
only in urban areas but in rural areas of the province too. The Member for
Exploits, I'm sure, would highlight what Superior Glove Works has been doing;
over 3,000 types of gloves being produced in a very rural community where
anybody who wants a job there can work at this glove factory. They've actually
opened a satellite location where they're operating in Springdale, and they
initially started in saying they were going to hire 12 people. Well, they've
exceeded their targets and they have far more.
These
are where opportunities lie, it's where there are companies like Dynamic Air
Shelters in Grand Bank and there are various companies that are doing things
unique and different, where government can work with them to help scale up and
grow and not always in a financial way. That's not always government's role to
provide finance or provide a loan or provide a grant or a subsidy. It could be
advice or it could be directing them to somebody who can help them like Export
Development Canada, the BDC, the CBDC has various partners. There are commercial
banks. There are equity firms. There are a variety of tools. There's the
university of which they could tap into R & D, or research capacities.
There
are all kinds of capabilities, and this is how we look at our department. We're
very much a horizontal department that works with other departments across the
government but also out there in the community and that's what's really
important.
The
only way we're going to have further success is if we continue to have that
ongoing engagement and dialogue and continue to highlight the successes and
where we can continue to grow and create these high-value jobs all across this
province.
MS. COFFIN:
I think you've managed to answer that we did not need the McKinsey report, that
$1 million on the McKinsey report because it seems to be that we had a wide
breadth of forms of industry already in Newfoundland and Labrador, but my time
is up and perhaps we'll go on to talk about another thing after.
MR. MITCHELMORE:
Well, that's not what I said in terms of the investment. I had highlighted that
the report provided us with some key directions and some initiatives are
reflected in the department and in the budget right now that we are debating.
So, for clarity, I had not said what you had just stated.
CHAIR: Are
there any further questions?
MR. PARROT:
Still on 3.2.01, Salaries, there was a reduction of $141,700. How was this
determined?
MR. MITCHELMORE:
The Salaries decrease just reflects adjustments required for the 2019-2020
salary plan. There was an increase of $5,200 in last year's budget and that was
for a continuance in retirement costs that was paid to employees.
MR. PARROTT:
Transportation and Communications, again, seeing a significant reduction of
$80,000 from what was spent, but the budget is back up to the previous year. Can
you explain?
MR. MITCHELMORE:
The reduction has to do with some of the vacancies of staff who would normally
be required to travel during the fiscal year, and we have been working to fill
those vacant positions, reflective with the salary plan. We anticipate that
there will be more travel that would take place by the economic development
officers to have more direct contact within the regions and areas with business
and initiatives that are taking place going forward.
We've
spent a lot of time over the last year or so working with the industry, working
with major associations and having engagement, but now the implementation of
these initiatives will take these economic development officers on the road more
to realize the benefits and conduct implementation.
MR. PARROTT:
Okay.
The
current status of the government's efforts to – that's 3.3.01, sorry – expand
the rural broadband access.
MR. MITCHELMORE:
3.3.01, this would be our Comprehensive Economic Development fund where we would
work primarily with the federal government. We work very closely with ACOA under
this particular fund to leverage investment, to do community development
initiatives, but we also have allocated within the budget $1 million to expand
on a pilot project for cellular service.
Last
year, we had successfully piloted this initiative in the previous budget and
we've done a number of projects that have been announced. There was a project in
Southeastern Labrador that would give cellular service to Red Bay and a number
of communities like Cartwright, St. Lewis, Port Hope Simpson, Mary's Harbour and
Charlottetown.
There
was also a project for the Great Northern Peninsula that included a UNESCO World
Heritage site and a number of businesses. About 4,000 people in the catchment
area would get service for 16 communities in the SABRI region.
The
Port au Port area received a project in the francophone communities of Mainland
and Three Rock Cove, I believe, and there was also investment in Lord's Cove and
an announcement that I had with the Member for Cape St. Francis in Pouch Cove,
which would see further investment around Marine Park and further investment to
stimulate activity.
There
were other investments that were made in the St. Mary's area, Riverhead, a
project that leveraged over $3 million. We saw success in partnering on that and
we're offering this program again in the budget to see further cellular service
added.
When it
comes to rural broadband, under the last round we used $1.5 million to leverage
close to $40 million in total. That would include the federal government and the
private sector for various projects, and they're working through their
implementation phase throughout Newfoundland and Labrador.
The
federal government is primarily responsible, that's their jurisdiction; it's
federally regulated. They've made the decision that they are going through to
improve broadband Internet to 15 megabits per second by 2030. There are
investment dollars announced in the federal budget to expand rural broadband,
and that's certainly important to our communities because advancing
telecommunications is one of the most critical enablers to growing an economy,
whether it's an urban or rural economy. We need to work with the federal
government to capitalize and make the greatest number of investments to see
broadband enhanced in our province.
MR. PARROTT:
So, just one quick
follow-up.
Last
year, you suggested that you'd be at 98 to 99 per cent of coverage. Have you
achieved that goal?
MR. MITCHELMORE:
Once these projects –
MR. PARROTT:
Are completed.
MR. MITCHELMORE:
– are fully complete –
MR. PARROTT:
Cool.
MR. MITCHELMORE:
– they will have a 99 per
cent coverage for broadband in Newfoundland and Labrador, yes.
MR. PARROTT:
Can you provide us with a
list – and I don't want you to read it out now – of the Grants and Subsides that
were provided last year?
MR. MITCHELMORE:
We can certainly provide a
list of the Grants and Subsidies.
MR. PARROTT:
Okay.
MR. MITCHELMORE:
I believe there were some
good projects, even in the District of Terra Nova.
MR. PARROTT:
No, that's good, you can
stop.
MR. MITCHELMORE:
Elizabeth Swan Park would
certainly be one of those and the trails that I had mentioned earlier for the
Eastport area.
MR. PARROTT:
Yeah.
MR. MITCHELMORE:
There would've been funding
for the White Hills ski resort as well that would follow in that particular one.
MR. PARROTT:
We'll talk about that later.
MR. MITCHELMORE:
We've had some very good
partners in the Town of Clarenville around that particular one.
MR. PARROTT:
3.4.01, Purchased Services.
In the revised numbers for '18-'19 there was a savings of $85,400, in Purchases
Services last year, but in budget '19-'20, this line item only sees a decrease
of $400. How are the original savings located and how is this decrease
determined?
MR. MITCHELMORE:
Sector Research allows us to do research in various areas of the economy. In
terms of the decrease of $85,400, it's reflected savings due to unforeseen
delays in a research project. The $400 reflects a lower subscription funding
required for the 2019-2020 fiscal year. So we'll be able to complete our
research, but one of the subscriptions is at of reduced cost.
MR. PARROTT:
What research project is that?
MR. MITCHELMORE:
Well, in terms of what we would purchase, this would be where we would get
information pertaining to tourism statistics. It may be information from various
subscriptions around airports, passenger movements and things like that.
Carmella, I don't know if you had anything further you wanted to add?
MS. MURPHY:
Sector Research takes in all sectors now, not just tourism. So we have about
eight or nine active tourism research ongoing projects and others that are being
done that there was just a delay in, so we're carrying over to do in this
fiscal.
MR. PARROTT:
Okay. Thank you.
Under
Grants and Subsidies, there was $20,000 budgeted in '18-ֽ'19. None of those
funds were used and it's re-budgeted again in '19-'20. So how come they weren't
used and how come you need them this year?
MR. MITCHELMORE:
So this was funding that was allocated for work to be done, research with
industry associations, and that was not required during the 2018-2019 year. We
anticipate that that research will take place in 2019-20.
MR. PARROTT:
Okay. No more questions.
CHAIR:
Okay, any further questions?
MS. COFFIN:
Thank you.
Can you
explain the Comprehensive Economic Development and its relationship to
Innovation and Business Investment? There seems to be a little bit of
duplication, and I recognize that Comprehensive Economic Development refers more
to regional and sectoral, but if we're talking about businesses, most businesses
can fit in a region or a sector. So perhaps there's some duplication there that
is happening, or maybe there's not, but it's not immediately obvious to me in
reading the overlays here.
MR. MITCHELMORE:
Comprehensive Economic
Development would be funding that would be granted to non-commercial entities or
non-profits, municipalities. Groups of which we would work to leverage various
projects, such as the Atlantic Canada Opportunities Agency, to do things, as I
had mentioned, the Elizabeth Swan Park. There would be some development that may
happen around the Placentia Wayfinding Signage policy to improve visitor
services.
So that
investment would happen from there. We have the Argentia ferry that would be
coming in, so we want to make sure that people are navigating the best possible
way to business, to key attractions, tourism areas, and finding their way and
having a good visitor experience.
We
would put in some dollars there and then the federal government would also put
in a bigger piece because of the way we would negotiate a particular project,
and then the proponent as well, whether it would be the town or the port or some
group or organization that would be applying for the funds. That would be how we
would be disbursing the Comprehensive Economic Development.
As well
as the cellular service pilot project falls under this particular fund and some
funding to organizations in terms of annual operating grants.
MS. COFFIN:
Okay, a couple of other
things now, in no particular order. Regional Economic and Business Development,
is this what happened to the REDBs, the Regional Economic Development Boards?
Which were actually quite a good, cost-shared initiative that co-located a whole
pile of federal, provincial, municipal services in one, and I know that went
through a radical reorganization where some industries were able to – or areas
were able to or were hoping to maintain those.
Is this
what happened, that they've moved in here? Is that the nature of this beast? And
if so, where are they located? Where are these offices located?
MR. MITCHELMORE:
Well, the Regional Economic
Development Boards would be completely different. They were a non-government
entity. They would've had core funding from the federal government and the
provincial government. Primarily, I believe it was a 75-25 split with the
federal government. This would've been the decision of not the current
administration, federally or provincially, to remove the RED Boards.
I sat
as a director on a RED Board and could certainly see the work that they were
doing in community and in regions because I worked in community economic
development and I worked with CBDC previously to being elected. They did a lot
of stakeholder engagement and work throughout the province, and some of their
work still can be seen and felt through various regions.
When it
comes to Comprehensive Economic Development, we would have our offices with our
economic development officers that are trained to work with community, to work
with municipalities, work with various groups of which they could apply for some
funding here under this model to carry out a specific project. But they may also
look for capacity-building initiatives of which they look for opportunities
management, stakeholder engagement and governance structures. We do all this
type of training as well within the department.
So the
RED Boards, it's my understanding that there are no remaining RED Boards that
exist today. There are a number of development associations that still exist
that have predated the RED Boards as well. I actually went to the St. Barbe
Development Association's 50th anniversary, and they continue to do economic
development in a very similar capacity that did not have core funding. They
still do not have core funding but they carry out a number of development
initiatives and our department would work with them on various initiatives as
well, as we would with other communities and entities and stakeholders
throughout Newfoundland and Labrador, as would ACOA with the federal government,
to provide community economic development.
MS. COFFIN:
So you do have economic development officers all across the province?
MR. MITCHELMORE:
Yes.
MS. COFFIN:
Okay, that is reassuring as well.
We
talked earlier about CETA and the movement of energy resources. Perhaps you can
clarify something. I know I heard somewhere along the way that energy exports to
the United States need to be from competitive industries. We have a monopoly on
energy right now, so how is that working with the trade agreements and, in
particular, with our ability to sell into the US?
MR. MITCHELMORE:
Well, we would be following the rules that exist. There are the FERC rules that
exist that would allow people to sell north to south. So if we have an ability
to enter into the grid and do so competitively, we could sell energy into the
United States. There has been energy sales made into the US through surplus
power that would exist, but that would not fall under the Department of Tourism,
Culture, Industry and Innovation. These would be questions that would best be
directed to the Minister of Natural Resources that would deal with energy and
electricity and those matters.
MS. COFFIN:
I realize that. You mentioned it in your earlier response, that's why I thought
–
MR. MITCHELMORE:
My only point that I had made in my earlier response was the Canadian Free Trade
Agreement, which is an agreement between the provinces and territories. There
has been extensive debate in the House of Assembly and dialogue around the
Canadian Free Trade Agreement, of reducing trade barriers, and one of the
chapters is on electricity.
MS. COFFIN:
Great. I will certainly bring that up when we get to Natural Resources, which I
think is Thursday morning.
Is our
aerospace industry profitable?
MR. MITCHELMORE:
Our aerospace and defense industry, if you look at just any of the companies –
EVAS Air, for example, has over 200 employees; they have a flight training
school; they have contracts with Air Canada offering major flights. This would
be a company that is a private company, to my knowledge, so those particular
matters would be – the profitability of any particular company is within the
shareholders. So you're asking a question that's very difficult, I believe, for
government to answer in a full entirety.
But, if
you look at Provincial Aerospace, they have over 1,000 employees and they
operate internationally. They've been doing ice surveillance; they've been
involved for quite some time. We have to look at what C-CORE is doing in terms
of their partnerships to attract international investment and what they're doing
with the space agency. There is a lot happening in defense and aerospace here in
this province.
We have
a Regional Innovation Systems pilot project in Gander to focus on the capacity
and scale of defence and aerospace, our aviation industry in this area, looking
at our educational institutions, looking at the chamber of commerce and their
partners, as well as players that are in the industry, as to how we can scale up
to grow. Because there are benefits that can be availed of through major
contracts that would happen, with procurement through the Canadian government. I
mentioned earlier how Kraken is achieving contracts with governments; they have
US contracts that they're highlighting.
We have
companies that are competitive, and there's opportunity in the aviation industry
and aerospace industry where companies are working really hard to secure the
adequate workforce, and that's why we need to look at how we can either scale
our programs appropriately so that we're training a workforce in that talent
pool right here in Newfoundland and Labrador so that we can create even further
opportunities.
MS. COFFIN:
Absolutely.
MR. MITCHELMORE:
And D-J Composites is another company, as well, that would be in the defense and
aviation industry; CHC Helicopter; we have Universal. There is a lot happening
in the charter and aviation industry here in our province, and we made
investments in Alcock and Brown with the federal government and partners like
Shell Aviation and PAL to highlight that significant milestone, not only for
historical purposes and celebration and commemoration, but to highlight the
future economic opportunities that we can have.
Looking
at other great successes that we've had: Amelia Earhart, Lindberg, we look at
Botwood and we look at the flying boats, we look at Gander as being the largest
airport in North America when it was built. There are a lot of stories to be
told and a lot of success around aviation here in Newfoundland and Labrador.
We're just scratching the surface of what our possibilities are.
MS. COFFIN:
Unfortunately my time is up. I do have a follow-up question if I have the
opportunity?
CHAIR:
(Inaudible.)
MS. COFFIN:
Okay.
Given
the fiscal circumstances of the province and what seems to be the burgeoning
aerospace industry, I have some concerns about subsidizing a profitable
industry. I just wanted to point out my concerns in that area.
Unless
we're perhaps being taken on as equity partners where we can actually share in
some of those profits, we are going to be left with a trickle-down or a
secondary benefit as a result of that. I just wanted to ensure that we are
investing appropriately and in places that we need it more than, say, providing
corporate welfare in any circumstance.
MR. MITCHELMORE:
I would say that our officials, the team at TCII, are very well equipped to work
in the private sector, to work with the overview of public money and the
resources that we are provided to make sure we meet our mandate of being able to
look at and lead economic growth here in this province and diversification. We
made an investment in Provincial Aerospace Limited where they made a significant
investment in their force multiplier.
This
was something that is very risky for a company to do when you're talking about
research and development. Anybody who is in that early stage of research and
development or innovation, you're taking on a higher level of risk than you
normally would and it may not pay off. There are times when government needs to
look at taking that risk with a company that could lead to a tremendous amount
more.
When we
do a contract with a company we look at saying: What is this going to mean in
person years or person hours? How much benefit? How much more are you going to
put in because you are doing this particular investment and what it could lead
to? This particular contract with the force multiplier has been highlighted
around the world. It's been showcasing Newfoundland and Labrador in Dubai and in
France and continues to be marketed in looking at South America.
If that
company is able to sell or lease these planes, which have multiple technologies
and capabilities, they'll produce more and manufacture right here in our
province. That's going to lead to long-term job growth, sustainability and
benefits. Sometimes it is absolutely necessary to make those investments when
there are risky situations for companies, or else you will not see those
opportunities or that innovation happen in the economy.
MS. COFFIN:
Wouldn't it be great if we
had equity shares in that?
MR. MITCHELMORE:
There are times of which we
do take equity in companies. There's always a mix of what you are doing in terms
of investment. There are times of which companies will go out to the market and
get equity investors or venture capitalists that will take a part of their
company.
Those
are decisions that we make to determine what makes realistic sense in any
particular deal that we do. That lens is applied by the civil servants, the
public service that we have and the staff. They have the competencies to be able
to get good business deals and accelerate growth. I have complete faith in the
staff of TCII on continuing to deliver, as they've proven in the past.
MS. COFFIN:
I wasn't questioning the
capabilities of the TCII staff; I was questioning government's policy direction.
That is okay. I think that may be the end of my questions there in this section.
Thank
you very much.
CHAIR:
We have one question there,
I think.
The
Member for Mount Pearl - Southlands.
MR. LANE:
Thank you.
Minister, I had some general questions so I'm trying to fit them in where I can.
I'm
wondering about our provincial sites, our provincial tourism – I'll call them
facilities and so on – what efforts have been made to ensure that they are
accessible? I know for a fact – and I know that we'll get to that section later
on Arts and Culture Centres – even the main Arts and Culture Centre here in St.
John's was only, up until about I'm going to say, two or three years ago when
myself and a couple of other people lodged complaints, that it actually became
accessible in terms of blue zone parking and everything else, which is pretty
amazing that it would be in that condition.
There
are lots of provincial facilities that I guess are directly related to your
department, whether it be Arts and Culture Centres or whether it be other points
of interest, visitor centres and all those types of facilities. Have you been
making an effort? Is there a plan to ensure that all of those facilities are
totally accessible, both from a parking point of view and also from an access
point of view, including washroom facilities?
MR. MITCHELMORE:
That's a very important question. Government has been working to ensure
accessibility and inclusion. We've updated legislation here in the House of
Assembly around building codes pertaining to accessibility. Some of the
properties that you mentioned, we are the operators of things like the ACC, but
the physical building and the assets would be Transportation and Works run. We
work very collaboratively with them.
If you
look at the Arts and Culture Centre in St. John's, we worked with the federal
government to leverage funding to see accessibility improvements to the Barbara
Barrett Theatre. There was an elevator service that would've been added to
ensure that it was accessible, whereas previously it would've been much more
difficult and nearly impossible for somebody who had mobility issues as well.
Some of
these facilities were built quite a long time ago. We've made great strides in
new builds and new designs to ensure accessibility. When we look at our parks,
we made sure that there were appropriate emergency and accessibility plans put
in place, ensuring that adequate accessibility was put in place. Some of the
investments that we had made as well – that's what I was thinking about – are
around playground equipment to ensure that it is accessible at our parks. We put
in a piece of equipment in Squires Park that would've been accessible.
There
are some initiatives that we've undertaken to make sure that there's greater
accessibility. Even in things that we do when it comes to trail design and
development, we take that lens and certainly do everything that we can to make
sure that there are greater levels of accessibility for everyone to enjoy in
Newfoundland and Labrador, and that goes for what you had mentioned.
If you
have some specific examples of which we can go and improve accessibility, it's
certainly something that we would look to undertake. I know that I received
complaints as an MHA around the Apollo
ferry service having a very narrow elevator. There are some people with
accessibility needs that would have larger wheelchairs that are motorized and
fairly large, compared to what the elevator had for that vessel that was almost
50 years old. So when it was replaced, they were certainly fully accessible in
terms of the new vessel, the new ferry that's there, and it's been positively
received by those in the community that would have mobility and accessibility
needs.
So,
there are some measures taking place, but likely there are still gaps that we
need to address. As they come forward, we will do what we can to make
accessibility accommodations.
MR. LANE:
Okay, thank you. I
appreciate that.
Minister, another question that some constituents of mine asked me to ask of you
whenever there was an opportunity – and this is a good one – is around the
flights to Ireland. When those flights were lost it certainly impacted a lot of
people from here who availed of them. Some of them availed of them quite often,
actually.
I guess
the thought was, or what people were wondering is, why that happened and what
efforts – I know what happened, they went to Halifax, surprise, surprise, but
what efforts were made or what efforts will be made to try to get that flight
back in terms of looking at things like perhaps packages; vacation packages,
where someone can come to St. John's or whatever and have the flight and work
with hotels and work with other companies and service providers to provide
packages and incentives for people to fly directly into Newfoundland to try to
get that flight to Ireland back.
Besides
the cultural connection, certainly from a business and tourism point of view, it
made all the sense in the world. I thought it was wonderful when we had that
direct flight, but to have people now to have to go out of the way to flight
over Newfoundland to go to Halifax and come back, I think a lot of people would
say it certainly doesn't work for our province for sure.
I'm
wondering what has been done or what will be done to try to get that back?
MR. MITCHELMORE:
I thank you for the question
because it's highly relevant and you hit a lot of key points when it comes to
the importance of access, and it is absolutely critical.
We were
fortunate enough to have that West Jet direct flight for a number of years. It
served us extremely well. It was very disappointing that West Jet had pulled
that service.
We had
been working with our partners, the Airport Authority and others, to put a
significant amount of marketing dollars there. The company had made a business
decision based on the fact that they had secured Dreamliners, which are larger
aircraft that's going to fly longer distances to get into key markets.
Previously, what would happen is smaller flights would do drops in various areas
and now that larger flight will be able to take the bigger population centres
and go into various areas.
Halifax
has a number of cities for their model, of which they have a direct link, and we
have less of that. So it created a situation of which we needed to increase our
marketing, in order to keep the flight, and we were very willing to do that.
It's a
competitive field when it comes to attracting new flights and there are things
that airports can do, there are things that government can do. We have a
significant amount of flight service and capacity, and we do see where flights
are added here in our province, like the flight to Calgary, or the Fort
Lauderdale flight, direct. There are areas where there are demand and where
airlines see the business case, they'll come and invest.
Sometimes it doesn't matter how much government or an authority will put on the
table, if a company – an airline – does not see a business case, they will not
invest in it because they need to, ultimately, fill up an airline with business
and tourism traffic, as you had mentioned. It's no point in having empty seats.
Airlines make money on baggage fees, on people cancelling tickets or rebooking,
all of these things. There's a business case there.
It was
very exciting to see how EVAS Air, through a charter service, is going to be
doing what you had described from Halifax to Fogo Island, to partner with a
company to do that tour, that package, and provide that service for that
specific market. That'll create an opportunity and provide a link there.
We have
been working with the St. John's Airport Authority and Hospitality Newfoundland
and Labrador and other partners to restore that flight service and we have
committed to making investment and working with them to provide financial
support. Should we be able to secure a new flight, a direct flight to Europe, we
see it as an important economic enabler, and we'll continue to make investments
and seek out opportunities with various airlines and with the airports to add
that capacity.
I
understand where people are; I use that flight service myself quite a lot,
personally. I do a lot of personal travel; I have for a long time, and that
flight was a great link into Europe. Whether people were going to Ireland to
stay there or not, it was a launching pad to get into other areas, and Europe
has a lot of low-cost airlines, which unfortunately we do not in Newfoundland
and Labrador, but we must continue to work on that. We work with Destination
Canada as well to highlight the marketing and the access with the federal
government.
MR. LANE:
Thank you.
CHAIR:
Okay.
Given
the time, I think it would be timely if we called that heading, unless someone
has a burning question that they would like …
Okay,
we'll call this heading.
Shall
headings 3.1.01 to 3.4.01 inclusive carry?
SOME HON. MEMBERS:
Aye.
CHAIR:
Carried.
On
motion, subheads 3.1.01 through 3.4.01 carried.
CLERK:
4.1.01 through 4.3.02 inclusive.
CHAIR:
Shall 4.1.01 through 4.3.02 carry?
Do
these headings carry? Questions?
Yes, go
ahead.
MR. PARROTT:
4.1.01, Salaries, there's an increase of $42,700 for '19-'20. Why did Salaries
go over $15,300 in the revised numbers for '18-'19?
MR. MITCHELMORE:
The increase of $15,300 is
due to a retirement cost payout for one staff member, and the current amount of
$2,216,400 reflects adjustments required to the salary plan.
MR. PARROTT:
Okay.
Under
Benefits, revised numbers for '18-'19 went $25,000 over budget, and now there's
an increase of $10,000 in the overall budget for '19-'20. How did the line item
go over, and how was this year's increase determined?
MR. MITCHELMORE:
$25,000 is additional
memberships in professional travel and tourism associations and organizations in
2018-19, as well as a mandatory occupational health and safety training in first
aid, so that accounted for the $25,000 increase.
This
year, we anticipate that there will be $38,000, which is $10,000 above what
would have been budgeted in last year's budget. That's higher industry session
fees and participation that was determined through zero-based budget. Some shows
attended are held biannually, but the significant cost last year would've
reflected the occupational health and safety training in first aid.
MR. PARROTT:
Okay.
Line
item 4.1.02, does MMDC act as a not-for-profit or is it a government
corporation?
MR. MITCHELMORE:
4.1.02?
MR. PARROTT:
Yeah.
MR. MITCHELMORE:
Marble Mountain is a corporation.
MR. PARROTT:
How many staff did they employ over the last fiscal year?
MR. MITCHELMORE:
Marble Mountain has a number of full-time staff that would be in management;
there would not be a significant amount. There would be a number of seasonal
staff that we would have. The number that has been typically referred to is
there are about 145 seasonal employees at Marble Mountain. I can get a number,
once we look at the financial statements and everything that is done, to look at
the T4s that would have been issued to all of the employees during the fiscal
year.
MR. PARROTT:
We'd like that information, please. How much revenue was generated in the past
season?
MR. MITCHELMORE:
Marble Mountain – we do not have the final audited financial statements, so
there's still revenue that may come in, accounts receivable and expenditures
that may need to be had. Typically, what we had at the date was just over $2
million in revenue.
MR. PARROTT:
What's the current deficit?
MR. MITCHELMORE:
The deficit, I would have to –
MR. PARROTT:
Overall deficit?
MR. MITCHELMORE:
I would have to get a copy of the financial statements to report what the
deficit would be. The Marble Mountain Development Corporation, given that it's
wholly owned by the province, and with the asset of land transfer, the lodge and
all the facilities that are there, the net asset to the province is in the
millions of dollars. It was around $12 million, as an asset surplus.
MR. PARROTT:
Okay.
Does
Marble Mountain avail of government's general liability insurance, or does it
pay for its own liability insurance? If so, how much?
MR. MITCHELMORE:
Carmela?
MS. MURPHY:
(Inaudible.)
MR. PARROTT:
Totally? For skiing and all …?
MS. MURPHY:
Liability and all insurances, yes.
MR. PARROTT:
Okay.
What's
the current status of the RFP that was put forward to Marble Mountain last June?
MR. MITCHELMORE:
The government had made a decision that we want to maximize our benefit at
Marble Mountain, recognizing that it has been faced with some financial
challenges, and the number of ski days due to weather and of reduced revenues
that are taking place. Given that Marble Mountain is a significant asset in the
province to, in particular, the West Coast and businesses that support that
area, we had taken initiatives to transfer inland and look at making a request
for proposals.
I had
reported publicly on multiple occasions that we received interest from three
particular parties. Those matters are being reviewed and when we have something
to report publicly on this particular request for proposals, we will certainly
do so.
MR. PARROTT:
Can we get copies of the applications?
MR. MITCHELMORE:
No.
MR. PARROTT:
The government previously offered a free skiing promotion in '17 at Marble
Mountain. At that time, the MMDC operational manager called it a huge success.
What follow-up was done to ensure that it worked and why didn't you do it this
year?
MR. MITCHELMORE:
Could you repeat that?
MR. PARROTT:
The free skiing that was offered in '17 after the hill was closed down.
MR. MITCHELMORE:
Yeah.
What
had happened this year, there was appreciation and introduction to encourage
people early in the season with some reduced rates to get people interested in
skiing up front and we actually had an increase in day ski passes. I think given
the history, if you look at the number of ski days that have happened in the
past, we've seen where they have been reduced and that may have factored in why
the number of people who have purchased season passes have declined. Certainly,
that is a challenge because when you're operating a ski hill you depend on
revenue up front for operations and having fewer season passes purchased does
put pressure on the overall operation.
MR. PARROTT:
White Hills seems to do pretty good without that.
MR. MITCHELMORE:
White Hills is certainly a different operation and is very important to
Clarenville and area in supporting the business community, in a very similar way
that Marble would on the West Coast of this province. We've supported and worked
with White Hills to provide them with efforts and training on how to make snow
when they have faced some challenges. We supported their fat biking study and
support Eat The Hill every year in annual operation to help extend their season
and create some activity at the hill.
White
Hills has had its challenges as well. I know it was publicly reported the
investment that the Town of Clarenville had to put in to subsidize operations as
well, and provide loans to the entity. It is challenging given the climate
conditions that we have, especially on the Avalon and Eastern area; snow-making
can be very expensive. But we see that those who to go to White Hills would be a
great feeder system, given that area of the province has the greatest population
for White Hills.
That's
not the only ski hill operations that we have, we also have Smokey Mountain –
MR. PARROTT:
Smokey, yeah.
MR. MITCHELMORE:
– in Labrador West, which is
a great ski operation as well. We've supported them through helping assist them
with the purchase of a groomer operation as well, so we work with all entities.
Maybe
there is a way to try and promote the three ski hills. There are things that we
can do together. I believe the corporation had said – the management – they are
willing to work with White Hills or work with Smokey, if there are collaborative
things that can be done from a promotional point of view. We've already shown
where we're willing to share expertise and provide that level of support around
snow-making.
Winter
tourism is a great opportunity for Newfoundland and Labrador but, ultimately,
for the taxpayers of Newfoundland and Labrador with Marble Mountain, we own that
facility. It is a cost, we provide an operational grant, but it is creating a
number of jobs. We do see where more can happen with private sector investment
at the base. I would say the same would be the case for White Hills or others in
terms of wanting to find ways to better attract more people to the facility and
the operations.
MR. PARROTT:
White Hills and Smokey would
both say that they don't get the investment from government that you have just
indicated.
I think
government's stand is that there's been a million dollars since 2002 and about
$600,000 of that has gone to the cross-country ski trails, which have nothing to
do with the Alpine Development Alliance Corporation in Clarenville. They compete
with $706,000 per year as a not-for-profit, when a $50,000 or $100,000 grant
would hugely promote their success.
On top
of that, nobody from St. John's learns to ski in Corner Brook; they learn to do
it in White Hills. If White Hills closes down, so does Marble, I would argue, in
short order. People in this province, certainly from the St. John's area, learn
to ski out there, and then they further their skiing by going to Marble.
I just
would like to see more investment and I don't understand why there isn't, or why
Marble hasn't adopted a similar type of model as White Hills, which, I will add,
has only lost money in two of that 19 years. That is on public record.
MR. MITCHELMORE:
Marble Mountain is owned
wholly by the province and it is a larger scale operation. We have made some
adjustments to reflect the operations of being closed one day a week where White
Hills is operated primarily on the weekends. They don't have the scale of staff
as well. There are a number of volunteers that operate White Hills.
We have
a union at the Marble Mountain site. We've been working with the management and
the team there to find ways of which we can be more innovative, how we can
reduce costs and inefficiencies and encourage more people to look at skiing and
look at other revenue-generating activities. We partnered with Marble Zip Tours
there. There are other revenue-generating activities through special events that
can happen.
It's
not just about skiing at Marble Mountain, it's other investment activities that
can take place throughout the year, whether you would see a new restaurant or
whether you would see other base-development activities take place at that land
and that ability.
But we
are taking a concerted effort at Marble Mountain to reduce the subsidy. It is
our goal to reduce the taxpayer subsidy at the ski hill, but see Marble Mountain
continue to operate but lever private sector investment at that base to see more
opportunity so that it does not rely on taxpayer subsidy as is the case with
White Hills. It may require some sort of operational or working capital loan
through the Town of Clarenville, the Alpine Development Alliance Corporation.
Our
department – the numbers, it was 2006, there's been over a million dollars
provided. We've worked with White Hills; we see them as a valuable entity within
the Province of Newfoundland and Labrador for winter tourism. When they came in
with requests, the department staff have reviewed them, they've done an analysis
and they've worked quite well. We recognize the challenges that they face, too,
because it is certainly not easy to operate ski hills in the province, given the
climate that we have.
The
Labrador West Smokey Mountain certainly would have the greatest amount of snow
and the longest season and the greatest potential for having predictability of
snow and not having to contend, necessarily, with all the high winds and
everything that we have to deal with at Marble Mountain.
I think
if we all worked together, we can find a better solution for all of these
entities. There's always a challenge. We want to promote people to go skiing at
all of these locations that we have and it's in our best interests as taxpayers
of this province to see Marble Mountain do well.
This
issue of the sustainability of Marble Mountain didn't happen overnight. It
certainly precedes my role as minister responsible for Marble Mountain in 2015
and many other governments. It has been an ongoing concern. But we see it as a
greater opportunity and I think, collaboratively, if we look at Marble Mountain
as an opportunity and not as a competitor for White Hills and Smokey, and from a
taxpayer perspective, I think we could see something amazing happen.
What's
good for Marble Mountain is good for the province and is good for the people all
over Newfoundland and Labrador, so I've been doing my best. I don't want to see
Marble Mountain fail; I want to see where there is significant investments; I
want to see where jobs are secure. We've, as a government, been firmly committed
that it is our responsibility for Marble Mountain and we'll continue to operate
Marble Mountain.
CHAIR:
Okay, further questions?
The
Member for St. John's East - Quidi Vidi.
MS. COFFIN:
Lovely, thank you very much.
Just to
start, given the lateness of the hour and the fact that we are nigh on close but
we do have a lot of employees here, in addition to those of us elected Members,
perhaps we can minimize the editorializing and keep the answers a little more
succinct now.
You did
say, in January, that you will not be hiring a new CEO for Marble Mountain after
Melissa Dwyer was
laid off last fall. This has been a cost-saving measure. Can you tell use what
the new Marble Mountain management model is like without a CEO, and did the
White Hills Ski Resort in Clarenville receive any funding from the department,
or in the upcoming year?
MR. MITCHELMORE:
The individual you had mentioned was the general manager and not the CEO of
Marble Mountain.
MS. COFFIN:
Okay. So what does the management model look like without the person?
MR. MITCHELMORE:
We would have a manager for outdoor operations; we would have a manager of
marketing and sales. There would be a manager responsible for finance, and they
would report to the chair and CEO of Marble Mountain.
MS. COFFIN:
Okay, excellent.
Let's
talk about another question or another issue that crosses several departments.
Just as a pretty solid example of this, I was going out over Roaches Line and I
was behind a Subaru Outback packed full of vacationers towing a little fold-out
camper. And they were going down over the road and they were hitting the brakes
pretty constantly; the back of the camper was popping around like crazy, so much
so that I thought that that was going to explode like a Jiffy Pop popcorn on a
campfire. I was very seriously concerned about these people and the integrity of
their vehicle and how well the towing was, so much so that they actually pulled
over. They had out-of-province plates on.
I'm
wondering, now, how Tourism, Culture, Industry and Innovation, in their
promotion of tourism, are working with department of works, services and
transportation to ensure that the roads that are going to get people out to the
more scenic areas, where they're going to get out to places like Cupids, where
they're going to get out to, say, the Newfoundland Distillery, out to the lovely
community of Brigus, all of these great places – how are we coordinating the
efforts of tourism, culture and innovation, where we want more people on our
roads, and the activities of works, services, and transportation in maintaining
those roads?
MR. MITCHELMORE:
Your previous question, as
well, I didn't fully answer the White Hills investment. We have supported White
Hills, and I will provide a list of details. I had mentioned a couple of
projects, like our support for snow-making, training. We've done the fat-biking
study support and partnership there. We've also provided them, given that they
fully repay the principal of their investment, the entity – it was decided that
there would be a write-off of interest that would be provided to them, given
that they were a non-profit and their request was accepted.
We have
worked very collaboratively with White Hills in what we can do to support them
and their growth. As I said, we want to see Marble Mountain be successful, and
we'll continue to work on base development and review the operations and the
RFP. We hope to be successful in that particular matter. But we will be very
firm that we will see Marble Mountain continue to operate in Newfoundland and
Labrador because it is such an important investment and operation for the West
Coast and regional business and the economy of our province. We must continue to
find strategic ways to reduce our overall cost to taxpayers, and that's what
we've been undertaking.
When it
comes to roads and road investment, you know, we've actually taken a very
responsible approach as a government to create a five-year Roads Plan. That's
something that's led by the Department of Transportation and Works. They will
assess roads and tourism inputs from the department would be factored in, so
places that are highly trafficked – I remember, actually, doing
Issues & Answers, talking about the
tourism in Newfoundland and Labrador with Lynn Burry. She had asked me about the
roads and the concern, and she highlighted Elliston.
I had
travelled to Elliston, and that road was in poor condition. It has the Sealers
Memorial; it has the Interpretation Centre; Roots, Rants and Roars – something
that we support – the Puffin Festival; season extension programs. That place was
in a very difficult position and now there is a significant amount of business
and that whole region is very prosperous. The road has been paved, and inputs
from tourism and those factors have helped.
It
cannot be solely based just on traffic counts alone. When we look at some of our
rural and local roads that we have in our province, L'Anse aux Meadows, in
particular, saw road paving because they have 30,000 people going in the season
at the UNESCO World Heritage site. You see the same at Port au Choix, they saw a
60 per cent increase in tourism numbers.
You're
seeing the Trans-Labrador Highway see investments where roads are being repaved
and supported. We have over 10,000 kilometres of road, hundreds of bridges and
culverts that need to be replaced each year and brush clearing. There are lots
of challenges, but we have, through our process of early tendering and getting
competitive pricing through the five-year Roads Plan, provided more
predictability to industry, what they've been asking in business and we've been
able to deliver better value and more road paving in this province because of
that.
I will
certainly agree with you, and I don't mean to be long, but you provided a lot of
context in your detail as well when you asked the question. So places like the
Newfoundland Distillery in Clarke's Beach is one that has won a double gold in
their product and they're actually using all Newfoundland and Labrador
ingredients in making their seaweed gin. That product is coming from the West
Coast. It's coming from Springdale. It's coming from natural seaweed off our
shores. This is where we're getting best value when we're making it 100 per cent
Newfoundland and Labrador local artisanal, and it's selling at a premium.
These
are the types of ways of which, not only Clarke's Beach, but that's how the
Bonavista Peninsula is seeing success. The Newfoundland Salt Company and others,
they're focusing on niche areas where there can be great value.
Quebec
saw that with a food revolution in terms of their culture, and we'll have the
next wave of that here in Newfoundland and Labrador because of efforts that are
being made through the Department of TCII, working with industry, working with
creative people, start-ups and entrepreneurs. I'm quite excited about it
actually.
MS. COFFIN:
Well, perhaps next time we have a conversation with the Minister of
Transportation and Works maybe we can put a greater weight on developing the
tourism industry and the importance of that because that was a conversation that
I did have as well. If that is where we're moving that would fantastic and I
would be delighted to see the roads improved. I'm planning a road trip this
summer myself.
MR. MITCHELMORE:
We are dealing with having synergies with tourism and agriculture, and I do
believe there are farms on Roache's Line and areas, so maybe there could be
partnerships that would take place. I'm not sure of all the tourism attractions
that currently exist on that particular route, but, nevertheless, places like
Brigus and Cupids, we have a provincial historic site; a very important area of
the province to promote tourism and growth and we'll continue.
If you
have suggestions or areas of which you see where investment is needed or there's
concern or poor condition, I would say the onus is on us, as Members who
represent this House, to raise it with the appropriate department and authority
to have the matter reviewed.
MS. COFFIN:
Excellent, I look forward to seeing that improvement.
Thank
you very much.
CHAIR:
Okay, further questions?
MR. PARROTT:
4.1.03, a $400,000 grant represents capital for Marble. What is it currently
being used for?
MR. MITCHELMORE:
Marble Mountain has not received an increase to their capital grant, but this
would be for investment that will be made around the maintenance and around the
hill: the operations, the lifts, the building, all of those particular matters.
That's where capital would be provided. The hill is given that discretion though
a grant and subsidy to make investment.
MR. PARROTT:
So they have full discretion over the money, do they?
MR. MITCHELMORE:
They would have discretion over this grant for capital investment or for their
overall operations.
MR. PARROTT:
Okay.
Under
4.2.01, can you explain the reduction of Salaries by $161,600? Was there a
position eliminated?
MR. MITCHELMORE:
At the Arts and Culture Centres?
MR. PARROTT:
Yes.
MR. MITCHELMORE:
The decrease just reflects adjustments required in the overall salary plan, but
we have maintained the positions within the Arts and Culture Centres in terms of
all the technicians and service and salaries that are required. There was some
mention earlier around the balance of our overall salary plan. In some areas,
there may have been positions that would've been listed that had not been
filled.
MR. PARROTT:
Okay.
Just
from my previous life in business, I was a cash-flow guy so I'd be really
interested to understand how you guys come to the $5,128,000? An identical
number year over year, and you must know what shows you have coming, how many
people you anticipate going to those shows, the revenue to be created. That's a
pretty big number to be estimating as revenue, right, especially when you're
considering six venues.
MR. MITCHELMORE:
We have six venues. We do
have a regular touring schedule. The Arts and Culture Centres have been very
successful in their overall operations and bookings. It's not just concerts, you
see Memorial University hold their convocations and they would pay a fee. There
are various rentals that would happen throughout the year. There are dance
programs that would happen. It is not all professional performances; some would
be through teaching and programs. We see the NLTA hold concert series as well
with students. They do their Christmas special.
There's
a very predictable agenda, typically, but there is a touring program that exists
and we've seen some new offerings with Opera on the Avalon and the Newfoundland
Symphony Orchestra does a significant amount of bookings there, so it is
relatively predictable revenue that happens at our ACCs.
Some
locations, like the Stephenville Theatre Festival is in its 40th year, and
that's certainly something that goes on for a long period of time that benefits
that regional ACC.
We also
have partnerships with the Sheila NaGeira Theatre in Carbonear and as well the
Lawrence O'Brien Arts Centre where we may help with the touring program there as
well. So, sometimes having centres in close vicinity will allow us to attract a
new act or an additional act because it hits a different market.
MR. PARROTT:
Okay.
MR. MITCHELMORE:
Also Revue happens
throughout the year as well.
MR. PARROTT:
Just, I guess, from my
standpoint, when I look at that number, if you project revenue, obviously, it's
based on something and if it's the same year over year, then it looks like
there's no desire for growth.
MR. MITCHELMORE:
Well, these are projections
only. Any of the actuals, in terms of revenue, would be reported in the Public
Accounts.
MR. PARROTT:
Yeah, but, back to that,
your projection from last year was identical to your revenue, so …
MR. MITCHELMORE:
We have taken measures in
terms of when we did our review. We've been reporting and had over $4 million in
revenue at these centres. We've done things like looking at adjusting our rental
fees and ticket prices in the past, and looking at where we generate revenue in
terms of beverage sales and other office spaces. So there is a model that we're
looking at our ACCs and how we can maximize revenue.
MR. PARROTT:
Okay. That's good.
MR. MITCHELMORE:
It is a big target. The more
revenue that we can get from these entities is certainly positive in terms of
our consolidated accounts and how we can make sure that we pay for other
programs. They do have operational costs.
MR. PARROTT:
Okay.
4.2.02
in budget '19-'20: this section seems to be an amalgamation of sections marked
out in the previous Estimates as arts and historic site development. Can you
explain why this section was amalgamated with no clear breakdown of the revised
costs for each of those previous sections?
MR. MITCHELMORE:
There are no changes to the overall amount that would be voted on here in Arts,
Heritage and Historic Development. What had happened is that budgeting would
like consolidation where it certainly makes sense from that point of view.
When we
had looked at our department, we actually have a director who is responsible for
all of these items within the salary line for the arts programming, the heritage
and historic development. So it just made sense to consolidate, in terms of the
three matters that would have been there: Historic sites, arts and heritage
funding.
MR. PARROTT:
Okay.
Outside
of this here, after it's over, can you provide us with a breakdown of the
revised costs from all the sections?
MR. MITCHELMORE:
Yes.
MR. PARROTT:
Thank you.
Can you
explain where the source of provincial revenue is coming from? Is that just
tickets at these – yeah, okay. That's good, carry on.
4.2.03,
Newfoundland and Labrador Arts Council. Can you confirm that the million-dollar
increase in the Grants and Subsidies is the same that was lobbied for by the
arts community in this past spring?
MR. MITCHELMORE:
The million-dollar increase is certainly what was committed to in the budget. We
had met with a number of arts organizations and artists and taken all their
feedback into consideration.
For a
number of years, the Arts Council had not received an increase in funding. Given
that we have 5,000 practitioners and the demand for programming and the value
that they add to the cultural industries – and important that we have a number
of new artists and organizations that are facing some challenges in terms of
constraint for growth – we had decided we would approve an additional $1 million
to support ArtsNL and their organization.
I'm
very pleased and look forward to the budget passing so that they can get
$2,936,600 in funding. That will certainly be a great benefit to the community.
I'm hearing that they have significant interest in applications for the million
dollars in additional support.
MR. PARROTT:
There's a $5-million election promise that wasn't in the official party
platform. You guys are committed to that I assume?
MR. MITCHELMORE:
We are committed to seeing further investment and increase to the arts and we're
committed to living up to our obligations in our election platform.
MR. PARROTT:
Will that money be put solely into the budget for the Arts Council, or will it
be distributed into other parts of the department?
MR. MITCHELMORE:
We just launched a cultural plan and we are working with all of our cultural
practitioners. That includes the Newfoundland and Labrador Arts Council in all
the programming that we have, because we also have over $3 million that's
invested in CEDP.
There
are many conversations that we're having with arts organizations to ensure the
increase in funding projected out in future years budgeting is allocated for the
right levels of programming and support. We will be engaging the Arts Council as
we move forward, but we have to get the current budget passed right now. There's
a budgetary process and consultation that would place as to how we move forward
and get to the $5 million.
MR. PARROTT:
What's the breakdown that the Arts Council invest in the greater metro region of
St. John's versus rural Newfoundland?
MR. MITCHELMORE:
I don't have those specific numbers. I'm sure the Arts Council would be able to
break those out and provide them. We could make a request to them, or you could
make a request to them. Because they are an arm's-length organization of
government, of the department, we provide them with a grant and they disburse
this funding.
MR. PARROTT:
As you give them this money, is there any stipulation that rural Newfoundland –
MR. MITCHELMORE:
We have no input in who they provide. There are adjudicators and peer reviews on
their applications that come forward, and then they make those decisions and the
disbursement of funds. It is not done by the department.
MR. PARROTT:
Okay.
So you
don't know if any of this money goes to rural Newfoundland?
MR. MITCHELMORE:
Some of the money will go to rural Newfoundland. The Arts Council releases
reports where they do their touring program, where they do their professional
artist program. You can sign up for their list and be a member and they will
highlight where their funding is broken down and which individual artist or
organization will get it.
They
have sustaining funding for three years – which is multi-year – for a number of
organizations. That will go to entities like Rising Tide Theatre, the Gros Morne
Theatre Festival and Perchance. There would be PerSIStence Theatre that may get
funding; there are a number of entities and organizations.
MR. PARROTT:
Okay.
MR. MITCHELMORE:
I don't have that list because they really fall outside. We provide them with a
grant and they disburse the funding to the arts community.
MR. PARROTT:
Okay.
CHAIR:
Further questions?
MS. COFFIN:
Yes, please.
CHAIR:
The Member for St. John's
East - Quidi Vidi.
MS. COFFIN:
Thank you.
Much of
this seems to be grants to very respectable agencies. I'm delighted to see the
$1 million in the Arts Council funding and I look forward to seeing that grow
into $5 million over the next few years, based on the platforms we saw presented
during the election.
For
now, can we have an update on the work you are doing on the potential UNESCO
sites, including Heart's Content and Mistaken Point, please?
MR. MITCHELMORE:
Yes.
We are
working very closely with the government, with Valentia in Ireland. We have
actually done our work through the Provincial Historic Sites in Heart's Content.
We made
an investment in 2016 to upgrade our facilities as part of the 150th
anniversary. We got shortlisted on the Canadian UNESCO list standing and it is
up to Valencia now in Ireland to get on their shortlist so that we can jointly
pursue UNESCO status of connectivity from the old world to the new in terms of
how that cable had crossed. It will present another point in history of our link
to telecommunications, but also to Ireland as well, just like we had talked
about Alcock and Brown of 100 years ago. Our director of Heritage and Arts is
closely involved and working with the group.
I went
to Valencia and I met the organization and saw what their facilities and what
the opportunity was. I think it's remarkable in terms of where we can go. This
could be a first, to have a joint UNESCO status between two separate countries,
two separate jurisdictions crossing the Trans-Atlantic. Given that we have four
other UNESCO heritage sites and we are also pursuing on the Bonavista Peninsula
a geopark – which is progressing as well through that status – they are doing
extremely well and hopefully they will achieve their UNESCO geopark in the very
near future, too.
We know
that the visitors that come to Newfoundland and Labrador are very well educated.
They have high disposable income; they are interested in natural history, our
environments and learning. The Heart's Content Cable Station is a great
opportunity for us to continue to tell the story of our place on the world
stage.
MS. COFFIN:
That's excellent.
Thank
you.
Can we
have an update on the restoration work being done on the Colonial Building? Is
there a completion date?
MR. MITCHELMORE:
The Colonial Building we've been working on advancing. The budget envelope has
remained intact. We have advanced four tenders on this matter, including the
non-historical finishes, and that matter is progressing. We did a mock room
which gave a better understanding of what it would cost to bring the remaining
chambers to historical finish, to period. There were some complexities in the
beginning that delayed the property, which certainly started a number of years
ago in terms of containing the ceilings and all matters that had taken place.
But we
are working very closely with our joint committee and Transportation and Works
to see the Colonial Building complete. It's an important public building and one
of our provincial historic sites that we want open as soon as we possibly can to
the public.
MS. COFFIN:
No completion date, though?
MR. MITCHELMORE:
We don't have a completion date.
MS. COFFIN:
Okay.
The
Rooms, how's the corporation been doing on developing new sources of revenue?
MR. MITCHELMORE:
The Rooms has focused on revenue generation in terms of what they've done with
their gift shop in terms of new items that would be added. Some of their
programming that they've offered, they've engaged in a suite of activities such
as their Coffee & Culture nights. They brought in a book club program. They've
had variety of cultural activities throughout summer and programming to look at
generating revenue. But also looking at memberships and how they can get more
memberships sold. Because that's really important; it'll get repeat visitors.
Those who have membership, they do not have to pay the parking fee that is
implemented at The Rooms. Parking is a means of which they generated some
additional revenue.
But
they have been very successful in increasing their own revenues through 74 per
cent increase to Canada Council for the Arts funding; that was a two-year
program of $330,000. They just had their funding renewed for three years with
Chevron Canada for Opening Minds. There is an increase in funding of 3 and 4 per
cent, and 20 per cent that will help go towards their overall overhead at The
Rooms.
They also have a potential where they could get funding to
implement this programming at the regional museums. That's certainly something
that's important. We have the Seamen's Museum down in Grad Bank
and we have the Mary March
Museum that would be in Grand Falls-Windsor and the Labrador Interpretation
Centre in North West River. These are all very important entities that could
offer further programming and continue to tell stories and generate revenues as
well. Touring the Mary March Museum and seeing the venue space that they have,
pop-up galleries, there are avenues of which hosted events and further activity
could take place.
We certainly see where the
corporation has those opportunities, and they have been doing things to generate
award recognitions. Like, in 2018, they won two communication awards under the
Atlantic guild, I believe, for work that they've done with the launch with The
Ennis Sisters, “I Will Sing You Home,” and there was another award for the Where
Once They Stood campaign that they had taken.
The Rooms has also made an
investment in the Military Family Resource Centres throughout the province, in
Gander and in Happy Valley-Goose Bay and St. John's, so there are things that
the corporation does to give back, as well, as part of the success that it has
had and through its corporate-sector fundraising.
MS. COFFIN:
Good. That is very reassuring.
Going back to the Pippy Park
Commission, I notice that there's an extra almost $200,000 in Grants and
Subsidies at Pippy Park Commission. Can you tell me what that money is going
for?
MR. MITCHELMORE:
The Pippy Park Commission, that amount was for the severance that was a payout
as part of the government's overall plan where all the public-sector severance
was paid out, so that had to be accounted for.
MS. COFFIN:
That's pretty impressive that they got $200,000 over and above a grant and
subsidy that was only $260,000, so they must have accrued a fair bit of
liability in their severance pot, hey?
MR. MITCHELMORE:
Well, the commission is set up – they used to have a higher operating
grant, and they're mandated and they're responsible for the land which the
Health Sciences Centre and the university and others areas, the landowners.
There would be various entities that would operate in Pippy Park, like the
Fluvarium and the Rainbow Riders, the Easter Seals. There are a number of
entities that they would be working with. They have the golf course and the
campground. They generate their own revenues; they have their reporting
mechanism in place.
We provide them with a small
operating grant for their overall operations, but they are
encouraged to be nimble, live up to their mandate and continue to do work to
preserve the heritage, the cultural and the environmental integrity around Pippy
Park as an urban park. Confederation Building sits on Pippy Park as well, and
there's an Independent Appointments Commission for the members that sit on Pippy
Park, and the university would have a representative, as well as the City of St.
John's and others. So, Pippy Park is an important entity here in this province,
and we continue to support them through an operating grant.
MS. COFFIN:
This is good.
What
about the Eagle River protected area? What is happening with that?
MR. MITCHELMORE:
The Waterway Park you're
referring to in Labrador?
MS. COFFIN:
It's a protected area in
Eagle River where, I do believe, they're putting a gold mine in, aren't that?
OFFICIAL:
No, that's Eagleridge.
MS. COFFIN:
That's Eagleridge, okay.
No,
this is Eagle River protected area in Labrador.
MR. MITCHELMORE:
The Waterway Park, yes. Our
government has been working on this particular matter of the Eagle River
Waterway Park. We've actually been working with a foundation that believes in
environmental sustainability and stewardship to look at leveraging funding with
the federal government to be able to advance the progress of the park. So we
have made application, and we are seeking funding there. We hope to be
successful in receiving that funding so we can move forward in advancing the
Waterway Park.
MS. COFFIN:
That's excellent. I'm sure
the people of Labrador will appreciate that.
That's
all my questions.
Thank
you.
CHAIR:
Okay.
We are
passed the point where we usually conclude, but are there any further –?
MR. PARROTT:
I just got a couple of
questions on 4.3.02. I'm just wondering the rate bookings on provincial parks
last year compared to this year – up or down, I don't need the exact numbers.
MR. MITCHELMORE:
In terms of –?
MR. PARROTT:
Overall bookings.
MR. MITCHELMORE:
We've released the overall
tourism indicators and bookings at our provincial parks were down –
MR. PARROTT:
Down. Yes, that's good.
MR. MITCHELMORE:
– from last year.
MR. PARROTT:
That's all I need.
MR. MITCHELMORE:
I just want to say, though,
we are taking some initiatives, and we do realize that there are a lot of
private sector campgrounds. We've been helping them grow and expand as well, but
we're trying to take some initiatives at our parks in terms of programming and
different supports. We did start an initiative on low booking days to do a buy
one, get one. So we are trying to be responsive to make sure that we look at
getting booking numbers up. We want to make sure that we are getting –
MR. PARROTT:
So you're forecasting higher numbers this year?
MR. MITCHELMORE:
We did our launch. I don't know if Carmella, who's responsible for parks, would
have any early indications of our bookings for season passes. Typically, we see,
basically, a very stable amount of season passes that are booked from year to
year, because at some parks in the province they're primarily booked by
residents and there are some campgrounds that are more non-resident-based. We
take different strategies at those parks.
MR. PARROTT:
I don't see the revenues. What is the revenue collected in park fees? Do you
have it?
MR. MITCHELMORE:
Park revenue is generally just over $1 million, about $1.2 million.
MR. PARROTT:
Okay.
MR. MITCHELMORE:
It operates at about 30 per cent revenue recovery.
MR. PARROTT:
Okay.
In the
revised numbers for '18-'19, Salaries were identified as going $74,000 over
budget, and a further increase of $104,000 is scheduled for this year. How is
that increase determined? Is it attrition and retirement?
MR. MITCHELMORE:
Our salary increase of $74,200 reflects increased overtime and student costs
last year. This year, the net increase in the budget is funding from the Green
Jobs in Green Spaces Youth Employment Strategy. It is $138,700 fully offset by
federal revenue, which you would see reflected in the federal loan.
MR. PARROTT:
Okay.
MR. MITCHELMORE:
There are some adjustments of $39,500 required for the overall salary plan.
We're doing our best, certainly, in the parks to manage operations in terms of
the salary lines that are there. But these are seasonal in nature and sometimes
there can be some unexpected matters that will come up where we would have to
look at backfilling positions. If somebody would go off on leave, et cetera,
that would put some additional strain on needing overtime, because the parks
have to operate and they have a certain number of staff.
MR. PARROTT:
When they hire students they don't get funding from AESL, that's direct from
your department?
MR. MITCHELMORE:
The students that are hired at the parks are coming from the federal revenue
through the Green Spaces Youth Employment Strategy.
MR. PARROTT:
Okay.
MR. MITCHELMORE:
Any other students that would be hired would come from the salary budget.
MR. PARROTT:
Okay.
Revised
numbers for budget '18-'19 show savings of $53,000 identified in the line item
for Purchased Services. Despite this, an increase of $16,000 is scheduled for
this year. Can you explain that?
MR. MITCHELMORE:
Purchased Services.
MR. PARROTT:
Yeah.
MR. MITCHELMORE:
The decrease of $53,400
reflects lower than anticipated maintenance costs. This year, the increase would
be Hydro costs and equipment rentals as determined through zero-based budgeting.
MR. PARROTT:
Okay.
The
last question: Revenue. Fifty thousand dollars of federal revenue was budgeted
last year for Park Operations; however, under revised numbers none of it is
showing as having been spent. Why is that?
MR. MITCHELMORE:
This was part of the federal
Green Jobs in Green Spaces Youth Employment Strategy. We anticipated we would
get $50,000 in funding in last year's budget. It didn't transpire, but we are
realizing $138,700 from this federal program to hire students in parks. So there
would be students working in parks throughout our network of Provincial Parks
this year.
MR. PARROTT:
Okay, I'm good.
Thank
you.
MR. MITCHELMORE:
That revenue of $138,000, as
I said, would be reflected as well in the Salaries line. It looks that the
Salaries line has increased but it's offset down below. If you took off that
$138,700 you would see what the Salaries line would be for the parks operations
without those summer students.
MR. PARROTT:
Okay, perfect.
Thank
you.
CHAIR:
The hon. the Member for
Mount Pearl - Southlands has a question I believe.
MR. LANE:
Thank you.
I'm
just wondering, Minister, I've asked this in the past I'm sure, but I'll ask it
again because I'm not sure what's been done with it. Signage strategy, is there
one? I know at one point in time, I can remember a good many years back when I
was on Municipalities Newfoundland and Labrador, actually, Avalon director – and
I can remember at the annual convention or whatever the case was, might have
been a symposium – and someone from government was talking about this signage
strategy. It died on the vine or seemingly it did. It was a past administration
that had started it.
I'm
wondering where we are with that because certainly I have noticed – I'm sure you
have as well – that signage in some areas is really not great. If we want to get
tourists into the province and we want to get them to the attractions, we need
to make it easy for them to get there. That doesn't just include a sign on the
Trans-Canada Highway, because once you turn off that road off the highway, and
you may have to go several kilometres, there could be turns left or right,
whatever the case might be. Unless you're from here and you know where you're
going, in a lot of cases you'd never know where you were going. I've even had
cases where I went looking for a place that I hadn't been before, I came to a
fork in the road and it's like, okay, now what? Will I go left, will I go right?
No signage to tell me.
MR. MITCHELMORE:
Right.
MR. LANE:
I'm just wondering what's happening in that regard, if anything?
MR. MITCHELMORE:
The signage is certainly important in the province. Wayfinding is an initiative
we've undertaken. Under our sector development we recognize that we need to
improve the visitor experience at key entry points. Places like Port aux Basques
– I see the member for Burgeo - La Poile is here – we've done a lot around
investment in Marine Atlantic in the waiting area and finding ways to enhance
that experience at the base in and around the downtown of Port aux Basques.
We look
at the same type of investments around St. Barbe with the Labrador ferry
crossing, the Deer Lake Airport; we look at other airports across the province
like Argentia. We talked about the signage strategy that we've initiated in
Placentia.
There
are avenues of which we certainly need to look at signs that are in poor
condition. We've had that conversation with the Department of Transportation and
Works to find a mechanism to remove or get signs replaced that are in poor
condition or that would not be deemed as a commercial sign for the highway that
fits with the overall plan.
Then,
we're always encouraging people to utilize Tourism-Oriented Directional Signage,
TODS. These are the blue signs that people pay an annual fee for. We have seen
where there's been greater uptake in Tourism-Oriented Directional Signage, TODS,
in the province and there's been some new ones that have been going up. We've
been also looking at ways of which our Visitor Information Centres would have
opportunity to enhance service.
Sometimes it's about digital service as well, how we improve cellular service
and have Wi-Fi hotspots so that people who sometimes have challenges and may
veer off in a direction, find a way to appropriately navigate. I've travelled
every road and nook and cranny of this province and there are some challenges,
even with signage. You may need to put a significant amount of signage, given
the way some of our towns are organized and planned, to find a business or
whatnot.
It's
not a simple solution, but we need to continue to work with Hospitality
Newfoundland and Labrador. We've met with them, we've had conversations and
we'll continue to work with them because it was in my mandate to create a
signage policy that is consumer friendly. We need to make sure we're doing that.
It's certainly something that we must continue to ensure that navigation,
wayfinding – we did it in Red Bay for the UNESCO World Heritage site. Glovertown
is a great example of where we worked with the town to enhance the signage
strategy as well. And I think it's been really successful because towns like
Glovertown, in many cases, would've been bypassed and having a good signage that
says all of these amenities are just a minute away is a means to pull people
out.
The
more we can strategically look at making investments in community using our
Comprehensive Economic Development plan, the more we can have that success. But
sometimes we need to be working with the stakeholders on the ground and
identifying it and coming to the department and we'll certainly work with how we
can make those improvements. It won't be a radical shift overnight where we can
just see hundreds and hundreds of signs go up. But we have seen improvement in
areas where signs have been fixed, signs are being improved, more TODS are going
up and we will encourage people to keep using TODS.
If you
have further ideas, Paul, feel free to reach out. I'm open to ideas and
suggestions and working with TW to see how we can better improve signage here in
this province, because it will help increase visitor spending, it will help
improve the experience and it will help business grow, so it's important.
Thank
you for raising it.
MR. LANE:
Thank you, Minister. I
appreciate that, and I think it is important.
Minister, another issue – and again, I may have asked you this in the past. I
know I've raised it in debate in the past, for sure. One of the other things
I've noticed on my travels and I'm sure you would have noticed as well because
you are right, you've been all of the province because I followed your
adventures on Facebook and so on and your pictures and so on. So I know you're
all over the place, which is great, actually, for the Minister of Tourism.
But,
Minister, I've noticed on some places I've gone to where there may be a sign –
I'll just give a random example. There's a sign and it says – I'm not going to
say it's a historic site, but some spot of potential interest for tourists, some
kind of a lookout or something like that, or whatever the case might be. So you
drive down this road, and it could be 10 kilometres or whatever the case might
be. When you get down to that particular location, whatever was once there at
some point in time, perhaps it was done as part of some sort of make-work
project in the past or whatever, maybe it was done by a municipality or
something in the past that just didn't have any money to maintain it in upkeep.
But the
bottom line is you drive down and whatever was there is all falling apart; there
was a playground – one place comes to mind, it was in the Twillingate area
somewhere, we drove down, there's supposed to be this nice lookout, and you went
down there and there was a little playground there, and it was a beautiful area,
but there was a little gazebo that was all falling apart; the playground was
actually tipped on over onto its side – the swings were – and so on. I'm saying
to myself, well, if I'm a tourist and I'm seeing this, I'm taking my time to
drive down here, and I get down here and it's just an eyesore and a mess, that's
not really good for our tourism.
Has
there been any effort to seek out those locations and either make the decision
where you have the money to upgrade them and maintain them and put them on the
list so they will be maintained; or to simply say, we're just going to take that
sign down and we're going to get rid of all that mess, if someone drives down
there, fine, but we're not going to advertise something that doesn't really
exist and give someone a bad experience?
MR. MITCHELMORE:
Some of the matters which
you raise may not be provincial in nature, which we would be responsible for.
What I will say is the department working with the tourism industry has put
standards in place to our Tourism Assurance program and there are minimum
standards that are required in order to be promoted on newfoundlandlabrador.com
or in our tourism guide. So if you are a walking trail, there would be
requirements to meet minimum standards. There is liability insurance, things
like that that would be required for promotion.
Sites
that do not meet those minimum requirements are not attractions that we would be
promoting in our guide because we have compliance through
newfoundlandlabrador.com and through our Visitor Services division.
If
something can be brought to our attention, we would work with the owner. If this
was something that was built with the municipality and it's recreation, maybe
there would be some engagement between the Department of Children, Seniors and
Social Development, that would be responsible for recreation; or if it's a
municipal project, it may be Municipal Affairs that would look for funding in
that particular matter or a partnership. AESL will provide job-creation
partnerships or Municipal Affairs. Some of these things may have been done
through community enhancement employment partnerships.
When we
fund trails, for example, we do destination trails and we do have criteria put
in place to ensure that the product, at the end of the day, is one that meets
the standard that the tourist and the visitor will continue to have a quality
experience. If there are gaps, if there are areas, some specific examples, we
can look in and see what we can do from a point of view. Because all of us
collectively, it's our interest to raise the profile of the tourism industry,
the quality experience.
This is
why we entered into the Tourism Product Development Plan. We launched that in
2017. I highlighted it in the speech that we had 900 engagements with community
operators, municipalities and others that are genuinely interested. We're having
a lot of success with going around the province through Carol-Ann Gilliard and
John Angelopoulus, who are leading this approach around implementation of our
Tourism Product Development Plan and working with the sectors and in regions to
see greater success.
This is
why we announced the signage policy with the City of St. John's. We're doing a
partnership, as well, with Portugal Cove-St. Philip's and Bell Island to look at
the potential for tourism on Bell Island, and also that reciprocal amount for
Portugal Cove-St. Philip's and also St. John's. So getting people to navigate
around areas, because we may live in a region, but it's not always as easy and
as simple. It goes back to your sign point; it goes back to making sure that
we're all understanding what the visitor expects and what the local may expect,
because the local may be a tourist if they're just a little bit removed from
where they live.
I'm
happy to, maybe, have further conversation, if you want to get into more details
on any specific example on this, Paul.
MR. LANE:
No. I appreciate that, Minister. I guess the overall point I'm trying to make is
that if we're going to be funding, particularly, some of these smaller projects
– and I know we try to spread it around a bit and so on – it has to be
sustainable. To simply say we're going to give you some money to do this as an
idea to employ a few people to put up this little thing, advertise it and then
everyone walks away and it all falls apart in a few years because there's no
money to maintain it, then that's not a good expenditure of money.
MR. MITCHELMORE:
This is why we have an anchor attraction fund as well and we've been focusing
on, because there have been properties that have fallen into disarray like the
Barbour village, for example. The Alphaeus house that they had was vastly
deteriorated there, and we made a significant investment in the Cape Freels
historic development organization there to see that property restored with the
Heritage Foundation and ACOA and that organization – I know the Member for Fogo
Island - Cape Freels is here.
These
are opportunities of which we need to work with community. They identified that
by getting this building restored, they could also unlock other
revenue-generation activities, whether it's opening up a fudgery or whether it's
creating accommodations in the site.
The
long-term sustainability of heritage and organizations is an important piece and
we'll continue to work with groups to try to find longer term sustainability
because it is a big challenge for everybody. There are great opportunities, too,
and I think some organizations have found that opportunity. They've pulled those
levers and they're having success. If we can replicate that, we'll see
communities do a lot better.
CHAIR:
Okay, I'm going to call the headings that we just discussed.
Shall
the headings 4.1.01 to 4.3.02 inclusive carry?
SOME HON. MEMBERS:
Aye.
On
motion, subheads 4.1.01 through 4.3.02 carried.
CLERK:
The totals.
CHAIR:
Do the totals carry?
SOME HON. MEMBERS:
Aye.
On
motion, Department of Tourism, Culture, Industry and Innovation, total heads,
carried.
CHAIR:
Shall I report the Estimates of the Department of Tourism, Culture, Industry and
Innovation carried without amendment?
SOME HON. MEMBERS:
Aye.
CHAIR:
Carried.
On
motion, Estimates of the Department of Tourism, Culture, Industry and Innovation
carried without amendment.
CHAIR:
We need a motion to adjourn.
MR. MITCHELMORE:
I would just say that the departmental controller has copies of binders here
that will be handed out to the three Members that had asked questions following
the adjournment.
CHAIR:
Okay.
I just
want to thank all the officials and the Members for being here tonight and being
so co-operative.
We need
a motion to adjourn.
CHAIR:
So moved, the Member for Burgeo - La Poile.
Is that
carried?
SOME HON. MEMBERS:
Aye.
CHAIR:
Yes?
Carried.
On
motion, the Committee adjourned.