The Committee met at 7:00 p.m. in the House of Assembly.

MR. CHAIRMAN (Penney): Order, please!

Ladies and gentlemen, welcome to the first meeting of the Resource Estimates Committee for 1994. Tonight we will be reviewing the estimates of the Department of Industry, Trade and Technology.

I would first introduce to you the members of the committee. My name is Melvin Penney. I am the Member for Lewisporte, and I will be chairing the meetings this year. On my left is Mr. Rick Woodford, the Member for Humber Valley, who will be the vice-chair. We have with us as well, sitting as regular members of the committee, Mr. Beaton Tulk, the Member for Fogo; Mr. Paul Shelley, the Member for Baie Verte - White Bay; and Mr. Ed Byrne, the Member for Kilbride.

Filling in tonight we have Mr. Lloyd Matthews, the Member for St. John's North, who is filling in for the Member for St. George's, and Mr. Gerald Smith, the Member for Port au Port, who is filling in tonight for the Member for Harbour Main. As well we have, sitting in with the committee members, Mr. Alvin Hewlett, the Member for Green Bay. Welcome, Mr. Hewlett.

I welcome the minister and his officials, and the members of the committee, to this meeting tonight. I will explain, for the benefit of those of you who have not attended an estimates meeting before, this basically is an extension of the House of Assembly except that it's a much more relaxed atmosphere. There is no dress code that we experience in the House of Assembly. Members, or dignitaries, or the minister or officials can remove his or her jacket.

Of course, as we're used to in the House of Assembly, members are referred to only by the district that they represent. That does not apply here tonight as well. We will refer to members by their name. We'll be in a position later on, if anybody wishes, to ask the Page to bring a coffee into the House; you'll be able to request that as well.

The procedure that we'll be following is similar to what we've done in previous years. We will allow the minister of the department twenty minutes to give an opening statement. At the end of that time the vice-chair, who sits to my left, will be given twenty minutes to reply. If he wishes, he can pass that task to one of the other members that he designates to so do.

Once we have finished that forty minute period, then we will go into a question and answer period for ten minutes per member, and it will be done very similar to the manner in which we do it at Question Period. Rather than allow the member ten minutes to ask a lengthy question that consists of twenty or thirty smaller questions, we will make the questions short and to the point, and request that the minister would give his answers accordingly. I would remind the minister that he can, at any time, ask his officials to answer for him, but if he does that their answers must be concerned with fact and not policy.

I would request that if any of the minister's officials were to speak here tonight, remember that this is being recorded by Hansard, and Hansard is not quite as familiar with your voices as it would be with ours, so would you please first identify yourself and, secondly, lean into the microphone on the desk. We're used to speaking from a standing position, so tonight you're going to be speaking from a sitting position, so we ask you to lean into the microphones.

One other individual that I overlooked when I was introducing the people here tonight is our table officer, Elizabeth Murphy.

That about says everything that needs to be said prior to getting this thing officially started. I will now ask the minister, the hon. Chuck Furey, if he would introduce his officials. Once he has introduced his officials he can begin his twenty minute statement.

Mr. Minister.

MR. FUREY: Thank you very much, Mr. Chairman.

I would like to thank the committee for arranging to have Industry, Trade and Technology as the first department before you. I know the arrangements were made to allow me to leave the country late next week. I thank you also, Mr. Chairman and Mr. Vice-Chairman, for allowing me to appear tomorrow in my capacity as Acting Minister of Tourism and Culture.

Mr. Chairman, I don't have an opening statement, I think I'll forego the opening statement. I'll introduce my officials and we'll get right to the questions, if anybody has any questions. On my right is Peter Kennedy, the Deputy Minister of Industry, Trade and Technology. I see them smiling in the background. They're delighted with that. Phil Wall is on his right, he's the new President of Enterprise Newfoundland and Labrador. On my left is Cathy Duke who's the Executive Director of the Economic Recovery Commission; behind her, Dorothy French who's the Chief Executive Officer of ERC; behind me is David Butler who is the Financial Officer for Industry, Trade and Technology; Randy Snelgrove who's come along to keep him out of trouble and Patrick Kennedy who's the Financial Officer for Enterprise Newfoundland and Labrador. I thank the officials for coming tonight on such a short notice. I didn't expect such a crew. I thought it would just be the deputy and one or two others. So we're here to answer any questions. It's an $80 million budget with related revenues of $40 million.

MR. CHAIRMAN: Thank you, Mr. Minister. That's the ministers twenty minute opening statement. I will now allow Mr. Woodford twenty minutes, unless he were to designate somebody instead.

MR. WOODFORD: My first comment, Mr. Chairman, is what nine-and-a-half years can do for you, a little over nine years.

First of all I'd like to ask a few questions to the minister and/or his officials, whichever, I'm sure he can answer them himself. First of all about the Rural Development Councils, I know earlier this year the minister made a statement in the House or maybe it was in response to a speech. I think it was in response to some questions asked by certain members and maybe myself pertaining to the Rural Development Councils in the Province. I understand now there's an extension to the agreement for this year. When will that end? Will that end as of next March or will it end before the end of this year, this calendar year?

MR. FUREY: Do you want me to make some notes or shall I answer?

MR. WOODFORD: Yes, go ahead.

MR. FUREY: Okay. The extension was put in place to carry us for a six month period and essentially what we did was collapse down the project funding into administrative funding. That was enough to cover off, I think $18,000 per Rural Development Association which is half of their operating grant. We made provision under the new SRDA which is the Strategic Rural Diversification Agreement which is a $38.7 million agreement which sits there to give effect and life to the actions as set out in the Strategic Economic Plan. We made provision to take out the balance of the required six months should it be required because what we were trying to do was give time for the federal-provincial task force to get up and running, to set out its terms of reference and to consult widely across the Province using the Rural Development Council, the Federation of Municipalities, the Community Futures people, the federal-provincial people at ACOA and Enterprise Newfoundland and Labrador DRC. So there is provision within the five year agreement which would have expired March 31 this year. What we did was, we froze the project funding, rolled it forward for six months and we left provision under the SRDA to carry it for a further six if that's required.

MR. WOODFORD: If it's required. What would be the status of that particular committee now or task force? Is it set up?

MR. FUREY: Yes, it's set up. Dr. Doug House will chair from the Provinces side, Gordon Slade who is the senior federal bureaucrat in the Province will co-chair from the federal side. As far as I know, and correct me if I'm wrong, CEIC will have somebody on that federally. Industry, Trade and Technology -

MS. DUKE: Actually I think the federal membership is as the minister said; Gordon Slade, Max Street from ACOA as well and Rick Fifield from Human Resource Development, yes.

MR. FUREY: Okay, so it's that industry. On the provincial side, as far as I know, it's Dr. House, Richard Fuchs from ENL and Sam Kane from ERC. Now also the Federation of Municipalities is putting forward a name to sit on this task force and I believe the rural development council has already put forward two names that we've accepted. It was my intention to appoint a provincial politician, I wanted to appoint the Member for Port au Port who brings a great wealth of experience in that field and to seek from the federal people a federal politician but the feds were not agreeable to that. I did not want to politicize it in the big `P' sense but to bring some small `p' grassroots politics into the system, but that was not acceptable to them and we did not want to delay the work of the task force.

AN HON. MEMBER: (Inaudible)

MR. FUREY: They offered two names, Woodrow Mullett who was the former president, the just currently retired president, and - I can get you the name. It's no problem.

MR. WOODFORD: What about the Federation of Municipalities? Did they put forward a name yet?

MR. FUREY: I do not think they have as yet. I would be most happy to table the full task force tomorrow.

MR. WOODFORD: But the Federation of Municipalities are represented on the task force?

MR. FUREY: Absolutely, because there has been a lot of co-operation amongst both orders, and Community Futures as well.

MR. WOODFORD: Well, that is CEIC really. They did not determine it but that is who it operates under anyway.

Ms. DUKE: Certainly the funding is through (Inaudible)

MR. FUREY: I say CEIC but they call it HRD now, don't they?

MR. WOODFORD: Yes.

What would be the terms of reference with that particular task force?

MR. FUREY: Well, they are going to put together the specific terms of reference very soon, but the broadbrushed approach we have given them is to look at the plethora of agencies that have grown up around the Province over the last number of years. Now, my own personal preference would be to look at every single federal/ provincial agency. Some would argue there are over 180 of these that have an administrative budget of $50 to $70 million, depending upon who you talk to.

What we are going to do is do it in steps. Step one for this task force is to look at rural development associations, and community futures groups from the federal/provincial side and see how we can form them into seventeen economic zones in line with the Strategic Economic Plan. We kept it very general for them to set their own terms of reference, but the idea is to collapse down into the seventeen zones for efficiency, better management, accountability, and that kind of thing.

MR. WOODFORD: So, the bottom line with regards to rural development councils in the Province is they have enough funding to carry them through for the next six months, and if the task force report has not reported by then, then there is room there and there will be an accommodation made to sustain them for the following six months. They are good for the next year, really.

MR. FUREY: Correct.

MR. WOODFORD: With regards to ENL. I do not mean to jump around to almost the complete opposite, but how did this year fare with last year with regards to loans and small businesses?

MR. LUSH: In what sense? In how many loans did we put out?

MR. WOODFORD: Yes, to put it simply, how many loans did you put out this year through ENL?

MR. FUREY: This past fiscal year?

MR. WOODFORD: The past fiscal year.

MR. PATRICK KENNEDY: This past fiscal year there were 288 loans for a total of $18.2 million.

MR. FUREY: Is that actual or committed?

MR. PATRICK KENNEDY: That is committed.

MR. WOODFORD: I understand ENL operates through term, conventional, or small business. Am I right?

MR. PATRICK KENNEDY: That is correct, yes.

MR. WOODFORD: What would be the breakdown of those particular loans?

MR. PATRICK KENNEDY: In small enterprise loans, a loan defined as $100,000 or less, there was $2.5 million. In conventional loans which would be anything from $100,000 to $1 million in total, there was $9.9 million, and in direct equity investments in companies there was $2.6 million. We had $362,000 in venture capital financing. In interim funding, or bridge financing in terms of ACOA grants, or just money that would be done in short-term was $1.9 million. In the special sawmill assistance program which was a carry-over from the former RAND there was $348,000. In our company development and our young entrepreneur program there was $134,000 and we have one loan guarantee of $600,000, that's the breakdown.

MR. FUREY: I will tell hon. members too that the board, the President and the Board of ENL just took a decision to put an uniform rate of interest rate in place, right across the Province, you know, in each region depending upon the so-called RACs, the Regional Authorization Committees, it is a levelled interest now, it is prime plus 2 for everybody as of April 1st. That's a floating rate but once you -

MR. WOODFORD: Including your small business loan?

MR. FUREY: The whole works, yes.

MR. WOODFORD: The whole works, and your conventional?

MR. FUREY: Every loan is prime plus 2, from now on. We were finding different levels in different regions and there was an unfairness basis we built in the system because some were, in some regions given the low rates, others weren't, so we had to equalize -

MR. WOODFORD: I know the West Coast is fairly high with regards to a conventional loan and -

MR. FUREY: Low interest loans there too.

MR. WOODFORD: Yes. Well that's the other thing I want to mention because when you say that there is a uniform rate -

MR. FUREY: As of April 1st.

MR. WOODFORD: - as of April 1st of two percentage points above prime, the small business loan always operated at three percentage points below prime, but then again, prime as of a month ago was fairly low in any case so you can almost get a loan for nothing, and I can understand why you would put a small increase on a small business loan because as I said, what is prime there of one point is a little above 5 per cent.

MR. FUREY: You have some great success stories in your region with ENL loans.

MR. WOODFORD: Yes, we have and -

MR. FUREY: A few losers too but mostly successful.

MR. WOODFORD: Well you have them -

MR. FUREY: A few properties reverting to the Crown.

MR. WOODFORD: Yes. There are a few more to come by the way, but in any case as I recall, because it is an area where, I think a lot of attention should be paid, especially now with the economic times we live in and in relation to that, I would like to mention that sawmill assistance program; that was one of the best programs that I had, as I had six months with RAND in administering that particular portfolio and it was one of the best things that I have seen. I know in my area, I can't speak for other areas of the Province but I can certainly speak for my area regarding that because I mean, you have people working all winter providing saw logs to operators, and then they can saw it and sell it in the summer time and pay it back in the fall of the year.

MR. FUREY: That's a great program.

MR. WOODFORD: It's an excellent program in my understanding, and by the way, what is the record of that particular program with regard to pay back, is there much default?

MR. PATRICK KENNEDY: The way the program works is that once a loan is given to a particular individual or company, if they don't repay it they don't qualify for the following year. That is the general rule so the success of the program is basically predicated on the basis that the company which receives the money must repay otherwise they don't qualify for the following year. This year we had twenty companies or twenty individuals coming forward looking for the funding under that program on a Province-wide basis.

MR. WOODFORD: What about the record for last year?

MR. PATRICK KENNEDY: There was $348,000 this past year; last year was around $440 so any company that did not repay or did not fully meet its obligation in terms of recouping the money because, primarily it is for working capital, they don't qualify the following year.

MR. WOODFORD: Yes, but I would say you are going to see a bigger increase than that this year because of the situation with paper mills and so on, and then you have extra access roads and operators will be able to take advantage of more of the sawmill business than they would have previous to this year. What would be the overall repayment record of all Enterprise Newfoundland and Labrador loans, term (inaudible)?

MR. PATRICK KENNEDY: For 1993-1994, the total pay back to government was $9.98 million in total, principle and interest. The total outset in portfolio was in the order of $105 million.

MR. FUREY: I can tell though, in fairness, Pat, didn't we just write off $8.7 million?

MR. PATRICK KENNEDY: $9.6 million, Mr. Minister.

MR. FUREY: $9.6 million and if my memory serves me correctly, 97 per cent of that came from NLDC and RAND?

MR. PATRICK KENNEDY: That's correct, Minister, yes.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Well, that's the question I was getting to.

MR. FUREY: RDAs, wasn't it, rural development loans.

MR. WOODFORD: Rural development, yes.

MR. FUREY: Yes, these were back in the seventies, early eighties, mid-eighties, up to eighty-five, was it?

MR. PATRICK KENNEDY: Yes, eighty-five, eighty-six; that's correct.

MR. WOODFORD: What would it be since eighty-five?

MR. FUREY: Well, they're still out there as doubtful accounts, but we haven't written them off yet, but it's substantial.

AN HON. MEMBER: At March 31, 1993, the allowance for (inaudible) was $37.1 million.

MR. FUREY: On the total picture -

AN HON. MEMBER: On the total portfolio.

MR. FUREY: - of NLDC, the rural development loans, and the new ENL?

AN HON. MEMBER: Yes.

MR. FUREY: About thirty what?

MR. KENNEDY: $37.1 million, or about 44 per cent of the total portfolio.

MR. FUREY: Okay, now break that out and NLDC, the old world development loans and ENL.

MR. PATRICK KENNEDY: Okay, the ENL loans would have represented about $11 million of that figure, of the $37.1 million. NLDC was about $19 million, and the balance was RDA, rural development authority.

MR. FUREY: Allowance for doubtful accounts.

MR. PATRICK KENNEDY: Allowance for doubtful accounts. That's potential for write-off, yes.

MR. WOODFORD: But even that -

MR. FUREY: That's not bad in high risk loans.

MR. WOODFORD: No, well that's what I'm saying - high risk loans, because the banks today, it was bad enough before, but today they have absolutely no social conscience whatsoever - none. Whatever chance a small business person has, and if the viability is there and if the proper projections are made and the proper estimates are made, and the work is done on the application, because a lot of people have a good idea in their head, and they can really carry it out, but they just can't put it down on paper, and I think that they do get some help. I know with the office on the West Coast they do get some help with their applications as well, so that's a good thing. So you can't really look at the percentage of default. It depends then on the breakdown of everybody is treated alike, not chalk made of one and cheese of the other.

I think my twenty minutes is up. I don't want to hog the time, or take anybody else's time, so pass it along to someone else, Mr. Chairman.

MR. CHAIRMAN: Thank you, Mr. Woodford.

Mr. Matthews, do you wish to take your spot now?

MR. L. MATTHEWS: In the department, Industry, Trade and Technology, I guess whatever focus and emphasis the department has with respect to small business and small business sector is done through Enterprise Newfoundland and Labrador. Is that a fair statement?

MR. FUREY: Yes, most of the business help for small and medium-sized businesses is channelled through Enterprise Newfoundland and Labrador, although there are some programs that continue to sit in the department. One is called MAPD, which is market and product development, and that's not restricted to any size of business; it's to help any business get out and market and produce results out on the world market for their products, or to do market intelligence and research.

The other one is the SIID agreement, of course, the $42 million agreement, which is to help industries of all size get out there and export their services and that kind of thing.

MR. L. MATTHEWS: I don't see, looking through the department's estimates, under the headings, that sort of thing, any emphasis on the small business sector other than through ENL. I guess that's where any help you have, any emphasis you put on small businesses, goes through that agency.

In looking at the overall budget of the department, perhaps you could comment for me, because I am new to looking at the estimates of this department, the projected budget last year was $56 million and change. It was revised down to $44 million and change, and this year it comes in at about $45 million, which is almost dead on with the revised figures for last year.

MR. FUREY: What page are you looking at there?

MR. L. MATTHEWS: Well, that's the last page, page 149, the total. There were some major adjustments from the budget to the revised figures, and I've identified some areas where these adjustments took place, but could you comment on what happened there?

MR. FUREY: Most of the drop is in Bull Arm - costs have fallen off the table. They're one-time shot costs where the province as you know put up roughly 30 per cent. I can get you the exact. Do you want the exact?

MR. L. MATTHEWS: I was just saying that last year the Budget called for $56 million. That is what was voted, I guess, in the estimates and it came in at $44 million. This year you are in at $45 million, so you are saying that the changes and the drop mainly in the total global departmental budget relates to changes in the situation at Bull Arm?

MR. PETER KENNEDY: Most of the explanation for that particular observation is found on Page 141, the last set of numbers on that page, which is the Province's contribution to the Hibernia GBS site. This is a contribution made from the offshore development fund which is cost shared 75/25 by the federal and provincial governments. The cash flow on the project, because the cost of that particular set of facilities is higher than originally budgeted, our cash flow effectively slowed down on the thing and we did not have a legal requirement under the agreements to flow that particular money, which would, naturally then, just flow into the new fiscal year. That is an $18 million difference and I think that accounts for a large part of it.

MR. L. MATTHEWS: Where is that?

MR. FUREY: On Page 141, Subhead 2.2.03, Section 10, grants and subsidies. See the $18 million on the right column. That was budgeted last year. It was not taken off, it fell off.

MR. L. MATTHEWS: Okay.

The Province is no longer involved, I guess, in Vinland Industries?

MR. FUREY: We are involved in Vinland Industries. Vinland Industries was a joint venture between Kvaerner Rosenberg and the Province through Marystown Shipyard. It remains an active company but the Kvaerner half of the company have withdrawn so it is 100 per cent owned by the Province now. We had to maintain the company for pre-qualification reasons so that we could continue to bid. Kvaerner is providing limited services now.

MR. L. MATTHEWS: There is nothing in this year's estimates relating to the training program so I guess there is no activity ongoing there?

MR. FUREY: Just what you see there, a small amount of capital dollars to finish that facility. That's all. Which I am happy to tell you is up and running. I think we have about $153 million worth of work on the books there now, on both facilities.

MR. L. MATTHEWS: Thank you, Mr. Chairman. I have no further questions.

MR. CHAIRMAN: Thank you, Mr. Matthews.

Mr. Byrne.

MR. E. BYRNE: Mr. Minister, I will try to be as brief as you did in your opening statement.

MR. FUREY: Well, in that case, in conclusion -

MR. E. BYRNE: In conclusion I would like to say thank you now.

I have some questions, I guess, certainly dealing with the Economic Recovery Commission. I am not sure if it's your department or not that answers for policies developed by the commission or if your department just handles the financial administration.

MR. FUREY: We handle the financial administration for purposes of the Budget. It sits in our department to flow the cash and to account for it.

MR. E. BYRNE: Would questions then be more appropriately asked of the Minister of Employment and Labour?

MR. FUREY: No. Under the Economic Recovery Commission Act it reports directly to the Premier, unless you ask questions of the Executive Council in the House of Assembly to the Premier or the President of Treasury Board. I do not mind answering. I will attempt to answer and we have support staff here. Please, feel free, ask anything you would like to ask.

MR. E. BYRNE: Grants and subsidies $2,191,300, what are the heads or subheads of where that money is allocated, and what is it allocated for?

MR. FUREY: That is $2.1 million?

MR. E. BYRNE: Yes.

MR. FUREY: It is not listed in there spelled out, but I would be happy to spell it out for you. Salaries and benefits are $1,060,000, personnel costs carried with that are $9000, travel is $87,000. I notice you guys are way down from years ago. Premises for renting $157,000. Miscellaneous; I imagine that is your phone bills, faxes, and administrative, $162,000. The total operating of personnel would be $1.5 million and I'm rounding that off for you. There's a section called economic initiatives; $500,000, professional services; $35,000. Economic initiatives can be everything from the new school program that you've launched, on entrepreneurship, the ambassadors program, there's a whole range of them. I'd be happy to go through them for you. So the total budget would be $2,011,300 directly to the Economic Recovery Commission and under the Strategic Economic Plan there is $180,000 added for the educational strategy and a number of other projects that you have ongoing which brings you up to the $2.19 million.

MR. E. BYRNE: What are some of the economic initiatives being worked upon, developed -

MR. FUREY: The Conservation Corp for example was one of the initiatives that came out of there.

MR. E. BYRNE: For initiatives that are presently being worked on. Would that necessarily be in the public mind for a variety of reasons but could be discussed here?

MR. FUREY: Sure. Yes, some of these are not made public yet because they're still under consideration.

One of the issues is privatization. That's an interesting subject these days but the Economic Recovery Commission is helping us with a planned approach to privatization of certain areas. I know that they were very involved for example in Farm Products, helping to look at how we can regenerate that into a new industry should we move on what has to be done down there in that old premises in the old building.

They've just developed a strategy on job creation that they're just getting ready to present to government. They've been working for some time on a recreational fisheries paper, discussion paper, which has some interesting things in there on how to maximize benefits from the outside. They've come forward with a small business policy, they're looking at a labour sponsored venture capital program, they're looking at the whole concept of community bonds for the government, labour employer advisory council, the income supplementation, community relations, innovations in rural planning and development was there, they're looking at - in fact the task force that we've just appointed them to is perhaps the biggest project that they'll do this year. The apprenticeship program is another one they're looking at. They've just developed a booklet for all of the schools to be going around the Province called, At The Crossroads to raise awareness about the new economy. They've started a school visits program where they've hired university students to go into the classrooms across the Province to let young people in the schools know that profit's not a dirty word, business is okay and entrepreneurship is a good thing and a noble thing to strive for.

They're doing some work on the health industry sector which is a major growth sector. They did their strategy on the eleven new growth sectors that were released, including Adventure Tourism in a whole other area. They organized the international peat conference in Corner Brook this past year. It looks like there's going to be some interesting projects fall out of that with Genesis Organic, the Stanton Group and a number of others that are looking to invest both here at home and to export the product. I know Genesis has a container load in Saudi Arabia now?

AN HON. MEMBER: Yes.

MR. FUREY: They're looking at the information industries, they helped with the privatization of NLCS, which we started. They have a business prospects initiative that they're working in concert with our department. We've launched a ministerial prospecting initiative where we're targeting companies around the world using the marine environment as our launching point and all of the centres of excellence that we have here to sell and draw on new activities. In fact in our department, Peter, we've isolated down roughly about 100 companies that we're going to target now?

MR. KENNEDY: 125.

MR. FUREY: One hundred and twenty-five companies worldwide that we think would have an interest in investing here and we're going to use the local business community, the department, the Premier and myself to try to lure some of them in here. Some work was done on that in Boston in the last number of weeks. I was there and visited four particular companies and there's some interesting prospects. The conservation corp I mentioned and there is a range of others; I would be happy to put them all together for you and send them to you.

MR. E. BYRNE: I certainly wouldn't mind.

MR. FUREY: We will do that.

MR. E. BYRNE: With regard to the Income Supplementation Program, that initiative I understand cost somewhere in the vicinity of $600,000 to $700,000. If I am off base, please correct me or -

AN HON. MEMBER: $600,000

MR. E. BYRNE: Pardon me?

MR. FUREY: No, you are not off.

MS. DUKE: $600,000.

MR. E. BYRNE: $600,000? Again, I am not sure if this is the appropriate place to ask or the right committee but I will ask it. What is the status of that initiative launched by ERC, in terms of the federal/provincial discussion that is taking place not only about social programs, but the Income Supplementation Program as it specifically deals with this Province?

MR. FUREY: I am not sure that I am the right one to answer that question to be fair to you. It may be better addressed by the Minister of Employment and Labour Relations because once the document was borne, it was passed to that department to carry, but I do know from my informal discussions with Dr. House, that he is still involved on the policy side, and has had a number of meetings in Ottawa with the Human Resources Development assistant deputy minister, to iron out some of the questions that Ottawa had with respect to the intent of the document; and also to trade intelligence and ideas on how it can be improved, so I know that he reported back to the Minister of Employment and Labour Relations.

MR. E. BYRNE: I will leave that for the Minister of Employment and Labour Relations. In terms of the privatization initiatives or the concept of privatization and what industries may be privatized or may not be privatized in this Province that ERC has been working on or intends to work on, other than farm products and other than NLCS, has ERC done any work in advising government on the privatization of other industries in this Province?

MR. FUREY: Well, I do know they were very much involved a long time ago too, and they have done a lot of work for and research on Newfoundland Farm Products in particular, and I do know that one of the commissioners, I believe it was Adele Poynter, was very much involved and tuned in with the department on the information sector side with NLCS. As to the other ones, I think they are looking generally at other operations that government is currently involved in, to see in fact, if there is some interest out there in the private sector and they are not doing this in isolation, they are doing it in concert with various departments.

In the case of my own department, there is a number of Crowns that report to me. Marystown Shipyard, we came within a whisker, nearly a year-and-a-half ago of selling that but we are still very much interested in divesting that particular shipyard if we can. Newfoundland Hardwoods as well, we are looking at divesting that but we want to do it right and we want to do it with minimum job loss and in fact, where there may be an opportunity to enhance jobs. I can't think of any other thing; they may have done some work in housing, a small amount of work - Newfoundland and Labrador Housing?

MS. DUKE: I guess the other aspect of the privatization which the commission has been looking at is, I guess you can go with the large Crown corporations which you might want to privatize, but there are many other things that are currently being done in government that could probably be done more effectively and more cheaply in the private sector, so we are looking at the whole aspect of out-sourcing and contracting out specific services, so the paper that is going forward to government which ERC was involved in drafting, is basically recommending approach to privatization which tackles it at a number of different levels.

MR. E. BYRNE: Are you in a position to discuss or to lay on the table here, any of the proposals or departments or resources or things that you may be advising government on in terms of contracting out other services outside of the large Crown corporations?

Certainly, if I am reading you correctly, there are other departments within government, smaller services, I guess a collection of privatizing certain government bureaucracy and services that we can save additional funding; are you in a position to talk about any of those? Would government mail service be an option for example, or would - Oh I will just use that one as an example now, is that something that is being looked at?

MS. DUKE: At this point, really, the approach that we are recommending to government is one based on experiences in other jurisdictions and so on, but we really haven't gotten to that point yet of actually recommending specific services or specific divisions or so on. Right now, I guess, government is basically reviewing that approach and we'll have to make some decisions on how it will want to tackle the whole issue.

MR. E. BYRNE: Can you see yourselves at some point in the near future, or within the next year or year-and-a-half, at what point you will be ready to advise government on these matters based upon your research and collection of what's happening in other jurisdictions?

MS. DUKE: Well I guess, as the minister said earlier, the work that the commission is doing is in concert with other government departments, but certainly there will be a point where a major review will be done and recommendations will be put forward, but I can't really give you any time lines on that.

MR. E. BYRNE: Okay, fair enough.

MR. CHAIRMAN: Order, please!

Mr. Byrne, your ten-minute time period is up. We'll get back to you again.

The Chair has been somewhat lenient over the last few minutes. I would remind all members of the committee that they are not, under any circumstances, ever to ask a question of anybody but the minister. It would be entirely up to the minister to ask somebody else to reply.

Mr. Smith.

MR. SMITH: Just a couple of things. Obviously I came into this process rather late, so I've been trying to catch up. I'm looking through the two areas that I had noted. My colleague to my left and the gentleman behind me have already referenced, but I would like to just spend a couple of minutes, if I could, on page 146, 3.2.03, Enterprise Newfoundland and Labrador again. There are just a couple of things related to that.

First of all, in terms of the budgeted amount for ENL that was showing a significant reduction from last year in the bottom line amount, and I am just wondering if you could just elaborate a little on that. What does that reflect?

MR. FUREY: All questions are coming to me, and I will delegate an official to answer.

MR. CHAIRMAN: Sure; there's no problem with that.

MR. FUREY: Maybe we'll give the new president his first shot at it.

MR. CHAIRMAN: We'll ask the officials, though, to remember to identify themselves.

MR. WALL: That's reflective of a reduction in demand, basically. Both Enterprise Newfoundland and Labrador and ACOA have noticed, in the last year or so, a significant reduction in demand for financial assistance from industry in the Province. That's basically where it's coming from.

We, in the past year, noticed that, and therefore the government, in consultation with the corporation, determined that there was a reduction warranted on the basis of a lack of demand from meeting with small business, for financial assistance.

We don't anticipate, despite the reduction, from our experience in the last couple of years, that there will be any shortfall of financial assistance available to business. As I said at the beginning, the same thing has happened with the federal program which is mostly utilized by small business in the Province, which is ACOA. They've indicated as well that there is a significant reduction in the demand.

The amount, by the way, that's shown there would not necessarily as well be the amount that flows. I think Mr. Kennedy mentioned earlier that there was $18 million approved for one of the programs last year. Some of that money is approved and will flow this year - in other words, programs that were approved before the end of March - and I believe that, tell me if I'm wrong, I think there's $7 million left over from - yes, there is; there's $7 million that was approved up to March 31, 1994, which will flow this year as well. So there will be more money flowing than is indicated here, or available for flowing, because in addition to that seven there are fourteen or fifteen of the twenty-one which can flow in new money, but I still indicate to you that there is a reduction in demand from small business for financial assistance.

AN HON. MEMBER: (Inaudible).

MR. FUREY: The general government policy still holds true, though, that at any one time in the year ENL is authorized to commit - not to flow, but to commit - up to $24 million.

MR. SMITH: Very specifically, at the present time the total personnel employed by ENL, and the total payroll figure for -

AN HON. MEMBER: (Inaudible).

MR. PATRICK KENNEDY: As of April 1, 1984 there were 159 permanent staff, and the total payroll burden, including benefits, is $8.1 million.

AN HON. MEMBER: (Inaudible).

MR. PATRICK KENNEDY: Yes, I do, Minister.

AN HON. MEMBER: (Inaudible).

MR. PATRICK KENNEDY: Yes.

The corporation is comprised of five regions, and within the corporate office, within the St. John's office, we have three divisions. The three divisions in the corporate office are comprised of the executive, which is the office of the president and support staff, corporate services, of which I am the vice-president, and we have a rural and development services group. Then we have five regions, the avalon region in Clarenville, in Gander, Corner Brook, and in Goose Bay, Labrador with satellite offices feeding into it.

The total salary breakdown per division and region in the office of the president is $238,000. In corporate services there is $1.04 million. In rural and development services it's $734,000. In the Avalon region it's $1.7 million - these are round numbers. In Clarenville it's $600,000. In central region it's $981,000. In Corner Brook or western region it's $890,000, and in Labrador it's $767,000. That's the total gross salaries. Now there are benefits on top of that. The benefits would be unemployment insurance and so on. That would bring it up to the $8.1 million.

MR. SMITH: Thank you.

How long has ENL now been in existence?

MR. PATRICK KENNEDY: The amalgamation of the Newfoundland and Labrador Development Corporation and certain divisions of the former Department of Development took place on January 1, 1990.

MR. SMITH: As part of the process, and I can recall when it was being set up - it's now a little better than three years - built into this has there been an ongoing evaluation process? As a person who has worked out in the community as a volunteer, the biggest criticism that I've heard of ENL is that to begin with, when the corporation was set up, we probably didn't realize the full benefits that we could have from ENL, and the fact that government felt obligated for whatever reasons to work with a lot of the people who were present within the system, so it wasn't really constructed; you just referenced it you said amalgamated, rather than setting up a new corporation. There were certainly a lot of people I know from the old Department of Rural Development, and a lot of these people have ended up in certainly positions that are quite different from the responsibilities they were doing earlier, and the criticism has been, rightly or wrongly, that some of these people have been placed in positions where they are finding themselves a little out of their depth.

Now the question that I have with regard to that, has there been an ongoing evaluation process in terms of, we have a corporation here now, it's a little over three years old, and if not maybe it's something that certainly the new president coming in, I would assume that to him that would be a major responsibility to take on. I would suggest an internal review.

When I say evaluation, you have to be very careful as well, and to you, Mr. Minister, I guess ultimately the responsibility would be there because obviously it would be difficult to evaluate the new president because he's the new kid on the block and he's obviously going to be evaluated anyway, but from there on down it would seem to me, because when I'm saying evaluation it doesn't necessarily mean down in the satellite offices, a single person working in the office in Stephenville. I'm talking about the total corporation, at the different steps, so my questions again are: Has this been ongoing, and if it has not been ongoing, are there plans to engage in some sort of an internal review, possibly using some outside sources?

MR. FUREY: I'll just respond quickly and then I'll pass it to the new president. There is an ongoing evaluation as you call it, we're constantly reviewing the corporation. In fact there's a serious review underway now with the president and the new board. You're quite right, when we first structured this new corporation there were a lot of growing pains for a lot of people. It wasn't and isn't a perfect corporation but as I recall Patrick, there were a lot of training dollars spent to bring people up to speed and to bring them in line with the new jobs that they were presented with and lots of people didn't feel comfortable in the beginning. I sense that there's a great deal of relief and comfort out there now.

Let me tell you the best evaluation that anybody could give of any corporation to see whether in fact it's working or not. Statistics Canada just released, a little while ago, a report that covers 1990-93, a three year period of areas of business growth in the country. When they say business growth they mean new businesses that had been sustained over that three year period and were continuously operating as they took this survey and it employs anywhere from five to fifty. If you look at that, Newfoundland in the Atlantic Region led the way and had a 20 per cent growth, from 14,500 businesses to 17,451 businesses and anywhere from five employees to fifty employees. New Brunswick in the same category, same criteria, grew by 10 per cent. Everybody raves about New Brunswick and its growth and stuff. Nova Scotia by 7 per cent, PEI by less than 1 per cent and the country as a whole by 8 per cent. So I think the policies of ENL and the fact that it was decentralized, the fact that it was made user friendly, client friendly and the fact that people could walk in and not have to wait for decisions from inside the overpass, as was done for many, many years, I think that's starting to take hold. I think it's starting to show positive results. It's not the cure-all for an economy that's been brutally beaten but it certainly is helping. I don't know if you want to add to the review, Mr. Wall?

MR. WALL: I don't have much to add to that, minister other than to say that it is one of the priorities that I have. I've recognized some of the comments that you've mentioned before, I've heard them before and it is something that I intend to follow up on in terms of ensuring that there is adequate training for the officials at ENL. I'm very sensitive to it and I know the executive and the board as well are very sensitive to that issue. We will continue to attempt to upgrade the skills of all the staff at ENL to a point where they are beyond reproach and until we reach that level, which may never be, until we reach that level there's always going to be room for improvement. Just to echo the minister's comments, it's an ongoing process which seems to be showing results in the last few years.

MR. SMITH: Thank you. That's it for me, Mr. Chairman.

MR. CHAIRMAN: For the benefit of Hansard the last speaker was Mr. Wall. Yes, that's right, the last speaker before Mr. Smith.

Mr. Shelley.

MR. SHELLEY: Thank you, Mr. Chairman.

A couple relating directly in the estimates, the first for basic clarifications I guess and then I have a few general questions but on Page 143, 3.1.02, Technology Transfer Opportunities-Offshore Fund, I mean basically when you look at the heading and read it - I just want clarification that if you're going to require expertise to participate in the development of the Province's offshore petroleum resources and in the numbers that show at the bottom then - well it's a two part question I guess - I want to sort of get an explanation of that particular heading, does that mean the training and that type of thing that goes into that - just an explanation of that heading. Then the second part of the question is the explanation of the $625,000 that was budgeted and then $162,000 that was spent and of course it's estimated this year for $400,000.

MR. FUREY: Yes. That comes under the Canada/Newfoundland Offshore Fund that was negotiated by the previous government. I think there was some $300 million, a portion of that was blocked off for technology opportunities, transfer of technology opportunities, OTTOP program it is called, and in essence it was used by companies to go and work with other companies around the world or bring those companies in here. A good example would be fifty-five welders from the Marystown Shipyard for example, who went overseas and trained -

MR. SHELLEY: Okay. That's what I was wondering.

MR. FUREY: - eight months at the Kvaerner Rosenberg Shipyard. I have some other examples here. The MNC Group Inc., we funded $163,000 to bring ten employees up to speed on the QA/QC; AMI Offshore Inc.; Metal World, Terra Nova Marine; these are all local Newfoundland companies.

MR. SHELLEY: That's the point I was getting at, to bring Newfoundland people into training so that they would be upgraded.

MR. FUREY: So they would be upgraded into a real situation with respect to offshore, whether it was actually constructing or doing work, and they in turn take those skills and transport them back here, or conversely, bringing people over and picking up the cost over here as we did, for example on some management matters at Marystown.

MR. SHELLEY: Okay.

MR. FUREY: You asked about the $625,000?

MR. SHELLEY: Yes.

MR. FUREY: There was a small take up last year I guess of $162,000 that's why it is down. In previous years there was a large take up at Hibernia -

MR. SHELLEY: So you expect to spend $400,000 this year then?

MR. FUREY: We budgeted it there because it sits in the global offshore fund and we took out that chunk; if we need more we can get more, if we need less we leave it there and roll it forward.

MR. SHELLEY: That is why I asked the question because if it is for the training of Newfoundland people in that particular industry, then I would rather see you spend it.

MR. FUREY: But we can only spend it if companies come -

MR. SHELLEY: If they come and ask for it to be spent; okay, fair enough.

MR. FUREY: For example, if they come from Baie Verte and want $400,000 -

MR. SHELLEY: I am sure you will give it to them.

MR. FUREY: - (inaudible).

MR. SHELLEY: I am coming to that. The second question directly from the Estimates again is on page 144, 3.1.06, Research And Development-Offshore Fund. Again, just for clarification on the heading, it cost you -

MR. FUREY: Which heading?

MR. SHELLEY: Provide for marine petroleum research; and is it the same thing, waiting for companies to come to you; it was $410,000 budgeted and only $25,000 spent?

MR. FUREY: Yes. In previous years, and again, it is from the offshore development fund. In previous years there was a high take-up. We decided this year to ask the Science and Technology Advisory Council to government to look at the criteria that was being used in the past, because one of our fears was, we were pumping considerable chunks of money into research and development and once it reached the commercialization bridge, where you took this technology across the bridge into the marketplace, there was no way to guarantee that Newfoundlanders, having spent considerable sums of money, could protect this for our own job marketplace; and there were other problems too, because sometimes it was entered into with a joint venture.

I can think right now of one company in particular that had a beautiful piece of technology, we put a lot of money into it and as it moved forward, they were contemplating building these structures in Britain and in Asia and in South America and only advertising the head office out of Newfoundland. Now, is that fair to Newfoundland technology? We didn't think so, so we asked them to review and confine and restrict as much as is possible to do so, so that a benefit would be retained here, and that is why last year there was a small take up because we were reviewing that criteria.

MR. SHELLEY: That's good because I was just wondering why the money wasn't used and that's a reason.

MR. FUREY: It was a good question.

MR. SHELLEY: To get away from that for a minute now. When I knew I would be meeting you tonight and your department - the small business loans and I ask the minister - but I would also ask Mr. Kennedy, who hit on it earlier - just to go through very quickly, not the sums that were used up but the different loans as you break down starting with $100,000 and less and then it went to conventional - could you just go down through that again, just very quickly. I mean I can understand the $100,000 and less, than the conventional. I want to just note what that takes in and so on.

MR. FUREY: The amounts you mean?

MR. SHELLEY: No, not the - I know what the amounts are but -

MR. FUREY: What kinds of things you mean?

MR. SHELLEY: Conventional, what comes under that and what comes under the next ones up, I didn't catch them as you were saying them so I just wanted you -

MR. FUREY: It crosses over all sectors of the economy.

MR. SHELLEY: Sure, I know that.

MR. FUREY: You are just wondering what kind of things fall in conventional or what falls into small business?

MR. PATRICK KENNEDY: The small enterprise loan program is loans of $100,000 or less, and as the minister rightly pointed out, it can be any business or enterprise that qualifies under the corporation's mandate for financing. The fact of qualifying for small enterprise is dedicated to the size of the loan itself.

There were 100 loans given under the small enterprise loan's program this year for a total of $2.458 million. That is the exact figure. In conventional loans, which are loans greater than $100,000, there were 110 loans and the total was $9.946 million. In direct equity there were twelve equity investments.

MR. SHELLEY: Could you repeat that again? I did not hear.

MR. PATRICK KENNEDY: In direct equity there were twelve equity investments totalling $2.6 million. There were four venture capital loans totalling $362,000.

MR. SHELLEY: Can you tell me who those were?

MR. PATRICK KENNEDY: I do not have that available now but I can get it for you, if you wish.

In interim funding or bridge financing, it could be in terms of working capital or an ACOA grant, that type of loan, there were twenty-eight for a total of $1.846 million. There were twenty loans given under the special sawmill assistance program and that totalled $348,000. There were thirteen loans given under the company development or young entrepreneur program totalling $134,000, and there was one loan guarantee in the amount of $600,000. The total was 288 deals or loans totalling $18.3 million. That's commitments.

MR. SHELLEY: And the last one, $143,000 under the young entrepreneur program?

MR. PATRICK KENNEDY: Company development we call it. They would be primarily used for things such as doing feasibility studies, management reviews, or stabilization type of reviews for companies that are clients of the corporation.

MR. SHELLEY: The next question relates to small business again. I talked to the minister before about this. I know you are making progress, as was mentioned before, but to keep it simplistic I had two more calls today from some people. With the fishery the way it is these days I think we are all encouraging more people to think up ideas and to try them. As the old saying goes, `Any man who says he never had a chance, never took a chance.' We always encourage these people to do these type things.

Today two more people at least say the same thing: well, I started this four months ago and I got caught up in so much red tape that I just gave up on it, but I am going to try it again now, so as I keep saying the same argument is there, Mr. Minister.

MR. FUREY: I would be glad to intervene with the federal government for those people if you want me to.

MR. SHELLEY: There are those problems, but the point I am getting at is in the future, I guess, as we move on, any initiatives that you have to educate people on moving forward on small business, anything within your department that is going to help people get there quicker, the one-stop shop type of thing, are there any ideas coming in the near future for that?

MR. FUREY: We really have tried to simplify things with ENL. Some years ago we made an offer, in fact I made it to Mr. Crosbie when he was the minister responsible for ACOA, that we collapse ENL and ACOA into one-stop shopping in the five regions in the satellite offices. Now, there was some difficulty at the time because everybody wants to get credit for this, and credit for that, and that kind of thing, so there were problems at that time.

We have tried our best to simplify ENL. We are in the process now of doing the same with lands, permitting, and that kind of thing, and you will see an announcement on that shortly. Also, in terms of regulation we have moved toward zero base regulation and by June of this year we hope to have in place a commission whose task it will be to eliminate all of the rules and regulations that have grown up and become a monstrous obstacle to business over the years.

MR. SHELLEY: There will be a commission?

MR. FUREY: Absolutely, and this will be announced by the Premier hopefully in June - if not June, then July with certainty - and its task will have a twelve month race to the clock and zero-based regulations stripping down all of the - you wouldn't believe some of the regulations that are still on the books. It is just ridiculous. Now, we want to be sensitive to the labour laws, sensitive to the environmental laws, but we want to get on with removing obstacle to business.

In the case of the two examples that you're thinking of, I would be happy to take them under my wing and run with them, if they make sense and if (inaudible).

MR. SHELLEY: Sure, that's fair enough. That's really getting caught up.

Now you mentioned earlier about the seventeen economic zones and, of course, we talked about them a lot. It's the same question, I know, in a way, that the other people have asked, but they were ahead of me, so...

As we look, I guess, down the road a little ways to Community Futures, development associations, business development corporations within these regions, within these economic zones that you're talking about, how do you see them develop? Are they going to continue? What do you see? Is there going to be a merger there of groups?

MR. FUREY: Well, what we're trying to do is target, redirect some administrative funding. A lot of money is being lost in administration. Now I'm partly to blame for that. Some of it is locked up in satellite offices of ENL. Some of it is locked up in FAP offices in the same communities. Some of it is locked up in women's enterprise bureaus in the same little communities. Some of it is locked up in Community Futures, business development centres, and on and on and on the list goes. The problem is, these have grown up over the years because there has been a reaction to a problem by piling money into the circumstance and into the problem. Frankly, it hasn't worked; it really has not worked. We really have done ourselves a disservice creating these small entities that are out there, and I think their hearts are in the right place. I think they really want to strive for economic development and opportunity, but when you have five, six, seven or eight or, in the case of my own district, eleven separate organizations running toward the same goal in different directions, it just really makes you shake your head, and it's time for us to circle the wagons, to collapse it down, to build in a strategic plan into each of these zones. I see each of these seventeen zones creating their own strategic economic plan that will complement the Province's global umbrella plan.

In my own district, area seven, I see their strategic plan capitalizing on the World Heritage Centre site at Gros Morne National Park and the tablelands. I see them capitalizing on tourism, bed and breakfasts, country inns, boat tours, and those kinds of things where there's terrific opportunity for growth, but it has to be developed in concert with local people. Everybody, the stakeholders who live and will live there for a long, long, time, have to participate in that, but they have to set out specific action items, and if they come to government for funding and advice and expert help through our agencies, they have to show and be accountable and say: In year one in our plan here's what we've achieved, and here are the benefits.

I think that makes eminent sense, and I think we've got to move towards that.

MR. SHELLEY: Well, I certainly agree with you on that, and that's why I brought it up, because I don't care how much you say; you've still got the average citizen who walks into a building out in my district and he doesn't know if he's talking to Community Futures, if he's talking to development corporation, if he's talking to the development association, and they've been living there for years and don't know it, so they don't know where anybody is going. That was why I brought up the question.

MR. FUREY: It's a good question. I'm glad you support it, and I know the Member for Humber Valley echoed those sentiments in a speech here in the House as well, and it's not about dismantling or saying that people haven't worked hard. It's about restructuring for the future and -

MR. SHELLEY: Funnelling into the same direction is the basic idea of it, I guess, and not wasting the time.

MR. CHAIRMAN: Order, please!

I have to remind the member that his time is up. We'll get back to you again.

MR. SHELLEY: Okay. Thank you.

MR. CHAIRMAN: Mr. Tulk.

MR. TULK: If he's not finished, Mr. Chairman, I've only got one basic question for the minister.

MR. CHAIRMAN: Okay, we'll get back to you. Mr. Tulk.

MR. TULK: I've only got one question for the minister, and that is in relation to the downsizing, I guess, and the attempt to make economic development in the Province more efficient and more effective and trying to create seventeen economic zones and presumably a great deal more autonomy perhaps than an economic zone might have now, but yet bring all the people together. Has the minister had any thought on whether - what kind of budgetary powers the seventeen economic zones would have for themselves? To whom would they be responsible? Does the minister have any thoughts on that himself or, is he going to leave it up to the commission to tell him what he should do, the task force or whatever you want to call it?

MR. FUREY: They are going to come with some recommendations but ultimately it is going to be both orders of government that will have to (inaudible).

MR. TULK: I find, quite frankly, Minister, I don't know whether I can name them all or not, the people who are involved in economic development in this Province, groups such as the ERC, there is the Advisory Council on the Economy, there is the Department of Development and so on, and I am just wondering if the minister is going to put all this together in one group or is planning on it, that's a good idea, nothing wrong with it, but what kind of budgetary power do those people have? Will they still have to come over to Phil Wall and say: Phil, could I approve this project for my area, or will they have some budgetary power to do that themselves? I know that people in the ENL office can do up to $100,000 on that level, Phil, or will they have greater powers where you give them a budget every year and say: use that, justify it and then we will give you some more?

MR. FUREY: In your earlier comment about ACE and ERC and all those kinds of things, the Throne Speech talks about a restructuring of government and that's underway, we are not just going to restructure the regions without looking inside our own backyard and perhaps doing some restructuring there, but that's out of my hands, that's for the First Minister to decide; but with respect to the -

MR. TULK: But you must have some ideas on them?

MR. FUREY: I do and I presented them and he certainly knows where I am coming from in that regard; but with respect to the regions I would see - and I don't want to prejudge it, this is the work of the task force and it depends upon the energy and the excitement that these regions can create. I would see rural development and municipalities, business men and women becoming involved in this; it is not just going to be an exclusive development association, it's not going to be just an exclusive Community Futures group. It's not going to be a businessman or woman operating in isolation. We are trying to bring the communities together to become stakeholders, to examine their surroundings, to generate their own strategic economic plan based on the vision of how they see rural life continuing and it's based mostly on rural life.

How can we survive together? What is our action plan, and yes, government will be there to fund action plans but we will also be there to seek accountability and much more accountability than we seek now, rather than just dropping money in areas helter-skelter, federally and provincially, and having everybody run in different directions and come back next year for their allotment. There has to be some discipline and efficiency and focus brought to the management of the seventeen economic zones and that's what we are trying to do.

Will they have autonomy? There is a number of programs we are looking at now: community bond programs, adventure capital programs and others that perhaps can fit into it but let's not prejudge what the structure will be but let's let it grow and evolve from the grass roots of it.

MR. TULK: Mr. Chairman, if I could, just one other question.

Mr. Minister there is a belief, at least in my mind, that we are in terms of survival in rural Newfoundland, that we are entering into one of our - I don't know what you call it, most challenging probably, periods in the fishery, and I know that there has been some talk of economic diversification. What role do you foresee those economic zones and that type of organization playing in the development of rural Newfoundland and the keeping of rural Newfoundland; for Christ's sake, I am not talking about some quaint place up there, where people go and collect their unemployment insurance and go up to their cabins and get drunk as is the stereotype probably of the Globe and Mail, but what do you see those economic zones that you are talking about creating in your mind, what kind of role do you see them playing in the fisheries development and the fisheries and I suppose downsizing, let's put it at that?

MR. FUREY: Yes, you make a good point. I agree with your sentiment that this, perhaps this next twenty-four months if not longer, will probably be the most challenging time in our history. History will record that this was one of the most challenging, turbulent times ever in our history. Our children and grandchildren will look back and read about this. It's going to be incredibly painful and difficult because we've clung to this place for 500 years based on fish and the sea is dead but we're trying to regenerate it.

I see these zones as being active not passive, not just passively waiting for someone to come in and tell them what the solution is, that's gone on for far too long. Successive governments of all political stripes have raised unfair hope and unfair expectation by saying you can have this plant for this and you can do this and you can do that, that's just not on it. We can't come in and lecture from the lectern down anymore. We've got to go in and provide the tools and let people build up. It's going to be a painful struggle but I think if the proper tools are put there, if people are helped to generate their own plans and if we listen rather than talk, then maybe, perhaps people will have solutions and good solutions to some of these problems but I'm not pessimistic. I don't see brilliant rays of hopefulness out there over the short term but over the long term I do. It's areas like aquaculture, the crafts industry that needs to be focused and strengthened, tourism, bed and breakfasts, those kinds of things but we've got to be careful not to saturate on that side either or we'll kill that industry dead in its tracks. So it's a delicate balance moving forward inside each zone but it has to come from the people not from us. It's come from us for 100 years, it's time it came from them.

MR. TULK: Just one other question, one question leads to another but I think this is the last one. It seems to me that one of the weaknesses in rural Newfoundland, in development in the Province, particularly in the fishing industry, is in the area of research and development. To be quite frank with you minister, I'm sick and tired of hearing people tell of bed and breakfasts, Irving stations and all the rest - but it seems to me that research and development is one of the weak components of development in this Province, and nowhere is that more evident than in the fishing industry at the present. I'm told that we've got 100 federal fisheries scientists in the Province and they must be all down in the White Hills somewhere. How do you see that happening in the Province, research and development, as to ways - ITT used to be the Department of Development, it's got that new ring to it, there's still the same people over there basically but you are responsible for development in the Province, then the basic thing is research and development. How do you see that involvement in the Province, in rural Newfoundland, research and development, particularly in the fisheries?

MR. FUREY: Yes, your point on the fishery is well taken. Newfoundland is way behind on fisheries - I think we are, anyway that's a personal opinion.

MR. TULK: I know we are.

MR. FUREY: When I look at New Brunswick and I see that their aquaculture industry is such a young industry, it generated $100 million in revenue last year and they had BP investing in a palletized plant for the aquaculture industry to the tune of $40 million. I wonder where we've been for fifty years. When I look at what's happening in Norway and some of the other Scandinavian countries producing beautiful produce, commending sterling prices on the world market, I wonder where we've been. When I see Scottish smoked salmon in all the airports, just commanding huge prices and emptying their coolers with every flight that goes through there internationally, I wonder where we've been. I mean we have really been lax as a people, not as a government, I don't blame any particular government because it's the people that are the government and I think we've got to try to steer some of that larger volume of dollars coming into the Province through NCARP and through other programs that the federal government are bringing forward and really try to get an aquaculture strategy in place where we can help to restore what's happening to the sea.

You mentioned that a couple of times to me in private I know. I think there are golden opportunities to do that, Mr. Tulk. I'm not so pessimistic that we can't catch up, but I get despondent about why we aren't way ahead.

MR. TULK: I just want to make one observation, Mr. Chairman, and that is that I think there's a need for somebody in this Province, not only in fisheries but certainly in other areas as well, but it's particularly obvious today in fisheries, when you call up some officials in the department and you ask them a very simple question. You say: If I want to reseed the land in this Province, some agriculture specialist will tell me whether I can or can't do it.

If I call up somebody in federal or provincial fisheries in the Province today and ask them if I can reseed the ocean, they bloody well can't tell me whether it will grow or not, and we've been a fishing nation, and we've been a nation that's lived by the sea for hundreds of years. That means to me that there's been a terrible lack of research and development in that particular area, but I think there are other areas as well, and somebody has to head up that - and you are the department - science and technology department in this Province.

Somebody has to push for that kind of thing, and I don't think you're going to see it, to be quite frank with you, done by many of the people in fisheries or forestry or in that area. I think there's a certain kind of expertise and a certain kind of person that has to follow a certain kind of department, and I think that department happens to be your own. That's an observation more than a question, Mr. Chairman.

MR. CHAIRMAN: Thank you, Mr. Tulk.

Now that each member of our committee has had an opportunity to question the minister, I'm going to give Mr. Hewlett the opportunity, if he so wishes, to take a ten-minute spot.

MR. HEWLETT: Thank you, Mr. Chairman.

To the minister, with regard to this task force on the various development bodies and agencies existent throughout the Province, and it's presumed collapsing into seventeen zones, the task force itself, how is it going about it's business? Is it basically going to consult quietly internally with various bodies? Has it been mandated that it must consult with a, b, c, d? Has it been mandated to do certain public consultations, say, through public hearings? What will be the mode of them going about their business of producing and recommending a new structure?

MR. FUREY: They're going to operate from the premise that the Province wants to give real effect and life to that action item, the seventeen economic zones within the strategic plan. They're operating from that premise. They will be given a budget from the SRDA agreement. Were you here earlier when we talked about the make-up of the committee?

MR. HEWLETT: Yes.

MR. FUREY: Essentially they'll take six months in a series of public discussions and consultations throughout the entire Province to lay out what the plan says - in concert, by the way, with the rural development movement, Community Futures and those groups, and all stakeholders around the Province will have an opportunity to have their input into how they see the seventeen economic zones being born and what their role ought to be, so it will be a series of public consultations over a six-month period.

MR. HEWLETT: And will these be open to the public or any citizen or town council or anyone who wants to make a comment?

MR. FUREY: Yes, anybody; and it's my fondest hope that businessmen and women, people involved in the rural development movement, everybody, it's my fondest hope that people will come out and support the concept and generate an enlivened debate to tell us how it ought to operate.

MR. HEWLETT: Minister, I believe there was something in the order of $20-odd million you indicated in various administrative costs for these various bodies, is that correct?

MR. FUREY: There are varying figures. I have been using the figure 167 separate entities, not agencies, entity being an office with a fax, a modem, a phone and a secretary, light bill et cetera; 167 agencies with $41 million in just administrative costs. Now if you look at some other studies by ACE and others, you will see that that's factored up higher. They say 175 to 180 agencies with up to $60 or $70 million of just administrative funding, but I think, Mr. Hewlett, they are including crisis funds and funds that were born out of the loss of one-industry towns and those kinds of things.

MR. HEWLETT: Minister, how many jobs, presuming that we have collapsed all these various entities tomorrow or whatever, what sort of jobs would be lost in terms of the $40 to $70 million in administration costs and what not? How many people, for want of a better phrase, are making a living out of the existence and the maintenance of these various entities and agencies? Any idea?

MR. FUREY: I used to know that number; I can get it for you and bring it to you tomorrow, 280 or something ring a bell, that may or may not be right, but I wouldn't prejudge that a lot of people are going to lose their jobs either; I mean, maybe it will be a refocused, dynamic, new staffing complement under a different - depending upon how the regions will look.

MR. HEWLETT: And what, Minister, do you see as - I am still a bit fuzzy as to, and maybe it is yet unknown - what will be a zone? Like for instance, I know what the Green Bay Economic Development Association is; it's a body with a rural, economic mandate, the executive of that particular body is elected at a public meeting every year and they pursue certain projects of their own, they access government funds and various government agencies, that sort of thing. For instance, they are the agency of record for doing silviculture work for the local forestry office. What will be a zone? Will it be an arm of government, an arm of the Economic Recovery Commission or ENL, will it be a publicly elected body and some sort of executive elected at a local, regional meeting of some sort? What kind of a creature will it be, or do you know that?

MR. FUREY: Well, you saw the map that we basically carved out in the geography of twelve on the Island and five in Labrador. I would see it being a publicly elected board inside that zone, inside my own zone, for example, zone 7, that would encompass something in the order of seventeen or eighteen communities, separate communities, that would take up one-and-a-half development associations, one-and-a-half Community Futures, one-and-a-half business development centres, one women's enterprise bureau, two-and-a-half business development centres so I would see it -

It's difficult, you are quite right, it is fuzzy at this time until we hear inside these zones where would be the growth centres, who will determine what the Economic Strategic Plan of the area will be? How will elections be conducted, who will be allowed to serve? I presume it would be wide open and I would presume you would have somebody representing municipalities, somebody representing rural development and somebody representing the business community, you know, all of the various competing interests that we are trying to fold into a co-operative interest, so it is hard to tell; it would be something that would evolve I would think but it would be done I imagine in terms of elections, public elections, but it would not be an animal of government.

MR. HEWLETT: It would be a local animal, so to speak?

MR. FUREY: That is right. Set aside on its own. It has to have arm's length so that it can criticize government or do whatever it needs to do, lobby government, or whatever.

MR. HEWLETT: Mr. Minister, you mentioned in some earlier remarks that the Economic Recovery Commission had done some work on policy vis-à-vis privatization. At the same time it is known that certainly Hydro, Farm Products, and Computer Services are already more or less underway in that regard. Would you care to comment as to whether or not it is somewhat putting the cart before the horse to have three major privatizations underway to some extent and now a government agency is developing a policy vis-à-vis privatization?

MR. FUREY: I think, as Cathy pointed out earlier, most of the work as I recall now, that the ERC is doing in that regard is what kind of things can best be done by the private sector that are currently inside the large bureaucracy of government? I know that, for example, NEIA, which is the Newfoundland Environmental Industries Association came to us on a number of occasions and said: look, we can do your inspections cheaper in certain areas. We can do them better for you. We can do this better for you. We can deliver faster. Would you please look at that? We have asked the ERC to look at that.

The Newfoundland Home Builders Association came to us at some length in some meetings talking to us about what is the role of Newfoundland and Labrador Housing? Should it be a social role? Should it be a developmental role? Are they in the business of competing with business? Would you take a look at that? There were a number of others inside government that we are looking at.

I do not think I meant to leave the impression that the Economic Recovery Commission is to look at the larger structure of government such as the Marystown Shipyard and show us how to divest of that, or to look at Newfoundland Hydro and show us how to divest of that. We asked them to come into NLCS and help us on that because one or two of their people were expert in the information industry sector and they were very valuable to the work of the Deputy Minister of Industry, Trade and Technology, and indeed the Department of Finance who led the charge on that.

MR. HEWLETT: So, if you will pardon the phrase, Mr. Minister, I guess the privatization with regard to Hydro, at least as far as the commission's policy is concerned, is sort of 'stand alone?'

MR. FUREY: Yes, I will pardon that phrase.

MR. HEWLETT: Thank you.

One of your officials mentioned earlier there were 288 loans made under the various categories by Enterprise Newfoundland and Labrador, some $18 million or so. Do you have any ballpark figures of how many direct jobs these nearly 300 loans would have created roughly?

MR. PATRICK KENNEDY: I do not have those numbers right before me I am afraid, but I can get those numbers for you, Sir, and forward them on to the minister.

MR. HEWLETT: Are we talking in the hundreds or in excess of 1000?

MR. PATRICK KENNEDY: It would be in the order of thousands, yes. It would be from both a stabilization and maintenance of jobs. The way we capture our statistics is the number of new jobs created, but more importantly those that would be maintained. That is primarily where the activity would be. I can certainly give those numbers to the minister for you, Mr. Hewlett.

MR. HEWLETT: Thank you.

A more general question, Mr. Minister: If the government developmental agencies such as the recovery commission or the enterprise corporation are developing in the order of 1000, or even 2000 jobs, or whatever in a given year from its loan and business support activities, would you characterize the situation as somewhat frustrating when you look at today where we had, from two federal ministers, an announcement with regard to the fishing industry which by their own figures would indicate that in excess of some 17,000 people would be displaced in the fishery over the next five years? Even assuming 30 or 40 per cent of those were people who somewhere during the five year period reached a category of being able to take early retirement, we are still talking about in excess of 10,000 persons suddenly, over a few years certainly, thrust upon the Newfoundland employment picture where you, through your own agency, are creating in the order of say 1,000 or even 2,000 jobs a year. Isn't that a rather daunting task, to put it mildly?

MR. FUREY: Well, I guess your question is more rhetorical. Yes, it is daunting; it's frightening, humongous. Daunting is a kind word for it.

It's not just the fishery, either. We've been battered by the recession. Newfoundland doesn't just go into the recession. You recall in your days with Premier Peckford; when you go in, you go in deep. You go in first and you're the last one out, if you ever get out. So it's almost like there's a whole bunch of things out there conspiring at the same time to hold back whatever bright spots there are in the economy, but you're quite right; it's daunting, it's frightening, it's the challenge of the century, I think, before us over the next twenty-four months.

MR. CHAIRMAN: Order, please!

Mr. Hewlett, you've gone over your ten minutes. If you care to stick around, we'll accord you the same privilege again.

MR. HEWLETT: Thank you, Mr. Chairman.

MR. CHAIRMAN: I'm going to take a five minute coffee break, but before I do, Mr. Tobin, the Member for Burin - Placentia West, has indicated to the Chair that he wishes to ask the minister one question. As soon as he has asked his one question and the minister has answered that one question we will then break to the caucus room.

MR. TOBIN: Actually, there are two questions I will get through rather quick.

Number one, I would like to ask the minister if he could tell me what the status is of the contract between Maersk Offshore, the Marystown Shipyard, and when he can anticipate work starting on that contract? That's the first question.

MR. FUREY: There were some hurdles to get over once we had put this negotiation to bed in terms of the actual award, and Maersk won the contract. It's a fairly significant contract. The legal text between Marystown Shipyard and Maersk, the final touches are being put on that. We hope to have that signed in the next week or so, week or ten days, there are a couple of other wrinkles that we need to sort out to the Province's benefit, we think. When those are ironed out and the text is ready it ought to be signed in about seven to ten days, and once that's done the engineering can begin right away, I think.

MR. TOBIN: I would also like to ask the minister: What is the status of the privatization of the Marystown Shipyard, and are there any negotiations or consideration or discussions under way with anyone at this point in time?

MR. FUREY: The Marystown Shipyard has been for sale from the minute after I was sworn in on May of 1989. We, as you know, came within a whisker of selling it. I think it was the appropriate thing to do and would have paid big dividends for the Burin Peninsula. It fell through with the pull out of Gulf shares and the hold that was put on Hibernia, and the negative shudder that went through the whole project.

It's still for sale. We're not out actively advertising around the world. The order books are very full. There's a happy group of workers down there, I think, and management are proceeding and moving at a brisk pace. There are some dynamite contracts down there that our work force can earn considerable experience from.

We see Marystown being positioned over the life of the actual production of Hibernia, which has a twenty to twenty-five year life, which will flow out some $18 billion to $19 billion. Marystown is positioned well to capture some of that in terms of maintenance and that kind of thing.

Is it for sale? Yes. Are we actively pursuing people? No. Have people come to us? I've had one or two expressions of interest, but when I've asked for details, no details have shown up.

MR. TOBIN: Finally, Mr. Chairman.

MR. CHAIRMAN: This is your third question now, Mr. Tobin.

MR. TOBIN: First of all, let me thank the committee for the opportunity to ask the questions. Let me say that the third question to the minister is: Can he tell me what the situation is regarding the Cow Head facility? What I'm talking about is in terms of the work for the Hibernia project. Obviously I know it's started; it's ongoing. What's taking place in that regard?

The final question, if I may put it to him at the same time, I am wondering if I could have a copy of all loans and grants made by ENL in the past year.

MR. FUREY: I think I made them public last year, didn't I? I would say to you one thing though, look for Gods sake when I give you companies don't beat them up in public. It's not fair to a company that goes in and gets a loan and you know what I'm talking about. Alvin is back there having a great laugh. You know what I'm talking about. Don't be unfair or unkind to companies they take risks.

MR. TOBIN: I wouldn't.

MR. FUREY: I know you wouldn't. This is not aimed at you, it's aimed through you.

MR. TOBIN: Unless it's the Member for St. John's North.

MR. FUREY: I don't mind tabling the list of companies. I think that companies who come in and ask us for loans ought to recognize - and they sign a waiver don't they?

AN HON. MEMBER: (Inaudible).

MR. FUREY: Yes, that if you take public money be prepared for it to be announced or be prepared for it to be tabled in the House. I have no problem with that. I find it a bit frustrating though when you selectively pick a chicken company or some other company, like they did last year and beat the hell out of it, it's just not fair to that company. It's not fair to the four employees or the five -

AN HON. MEMBER: (Inaudible).

MR. FUREY: Anyway I walked into that one. Your question on Cow Head, things are proceeding fairly well. There's an announcement being made tomorrow that I'm going to name a president for the fifteen or sixteen month life of the M-71, 72, 73 in particular and I've seconded the ADM in Industry and Technology, Mr. Max Ruelokke. I'll be appointing him tomorrow as the new president of Vinland Industries for that term and I think he'd be a superb performer down there.

MR. TOBIN: My final question -

MR. CHAIRMAN: Order, please!

We'll recess for five minutes to the government Cabinet room.

MR. FUREY: What was the other part to your first question?

MR. CHAIRMAN: Order, please!

I apologize to some of the officials and the members of our committee who were out in the coffee room. I guess the speakers were turned off because the bells were sounded and we didn't hear them. Anyway we'll resume and I'll ask Mr. Woodford to proceed.

MR. WOODFORD: Thank you, Mr. Chairman.

MR. CHAIRMAN: No, it's not a half hour it's ten minutes.

MR. WOODFORD: I don't see the heading there now but for Marble Mountain - I was looking at it the other day, I don't know where it's at there now - in any case, Minister, how much money will be spent there this year? There's a portion of that called now, I think there's a contract of $2.1 or $2.5 million allocated for Marble Mountain. I saw it there today. Anyway that's okay, I can get into that tomorrow morning. I thought I had seen it there but I must have been looking in - I don't know where I saw it. I must have saw it - anyway, earlier tonight one of the members mentioned about ACOA, I believe it was the Member for Baie Verte - White Bay mentioned ACOA in some way shape or form. One of the members of your staff responded and said that the - I believe it was Mr. Kennedy or Mr. Wall - said the demand for loans this year was down and that's one of the reasons why that heading in the estimates were down. What's the relationship? I know that in the past, in regards to Enterprise Newfoundland and ACOA, there was some friction and the minister has already alluded to that but what is the relationship right now between Enterprise Newfoundland and ACOA? I say that because previous to this year, it used to be administered by a Cabinet minister from the Province, mainly Mr. Crosbie, and now Mr. Dingwall is the minister responsible for ACOA. What is the relationship and has there been any problems?

MR. FUREY: It has not been a bad relationship. Gordon Slade seems to have authority in quite a few areas. I can report though that under the SIID Agreement, I just spoke to the Minister of Public Works responsible for ACOA and the ERDA arrangements between the jurisdictions, that I'm not pleased with the slowness in which our SIID arrangements have been working. It is a $42 million agreement and in the past with Crosbie and I, we have allowed the co-chair people to proceed and we would sign off on them. What's happening now, as I understand it, it goes to Ottawa, all of these arrangements and they are slowed down into a paper blizzard up there, and then they come back down so I am not happy about that and I have written to him about it and I think we should return to the procedures that were in place when Mr. Crosbie and I administered the agreement on the very beginning of it, then the election intervened, but I can tell you, Dr. House, the ERC and Gordon Slade have a magnificent relationship.

Mr. Wall from ENL has established a very good working relationship with Mr. Slade. Mr. Wall had to go to a funeral at nine o'clock so that is why he is not here. I don't see any major problems. Your question with respect to Marble Mountain, the SIID agreement, parked $3.5 million in last year's estimates for the call of the engineering design and the beginning construction of the new multimillion dollar base lodge. That came from the Strategic Investment Industrial Development agreement where we also took some money from White Hills, do you remember how much it was, one million I think, one or two millions, is that it, from White Hills?

MR. KENNEDY: Yes, (inaudible).

MR. FUREY: I think it was two million from White Hills. Now the balance of that will sit - page 175 in Tourism.

MR. WOODFORD: $5.5 million?

MR. FUREY: $5.6 really, it's $5.57 but it will work out to about $5.6 even. That sits in the Tourism budget with a related revenue offset of 70 per cent flowing back to the Province from the federal government. Five tenders were just awarded this week for the mechanical, the electrical, the foundation and the actual construction so we hope to have the new base lodge up and operational in February of next year, and it is going to be quite a boon to the west coast I think.

MR. WOODFORD: Yes. They have started there now, the ground work is started.

The conservation corps you alluded to earlier, and we mentioned it last year in the first part of our estimates and I think, if I am not mistaken, Miss French, at that time responded that you had spent $1.8 million last year and I think there is a $3 million budget for it, and there was never a demand for the total $3 million, I think it was $2.6 in one year?

MR. FUREY: I think you are confusing that maybe with something else. The most I remember for conservation corps was $200,000 - $300,000.

MR. WOODFORD: The Labrador conservation corps?

MR. FUREY: Sorry, I (inaudible).

MR. WOODFORD: I could be wrong, but you had better check it.

MR. FUREY: It may have been a printing error, Mr. Woodford, it was $300,000; if there is an extra couple zeros on there, it may have been a printing error. Yes, and the $300,000 take up was there. You are reading from -

MR. WOODFORD: Last year's estimates -

MR. FUREY: Estimates?

MR. WOODFORD: It must be a mistake because the latest program brought forth by Newfoundland and Labrador Conservation Corps for the young; now there is a part of that particular corps that is absolutely exceptional and done lots of good work and so on, but with respect to their budget, initially, in 1989 it was $3 million and -

MR. FUREY: Oh no. That would have been for the ERC total global budget. The ERC was $3 million and each successive year it has declined so there is a typo there or a misconstruing of information.

MR. WOODFORD: Yes, because as I said: it did superb work on the craft industry and the five-year craft study for this (inaudible).

MR. FUREY: Yes, that's the Economic Recovery Commission.

MR. WOODFORD: Okay.

MR. FUREY: That would have been their global budget, Mr. Woodford. In '89 we placed $3 million there because we weren't sure -

MR. WOODFORD: Within that program there was $1.8 million taken up last year.

MR. FUREY: In the conservation corps?

MR. WOODFORD: Yes. $1.8; $2.6 the year before - it was ERC, okay.

MR. FUREY: That's the ERC.

MR. WOODFORD: What is it this year?

MR. FUREY: The ERC?

MR. WOODFORD: Yes.

MR. FUREY: $2.191 or something?

AN HON. MEMBER: (Inaudible).

MR. FUREY: Nearly $2.2 million, Mr. Woodford.

MR. WOODFORD: So it's over last year because I think it was $1.8 last year.

MR. FUREY: Last year's budget? Just a second now, I will get you the exact numbers. '94-'95 has $2.19 approved; '92-'93 was $2.14 and '93-'94 was $1.8.

MR. WOODFORD: Oh, that's the $1.8.

MR. FUREY: That was the original that was budgeted, what was spent was $2.1 and that's because of the education strategy which brought it up to $2.1.

In 1994-'95 there was a request from the ERC of $3.7 million, and we approved $2.1 million actual dollars. So it started with $3 million real dollars in their base budget of 1989-'90 and it has progressively declined down to $2.1 million.

MR. WOODFORD: The limits now for -

MR. FUREY: But that has nothing to do, Mr. Woodford, with the conservation corps.

MR. WOODFORD: No, okay.

MR. FUREY: The conservation corps was designed -

MR. WOODFORD: It's one of the things mentioned in it.

MR. FUREY: Yes, designed for young people green teams, $300,000, and there was a full take up. If we had to have $3 million, it would have been taken up.

MR. WOODFORD: The limits - there was some talk, or are they gone? The limits now on a regional basis, is it still $100,000 or is it $150,000?

MR. FUREY: The limit is $100,000 isn't it? We tried $150,000, didn't we? Is that still a go forward?

AN HON. MEMBER: The implementation of the $150,000 regional approval has not been done yet. The regions still have authority for $100,000.

MR. WOODFORD: $100,000?

MR. FUREY: We're moving towards that.

MR. WOODFORD: Yes, because last year the minister mentioned they were looking at the possibility of putting in a $150,000 limit instead of $100,000.

AN HON. MEMBER: That's right, but that has not been implemented, though, Mr. Woodford.

MR. WOODFORD: So you're still looking at that?

AN HON. MEMBER: Yes.

MR. WOODFORD: Under some of the headings there -

MR. FUREY: I think, Mr. Woodford, one of the reasons why we didn't move on it is because the Auditor General asked us to clean up on collections and that kind of thing. We wanted to make sure we had our systems in place before we elevated the amount.

AN HON. MEMBER: That's right.

MR. WOODFORD: Under Trade and Investment, Business Analysis, 2.1.01, subhead 10, Grants and Subsidies, last year in the budget there was only $30,000 but it was revised to $130,000. This year it's back to $30,000 again. What came up, or what exactly did that involve?

MR. FUREY: Okay, that particular Grants and Subsidies, Mr. Woodford, was a one-time grant to the Y Enterprise Centre of $100,000.

MR. WOODFORD: The Y Enterprise Centre.

MR. FUREY: Yes. So it went from $30,000 to $130,000 back to $30,000. It was a one-time grant.

MR. WOODFORD: Under 2.1.03, under Salaries, there was $110,000 budgeted last year but you only spent $48,200 for salaries. Was there any reason why that particular...

MR. FUREY: Wasn't that the first year of the SIID agreement, and we were going to hire on new officers to handle applications and such?

AN HON. MEMBER: (Inaudible).

MR. FUREY: It was the first year of the SIID agreement, and we weren't geared up to spend that. We're preparing to hire new officers now to handle applications and that kind of thing under the SIID agreement.

MR. WOODFORD: So that's where it will come this year?

MR. FUREY: Yes.

MR. WOODFORD: Because there's another $110,000 put in there for that.

MR. FUREY: Right.

MR. WOODFORD: Under Transportation and Communications it's probably the same thing, then, I guess. That's his explanation is it?

MR. FUREY: Where is that?

MR. WOODFORD: Still 2.1.03 -

MR. FUREY: Yes.

MR. WOODFORD: Subsection 03. There was $29,000 and then it was revised to $54,000.

AN HON. MEMBER: (Inaudible).

MR. FUREY: Yes, okay, that's what that is.

Mr. Woodford, we did a fairly comprehensive study on Hibernia vis-à-vis the production stage when it kicks in in 1997 so that we can prepare businesses to take benefits from the actual production phase and not just the construction phase. A portion of that sits there for travel related to conducting that study which came out of the SIID agreement.

MR. FUREY: (Inaudible).

MR. WOODFORD: What about subsection 05, Professional Services; budgeted $150,000, spent $80,000, and now budgeted $150,000 for this year?

MR. FUREY: It's all related to the SIID agreement, Mr. Woodford, and I think that may be, if I'm not mistaken, isn't that the IT study?

AN HON. MEMBER: (Inaudible).

MR. FUREY: This all has to do with the SIID agreement. I can get you the particulars if you want.

AN HON. MEMBER: (Inaudible).

MR. FUREY: The deputy points out too, Mr. Woodford, this is the first year that the agreement started to kick in. The numbers would have been down in the beginning years of the setting up, the numbers will be inflated. In fact next year if you look at the estimates they may be over what we project here, in each of those categories.

MR. WOODFORD: Yes, go ahead.

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

MR. E. BYRNE: Thank you, Mr. Chairperson. I'd just like to return to the Economic Recovery Commission and some of the questions or thoughts that were on before. The minister indicated in some of the answers to the questions I asked earlier and some of the things the Economic Recovery Commission were involved with, one of the things you indicated was that they were either in the process, have developed or are about to develop a pretty comprehensive job creation plan. Would you be able to elaborate on components of that plan? What does it involve, what stage it's at, is it something that is going to be announced by government in the near future? Those sorts of things.

MR. FUREY: I'm going to ask Cathy Duke the Executive Director of ERC to deal with that specifically because she's been involved in it.

MS. DUKE: I guess the best way to describe the job creation proposal or package that the ERC has put together is that it's really a sister program to the income security program. There's a basic recognition that for some time in the future we are going to have to continue with some job creation because the private sector just isn't prepared at this time to be able to pick up the number of jobs that are required. What we need to do is to channel the monies into programs that will stimulate economic development so that they are things that are not basically moving rocks from one end of the beach to the other. It may be things involving infrastructure that will contribute to particular areas of the Province; specific types of training programs and I guess the conservation corp, as mentioned earlier, that kind of thing where there's some job experience and training but that basically it does contribute to the development in some aspect of the economic development process. So it's still very preliminary. The commission has completed its work but now it basically has to be presented to other levels within government. So it isn't something that's ready to be released yet because it hasn't really been approved by the appropriate authorities within government.

MR. E. BYRNE: Minister, the job creation plan, as Ms. Duke has said, is linked to the Income Supplementation Program. In view of the fact that it has received such a lukewarm sort of welcome from the federal government in terms of its strategy for its own reform of the social safety net and social programs, is the ERC still going to proceed in terms of its study as it relates to the Income Supplementation Program and job creation initiatives in line? Is there an ongoing consultation process with the federal Department of Human Resources, Development and Labour on the Income Supplementation Program? Can we look forward to that or aspects of that program being implemented in the near future? I know that the Minister of Employment and Labour Relations talked about a possible educational supplement being developed by the federal government. It just seems to me that there's almost a redundancy taking place within the Economic Recovery Commission in terms of reforming the social safety net or recommendations to reform the social safety net and what the federal government is doing - I mean are both levels talking at all or what's happening there?

MS. DUKE: No, in fact there is no redundancy there. The Income Supplementation Program which was put forward to the federal government is still very much under consideration. I think that the reporting recently in the media has been inaccurate based on sources which were not reliable. There is in fact a technical committee, a federal-provincial technical committee which has been working on the program. There are eight to ten people who have been assigned full time in Ottawa to work with us. We have people from the commission and the Minister for Employment and Labour Relations will be able to give you more details but certainly people from his department as well and Ottawa has committed significant funding to looking at it. Basically, the Province put forward the proposal to the federal government requesting that Newfoundland be treated as a pilot and the federal government proceed (inaudible).

While they aren't prepared to move forward at this time on the pilot, what they're saying basically is that they want to look at the revision of social programming across the country, but they are prepared to work with us and to further refine that proposal, and to look at other implications, things like the implications for taxation and so on, and they're willing to commit their own resources and financial resources as well - human and financial - to work with us, and they're hoping that by September of this year they will have reached a point where they will be able to make recommendations for something across the country.

They are very interested in an education supplement, and want us to continue to work with them and perhaps to do a separate pilot related to an education supplement, but certainly the whole aspect of job creation is something that would be very much a partner for that kind of program. It doesn't contradict it, really, in any way.

MR. E. BYRNE: I didn't mean to leave the impression that a job creation program would conflict with the ISP program. I guess I'll save the majority of the comments dealing with that program for the Minister of Employment and Labour Relations.

Minister, you also mentioned in some of the answers that you provided to some of the questions that I asked that you and your department officials have identified some 125 companies worldwide that would have a possible interest in coming to this Province, setting up shop in this Province, hopefully creating work and employment in the Province. You also indicated that yourself and the Premier would be travelling to visit with these companies on an ongoing basis. Some of that work began in Boston. Could you elaborate on that? Are these companies serious companies? How interested are they? What types of things are they interested in in this Province, and where to?

MR. FUREY: It took a long time to develop this, but we developed it in concert with all other departments, a trademark called `The Right Place For Business', and it lays out, in a lure brochure, the centres of excellence, the kinds of things available in the Province, and it's going to be used in all of the embassies around the world and in this ministerial prospecting initiative.

We've isolated 125 companies. I don't think it would be appropriate right now to name them, or who they are, but we feel, through our contacts around the world -

MR. E. BYRNE: Could you name what areas they may be interested in?

MR. FUREY: Yes, certainly.

MR. E. BYRNE: Broadly, without naming companies. I wouldn't want to jeopardize that.

MR. FUREY: No, no problem. In fact, the four that I met with in Boston are involved in marine technology, hi-tech new instrumentation. They're looking at our marine simulator, for example, as a great opportunity; one company is. Another one is looking at a product that they would like to come up here and develop in Newfoundland dealing with aquaculture. Another one has underwater sound technology that they're trying to develop, and they recognize that there are some scientists in this Province that are world leaders in that area. So we looked at a number of areas.

The natural resources area is one column of companies that we're looking at. We've had some measure of success with the Swiss company that's looking to come in and set up a lamination factory in Roddickton on the Great Northern Peninsula, which will be taking the resources, value adding, and shipping them into Europe. They'll provide the capital, they'll provide the training, they'll provide the markets, we'll provide the product.

There's a whole range of companies, but what we've done is used our intelligence and networking system to isolate down from the hundreds of companies, some of them very large, information technologies, for example. What's happening in Ireland, which is very similar to Newfoundland, they've built an infrastructure there where they can do just about anything worldwide, and they're starting to become a financial centre in Dublin, so there's some information technology companies looking to come here as well.

Also, we've got some young companies here that we're trying to match up as well, and draw in new technology information and know-how in capital. In a couple of weeks time the consulate in Boston will be bringing up a number of venture capitalists, who are bringing pools of cash to the Province, to meet some of these companies to see whether they're worth investing in, so it is things like that happening. The 125 companies we have targeted, now we set about putting out feelers to those companies, we determine the level of interest, Mr. Byrne, and if there is a degree of interest then we start knocking on doors and we are quite prepared at the Ministerial and Premier's levels to get in there and roll our sleeves up too.

MR. E. BYRNE: Are any of those companies involved in secondary processing of any nature whether it be of what remains of our fishery, and in any of our resource sectors?

MR. FUREY: Yes. Some of them are keen on aquaculture development; many are interested in lumber, the lumber stocks that we have been following; stocks lately which I have not been doing up until a year ago. The lumber stocks have just gone off the map and intend to hold there for quite a period of time -

AN HON. MEMBER: (Inaudible).

MR. FUREY: Yes, if you have any money, put it in lumber and leave it there. There are some mining companies looking at some opportunities; the Baie Verte Peninsula is an example and some of them have been in to see me, but it is not passively waiting for someone to come either in the old economy or the new economy to exploit the resources. We are taking an active role in going out and targeting these things.

The other thing I should say to you is that Cathy Duke and Dr. House and Susan Sherk set up a session in Toronto that I attended a little while ago, where we tapped into expatriate Newfoundland businessmen and women, who are very successful on the mainland, who are running very successful companies, and we had a morning and a breakfast and an afternoon session and I spoke to them about Newfoundland and asked them to start presenting some of the positive things that are happening, not just this nonsense that you see in the Globe and Mail with seal penises and all that other nonsense and crap that we get blasted about in the national newspapers, but to start presenting the good news stories that are happening, some terrific news stories happening in the small and medium sized sector, and these people, most of them signed on as ambassadors to help us draw out opportunities and feed into our network and system through Industry, Trade and Technology so that's a very hopeful and positive sign, but it is a broad range of companies.

I don't know if you want to add anything to that, Peter? I know I can't speak specifically about the companies because, how can you target a company and start doing all kinds of work on it when it is out there publicly? But it crosses everything through the old and new economy but mostly new economy companies.

MR. CHAIRMAN: Order, please!

Your time is up, Mr. Byrne. We will get back to you if you desire.

MR. E. BYRNE: Well there is always Question Period, isn't there?

MR. CHAIRMAN: That's right, there is always Question Period.

MR. E. BYRNE: I appreciate that.

MR. CHAIRMAN: Mr. Tulk.

MR. TULK: I will follow up from something that Ed was asking and that is: there has been a great deal of energy I guess put into trying to develop through the ERC and through your own department and through the (inaudible) development and push us into a new economy, the IT economy I guess primarily.

There has been a great deal said about the fact that if we don't leave our traditional economic activities - not leave them, if we don't start doing other things other than our traditional economic activities, indeed our unemployment rate will remain where it is and perhaps go even higher. Where do we hope to be in terms of employment in the new information, the new technology and the new economy that the minister was talking about, in relation to the rest of our traditional economies?

I know it is a very iffy question but it is also very important in terms of what Ed said there and what we have been saying all night, that if we are going to see 18,000 to 20,000 people taken out of the Newfoundland fishery, that means that unless we can find some other economic activity in this Province, our unemployment rate is going to be looking probably something like 30 per cent by my estimates.

MR. FUREY: Yes.

MR. TULK: So what role does the minister see that playing in terms of employment in this Province?

MR. FUREY: I see the old economy, the old economy being the resource based economy, still being a very important part of the economy of this Province. The new economy is not just restricted to high technology or information industries as well. The non-resourced based manufacturing, 6000 people take their jobs in this Province from non-resource based manufacturing.

MR. TULK: Personified by those two things.

MR. FUREY: But if you think about it companies as old as Brookfield Ice Cream are looking to export. They have the domestic market so why would they not look at the export market using the backhaul rates on empty trucks that are bringing products in from Ontario? They sent seventeen tractor trailer loads of ice cream out last year and that was a considerable piece of profit.

AN HON. MEMBER: (inaudible)

MR. FUREY: There was some other stuff, those Longtreats I used to call them as a kid. I do not know what they are called now.

AN HON. MEMBER: Ice cream sandwich.

MR. FUREY: Anyway, those ended up in the Skydome at the Blue Jays games. I do not eat them anymore. Mr. Tulk, seriously, EDM Consultants, a little engineering and design firm from the district of the Member for Humber Valley, they leveraged a few dollars out of the SIID agreements, joint ventured with a small firm in Jamaica and just landed a $12 million contract to redevelop the entire Kingston airport out of Deer Lake, so it is not just the new economy in terms of high tech and information industries, it is taking what is in the old economy and not being afraid to step out on the world stage and say: Hey, I'm pretty good at this, too. A $12 million contract to a little firm in Deer Lake, that is big stuff. That is stuff to be really proud of.

Pro Dive a little diving firm here in St. John's, located in Mount Pearl, in fact, went down to New Orleans two years ago at the oil show and did a joint venture with one of the world's largest remote underwater diving firms Sub Sea. The idea was to get them to joint venture with Pro Dive and come back and take advantage of the great Hibernia project and transfer technology back here. When they came here and saw how good Pro Dive was they immediately gave them a contract in the Gulf of Mexico for $1 million with ten Newfoundlanders diving down there and working at that. So, it is getting out on the world stage and drawing back new money into this, what I called a recycled economy, you are just recycling money here unless you break open into new marketplaces.

Claymore Plastics out of Bishop Falls, a little firm that I visited two months ago, they just doubled up their shift. They do injection moulded bottles for the dairy industry and they have 100 per cent of the domestic market. They just competed for a tender in New Brunswick a month ago and won it. They will supply for the next two years two million containers to North Humberland Dairies in New Brunswick. That is new money coming into the economy. That little company incidentally works 365 days a year, flat out twenty-four hours a day. That is good stuff.

Hipoint Industries out of Bishop Falls exporting to Brazil, a major contract. Their product sits in the fire trucks of the Metro Toronto Fire Department because it cleans up gasoline very quickly. It is called oclansorb. It uses a peat based product to soak up quickly oil spills and stuff.

MR. TULK: It is very good stuff.

MR. FUREY: Genesis Organic out of Corner Brook, Rick you would know about this, they sent a container load of peat out to Saudi Arabia where they are worried about the encroachment of the desert and they are trying to figure out ways to stop the encroachment of the desert to taking up all the irrigable and fertile land that is left.

Newfoundland is all over the map and our companies are starting to get out there acting globally capturing contracts, bringing back new money, and expanding the economy. We cannot just think insularly that this is the only economy we can operate under. We are very good at what we do. Ultimateast is exporting new marine technology to the South China Sea. Cora just landed a contract in the South Pacific for $8 million.

There are golden examples of Newfoundland companies daring to step out, and I think that is part and parcel of it. The old economy will chug along but we have to give incentive and new energy to get our people out there to operate in the new economy as well.

MR. TULK: Mr. Chairman, I would just like to say to the minister, we should chide him a bit for not bringing the good news more out into the open, I mean, the most we hear these days in terms of the economy in this Province is bad news, and here he has sat down and has lectured me for five minutes on the good news that he has in his department, yet I never hear him in this Legislature stand up and -

AN HON. MEMBER: They don't take advantage of Ministerial Statements.

MR. TULK: Even Ministerial Statements saying the good stuff I would encourage the minister - but for one time I am going to agree with the Member for Green Bay, for God's sake - I will encourage the minister to stand up and do some of those things in the Legislature and let us know what's going on but, he deserves to be

chided a bit for -

MR. FUREY: Thank you for (inaudible).

MR. TULK: - for hiding his candle under a bush. You should do it Minister, you should do it more often.

MR. CHAIRMAN: I am sure the minister will act accordingly, Mr. Tulk, and -

MR. TULK: Thank you.

MR. CHAIRMAN: - will consider that to be good advice. Are you finished, Mr. Tulk?

MR. TULK: Yes, I am.

MR. CHAIRMAN: Mr. Shelley.

MR. SHELLEY: Thank you, Mr. Chairman.

Just a couple of other things as quickly as possible.

You mentioned about the lumber stocks a few minutes ago, and I have been following that a little bit too because it is interesting for my area as well, and I will try to run it all together with the lamination plant. I would like to get an update status on that, where it is, if you could, I can start with that and then run into other things.

MR. FUREY: Yes. Their consultant, Mr. Ron Dawe, has done what I would consider a terrific job, he really has done a superb job with this company. It is a consortium of investors led by a Switzerland group - Pardon?

MR. SHELLEY: I thought it was Norwegian.

AN HON. MEMBER: (Inaudible).

MR. FUREY: No, no. A Swiss group. No, that's an Austrian company. They would be a 10 per cent shareholder in this other company but it is a series of Swiss investors. Incidentally, while I was in Switzerland, I met with the Canadian Ambassador and a number of bankers and asked the Canadian Ambassador to come to Newfoundland and speak at a few venues over the next few months to talk about the huge pools of capital that are there for investment and to also get some sense of the kinds of resources we have here, with which he could respond back to that community, and he has agreed to do that.

The investors are in place, they are from Liechtenstein, Austria and Switzerland, there is a consortium of them; it is their intention to put up - I am just trying to remember the amounts now - it's a $12 million project, they would put up as I remember, both by way of direct cash equity and bank loans here in Canada, $8 million, and this has to be developed in their business plan which they will present to government next month, I think, June 1st, if I recall correctly, their business plan is to be presented. From the SIID agreement, they would look for $1 million and from FAP $1 million and they would make other arrangements for the balance.

They are looking at two sites and their consultant, Mr. Dawe, has visited with two of the communities: Roddickton, where the Canada Bay Lumber company now produces the lumber for Europe, but they would take that product and value-add it into laminated wall beams using a natural glue process which is used in bridge construction, ski chalets and a whole range of products in Europe. They have a fantastic thirsty marketplace over there and everything we can produce they will take, but they want all the jobs to stay here, they see a good, handsome profit in conducting their business in Newfoundland.

Part of the problem, Mr. Shelly, is resource. They can't get enough resource. Currently, they have enough resource that the plant would operate with one full shift; that would be roughly forty people in the plant going full tilt and fifty people in the harvesting sector for ninety jobs. They want to go three shifts, they want to go round the clock, full tilt, and in order to do that they have to get access to more timber supplies and they are eyeballing Labrador, where there is 400,000 hectares of black spruce, much of it dying and falling down.

MR. SHELLEY: Over-matured, yes.

MR. FUREY: Right. The problem is, the Department of Environment and Lands has now called for an EPR on harvesting in Labrador, so we're waiting; that will delay the thing for six months, but I do know that they will purchase locally, they will take in local sawmillers. Many of the people in my riding who have the small sawmills are really excited, and they're talking to this company through Mr. Dawe now, and I understand they were looking at Harbour Deep, too. Now there may be a difficulty in transporting wood out of there.

AN HON. MEMBER: (Inaudible).

MR. FUREY: Yes, exactly what they're doing.

Mr. Shelley, if they could get the supply that they require to run three shifts per day flat out, which would bring you up just short of 300 jobs, good paying jobs, they would do it.

MR. SHELLEY: Okay. Well, I suppose in all a spin-off to that, and that's the reason -

MR. FUREY: Incidentally, I just want to clarify the two areas they're looking at. It's Roddickton -

MR. SHELLEY: And Hawkes Bay.

MR. FUREY: - and Hawkes Bay, and they were looking at that from a strategic shipping point of view and from a municipal land and tax grant point of view. They would like to have some incentives for coming in, and that's one of the things we're looking at now in our business investment bill which will be tabled in the House in the very near future, which is a bill which will lay out certain tax regimes for non-competitive businesses coming into the Province.

MR. SHELLEY: Okay.

MR. FUREY: Basically zero-based tax for a period of time, with a number of other incentives.

MR. SHELLEY: Have they been encouraged to look anywhere else besides Hawkes Bay and Roddickton?

MR. FUREY: I didn't encourage them to look anywhere. Their first choice was Roddickton. Their consultant said: Do you realize there's a pier there, a very good wharf facility, and a storage shed where the Daniel's Harbour mine through Hawkes Bay shipped all the zinc from Tek (?) Corporation right into the European marketplace.

MR. SHELLEY: (Inaudible).

MR. FUREY: Yes, they did, but they settled on these two areas, Mr. Shelley, but I -

MR. SHELLEY: Well, to be straightforward and blunt about it, first when I heard about it my district... Everybody would like to have something like that in their district - let's be frank about it - and of course the people in my district very simply asked me. They've been cutting wood down there for years; they've got probably one of the best dock facilities around with the mine there, they hardly use it - the biggest ships went in there - and right now it's just lying dormant, and the large buildings down there.

MR. FUREY: In Baie Verte?

MR. SHELLEY: In Baie Verte, at the mine site there.

MR. FUREY: They're looking at Harbour Deep for wood supply.

MR. SHELLEY: That's what I'm going to continue on with now. Right now Abitibi-Price have done some research on that.

MR. FUREY: Incidentally, if you want to talk to Mr. Dawe about Baie Verte please feel free to do so.

MR. SHELLEY: Okay.

MR. FUREY: But I think they've zeroed in on two, and I think they've concluded Roddickton.

MR. SHELLEY: Well, that's fine; but I just wanted to find out anyway.

MR. FUREY: That's their call.

AN HON. MEMBER: (Inaudible).

MR. SHELLEY: I don't mind. It's just that everybody has their chance and if there's a better place then sobeit.

MR. FUREY: I agree.

MR. SHELLEY: But as far as the Harbour Deep situation goes, I've been dealing a lot with Harbour Deep because of the situation that came up with the resettlement and everything else. Of course, we went there and looked everywhere for alternatives. This was a group - it was a very emotional situation up there for awhile with the resettlement that was there. I didn't fabricate it, as some people suggested. I'm certainly not going to fabricate a resettlement story - I don't want to hear anything about it - but basically we started looking around and the first thing I noticed up there, of course, was the beauty of the place. It's one of the most spectacular communities around, as far as I'm concerned, and if you've been there - I think you have - with the trouting and all of those things -

MR. FUREY: I went there on a skidoo two years ago.

MR. SHELLEY: Yes, they told me -

MR. FUREY: (Inaudible) Bay to Harbour Deep.

MR. SHELLEY: Yes, I was there a few days ago, actually, and they told me you had a skidoo run there.

Then we started looking at the forests. I researched it a little bit and found out that the stand up there, called the Mooney Block, which was sold by a Doctor Mooney back in 1934 to Abitibi; Abitibi hasn't touched the land, and it is a very good stand of timber. It's one of the best left in the Province, as the Minister of Forestry and Agriculture has told me, and it's about ready to over mature, the same thing. Trees fall down when they over mature, as you know, and they're of no use any more, but I would lean towards, instead of Abitibi using that for pulp, because it's good wood - and, of course, I believe personally that using the wood for lumber is much more efficient; it's better for everybody; it's more profitable than using it for pulp. Of course, as far as this lamination plant goes, I would like to have them look at that as a resource down there. As far as transporting goes, a barge from Harbour Deep, which they have a ferry going in there, to Roddickton or Baie Verte, or wherever it is -

MR. FUREY: Who runs the ferry into Harbour Deep now? Is councillor Wells still running it?

MR. SHELLEY: Yes.

MR. FUREY: Is it a good operation?

MR. SHELLEY: We won't get into that. I haven't used it a lot, to be honest with you.

MR. FUREY: Toss down my tourism hat there for a second.

MR. SHELLEY: Rick has probably used it, yes, but I haven't. Anyway that's one of the avenues I'd like to pursue and that's why I asked about speaking to you today about that resource. Basically I'm going to pursue it now and I've already told the minister -

MR. FUREY: That's with Abitibi now is it?

MR. SHELLEY: Yes, I've met with them already and they don't want to use it. They haven't used it for fifty odd years. They're paying taxes on it.

AN HON. MEMBER: What are they doing with it?

MR. SHELLEY: So I've asked them to consider passing it back to the Crown and they are considering it. Mr. Flight is talking to them but there's a resource there and my whole point of bringing this up -

MR. FUREY: Local people could harvest it and then barge it up to this lamination plant.

MR. SHELLEY: Exactly, I mean you don't have to be an expert in all these fields to realize - they have the resource there that's not being used. You have people there who definitely can't look at the fishery any more as an alternative. Instead of resettling 200 people to another problem that could be a community of 200 with all them working.

MR. FUREY: What's the volume of that Mooney stand?

MR. SHELLEY: Well I couldn't give you it exactly but I looked at it on a map. I don't know the areas size, I could find out for you but it is very big. I mean it could last a long time but the point being is that it could be a model. That area could be a model for this Province, like I told the Minister of Forestry and Agriculture. We could show a real model for the rest of the Province, how we could sustain a good development there, cut the trees but then use proper silviculture practices, it could be all done in a very isolated place. I'm going to be pursuing that and I thought I'd bring it up with you here tonight.

MR. FUREY: It's a terrific idea, it's a marvellous idea. Look, would you make sure we follow up on that, you and I, with Ron Dawe too?

MR. SHELLEY: I'd love to.

MR. FUREY: Okay.

MR. SHELLEY: I think it's something worth looking in to.

MR. FUREY: Wayne is checking on it for us, is he?

MR. SHELLEY: He is, yes.

MR. FUREY: With Abitibi?

MR. SHELLEY: Well Abitibi, yes. I've been -

MR. WOODFORD: Abitibi won't give it up unless there's an exchange.

MR. SHELLEY: Yes, well.

MR. WOODFORD: If there's an exchange they'd give it up tomorrow morning.

MR. SHELLEY: If there's an exchange?

MR. WOODFORD: That's what they'll do. That's what Kruger will do and that's what Abitibi will do. They want an exchange and accessibility.

MR. SHELLEY: That's been the history, yes. I realize that, Rick, but I mean we got to pursue it if we're ever going to get anywhere with it and maybe the exchange will be worthwhile.

MR. FUREY: I agree with you. I like your idea and in fact we're talking about managed private wood lots. I can imagine the community of Harbour Deep caring for that, looking after it, silviculture, regeneration, reforestation and harvesting chunks of it, creating employment and barging it to this plant, it makes good sense.

MR. SHELLEY: It does -

MR. FUREY: But let's ask Ron Dawe what the economics are of barging, that's the issue.

MR. SHELLEY: Yes, that's the other issue. So I want to mention that tonight I'm really pursuing that and I'll hopefully keep in touch with you.

The last one I'll mention now, just to clue up because there's just a couple of minutes left but I'd be remiss if I didn't and I'd probably be shot too if I didn't and that's the Copper Creek Ski Hill out in Baie Verte, in the district.

MR. FUREY: Aren't you coming to tourism estimates tomorrow?

MR. SHELLEY: Yes I am but I'm going to mention it to you because you've been involved a little bit anyway to this extent and -

AN HON. MEMBER: (Inaudible) to the minister that it will be here for tourism tomorrow.

MR. SHELLEY: Yes, I know but I'm going to follow up a little bit more in detail with it tomorrow.

MR. FUREY: All my answers tomorrow will be as acting minister.

MR. SHELLEY: He will be here again. So actually I'll just say that now I will be bringing some specific questions on that and maybe tomorrow will be a better time to ask them actually.

MR. FUREY: You must be tickled pink with all the support I've been giving that little project.

MR. SHELLEY: And all the cheques.

MR. FUREY: You're blinded with cheques from me every week.

MR. SHELLEY: Anyway I think that will all (inaudible).

MR. FUREY: I'll talk about it tomorrow. I think it's a terrific project and I can only endorse it 100 per cent. I think it's fabulous.

MR. SHELLEY: Okay, we'll give a little bit of detail tomorrow maybe.

MR. FUREY: Alright.

MR. SHELLEY: Thanks. Thank you, Mr. Chairman.

MR. CHAIRMAN: Shall we call the sub-heads?

AN HON. MEMBER: Just one second now. Mr. Chairman, I got a - oh, go ahead.

MR. CHAIRMAN: Mr. Matthews.

MR. L. MATTHEWS: I'm really impressed with the love-in we have here between the minister and this Opposition member. I think it's only a sign of good things to come in the House but in deference to my colleague here from Fogo, I have to come to the defence of the minister because I - he was borrowing my glasses all night and I was so upset with his comments about you not promoting the good news stories that I took my glasses back while he was talking and you're not getting them anymore until - you be nice to Chuck over here. I've been in many forums where the minister has pontificated and articulated the good news stories.

MR. TULK: On a point of order, Mr. Chairman. I have to tell the hon. gentleman that the Minister of Industry, Trade and Technology has often, sometimes taken my advice, sometimes he hasn't, but please for God's sake get out and tell everybody how good you are.

MR. L. MATTHEWS: I just wanted to say that.

MR. TULK: That's your problem.

MR. FUREY: Mr. Chairman, would you get these two to stop fighting.

MR. CHAIRMAN: Order, please!

MR. L. MATTHEWS: Speak about the good news stories that -

MR. CHAIRMAN: The Chair will now rule on that point of order.

MR. TULK: It was a legitimate point of order, yes.

MR. CHAIRMAN: It was a legitimate point of order and was well taken Mr. Tulk, thank you very much.

MR. L. MATTHEWS: I have a question though Ms. Duke and that is with respect to privatization.

In my view, privatization takes two forms, one being what I guess is the type of thing we are pursuing with Hydro and NLCS and that sort of thing, but another form of privatization to me is the aspect of contracting out and I am just wondering if the Recovery Commission has done any work in terms of looking at what types of goods and services that the government provides now in-house if you like, could be contracted out to the private sector as another form of privatization?

MS. DUKE: I guess the work that the commission has done so far has been work that has been done with other departments. We are part of I guess, a committee that is looking at that whole thing, but we really haven't gotten to the specifics yet of looking at any particular departments. We are basically looking at approaches and in terms of doing this kind of thing how you would do it, what would be the best way to bring the most efficiency to the most economic benefit so really you know, we haven't and wouldn't be pursuing that alone, it would be something that the government would be looking at generally and we would be a participant in it.

MR. L. MATTHEWS: So you are not really actively involved in the consideration of what goods and services government could, and those agencies could be contracting out as opposed to providing - I am thinking of simple things like cleaning services, security services that type of thing.

MS. DUKE: We haven't been up to this point in time. I think that that kind of an analysis would be done at some point, to look at what kinds of things could be out-sourced.

MR. L. MATTHEWS: Thank you.

MR. CHAIRMAN: Mr. Byrne.

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

I don't know a lot about the Economic Recovery Commission and I think what I do know is a lot more than most people in this Province know about it. In every department in government there is, for example, in the minister's department a policy and planning, market research, market investment.

If you go through department by department in these estimates you will find layers upon layers of government administration that does exactly or supposed to do exactly what the Economic Recovery Commission is doing, and I say to the minister I am not trying to be facetious, but it is just something that sticks with me, that you know, in many ways I think that Economic Recovery Commission is really the social think-tank, an economic think-tank of the government, and as a non-elected, unaccountable body, I mean, to whom does it answer besides the Premier, and, what is its ultimate function, is it a privatization commission?

You know, we have talked about it here, I mean, there are discussions about streamlining government services and these are legitimate questions and I think that they deserve more public discussions so I guess my question is: what role is the Economic Recovery Commission playing today, in terms of when it was first created by the government that you represent, and what role do you see it continuing to play?

Maybe my comments are completely off base and off-the-wall, but again it is based upon little knowledge of how the Economic Recovery Commission works, what it does, what direction it is working under, there doesn't seem to be any sort of format or structure or avenue by which the commission's work can be questioned on a regular basis.

MR. FUREY: No, I don't think your questions are off the wall, I think they are good, sensible questions.

The Economic Recovery Commission was formed by the government in 1989 after the election. We thought we needed some fresh ideas; their job at the time was to come up with policy and to help us implement the policy. They, for example, helped to restructure the old Department of Development, NLDC and all of those various agencies out there into ENL which is, I think, a success story. It is not the cure-all for the entire Province. Now, they were involved in the implementation and on the Board of Directors for a number of years, they just came off with one less now this year, and I think they are moving more towards, if I can call it global policy and think-tank for the government.

ACE is a group of businessmen who are volunteers, who once every so many months, I think biannually, come in and report to Cabinet what their thoughts are on what we should be doing, whereas the Economic Recovery Commission is a think-tank that gives specific policy ideas to specific departments and helps to try to run with them and implement them, whereas line departments have their own policy and strategic planning; that's within the confines strictly of a department, whether it be forestry or industry or fisheries or whatever. It's strictly within the context of the budget they have and the department has. We want the Recovery Commission to be a broader, more global think-tank of policy direction and help us to implement it.

Now in the Throne Speech you heard the Premier talk about restructuring. Only he knows at the end of the day what will happen in terms of restructuring, but I suggest that there may be some radical restructuring in the agencies throughout government in the next number of months.

You asked a broad brush general question, and I am trying to give you a broad brush general answer. It's answerable through the Premier - that's who it reports to - but also to the members of this House. Anybody who wants to ask a question at any time about the $2.1 million -

MR. E. BYRNE: That's half true and half not true, Minister. Just on the Income Supplementation Program creation, or the creation of that program, over $500,000 - or close to $600,000 - was spent by government before releasing any parts of the document. I made presentations on behalf of the Province and the people to the federal government, a proposal that would radically alter the sorts of lifestyles and incomes coming into people in terms of what they receive from UI and social assistance and NCARP and all those sorts of things.

I guess the question -

MR. FUREY: I'm listening.

MR. E. BYRNE: The question that really comes to mind, while the opportunity is open to every member in the House of Assembly to ask questions of any department or any public expenditure, especially the Economic Recovery Commission, it seems to me that the work that the Recovery Commission, based upon the information that I have, it seems to me that their work is far more reaching than most people in this House know, than most members know, so I personally take affront to that sort of approach in terms of major public policy, that we hear about things after.

I just question, number one, the status -

MR. FUREY: You mentioned the Income Security Program. That was released as a discussion paper, as I recall. You're not going to release something, Mr. Byrne, until you have the research done, and then you release it with all the information that you have. It's generated considerable discussion, as you well know. Would you think we should release it part way through?

MR. E. BYRNE: I use that as an example. I wouldn't suggest for a moment that you would release something without having the research done.

MR. FUREY: Completed, you know, having the document -

MR. E. BYRNE: I guess the point I'm making is: What role is the commission playing? Is it a role that is already being played within departments in government, or is it really creating a new sort of role in this Province on behalf of government and us, on behalf of the people of the Province? That's an open enough question.

The second part I would like to ask of the Economic Recovery Commission: Are they working on or developing a comprehensive strategy that would look at what opportunities are available for young educated Newfoundlanders in the Province? It is by far the most serious issue, in my opinion, that faces us today as a Province, when thousands of people in the last decade for sure, but in the last five years, are leaving this Province in increasing numbers, and the people who are leaving are the ones who have the most opportunities, who can take advantage of the most opportunities. They are people with degrees in business, education, economics, social degrees, nursing, professionals. These are the people that we need, so if I can clue up my question, Mr. Chairman -

MR. CHAIRMAN: You can clue up the question.

MR. E. BYRNE: Is the Economic Recovery Commission doing any development work or research work on this issue at the present moment and, if so, what is it?

MR. FUREY: I'll just let Cathy deal with that because they are, actually; but, you know, the eleven new sectors, the `Opportunities for Growth' they call it, they just didn't fall out of the air. A lot of time and energy went into those sectors. The Adventure Tourism strategy which we are about to release in the next little while, they played a critical role in pushing and prodding the Department of Tourism and Culture in creating the group of people who finally emerged to run with that particular study and it is a fabulous piece of work and it lays out a plan in Echo Tourism and Adventure Tourism.

The five-year craft study, with the emergence of Devon House and the good work that we are seeing in the crafts industry, the Economic Recovery Commission were critical players in that; it is not to take credit away from those people who worked in the industries already but sometimes when we are working along you know, inside our own departments, we tend to fall into a mold, not a rut but a mold and we carry on.

Sometimes it is not a bad idea to have somebody come in with fresh ideas and that is essentially what they are, the catalyst for prodding and provoking new ideas and new energy and new thought and new development, and I think, in some ways if you look at those eleven opportunities for growth, the new sectors for growth, they have done magnificent work there, this at the crossroads that Mr. Tulk referred to earlier, is a really good piece of work; set aside any prejudices and biases and read it, it really is.

AN HON. MEMBER: (Inaudible).

MR. FUREY: The plan now is to send it to most of the schools?

MS. DUKE: I guess up to this point, we have printed 20,000 copies and they are just about all out right now. We are sending them to all the key economic development agencies, the schools, libraries, direct government agencies.

MR. FUREY: So you know, I am giving you a general answer, Mr. Byrne, it is difficult in two or three minutes -

MR. E. BYRNE: No, but that's what I am asking.

MR. FUREY: - but I would like Cathy to address your particular concern about young people, I share your concern and I think it is a major problem.

MS. DUKE: We agree, it is a very serious issue and is something we have been looking at for some time and as the minister said, in identifying where the new growth sectors are, part of that is looking at where the career opportunities are as well, and I just would like to add one point and that is, that we are currently researching three additional sectors and we expect that the strategies for those will be released within the next month or so.

We have one on the health sector, one on secondary processing in agri-foods and seafoods and one in the peat sector, but just to answer your question specifically on, I guess, education and training, that is one component of what we see as an integrated approach to economic development and we have recognized for some time that there are serious difficulties within the post-secondary education system in Newfoundland.

We have the current proposals or recommendations in place for K to 12, but we really need to look at encouraging community colleges, Marine Institute, private colleges and so on, to train for the new economy as opposed to training the unemployed which is really what is happening now, and under the additional funds that the commission received this year which the minister explained earlier, is for an education strategy. We basically have the terms of reference in place for some research that we propose to do in terms of looking at what the training requirements are for the new economy, what kinds of things we need to put in place then look at our post-secondary education system, see what's happening now, look at future labour markets and so on, so we are, this year, hoping to do some detailed work in that area.

MR. E. BYRNE: Could I just make one final comment and a question, Mr. Chairman?

MR. CHAIRMAN: Mr. Byrne.

MR. E. BYRNE: Maybe I am as guilty of the things that I am asking because I haven't I think, since being elected probably picked up the phone once or twice and phoned the Economic Recovery Commission on a specific or specific issues, but I would say that maybe the commission itself or government should look at talking more or promoting more of what the commission's work is doing, if government is convinced it has a definite function that is required and is doing solid work, because there are people from whom I get questions all the time, what is the Economic Recovery Commission? Is it planning for economic recovery, what are the tangible benefits of it? I think they are legitimate questions that some people are asking.

MS. DUKE: I think that's a very good point. I guess, at the commission ourselves, we feel that we haven't been very good at marketing what we do or letting people know what we do. We have always taken a sort of a back seat with things, but one of the things that we have placed a lot of emphasis on this year, is what we call getting the message out, and we have been doing a lot of presentations around the Province. The minister mentioned the work we are doing in the high schools; we are also meeting with development agencies and industry associations and so on. We do have a presentation which basically outlines governments approach to transforming the Newfoundland and Labrador economy and what is involved in that. Through talking about that we do explain a lot of the things that government is doing and how the ERC fits into that and what our role is. So I think if our chairman were here tonight he would offer that if any of you would like to have an individual meeting or have a presentation, have us go through that, we certainly would be happy to do it because we have been doing public presentations over the last year on that very thing.

MR. FUREY: That's a good point, Mr. Chairman. It's difficult for people to understand what people are doing when it seems like they're so diverse. I would second Cathy's offer, I mean if your Caucus would like a presentation on what it is they're doing exactly, the new economy and the transformation of the old economy, it really is worthwhile seeing. I'd be most happy to set it up for the entire Caucus. You let me know.

MR. CHAIRMAN: Thank you, Mr. Minister. Are we ready to call the sub-heads?

MR. WOODFORD: Yes, Mr. Chairman, I will just call 1.1.01 to 3.3.01 inclusive.

On motion, subheads 1.1.01 through 3.3.01 inclusive, carried.

On motion, Department of Industry, Trade and Technology, total heads, carried.

MR. CHAIRMAN: I would like to thank the minister, his officials and the members of the committee for the manner in which this meeting has been conducted. I would like to thank the committee members, particularly the co-chair for the cooperation that the Chair has received this evening. I must also thank Mr. Oates who has been very diligent up there with the monitoring equipment all evening and our table officer, Elizabeth. We've had Jeff Pearcey, who's not here with us now, our Page has been with us most of the evening, I'd like to extend official thanks to him as well.

There's one comment that I would like to make for the record, as a Chairman of this committee I was left with the impression that the media had requested government to try its best not to arrange more than one estimate committee at any one time because they found it very difficult to cover two meetings at one time; one being at the House of Assembly and one being at the Colonial Building. So some pains were taken to see that that did not happen and I think its noteworthy tonight that there has been nobody -

AN HON. MEMBER: There is only one meeting tonight?

MR. CHAIRMAN: There's only one meeting tonight. It's here at the House of Assembly. It's noteworthy that there are no representatives of the media here this evening, and I would make that comment for the record.

Our next meeting of this committee will be with the same minister, the hon. Chuck Furey, wearing his other hat as Acting Minister of the Department of Tourism and Culture. We will be meeting here tomorrow morning at this same location at 9:00 a.m.

MR. E. BYRNE: Government Services have a meeting, the select committee dealing with Bill 59 are meeting here at 9:30 tomorrow morning.

MR. CHAIRMAN: Here? Meeting here?

MR. E. BYRNE: That is my understanding, yes.

AN HON. MEMBER: (Inaudible).

MR. E. BYRNE: Are we? Okay, I was told we were meeting here.

MR. FUREY: It's 10:00 a.m. here.

MR. E. BYRNE: Okay, I hope you're right.

MR. FUREY: Yes, it's 10:00 a.m. here; that's what Baker told me.

Does anybody have a problem with 10:00 a.m., because there are some business people from outside the Province that I've committed a meeting to.

MR. CHAIRMAN: There's no problem with the Chair. Is there any problem with any of the committee? Okay, then, it will be at 10:00 a.m.

AN HON. MEMBER: (Inaudible).

MR. CHAIRMAN: The Estimates Committee meetings have to take precedent.

On motion, Committee adjourned.