Pursuant to Standing Order 87, Gerry Reid, M.H.A., Twillingate & Fogo, substitutes for Robert Mercer, M.H.A., Humber East.

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

CHAIR (Mr. Canning): Order, please!

We are meeting this evening to discuss the Estimates for the Department of Forest Resources and Agrifoods. I propose we begin with an opening statement by the minister. Perhaps you might want to introduce your delegation and then I will introduce the members present.

MR. TULK: I have a statement that I am going to read and I have prepared a copy for each one of the committee members if you want to follow along. I don't want to make anybody believe that you are in school but it is sometimes better. I found this morning when I was reading it, to be quite frank with you, there was a fair amount of information that I think people might find handy, not only for this evening but maybe for some Question Periods or something of that nature.

This evening, I have with me, on my right, the Deputy Minister, Mr. Hal Stanley; on my left is the Assistant Deputy Minister of Forestry and Wildlife and Inland Fish, Dr. Muhammad Nazir, commonly known to most people as Dr. Moe Nazir; on my far left is Martin Howlett, the ADM of Agrifoods; behind me is Margaret Power, the Director of Human Resources with the department, and I guess, with the Department of Natural Resources as well, Margaret, is it?

WITNESS: Mines and Energy.

MR. TULK: Mines and Energy, I am sorry, used to be the old Department of Natural Resources; and Len Clark, the Director of Financial Operations with both departments.

Before getting into the -

CHAIR: Pardon.

MR. TULK: You want to introduce your people?

CHAIR: Exactly. I will introduce the members of the House who are present and perhaps we can start with the Member for Twillingate and Fogo; just introduce yourself.

MR. G. REID: Gerry Reid, MHA for Twillingate and Fogo.

MS THISTLE: Anna Thistle, MHA for Grand Falls - Buchans.

MR. WOODFORD: Rick Woodford, MHA for Humber Valley.

MR. OSBORNE: Tom Osborne, MHA for St. John's South.

MR. CANNING: Perry Canning, MHA for Labrador West.

CHAIR: Minister, you may begin with your statement and for your officials, if, at some time you answer a question, just introduce yourself at the mike, because it is being taped for Hansard purposes.

MR. TULK: Okay, you will find in front of you this sheet which I am going to run through: The Department of Forest Resources and Agrifoods includes the disciplines of Forestry, Wildlife, Inland Fisheries Management, Conservation of Biodiversity, Agriculture and Agrifoods.

The total gross budget for the above-mentioned disciplines is $52.69 million, which includes $5.1 million capital expenditure. It has a $26 million allocation for Forest Resource management; $10.1 million for Inland Fisheries, conservation of biodiversity and Wildlife management; $13.1 million for Agricultural development and $3.377 million for Administrative and Executive Support.

The net expenditure, excluding related revenues for the department, is $44.1 million as compared to $46.8 million last year. On the surface, it is only 5.5 per cent less than last year. However, if we exclude the programs which are fixed in nature, such as forest fire fighting and various cost-shared commitments with the Federal Government, and also count some extraordinary additions to this year's budget, the reductions in some of the other programs are as high as 25 per cent to 30 per cent and, in a couple of instances, even 100 per cent.

Before I discuss the individual programs, I should take a few moments to reflect on the contribution of our natural resources of Forestry, Wildlife and Agriculture to our economy and our well-being. The Forest industry employs directly and indirectly over 10,000 persons in this Province. The major industry, of course, is the Pulp and Paper industry, which produces newsprint with a value of shipments of approximately $670 million last year. The industry, after a long downturn, is in a profitable situation mostly due to high newsprint prices and some cost-cutting measures.

During the last few months, the newsprint prices have come under pressure, which has forced the industry to take some downtime to balance the supply with demand. The industry is still expected to make a healthy profit this year. The pulp and paper industry is planning to carry out investments in improving the pulping technology, modernization of some of the paper machines and various environment-related capital projects. The total capital investment for this year is expected to be in the order of $90 million.

The sawmilling industry, while much smaller in total value of products, generates in the order of $30 million value of shipments but its influence on the rural economy of Newfoundland and Labrador is very pervasive because of hundreds of small-scale mills throughout the Province. This industry is expected to reach another high during this year. After struggling for several years, the industry is transforming itself into a more progressive industry with increased integration of lumber and chip production, kiln drying and various value-added products which are being exported to Europe, U.S.A and Japan; and I might add that there is a number of those places around the Province that we should take a look at and a number of them being proposed, that use the total log, the total wood.

The forest industry has faced wood supply problems for the last many years which are related to past large-scale insect infestations and to historic imbalances between various age classes of the forest. This is also influenced by expansion of capacity in both pulp and paper and sawmilling. With the increasing awareness for various non-timber values of the forest resources, there is additional pressure on the wood supply because of various environmental and other ecological and cultural considerations which reduce the available area for harvesting.

Wildlife resources of the Province provide the basis for both economic and recreational uses. Newfoundland has one of the highest participation rates in hunting and fishing by its residents. There are over 113,000 qualified hunters in this Province. Almost 25,000 persons participate in salmon fishing. Since we do not have a licencing system for trout we do not have an exact number for people engaged in trout fishing, but estimates range from 60,000 to 100,000 people who participate in trout fishing. The Salmonier Nature Park received 53,000 visitors last year. Our wildlife resources contribute significantly to our way of life, recreation, and economic and spiritual well-being. Newfoundlanders and Labradorians spend about $200 million on wildlife and inland fish related activities every year.

Big-game wildlife populations are thriving. We have reached this year the highest level of population and hunting quotas for caribou in the history of this Province. Moose populations, though slightly less than last year, are still the third highest. The partridge population is rebounding after a decline for the past few years. Snowshoe hare populations are still low, but we expect their recovery soon. On a sad note, I must say, the pine marten populations on the Island have dropped further, and that has resulted in this animal being declared an endangered species.

Agriculture in one form or another has had a long history in our Province and has long been associated with the lifestyle of rural Newfoundland and Labrador. The raising of livestock can be traced back to the Vikings, and root crops were grown to supplement the diets of the first permanent European settlers. The agrifoods industry is generally a rural-based resource with production and processing spread over the entire Province.

Since 1988, agriculture has been the only resource sector that has made positive growth, an average of 4.35 per cent. It has also exceeded the Province's average rate of growth in GDP by 2.15 per cent. It has withstood the negative impact of a national economic decline and generally continues to prosper. Farm cash receipts have increased over 90 per cent since 1982, from $33 million to over $63 million. Significant increases have occurred in the dairy, fruit, potpourri, floriculture and nursery sectors. All other commodities, with the exception of the hog industry, and in more recent years, the fur industry, have continued to expand.

It can be demonstrated that increased production rather than general inflation has been the influencing factor in the increased value of farm cash receipts. In addition, productivity gains have occurred in most commodities. For example, annual milk production per cow increased from 3,600 litres in 1983 to 6,300 litres in 1994. Annual egg production has increased from twenty dozen eggs per bird to an estimated twenty-three dozen eggs per bird. Newfoundland farms equal or exceed national productivity standards in many commodities.

Some success in reducing Newfoundland's dependence on imported feed has also been achieved. Since 1982, forage, hay and silage production has increased from 8,000 acres with a yield of 1.8 tons per acre to 13,500 acres with a yield of 2.8 tons per acre. Total farm operating expenses and depreciation charges increased from almost $30 million in 1982 to approximately $56 million in 1994, an increase of 76 per cent. By comparison, aggregate net farm income increased from slightly over $0.6 million in 1982 to almost $8 million in 1994, an increase of over 1,350 per cent.

Clearly significant strides have been made in developing a viable industry. However, this development has been achieved at a substantial cost to industry as measured by outstanding debt. In 1982 approximately $16 million was owed, compared to over $39 million in 1994, an increase of over 143 per cent. According to the 1991 census on agriculture, the current value of farm capital was $110 million in 1982 compared to $176 million in 1991. The resulting effect has been a decrease in the equity ratio. Producers have had to borrow significantly more to finance expansion and improvements.

In 1981 there were 284 farms reporting sales greater than $2,500 compared to the 525 reporting higher sales in the 1991 census on agriculture. Significant increases in the number of larger operations have occurred and particularly with farms reporting sales of greater than $50,000. The number of farms in this category has increased by over 71 per cent and farms with sales of over $250,000 have increased by over 151 per cent.

Review of 1995; in 1995 the agricultural industry turned in a fair performance. An improved showing in the livestock sector, primarily dairy, chicken and eggs, resulted in total farm cash receipts reaching $63.6 million, a 1.1 per cent over the previous year. The major commodities were dairy, $22.4 million; poultry at $16.1 million; eggs, $8.6 million; vegetables $4.0 million and floricultural and nursery, $2.8 million. Secondary food processing also grew last year. Sales of manufactured food products, excluding fish, reached $130.5 million, an increase of 5.7 per cent, as companies continue to successfully market their products both inside the Province and abroad.

There are many examples of successful Newfoundland and Labrador companies involved in the production, distribution and export of various local value-added products. The private sector successes that have contributed to increased economic output includes numerous varieties of speciality jams, jellies, relishes and sauces made from local fruits, berries, flowers and other unique items; blueberry and partridgeberry wine, speciality chocolates, locally roasted coffees, fresh herbal products and beeswax candles. As an example of export potential, a local restaurant entrepreneur has expanded the market for Newfoundland and Labrador-produced fresh pasta, sauces and other products into the United States by expanding the chain of Newfoundland and Labrador-owned restaurants in the Boston area.

Contribution to employment; the importance of the agricultural industry as a valued and productive part of the Newfoundland economy is often underestimated.

In the early 1990s, it was estimated that there were 300 full-time positions, 450 part-time jobs, 800 casual workers and 1,000 family workers for a total of 2,500 direct on-farm workers. In addition, there were 700 positions associated with the processing and grading in the broiler, egg and dairy sectors and an estimated 300 persons involved in off-farm processing of other commodities. This represents 3,500 jobs directly attributable to the industry. With regard to feed suppliers, transporters, manufacturers of packaging material and other related services, there is no reliable data on employment. Nevertheless, it is estimated there are 4,000 to 5,000 jobs directly and indirectly related to the agricultural industry in the Province.

Now, coming back to the Budget Estimates, as mentioned earlier this year this budget is difficult to compare with last year. Significant reductions have been made in silviculture, access road construction, administration of forestry operations, private woodlot program and nursery operations. In silviculture a $1.6 million reduction has been achieved by renegotiating silviculture agreements with the pulp and paper industry. This will enable us to maintain the total size of the program at last year's level. The pulp and paper industry will be contributing more. Approximately 6,000 hectares will be treated on Crown land, Crown-held forest lands. Another 6,650 hectares will be treated by Abitibi-Price and Corner Brook Pulp and Paper.

The silviculture operations will consist of planting, thinning and site reclamation projects. The company and Crown silviculture programming, including the cost of nurseries, will cost $10 million during 1996-1997. I would like to point out that silviculture is a labour intensive forest enhancement activity which employs 500 to 600 persons every year. During the last two decades $117 million has been spent by industry and government on silviculture in this Province. This resulted in 201,000 hectares of forest land being silviculturally treated including 92,500 hectares of thinning and 42,500 hectares of plantations; 108 million trees have been planted so far.

As I mentioned earlier, the roads program has also been reduced by $600,000. We have re-prioritized the roads program, some of the operators will be asked to build their own roads and avail of reduced stumpage rates. This year's program has eliminated the private woodlot program on the Avalon, however, we have maintained the private woodlot management program in the western region. It is mostly located in the St. George's area. The private woodlot management program in the eastern part of the Province was not directly contributing to the wood supply for the industry. It was designed to release pressure on the wood supply by providing more firewood species and Christmas trees. The woodlot program in the western part of Newfoundland is providing and is expected to provide in future, significant volumes of wood to the industry. The program in the western region has therefore been retained.

The budgetary constraints also force us to phase out one of our smaller tree nurseries at Brookfield Road in St. John's. This will not impact on our reforestation program. The Wooddale Tree Nursery will provide the necessary seedlings. Some urban forestry programs and supply of trees to non-profit organizations will be impacted.

Faced with the budget restraints, the department was successful in maintaining the level of law enforcement and monitoring and other field operations. However, we were forced into reducing the administration of our field services by reducing the number of regions from three to two on the Island by combining the eastern and central regions. Similarly, we reduced the management positions in our districts.

The budget for fire management remains essentially unchanged with the exception of a portion affected by the amalgamation of regional offices.

Because of the increased forecast for hemlock looper infestation, the insect control program is expected to be much larger, 95,000 hectares as compared to last year, 48,000 hectares. The budget for the insect control program has therefore been increased by over $1.3 million to accommodate the larger spray program. Most of this, of course, is shared by the pulp and paper industry because of the location of this year's program on their limits.

In the case of wildlife management, the budget provides for continuation of big game surveys started two years ago. These surveys have allowed us to increase quotas for caribou for both resident and non-resident hunters. We are also able to provide a five-year allocation of moose and caribou to the outfitting industry. Similarly, the cost-shared salmon enhancement program has been maintained.

We have to curtail some expenditure on various wildlife field studies under the Wildlife Monitoring Program. Like forestry, the regional offices for wildlife have been reduced from three to two on the Island, again, by emerging eastern and central regional offices.

Last year an inland fishery section was created in the Wildlife Division. Funding has been provided for the operation of this new section.

Limestone sales: Due to the generally acidic nature of our soils, it is critical that appropriate levels of limestone be applied. Given the recent termination of the Federal Feed Freight Assistance Program, it is even more important today as farmers strive to become self-sufficient in quality forage and explore opportunities for grain production.

On March 31, 1996, the contract with Havelock Lime for the supply of agricultural limestone expired. Consequently, the department made a public call for proposals for the supply and distribution of agricultural limestone in the Province. As a result, I am pleased to inform the Committee that a Newfoundland company has been selected and the department is currently finalizing the contract for signatures. It is signed now, isn't it?

AN HON. MEMBER: It is gone out to them.

MR. TULK: It is gone out to them. Okay.

Limestone will be provided to farmers at $20 a tonne for bulk and $50 a tonne for bagged.

Safety nets: In 1995 Federal Budget, Agriculture and Agrifood Canada placed a high priority on safety net funding. Since that time, discussions have been ongoing with all provinces on the appropriate mechanism for the design and delivery of the program. As a result, it is expected that the Province and the Federal Government will find a Memorandum of Understanding governing this area in the near future.

This will be a cost-shared Federal/Provincial initiative to enhance long-term stability for the provincial agriculture industry. The initiative will serve as `companion' programming to the CORE, National Safety Nets Program, NISA - Net Income Stabilization Account Program, and Crop Insurance.

Programming under the framework agreement will include enhancements to these existing CORE Programs, to improve their responsiveness to the provincial needs. In addition, programs will be designed to address research, development, marketing, value-added and diversification needs - agri-food innovation program - in order to foster conditions in the industry which will improve in the long-term income stability.

There will be a three-year agreement, from 1996 to 1999, under the Federal Agricultural Safety Nets Budget Envelope. Newfoundland's annual share of Federal funds is a total of $1.2 million, which must be cost-shared on a 60/40 basis.

And finally, Newfoundland Farm Products Corporation: The Budget announced a new Board of Directors for Newfoundland Farm Products Corporation will be appointed to commercialize the corporation and pursue privatization. It is my intention to move quickly to put this Board in place. The operating grant to Newfoundland Farm Products Corporation is lower in 1996-1997 than in 1995-1996. The reduction is mainly the results of improved productivity and new and aggressive marketing initiatives undertaken by the corporation in the past year.

Thank you.

CHAIR: Thank you, Minister. I would ask the Member for Baie Verte if he wishes to respond to the opening statement by the minister.

MR. SHELLEY: Thank you very much.

First I want to apologize for being a couple of minutes late and I also want to apologize beforehand, I guess you could say, just to inform the minister and let the Committee know that I may have to leave very quickly. My wife and I are expecting our third child, and she is about to go into labour; that is why I have the cellular phone here. I hope the minister doesn't mind.

MR. TULK: Not nervous, are you?

MR. SHELLEY: No, I was there earlier today, actually, and left again. My mind is elsewhere, I will be up front with you, at this moment. But I have a few questions to get started on and then I am able to leave. My two colleagues have a few questions, I'm sure.

CHAIR: Perhaps, Paul, for the record, if you could just introduce yourself.

MR. SHELLEY: Okay - Paul Shelley, the Member for Baie Verte.

MR. TULK: Paul, (inaudible).

MR. SHELLEY: Yes I do. This is Kim Puddester, who is with our staff.

MR. FITZGERALD: Roger Fitzgerald, MHA for Bonavista South.

MR. SHELLEY: You've introduced everybody else? Okay.

First of all, I would like to make a few general comments, and I have some specific questions on the estimates. I will try to go through them as quickly as possible.

First of all, I suppose, officially to congratulate the minister on his much-awaited portfolio, I guess you could say. Because I know, over the years we have been on the same Committee with estimates and had some questions, not surprisingly, I shouldn't say, but with a lot of common concerns about forestry and agriculture in this Province and where it was heading. Then, we all have concerns in general about the forestry and, of course, the analogy is always used of the fishery. There are some good comparisons when you talk about the forestry and the fishery in this Province, especially in respect of its being a renewable resource that we have to manage properly. And if we don't manage it properly it could meet the same fate as the fishery.

Of course, there are people out there who will say that we are headed that way, and there are others who say we are not. Instead of arguing back and forth, I guess what the minister's job is, and his department's, is to make sure that we are on line and taking the proper steps so that down the road we don't see the same crisis in the forestry as we see in the fishery, and that this minister or any other minister doesn't have to stand and say: We are having a moratorium on the forestry, and sooner or later standing to the point where we say you can't cut a log to heat your home, like we can't catch a fish to eat now. Hopefully, it will never come to that.

Mr. Chairman, there are a lot of specific questions. I will try to get with them and deal with some of them, and then make some general comments again later. The first one I want to go directly to is 2.3.01, the Economic Renewal Agreement. Of course, we know what the agreement is. I want to ask the minister here to just give us an update, I guess, of where you think those dollars will be spent, more specifically than what is stated on page 144.

MR. TULK: Are you asking now?

MR. SHELLEY: Yes.

MR. TULK: Most of that money, I think, will be spent - if not all of it, I believe all of it - for the establishment of a forestry centre in Corner Brook. Professional Services, you see, is $200,000, I guess Purchased Services will hopefully represent what we think will be this year's budget. I can say to the member, there has been a fast-track schedule that has been established which will see the detailed estimates and architectural design and drawings completed by the end of July, and hopefully, a tender call for construction by September 1996. Actual construction is to be completed by July 1997.

We have allocated $3 million, as the estimates show, for construction in 1996-1997, with the balance of $2 million to be spent in 1997-1998. I wouldn't ask the member, as he knows, to hold me to any of those dates exactly, because as you well know, and everybody know it, in the construction of new facilities and so on anything can happen that will delay you for a period of time. But it is the intention of the government and the department to pursue this project in the fastest possible manner.

If I could, Mr. Chairman, revert to just some of the general statements - we can come back to this one - that the member made in his opening remarks, in which he compares forestry and fishery, I couldn't agree with him more in terms of the management of fisheries and the management of forestry. I think it is with that kind of lesson - and I take no credit for this; it was done before I got into the department - but I think it is with that kind of thought or that kind of concept that the department itself has undertaken to look not at forestry but at an ecosystem, a land-based ecosystem of which trees are only a part. There is presently a structure that is being worked on by the department and it basically deals with the governance, if you will, and the maintenance and the monitoring of an ecosystem in forestry.

I want to say to the member that since becoming the minister I had concerns and I still have concerns about a wood supply shortage in this Province. I think we might be able to manage - and I underline this word - manage our way through it. I wouldn't want to say to him that there is no shortage of wood in the Province. There is a shortage of wood on the Island portion of the Province, there is no doubt about that. If we could access all of the wood that is in Labrador, then there would not be a wood shortage in the Province.

At this point in time, though, we are dealing with a lands claim negotiation with the aboriginal people, and until that is resolved and until we have resolved some other issues on just how we are going to take that wood out, and I suspect we will resolve some issues with the people of Labrador themselves as to where the resource is best used, then we do have in the Province a shortage of wood, and we have a shortage of wood primarily caused by the fact that there is a wood shortage on the Island portion, so I am not going to try to say anything different from that. We think we can manage our way through it because the pulp and paper mills, as you know, are now importing wood from places such as Prince Edward Island and so on. I don't know how far along we can take it, but we have had to do that, and we will probably have to do it for some time.

I want to impress upon him, though, that if he should get the opportunity over the summer, I would advise him as the Opposition spokesman on Forestry to take a trip with me - and again, it is nothing that the Member for Baie Verte or the Member for Bonavista North had anything to do with, I can assure him of that - but I would like for him to take a trip with me around certain parts of this Province and look at just what has been done in silviculture. I tell you that I took a trip on the West Coast and a couple trips up the Northern Peninsula and in other areas of the Province and there has been a fairly good job done. And while we have a wood shortage today, I will predict to you that in twenty to thirty years time, because of the efforts of not only this government but other governments as well, there is going to be enough wood to take care of our future needs, if we can get over this hump, so to speak.

I don't know if there is anything else you want to ask about the Forestry Centre in Corner Brook - I suspect there is.

MR. SHELLEY: Yes. Thank you very much. Well, first of all just to rebut and comment on your asking me on a trip. I would love to look at more and I will let the minister know, too, that I did take a trip with Abitibi in their helicopter last year and saw some good things that have happened with silviculture in certain parts of the Province and I agree with you, and I hope we are on line. I think we are moving in the right direction.

MR. TULK: I think so.

MR. SHELLEY: I have never said we were not, and I agree with you that, maybe in twenty or twenty-five years time, yes, we will be okay; but what I am mostly concerned with, and I am sure you are as minister, is the interim, talking about the next few years. As a matter of fact - and I will be more specific now - a lot of times I will refer to my district for obvious reasons as I know it better than other parts of the Province but, of course, it reflects other parts -

MR. TULK: Actually, I was going to say something to you about it, but go ahead.

MR. SHELLEY: It reflects other parts of the Province, too, and I am going to ask you some questions about Labrador, which you have already referred to, and we will have more questions on that. But it is the interim I am wondering about, and of course, it is a general statement again, but as far as the two major companies in this Province, Abitibi and Kruger are concerned, we all know that there has to be a balance struck between profit line and what they have to do in order to maintain those profits and stay viable in this Province and employ the thousands of employees that they do. But, we also have to look at the full utilization, not just of the tree but of the industry, and what I mean by, No. 1, the tree, is that everybody, from the logger, the jobber to the sawmill operator right on up to the guy who works for Kruger and Abitibi - the full utilization of the tree. I know, I have heard the minister say that before in these estimates meetings and we both agree on that, but also, the utilization for the whole industry.

For example, the Kruger land now, what has been able to be utilized by other people who are not with Kruger and not in those unions and so on. We know right now that we have a problem with land that has been given back to the Crown by Kruger, and I ask you this question for the people in my area who have asked me to ask it: In the initial agreement, I think Kruger had something in the agreement which said that they would have the first chance to buy the wood that was passed back to the Crown on Crown land. Is there also something in that same agreement which says that they would have to buy it back at their nearest competitor? In other words, if they are given the first chance to buy that wood back, do they pay the same price as their competitor would have paid?

MR. TULK: No, they won't.

DR. NAZIR: They have two types.

CHAIR: Could you just introduce yourself, please.

DR. NAZIR: Moe Nazir, ADM, Forestry and Wildlife.

Kruger has two types of right of first refusal. One is in the Mount St. Margaret area where that land was part of the core wood supply and they did not want to give up that land. Different from the rest of the Northern Peninsula, that agreement requires everybody to offer wood to Kruger - that applies to only two Reid lots - before they can sell it to anybody. If Kruger is not prepared to make a deal, then there is an arbitrator whom the minister can appoint. If Kruger does not accept the ruling of the arbitrator, then people are free to sell anywhere they can if the price is not agreed to.

But the rest of the right to first refusal, Kruger has to do better than Abitibi-Price, its competitors. It is not exactly the same price. They have to offer at least a dollar, or something like that, more. So it has to be a slightly better price than the competitors.

MR. SHELLEY: A slightly better price. Okay. I have also had some concerns raised that the wood standards set by Corner Brook Pulp and Paper this year are a little bit higher than what Abitibi standards were last year, eight centimetres on top ends compared to five centimetres for Abitibi. Loggers are telling me they are going to have trouble - they think this will result in a greater amount of wastage in the wood. Would you like to comment on that?

DR. NAZIR: That is true, their standards are slightly different, but Kruger also needs to buy wood eventually if they have to supply their mill. For this year they are okay. Eventually they will have to match Abitibi-Price's price as well as standards if they hope to get that wood, which is cheaper, non-unionized wood. So that is why some of the people are bypassing Corner Brook and delivering wood to Stephenville. Once Kruger find they cannot buy the wood and be competitive, they will eventually change. Since there are two buyers in the Province, there is an alternative at this time.

MR. SHELLEY: It was a letter written by some loggers that asked that question. They have grave concerns about it. Maybe I will ask them to write the minister and talk about that specifically.

MR. TULK: Do you have the letter there?

MR. SHELLEY: Yes.

MR. TULK: Do you want to table it and let me take it and reply to it?

MR. SHELLEY: Well, sure, yes, I will table this, Minister. This is to me, as being their member.

MR. TULK: Yes. Read it into the record, too.

MR. SHELLEY: I will read it into the record. It is a letter from the Baie Verte Peninsula Independent Lumber and Loggers Association. I will table it for the minister and have him peruse it, and maybe respond to me later.

Another specific, now. In 2.1.01, Forest Management, there is an overall decrease of $429,800, estimates revised from 1995-1996. Could you elaborate on those?

MR. TULK: It is $4,890,800, down from -

MR. SHELLEY: It is a decrease in that section.

MR. TULK: - down from $5,699,300.

MR. SHELLEY: Yes.

MR. TULK: Could you explain - Moe, do you want to take that?

MR. SHELLEY: Amount voted. Why is that decrease there?

DR. NAZIR: We had to take some reduction in this activity just like others. There are a number of positions at Corner Brook which were given up: four in the current round, and there were two or three previously. Also, we have reduced by about $100,000 one of the programs, the utilization program, and there is reduced travel cost. There are reductions all over in that sub-program.

MR. TULK: I think it is important to point out to the member that Purchased Services, which last year was $1,140,300 and revised at $1,050,000, is now up to $1,249,000, or $1,250,000 approximately. I guess that has to do with the increased effort we are going to put into insect control this year.

So it is important, I think, that while we have cut certain other areas - and I think this is a poor place for this to be, by the way, the insect repellent or the insect protection. Insect control should probably be somewhere else but I think it shows that we are increasing our effort to control the amount of insect damage in the Province's forest.

MR. SHELLEY: Well, that's good because that was my next question, why that was increased there and the overall was decreased.

MR. TULK: We are trying to do more with less.

MR. SHELLEY: Okay, on insect control - and as the minister knows from the question I asked in the House - is the expertise directly related with insect control that was done by the forestry centre here? I did ask the minister this in the House and I ask him again now. We will just elaborate a little bit on it. First of all, to make sure I am correct on that, all the research and most of the work done on the hemlock looper was actually done specifically by the people here in this Province at the St. John's forestry centre? Is that correct, first of all, that the research - on the hemlock looper specifically.

DR. NAZIR: Yes, there were insect and disease surveys which were being done here. Are you referring to that one?

MR. SHELLEY: Yes. So that was all done by the St. John's forestry centre here?

DR. NAZIR: That's correct. They are being done out of Corner Brook and Pasadena and that money is provided in the insect control, $420,000, a little over $400,000. The remaining $4 million is for the insect control spray program itself, a little over $400,000 for that type of work which CFS used to do, and that now the two pulp and paper companies have agreed to cost-share with us.

MR. SHELLEY: Okay, right now in this budget most of the money is allotted for the surveying and the spray program for this summer. Now, ongoing research and so on, in reference to insect control, will that be now done in this new building in Corner Brook?

MR. TULK: The answer to that is - as I said to the member in the House the other day - as far as I can understand and I believe it to be correct, that will be the case. While we have lost certain things in the shift with the national forest service in the number of workers now employed by those people or who were laid off by them, I think it is the intention to use the forestry centre in Corner Brook to not only teach but to increase the amount of research - if you want to, to focus in on any type of research that is needed for forestry.

As a matter of fact, I think you will find that the idea behind this forestry research centre is not only to make us the best in Atlantic Canada but probably the best in the country. I think the aim and the objective of that forestry centre is to - and they focus attention in one area to carry out the types of research that was done with the hemlock looper and other insects as well. I don't believe you will see any decrease in the amount of knowledge, shall we say, or in the techniques for fighting insects such as the hemlock looper as the result of anything that has happened in the past. As a matter of fact, I think it is our hope that you will see us become far more proficient at the things we do in terms of research and development as a result of that centre.

MR. SHELLEY: Well, I agree with the minister, and I will say this, it was a sincere concern because I have talked to people in the forestry centre and from all I can gather, they have done some superb work. They have been recognized right across Canada for the work they did on insect control, the hemlock looper and the budworm and so on. Of course, the minister knows, we took care of the budworm, but the hemlock looper is the problem now. The question is still specific and I hold the minister to what he said, that research will continue, not that the spray program is going to go on for this year but that the research is continued with insect control. We all know in the forestry industry that that can be a most devastating thing to the forestry industry, the potential outbreak of the hemlock looper, budworm or anything. So I want to make sure that, not the spray programs or whatever but the continuing research that is done specific to Newfoundland forestry is still done and continual research will be done here in Newfoundland. The last thing we all want to see, I know that I want to see, is that we are getting research done in some centre in New Brunswick.

MR. TULK: Let me just try to allay the member's fears. The forestry centre in Corner Brook, as I understand it, will bring together three programs, and I will deal with just one of them because it answers your question specifically, I think. One of those is the Canadian Forest Service, which is part of the federal Department of Natural Resources.

As I understand it, the thirty professional, technical and post-graduate staff of CFS will be pursuing research on forest ecosystems and strategies for achieving sustainable development in our forests, in that centre. In addition to that, I don't believe that if you are going to do research today, you have to have as many bodies as, say, you did fifty years ago, or ten years ago. We do know that we are into the age where you can walk into your office and I can walk into mine and we can be in contact with people anywhere, practically, in the world on certain developments. This forestry centre, I think it is the intention to interface, to be connected with, other developments and other research centres in the nation, and I guess in the world.

In that sense, I think you will see the same type of research and probably better even, by the thirty people who are left in the national forest service in Newfoundland, shall we say, working out of that centre. I think you will see better research done than we have seen in the past even. I agree with the member that that research has been well done.

MR. SHELLEY: I will ask another question and then I will give my colleagues a chance to ask a couple of questions. In 2.2.02, Fire Suppression and Communications, there is an overall budget decrease of $172,900.

Just to make a comment on that, and I've got nothing to back this up, really, it is just my way of thinking, but we have had a dry winter, there is no doubt about it. I can only guess, and it is only a guess, that we are going to see a tremendous increase in the number of forest fires this year. I hope I'm wrong. Of course, we all hope. Like I said, there is no scientific knowledge to back this up, but I believe we are going to have an increase in forest fires. What has been put in place in your budget in case this happens? I don't see it. There is a decrease there.

MR. TULK: I am told the amount that is available - well, let me start off with what have we done. The truth is that if I could take what the member said, I guess it is fair to say that the department itself, the officials in the department, believe that the same thing is possible. One of the first things I got hit with - this summer, when I started to move around the Province and meet with Forestry officials, one of the first things they would say was: Minister, this is really a dry year. We haven't had snow, and it looks like we could be in for a terrible year in terms of fire. I think that is what the member is talking about.

I think you will find that most of the reductions there are just in salary savings that we could make. We are ready. I think it is fair to say that we are ready. Our people have been on stand-by and our fire crews, I believe, were called back early to make sure that we have people in place. We have had fires already in the Province. I don't know the exact number but I think it is somewhere around thirty.

MR. SHELLEY: They are up, aren't they? Is that right?

MR. TULK: Yes, there are somewhere around thirty fires that have burned over something like fifty or sixty hectares of forest land. I get the report periodically. I don't have one for this week. I have one for last week and I think it was fifty - don't hold me to this as the exact figure, but I think it was fifty-six hectares that had been burnt over as of last week.

I think we are ready. I can assure the member of this, that we will, as a government, do whatever is necessary to protect the forests in the Province. Don't get me wrong. As you know and as I know, there are times in this Province - and I remember 1961, which is some thirty-five years ago. I was a part of it. I was two years old. I was a little bit older than that. But some thirty-five years ago in 1961 I can remember the fire in Bonavista North.

AN HON. MEMBER: (Inaudible).

MR. TULK: I'm thirty-seven now. I can tell you that with that particular fire - I believe you were a young forester at that time, weren't you? There was nothing that any amount of equipment or government intervention could do at that point. Our hope, and I think we have been fairly successful to this point, keeping our fingers crossed, is to stop a fire before it gets out of control. We have our people assembled around the Province, geared up, ready to go. I think it is safe to say - Moe, you might want to comment on this further, or Hal, either one of you - but I think it is safe to say, thanks to the efforts of these people on both sides of me, that we have one of the best fire-fighting capabilities in the country, and we need it.

I wouldn't want for anybody to hold me to it that there aren't going to be any forest fires this summer, I don't know; we just keep our fingers and our toes crossed.

MR. SHELLEY: I know that, but the point being that if it happens and we all hope and pray it doesn't, but we do not have the luxury of holding back on the dollars, I mean, you spend what you have to spend at that time. So that is why, when you see a reduction for this particular year, I don't think we are off range by anybody in guessing that we could have a -

MR. TULK: If you look, though, at the total forest protection, I think you will see it has gone from $2.5 million budgeted -

MR. SHELLEY: Where is it?

MR. TULK: Are you talking about 2.2.02?

MR. SHELLEY: Yes.

MR. TULK: The total forest protection has gone from $2.5 million to $2.6 million.

DR. NAZIR: Fire itself is slightly lower.

MR. TULK: Fire itself is slightly lower.

MR. SHELLEY: Yes, $2.6 million.

MR. TULK: Yes, it is down some $38,000 and you will note that last year, even though it was budgeted at $1.98 million, in reality, we spent $2.12 million, which shows that there are times when governments spend more than they budget for this kind of thing. I can say to you that the officials in this department, sometimes under political pressure, have not given in to it.

For example, I have a fellow who sits on the left with me, who, I think if you sold the two water bombers that he was instrumental, I believe, in getting last year, that he would probably disown us all. And I intend to stick by him and see that those two water bombers stay, because I think it is vital that we have the kind of capability that we have, and I think it is safe to say, Moe, that we have as good as anywhere in the country and we intend to try to maintain that because our forest is important.

MR. SHELLEY: Okay, thank you. Mr. Chairman, I will yield to my colleague and then ask a few questions.

CHAIR: Thank you, Paul. The Member for Twillingate and Fogo, do you have any questions?

MR. G. REID: On Agriculture, I am just wondering about that feed freight subsidy now that the Federal Government has removed that. I know it is having a negative impact on agriculture and there was some talk last year about a feed mill being built in the Province. Is there anything happening on that? That was private sector.

MR. TULK: I will leave some of the details to the Assistant Deputy Minister, Mr. Howlett, but yes, the feed subsidy is gone and there is no doubt it has caused a great deal of hardship for some of the producers in the Province. There has been a program put in place, that I think, over three years - Marty, I think it is three years, gives $8.8 million in Atlantic Canada?

MR. HOWLETT: (Inaudible).

MR. TULK: Pardon?

MR. HOWLETT: (Inaudible).

MR. TULK: Yes, I know, I will get to that, but the replacement for the feed subsidy that was in place by the Federal Government, the freight rate?

MR. HOWLETT: Yes, over a three-year program.

MR. TULK: Over a three-year program is what?

MR. HOWLETT: Over a three-year program our producers will get roughly $10 million in lieu of that program.

CHAIR: Sir, speak your name into the mike.

MR. HOWLETT: Martin Howlett. In lieu of that program, there is a three-year program introduced by the Federal Government that will put about $10 million into the livestock industry in the Province (inaudible).

MR. TULK: No, that still I think is somewhat of a significant loss or significantly less than they would have gained through the freight subsidy. But there is some talk in, shall we say, private industry, there have been some approaches made which I do not want to discuss at this point in time because we are still talking to some people; there are still some people making approaches and I would not want to, at this point in time, endanger what we are doing. But there are some talks underway about establishing a single, milling/producing or whatever you call it, feed mill in one specific area in the Province. Whether that comes to fruition or not remains to be seen but it is there.

MR. G. REID: Yes. The other one would be in Farm Products and I think there is a reduction of $1.2 million dollars over last year?

MR. TULK: Yes. Well, as you know, it is no secret that Farm Products has cost various governments fair amounts of cash in terms of the subsidization. It is no secret either that there are some 335 jobs - I think it is 335 jobs - Marty? - related to the broiler industry in the Province, the chicken industry, and those are direct jobs, too, in that industry. There have been talks ongoing with the chicken producers in the Province, not the processors, the chicken producers, to put an effort into forming an integrated company. That is still ongoing. And let me say this to you, that Newfoundland Farm Products itself produces some of the finest quality chicken under the Country Ribbon brand that you will find, I guess, anywhere in the country. It is a product that we do not want to lose, and I give great credit to the fellow who is - and I did not appoint him, again, he was there before I got there; I give great credit to the fellow by the name of Eugene Noftall and another fellow by the name of Dr. Peters who is now retired. But Eugene Noftall has put a great deal of effort into trying to bring Newfoundland Farm Products to a break-even point. And I believe, to be frank with you - I know he now has some contracts with some of the larger grocery chains in the country - I believe he is quite near to getting that processing side of the industry to the break-even point.

The problem, to be frank with you - and I think, some of the officials, either Mr. Stanley or Mr. Howlett might want to comment on this, but some of the problem, I think, is in the cost of chicken. And the cost of chicken is not that the poultry producers themselves are inefficient, it has to do with where we are and our competition with the rest of Atlantic Canada and the rest of the country. They are making all kinds of efforts to integrate their industry and we are encouraging that. I think we will be meeting with them sometime next week to hopefully move closer to the point where we have an integrated industry in the Province, and one - because as you know and everybody else knows, this not the day of subsidization anywhere in this country, anywhere in the Western world. Anything that is subsidized today is in danger of having to change its ways - not in danger, it is being pushed to change its ways. Newfoundland Farm Products and the chicken producers in this Province are no exception, and they are working at it fairly hard. I hope that we will see by the end of this year - and you will see that reflected in the budget, that we hope to have greater efficiencies. I think Eugene Noftall is making headway, and I believe that you are going to see the chicken producers, farmers, if you want to, themselves make that type of commitment this year. So we are looking to see that done, therefore, you will see the reflection in that budget. We are hoping to bring it down.

MR. G. REID: That is the reason I asked. Because, as you said, they make some of the finest products, for sure, in Canada. Again, as you said about Eugene Noftall, he is quite capable. I think the problem with the cost of chicken, though, is related directly to the feed and if we could get around that, I think, Farm Products would have no problem standing on its own without subsidy.

MR. TULK: No. Well, I think that is borne out by the way that we subsidize the industry. I think we finally got straightened away between us all what we believe, that is to be the case. For instance, our subsidy of the producers - and somebody will correct me, if I am wrong. Marty is down there laughing. We pay chicken producers in this Province ten cents above the Nova Scotia price, plus half their cost of production - wait now, half the difference between the Nova Scotia price and their cost of production up to a total of sixteen cents per kilogram. In the particular case - Marty, pass on that thing you have worked out there. We had a discussion about it this afternoon. In the particular case, for example, of where the Nova Scotia price of chicken is $1.28 a kilogram, Newfoundland Farm Products price will be $1.38, that is ten cents above the Nova Scotia price. And then let us assume that the cost of production is $1.75, this is an assumption, the production subsidy would then be sixteen cents, the total subsidy, the price to the producers would be $1.55. So the difference in the Nova Scotia price and our chicken, in that particular instance would be twenty-seven cents. The point is, there is a substantial difference. Now why? The question you have to ask yourself is, why is there that difference between the Nova Scotia price and ours? Well, the answer, I think, is simple - it is called the Gulf, to be quite frank with you, and the fact that efforts have been diffused all over the place. If you could bring that back and combine it, I think - and part of that money flows through Newfoundland Farm Products. And it looks as if Newfoundland Farm Products is losing a lot more money than it really is. But I think we will be close to the break-even point. Now, there are a couple of other things that have to be worked out as well, but by-and-large, the feed problem is one of the problems.

MR. G. REID: Well, I guess if we didn't subsidize, and we closed it, what would happen then is the chicken may be cheaper coming from the mainland today, but if they knew we didn't have our own chicken here it wouldn't be cheaper very long, would it?

MR. TULK: Right. Well, those fellows on both sides may be absolutely proud of you. I said to them, well, if we can't get the price of chicken down in Newfoundland, keep Newfoundland Farms doing it, we will import it. Oh, yes, they said, a smart idea, but then as soon as you cut out the production of Newfoundland chicken, see what they will do with their price.

MR. G. REID: And the same goes for the Milk Marketing Board. I would hate to see what we got into if, importing our milk, we had ice in the Gulf and we lost a full load of it on the way over from Nova Scotia. I wouldn't want to see the cost of the next shipment that came in here.

MR. TULK: If you are not careful, if you don't stop asking me these questions, the next thing you will see those fellows going off to the Premier and asking to have me replaced and have you put there.

MR. G. REID: That's all I have, Mr. Chairman. Thank you.

CHAIR: The hon. the Member for Bonavista South.

MR. FITZGERALD: Thank you, Mr. Chairman.

Minister, first of all, I would like to congratulate you on your new ministry. If you listen to the people you are surrounded with I think you will have a very successful ministry, because you have yourself surrounded with some good people there and I am sure they will pick you up every time you fall, or else they will trip you up before you fall.

As far as the Member for Baie Verte going on a helicopter ride with you is concerned, I can only tell him about the ride that I was on and the door came open up over Clarenville. I still think it was intentional.

Minister, just to go back to Newfoundland Farm Products again. We talked about the cost of producing chicken and the cost of bringing in feed. We get a lot of chicken brought in from the Maritimes into this Province. In fact, most of the restaurants, if you talked it around, they don't buy from Newfoundland Farm Products because of the cost. What is the difference in subsidizing the cost of chicken versus the cost of feed?

MR. TULK: What did you say? Is that a question?

MR. FITZGERALD: Yes, what is the difference in subsidizing - or I suppose, the freight rate on feed versus the freight rate on chicken? Because if you are subsidizing Newfoundland Farm Products you are also subsidizing the broiler industry in the Province?

MR. TULK: Yes, primarily we are subsidizing the broiler industry.

MR. FITZGERALD: So the cost of bringing in feed is just as expensive - I mean the freight rates are just as expensive as bringing in chicken, I would think?

MR. TULK: Marty, do you know?

MR. FITZGERALD: Do you know what I am saying?

MR. TULK: I would think, but I don't know.

MR. FITZGERALD: I would think that it is. So then, why can't we compete?

MR. TULK: Why can't we compete?

MR. FITZGERALD: Yes.

MR. TULK: Well, I think there has also been the idea that maybe we should centralize our operations with Newfoundland Farm Products and not have two plants, one in St. John's and one in Corner Brook. Now, whether that's the total problem or not remains to be seen but that's the reason I have asked the government, and they have agreed, that we would put in place a group of people - and I want to say the make-up of that board - I would hope, and again it is up to the two components of the industry - will be made up of two union people, two from the producers and three people, shall we say, independent business-minded people to take a look at this whole thing and to tell us once and for all what it would take to commercialize,, and in some sense whether it is with the poultry people or not, the poultry producers or not, to commercialize the industry.

So all I can say to you is that I think we will put in place in the next while a process to - to be quite frank with you it is top priority with me because I want to protect the chicken industry in this Province. I think we would be foolhardy to sit here this evening or to sit anywhere and think that any government, regardless of whether it is my government or some other government, is going to subsidize the chicken industry in this Province indefinitely to the tune of $5 million. I think we would be foolhardy to believe that. Now, that doesn't say we are deserting it either, that we should desert it immediately, but we have to work towards a solution where we come as close to a break-even point as possible. I would hope that those people that we put in place over the next little while will give us that kind of advice, and I tell you, whatever kind of advice they give me, that's what I intend to take.

MR. FITZGERALD: Yes. it seems kind of interesting that it came up because it was only a couple of weeks ago that I sat with a restaurant owner and he was complaining about the same thing, that he would love to buy chicken from Newfoundland Farm Products, good quality, but there is no way he can afford to buy it.

MR. TULK: Is our price that much different?

MR. HOWLETT: I think what is starting to happen with Farm Products Corporation, is that the Corporation, I guess, under Mr. Noftall has gone to a new marketing area. What they have done is, they have put more emphasis on further processed products as opposed to fresh chicken. They have gone from roughly 1.3 million about three years ago into further processed products to over 13 million today. That is why the Corporation is starting to turn around, because that is where they can make some money, in the further processed product. So the fresh market, there may be, I guess, a shortage in the fresh market if you are looking at, say, people who prefer to buy from Farm Products if they could get it. The Corporation has started to produce products that there is a demand for. You know, in the Country Ribbon brands, the strips, the nuggets, the burgers and so forth, and that is turning the Corporation around.

I have often made the comment: At some point in time I hope all their production will end up in further processed. I think that is where you are going to see this Corporation turn around and make some money. Whether it is fresh chicken and frozen chicken, I think they can produce it and market it and continue to lose money. That has been kind of the history here, because if you look at the losses over the years they certainly prove that.

MR. TULK: I think if I could just add something to - maybe throw in a couple of other things here to just clarify the situation, to add on to what Marty said.

We still only with Newfoundland Farm Products supply I think it is around 48 per cent of the chicken market in the Province. Given the subsidies that we have there, we must at this time be producing it as cheaply as - and I don't see how that should impact on the restaurant owner. Maybe we don't have enough for him, that is possible, but I don't see how the price would affect him. Because there is a large - and I don't want to name him because he is right in the process of signing a contract with them - but there is at present one of the larger and, shall I say, more frugal food chains in the country presently on the verge of signing a contract, if they haven't already done so, with Newfoundland Farm Products. So we must be, given the subsidy that we have there, producing it just as cheaply. We may not be producing enough to satisfy your restaurant owner, but I think we are producing it just as cheaply as anywhere else, when you throw in the subsidy that we give, the $4 million or $5 million a year that we throw in. So it may be quantity as opposed to price.

MR. FITZGERALD: A couple of years ago there was a concerted effort by government to sell Newfoundland Farm Products, and I know there were several proposals that came forward at the time. Obviously, they all must have got weak-kneed and left. Is the Corporation still for sale? If it is, is there anybody now interested in buying it?

CHAIR: If I could pause here for a second. I see Paul is leaving. Paul, on behalf of the Committee, and I'm sure all of us who are here, best wishes tonight for you and your family. These are exciting times. It is indeed reflective of your determination to be here that you are spending time here tonight.

AN HON. MEMBER: (Inaudible).

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: Important stand that some progress has been made.

CHAIR: I'm sorry, Roger.

MR. FITZGERALD: It's okay.

The question I asked - I know that there were some people interested a couple of years ago in buying Newfoundland Farm Products from government. In fact, they were advertising the Corporation. I'm wondering if there is anybody interested now or if the thing is still for sale.

MR. TULK: Again, I'm not going to get into the details of it, because, as you understand, you don't do those things in public. The twenty-two chicken producers, farmers, around the Province have an offer in front of the government which we are discussing and which we will be meeting next week to discuss with them again, while at the same time we move with that board. There is that one. I'm not so sure you can put it down as an offer, but there is one set of discussions ongoing that hopefully will lead to - and I believe it is the best way for us to go. It may not be the only way, but it is maybe the best way for us to go, as an integrated poultry industry, shall we say from the cradle to the package.

There are some talks under way with those producers at this present time and we will be continuing those next week. I think it is some time next week that we are supposed to be sitting, next Thursday.

MR. FITZGERALD: Minister, I brought up the idea a couple of weeks ago in the form of a question, as it relates to a vegetable marketing board. Has that ever been considered by your department or has it been tried? We have an egg marketing board, a milk marketing board and it gives our producers some form of protection. I have spoken with local farmers in the area and they have been very - well, in fact, it was their suggestion and their thoughts that I brought forward. I am wondering if you are entertaining any such -

MR. TULK: Let me say to you - and I will pass it over to my officials to tell you what has been in the past there. Let me just say to you that we are - I think we recognize, as well as anybody, that at certain times of the year in the Province - I hesitate to use the word `dumping' but there is dumping from certain parts of the mainland for certain products in the Newfoundland marketplace in terms of certain kinds of vegetables. We are open to any sort of discussion or suggestion from any group that might not - I don't think I necessarily want to get into - and I think this is the word you used the other day - the protection side of things, but maybe on the supply side which is somewhat different. At least it carries a different connotation. If you say you get into the supply side of things as opposed to the protection side, but certainly we are open to sitting down and discussing with anybody how you protect Newfoundland farmers. Are you - and how we helped make them more competitive.

For example, I am told - and I have just started discussing this this morning about 8:00 a.m. with Marty; I am told that last year -and I could be completely wrong here because I do not have the full details on it but there is a person in the Goulds, a Mr. Eric Williams, who last year, I think, found that the Newfoundland turnip is very saleable in certain parts of the mainland. Because of our climate, apparently our turnips turn out to be a little bit better than from some other parts. Our cabbage is the same way?

WITNESS: (Inaudible).

MR. TULK: Okay, all vegetables, he said, are the same way. Now, it seems somewhat strange to me that we are unable to provide the type of marketing - and I guess that's what you are talking about -the type of marketing to make our farmers and our people competitive in this area. I am going to stop but I just want to say to you that we are open to any sort of discussion and I am open to discussion over the summer. There are a number of people in this Legislature who have expertise, politicians who have expertise - and I look at the Member for Humber Valley who has some expertise and possibly yourself as well, coming from the area that you come from - who have some expertise in the agricultural industry. I think, if you look at what I said and what has been impressed upon me by my officials, that one of the areas in government and one of the areas in this Province with economic development, that has been the poor cousin, is the agricultural industry. I think we have to explore all the possibilities and new ways of doing things. For example, I am told by Rick Woodford that in the Cormack area there is a tremendous amount of - and Rick you gave me the figures some time ago in Deer Lake sitting down over a cup of coffee - of the amount of agricultural land that is available in the Cormack area and yet the amount we are using is only a small fraction of it.

The Codroy Valley, for example, has been tied up, I understand from my officials, by the way that we used to issue grants one time. Well, I think we have to take a look at how we get that land back and how we get that land into production. Next door to the land in Cormack is what? Limestone, all the limestone that you need. It seems to me that if we make the right type of effort - and I am not talking about throwing money at them, but if we make the right type of effort, then we should be able to get that land back into production and supply some of the much-needed employment. Because if you look at the figures - and that is the reason why I passed them out to you, it is very obvious that with a minimum amount of effort on the part of government - over the past fifteen or twenty years there has been a tremendous increase in the production value of many of the agricultural products.

So I am looking forward to this over the summer and in the coming months. I don't know how much longer I will be in the party, you never know these days, you may be flicked out of it. But I am looking forward to the challenge of building with the members of the House a new trust in the agriculture industry. And if I could, to finish off on this - while it is great to talk about information technology and I think it is all-important, about beautiful types of minerals, Voisey's Bay and all that kind of thing, I think the kind of lasting improvements that we can make in this Province - and that is my personal belief, now - is, in areas such as agriculture and forestry.

So, to come back to your question, I will ask Marty if he wants to comment on the marketing side, whether it has ever been done before.

MR. HOWLETT: There have been two attempts, Mr. Fitzgerald, as you probably know, to establish a vegetable marketing board in the Province and neither of these attempts, I guess, succeeded. In recent years, I think probably three or four years ago, a group of vegetable producers got together and formed a vegetable producers association which, I guess, has had some success. I think what happened with the efforts on the marketing board side for vegetables was, you had your commercial producers and then you had so many numbers in the small operators that everybody had his production in August, September and October and everyone tried to market his production in a three or four-month period and that kind of I guess, really interfered with the commercial production because, in a lot of those small operators, part-time or hobby farmers, they probably drive school buses and teach school and some might even be politicians and, you know, they are out marketing their product, and marketing it below the price expected by commercial operators.

WITNESS: (Inaudible).

MR. HOWLETT: We do have, Sir, some politicians and ex-politicians in the agriculture industry. So these were some of the problems that the marketing board had in getting support for getting off the ground. Now, as the minister said, if there are any new innovative ideas, we are certainly open to look at it and to give some kind of support, maybe not in the way of a marketing board, but in terms of the competitiveness factors and so forth that could be introduced.

MR. FITZGERALD: The problem that has been put forward to me is, and getting back to what the minister talked about, the exporting -if you can call it exporting - between provinces of our turnips up to Ontario. That was tried by several farmers I know in the area that I represent, and they found: yes, it was a good product and yes, it was something that was marketable, but there was no way that they could compete with the price in Ontario and they found that it was not the market for them as much as they wanted to get in there and regardless of the fact that the product they were selling was good.

What they have referred to me is, the situation where - and the consumer is no worst off at the end - when they market their own vegetables, when the time of the year comes - and I am talking about root crops, potatoes, carrots, turnips what have you - then you get the dumping of Prince Edward Island vegetables, especially potatoes, here in Newfoundland. At the end of the season when our Newfoundland growers have all their vegetables sold, especially potatoes again, then you find out that in their season they cannot compete with Prince Edward Island's potatoes but after, when their own vegetables are sold, then up goes the price of PEI produce to, you know, fifteen and twenty dollars a bag, whereas now or a couple of months ago, you could probably buy it for two dollars a bag for fifty pounds. And to me, this is totally, totally unfair and I think very discouraging and it is probably going end up driving a lot of our farmers who provide much-needed employment, out of the business altogether. And that is what I am talking about when I refer to protectionism or some kind of marketing board where we would not allow this to happen or we would control the amount coming in here.

MR. HOWLETT: There is something different about the vegetable industry. Even prior to the two attempts at setting up a marketing board, there was an organization set up by the name of VMAL, Vegetable Marketing Associates Limited, and they tried to co-ordinate all the production and marketing of vegetables across the Province. It lasted probably a couple of years. That didn't succeed either.

When I talk about putting producers in a position to be competitive, maybe some of the things that we could look at, maybe have to try to look at the types of infrastructure that is on farms for storing, packaging and grading and the proper refrigeration and ventilation systems to extend that marketing season to try to get them out of marketing in maybe August, September, October and try to get them up into December, January or February. Now, I know a lot of the farmers that have their dollars tied up longer, but there may be some types of programs that could be looked at to, you know, help them be competitive and get into the market at that time of the year. Because, you are right, the prices do go up in the wintertime once it happens.

Another issue that might help, and I guess we will have to wait and see the impact of the Freight Assistance Program having been taken out now by the Federal Government. Because produce coming into the Province must be able to qualify for some of that freight between provinces, and not in provinces. So we will have to see how that one works out. That may put our vegetable industry in a little more competitive situation.

MR. FITZGERALD: You mean that would qualify for a freight subsidy, too?

MR. HOWLETT: No.

MR. FITZGERALD: A farmer on Prince Edward Island shipping vegetables into Newfoundland would qualify for a freight subsidy?

MR. HOWLETT: They used to under the Maritime Freight Rate Assistance. They did get some assistance. Out in your area -

MR. FITZGERALD: It is not there now.

MR. HOWLETT: No, it is not there now. That is the one the Federal Government has just gotten out of. So some of your farmers out in the area can tell you about that one. Because they did complain to us over the years about it, that it put them at a disadvantage.

AN HON. MEMBER: (Inaudible).

MR. HOWLETT: With some of these being taken out by governments, I guess, that we refer to as subsidy, maybe some of it will be to our benefit a little bit in the future.

MR. FITZGERALD: Well, that one certainly would have been. It should not have been there in the first place.

Anyway, I will let someone else ask some questions and come back afterwards.

CHAIR: The hon. the Member for Twillingate and Fogo.

MR. G. REID: (Inaudible). You are talking about the glut, basically, on the market in the fall of the year. A farmer in Lethbridge, I don't know if that is in your district or close to it -

MR. FITZGERALD: Yes.

MR. G. REID: - said last year, if they had some kind of an interest-free loan whereby they could hold their vegetables from say, September until December when the price went up, they have a problem with paying your employees in the meantime. If they had some kind of assistance where they could get an interest-free loan so they could hold those vegetables, pay their employees and then pay it back to whoever they got it from just after Christmas when they started to sell their vegetables, they thought that would alleviate the problem. I was just wondering if that would be available under E and L or anything? I know under E and L right now you cannot get an interest-free loan, but they thought that would solve their problem. Do you know what I am talking about?

MR. TULK: I think you will find, as you know, Mr. Reid, that it is becoming more and more difficult to put programs in place for interest-free loans. I would not sit here this evening and tell you it is a foregone conclusion that we would put forward that type of recommendation, or that government would even accept it.

It is certainly something to be considered. As I said to you earlier, I want over the summer and fall to put together a group of people who will take a look at the - and make it up of not only bureaucrats but politicians as well. Because those are the people who have to go back and answer to their constituents at the end of four years, and who are ultimately responsible for what happens in the Province. No offence intended to anybody else. Over the summer I hope we can put together a group of people who will look at some of the problems that we have in agriculture. Indeed, act as advisors to Martin Howlett, Hal Stanley, and myself, or whoever happens to be in the department. That might very well be one of things that we consider with regard to vegetable farmer.

MR. G. REID: Yes.

MR. TULK: It is not something that is going to be easy to come by.

MR. G. REID: No, I know. As for the other thing, you mentioned about all this farmland around the Province not being used. There were grants, up until last year or the year before, for clearing farmland, but yet, as you said, in the Codroy Valley you have all this land that isn't being used, and they probably got a grant to clear it in the first place.

MR. TULK: Rick, what happened in Cormack?

MR. WOODFORD: What happened with regards to the land clearing, especially in Cormack - as you know, it started after the Second World War. It was set up primarily for agriculture production. It is the only place on the Island today that has a municipal plan based primarily on agriculture, including all the cities, towns, and communities in the Province. You can't build, for instance, you can't subdivide or anything like that, without permission from the Department of Forest Resources and Agrifoods.

Anyway, the land was cleared over the years. They were given, for instance, 50 acres, 60 acres, 100 acres. They had been given a grant on 20 acres and the rest held in lieu. It is held in reserve and so on for if you worked that 20 acres, your original 20 acres or 10 acres or whatever. Some people worked it and then they got the remainder. Some people worked the first part, some didn't work the first part and never did get the rest of it, but always thought they owned it. I know I ran into it from 1975 to 1985 as mayor of the community. People who never had title to their property always though they owned it since 1945, because of the fact that they owned the first 20 acres, the grant on it, and held the rest in reserve, and figured they owned it. Eventually, it came down to probably 25 per cent to 33 per cent of the total of 33,000 square acres within the boundaries of the community itself that, you know, you got your so much percentage that is bad, it is wet, no drainage, and so on, it can't be utilized for agricultural purposes. The rest was tied up with people who figured they had ownership and nobody else could touch it.

I must say, a lot of it is coming back today, because a lot of it has been sold, a lot of title searches done on it, and so on, and brought back to - either the original ownership but then sold, or else taken back by the Crown and then bought by the farmer or leased out. So a lot of that property itself now has been coming back. That is what happened in that particular community.

MR. TULK: But that isn't true of Codroy Valley.

MR. WOODFORD: No, Codroy Valley is different. Codroy Valley goes back further - oh, way back, Codroy Valley, and a lot of that is absentee ownership, absentee altogether, out of the Province.

MR. TULK: I have asked our officials to - I don't have it yet, I don't suppose I have. I asked Marty this morning to put together for me how much land that we do know. I suspect that we don't know all the land that is available for agriculture in the Province - but how much land is available that we do know about in the Province, how much of it is being, shall we say, used for agricultural purposes and so on. I hope to have that information within the next little while. I think it is crucial that we get at it and see what is there for us.

MR. G. REID: It isn't just (inaudible) Humber Valley, it is the whole area from (inaudible) -

MR. TULK: Yes.

MR. G. REID: - (inaudible). I have a solution.

MR. TULK: Do you?

MR. G. REID: Use it or lose it.

MR. TULK: Oh, I agree.

MR. G. REID: I sounds pretty simple, but -

MR. TULK: I agree, use it or lose it.

MR. G. REID: I know it isn't as easy as it sounds but something should certainly be done (inaudible).

MR. TULK: No, but that is the general philosophy we should be using, use it or lose it.

MR. G. REID: I don't know why we continue to give grants to people in the last few years to clear land - I think, Marty, wasn't it, when there was land already cleared in the Province not being used.

MR. HOWLETT: We give them subsidies to clear land, but we don't give them grants.

MR. G. REID: Well, used to.

MR. WOODFORD: One short comment. I don't want to take time away from any other members. One of the mistakes the department made in the past, and I've always argued against it, was if there was a federal-provincial agreement - say, for argument's sake, for $300 - to give to a farmer per acre to clear land, there was never anything - like I saw all kinds of cases where, for instance, there was a 50-acre farm with 30 acres cleared, down in cultivation, and you couldn't get a cent towards it. Say, for argument sake, if one of us wanted to go in, if anybody wanted to go in and buy that farm tomorrow, say it was $50,000 - me, on the other hand, they would give me a piece of forest out of which to cut a farm. They would give me $300 an acre to clear that, spend three or four years trying to clear it, put it down and put limestone in it, reseed it and pick the rocks but yet they would not give John Doe over here $300 towards the buying of an already cultivated farm which was stupid. That's what happened to most of the farmland around today that is left idle, to be honest with you.

MR. TULK: That's the point I was making, we had an argument this evening over there, the same thing.

MR. HOWLETT: I will just comment on that Mr. Woodford. Your statement is not quite correct because we did a couple of times have programs for purchase of property. One year we had $6,000 but what happened in the cost-shared - and you are right, these all came from cost-shared programs but we had problems with getting our counterparts, the other government on side in terms of being able to do these things at arms length and not having sons or fathers selling to sons and vice-versa. We did have a couple of programs but it certainly didn't go smoothly.

MR. WOODFORD: (Inaudible) area there is a lot of land and it may still be bought. I don't know if you have it in the Budget this year or not - but the land consolidation program and the acquiring of land and leased it back to the farmer -

MR. HOWLETT: Yes, but we also did have a program one time where you could qualify for a $6,000 grant to purchase land based on so much per acre. There is money for land consolidation, yes.

MR. TULK: $300,000.

MR. WOODFORD: $300,000, yes.

MR. TULK: But I think most of that is committed. (Inaudible) shall we say, new.

CHAIR: If everybody is in agreement, I would suggest we take a fifteen-minute coffee break. Is everybody in agreement with that? I don't hear anybody condemning the idea. Let's take fifteen minutes.

CHAIR: Order, please!

The hon. the Member for Grand Falls - Buchans.

MS THISTLE: Mr. Minister, as you know, I represent a district which is at the heart of forestry country in Newfoundland and Labrador, I suppose - maybe some others would argue that point. But for years we have derived our living mainly from the forest in my district. In fact, Abitibi-Price and before then, the A & D Company have been in business in the Province since about 1905, 1909 and people all over my district; Millertown, Badger, Grand Falls, Windsor and so on, we have derived our living mainly from the forest and we have always had a higher than average per capita income from the forest, almost the highest in Canada at times, I have heard. As you know, the former town of Grand Falls was named the forestry capital of Canada in 1988. During my term on the town council of Grand Falls - Windsor we had $20,000 left over from that event and we wondered what use we would put it to so we could have a permanent marker of being designated the forestry capital of Canada. So we used that $20,000 to erect a concert bandstand and it is called the forestry pavilion concert bandstand or stage. Many of my constituents are asking me, as you are the new Minister of Forest Resources and Agrifoods, do you have any responsibility or do you feel that some of the programs that are being carried out now, mostly in St. John's and in Corner Brook could be moved out to Central Newfoundland, specifically Grand Falls - Windsor since we are a central location?

MR. TULK: I don't know whether it is fair to say that we feel that any of the programs that are in St. John's could be moved to Grand Falls - Windsor but I will say this to you that this year, as a result of having to reduce the number of employees and particularly the number of people at the management level - now, we did not do it all at the management level either, some of it was as a result of laying off some of our management people and some of our middle managers, and we ended up, of course, laying off secretarial staff as well.

But as a result of that kind of exercise, a lot that was being administered - there were three regions in the Province eastern, central and on, the Island portion of the Province, shall I say; I hope Wally Andersen is not around, he will hit me across the head - on the Island portion of the Province there were three regions, there was the eastern, central and western region. And you now have only got two regions administering many parts of the Province and a lot of that is being done out of Central Newfoundland.

To be quite frank with you, over the summer we are going to be, as a government, looking at many of the programs in various departments, including mine. At this point in time, I am not in a position to say where any of them will go or where the headquarters will be or what the end result or the outlook of the department will be. But we will be looking. We recognize that Grand Falls is key in the forest industry. It was called AND and then it was called Price. Now, it is called Abitibi. Grand Falls has provided a living for many of the people, not only in your district - I might say my family made a living for many years with the old AND Company and the Price Group of Companies. So we will be looking at over the summer and fall, a number of program areas in forestry. And while we have no specific plans to move anything at this point, I would invite you to make your representation to us, and we will certainly give any consideration to what you give to us, to that kind of program analysis, and as programs move, as things change in programs, locations may also change.

I think it is safe to say that we want to be where the action is and much of the action in forestry is in the Grand Falls area. So please, over the summer, when we start our program review in this department, make your views known to us.

Does that answer your question?

MS THISTLE: It does. I am pleased to hear you say that, Mr. Minister, because as you know, the most recent announcement by Abitibi-Price showing their commitment to the district, to Grand Falls/Windsor and indeed to the whole Province, in view of the hard times that have faced the pulp and paper industry over the past five or six years, they have renewed their commitment. I believe the residents of my district, in particular, would like to see more of a physical presence by forestry in the Grand Falls/Windsor region. But thank you, and I will be following this in the upcoming months.

MR. TULK: I must say to you, this spring we had some choices and we made choices that were not pleasant, and they never are because in the final analysis, you end up telling people who had served the department for twenty or twenty-five years that they have to leave, and that is where it becomes unpleasant. But we had to make choices this year, for example, in the area of nurseries, and the Wooddale Nursery, as you know, is in, it is not in your district, but it borders - it is not in your district, is it?

MS THISTLE: Yes.

MR. TULK: Is it in your district? Okay. I was not sure if it was in your district or in the District of Exploits. But we had to make choices as to what we would do in that area. Consequently, we downsized, I do not think we can say we closed, we did not close the Brookfield Road Nursery, but we certainly downsized it to the point where now it is not carrying out the functions that we had or either to do something with the Wooddale Nursery. I think one of the things that came into play was the recognition that in the Grand Falls area, the Windsor area, the Botwood area and all the areas in Central Newfoundland, it was important to the industry that we should attempt to keep as much going in Wooddale - as a consequence of that, we will be still growing 7 million seedlings in the Wooddale facility that we have grown over the past number of years.

We had to lay off a couple of people there, but we will still do the job.

MS THISTLE: Mr. Minister, I noticed in your opening comments you did mention the closure of the Brookfield Road Nursery, and the Wooddale Nursery would be supplying the seedlings. I know our government is committed to $10 million in silviculture for this year. Do you expect that with Wooddale having to produce these extra seedlings, there will be some job increases for Wooddale?

MR. TULK: No. I know what you are hoping, you are hoping I will say yes, but I'm not going to be able to oblige you. A lot of the silviculture work that we do will be commercial. It will be thinning, precommercial thinning and commercial thinning and some plantation work, of course, where we do planting. The Wooddale nursery will supply us with the same number of seedlings that we produce there every other year. As I said, I know you don't want to hear this, but we are going to have to do it with a few less people than we have done it before. So no, the answer is there won't be any more people. As a matter of fact, there will be fewer people employed at Wooddale nurseries. Is that correct?

DR. NAZIR: The main thing is that Wooddale will be the prime nursery.

MR. TULK: Wooddale will still be the prime nursery for it, yes.

MS THISTLE: Very good. Thank you.

CHAIR: Thank you, Anna. Tom?

MR. OSBORNE: You mentioned that your -

MR. TULK: Moe has just told me that we - if I could, Mr. Chairman, just add something to Anna's question about the importance of - we closed offices in the Province but we kept the two open in -

DR. NAZIR: Millertown and Bishop's Falls.

MR. TULK: Millertown and Bishop's Falls. Because we recognized that right there, there is an inordinate amount of activity in the forest industry.

CHAIR: St. John's South - Tom Osborne.

MR. OSBORNE: You mentioned you are closing the Brookfield Nursery. However, you are only showing a reduction in salaries of $76,600. Why is that?

MR. TULK: Moe, do you want to answer that? You can answer that right off without me -

DR. NAZIR: There are two permanent people there and four seasonal, so the salary relates to that. Then there is some operating money which buys the containers and other supplies. So the total cost of producing the trees there was in the order of around $114,000, $115,000. The rest of the money is in other areas, non-salary money.

MR. OSBORNE: Thank you. The second question I have is about the Salmonier Nature Park. You have an overall budget reduction of $40,500.

MR. TULK: Could you refer to the heading?

MR. OSBORNE: I'm sorry - 3.1.03 on page 146.

MR. TULK: The budgeted amount last year was $319,500, the budgeted amount this year is $325,300, so there is an increase in the budgeted amount. In terms of the revised amount I guess there is a decrease of $40,500. I guess the explanation that is required here is why did we go from a budgeted amount of $319,500 last year up to $365,800, and maybe what is happening this year is that we have now given $325,300. So does that mean we will be up to $375,000 or $380,000? I don't know. Moe, what is the explanation for that? It is in Salaries.

DR. NAZIR: Last year we had one position transferred into Salmonier Nature Park because we needed some additional work done. One of the Wildlife conservation officers was moved in. Plus we ended up doing some more work in terms of repairing the fences and the paths which were damaged during a storm in winter, so we ended up hiring additional people to fix that. That is why the revised figure is more than the budgeted. We ended up transferring money from other areas. But if we go back to the budget, in fact there is a slight increase and it is related to one position being moved in, but there was some reduction (inaudible). So there is a balancing going on there.

MR. TULK: If I could, Mr. Chairman, just to add in answer to that question. If you start at the bottom, Mr. Osborne, and you go - let's look at the two budgeted amounts there, 1995-1996 and 1996-1997. If you start at the bottom you see on both sides: $1,200, $10,800, $1,000, $51,000, $6,300 and $500. The only difference that is in the two amounts is the amount that has been budgeted for Salaries. As a matter of fact, there is an increase in the budgeted amount and a decrease from what the revised says and I think Moe was explaining that; it is in Salaries as opposed to other things. We have to do more of that.

MR. OSBORNE: Okay, due to temporary positions.

MR. TULK: Yes. One thing that I might add, Mr. Chairman, that I don't think we put into our notes, is, speaking of temporary employees, there was a number of employees in the department who have been temporary for years and years, even though they have been working with the department for twenty to twenty-five years some of them, and government undertook in its - I think it was before the budget actually - yes, it was, wasn't it?

WITNESS: During the Budget.

MR. TULK: During the construction of the Budget, the government undertook to turn all of those temporary employees into permanent, anybody who had more than two years on a temporary basis. So there is a substantial number of people in the Forestry Department and other departments in government as well, who were temporary. And I think, and justifiably so, they are now permanent employees and enjoy the same status as other people who have worked with the department for some twenty years.

MR. OSBORNE: Okay. The next question I have is on 3.1.08 and that is on page 148 - Salmonid Enhancement.

MR. TULK: Yes.

MR. OSBORNE: There is an overall increase of $916,100. I guess the greatest increase in this area is in the Grants and Subsidies which is $734.100. Can you explain where that is being spent?

MR. TULK: Yes. I will let the other people get to the specifics here. I will ask Moe, who is in charge of that area, to do it. We are very encouraged, Mr. Osborne, with what is happening with the salmon populations in the Province. There is a movement towards community-based management, in other words, the communities around rivers, to start looking at them, and some very good things are happening in that area. The counts are going up on many of the rivers in the Province and I think we have to move rather quickly to ensure that that resource is taken care of and used to perhaps create some employment for people in the Province. So any increase that you see in that area - but I will ask Moe and others to deal with the specifics and I am sure they can - but as you know, it goes from $1.4 to $5.613 so I suspect it is something left over from last year that is being paid out this year as a matter of fact. But I think that program, which is cost-shared with the Federal Government, ends this year anyway, doesn't it?

DR. NAZIR: Yes, this is the year.

MR. TULK: This is the final year. Moe may be able to answer in detail, but I want to tell you that I think there is some great work done in that area and I think the money that we have spent has been well-spent and will bring many benefits to the Province in years to come, employment benefits; but anyway, Moe can answer the specific question.

DR. NAZIR: As the minister indicated, this is a cost-shared program and the amount you see here budgeted is the provincial part of the cost-shared agreement. The federal part is spent directly. There is a management committee which decides which projects will be carried out in-house, which will be contracted out with various development associations, government management associations and so forth. So the amount of funding, whether it is in Grants and Subsidies or in Purchased Services, depends according to how that split of the Budget is. Some projects are done in-house, some projects are done through various other agencies. So whatever money is left in the last year that has been budgeted and to the best of our ability the budget is split up. If, for example, some project does not go through a certain development association, the money can be moved from, let us say Grants to something else, but the effort is to try to spend the rest of the money this year.

Since last year, there was money left but they were not that particular at that time to spend everything. For example, if some development association or some management association could not conduct a project, they did not replace it with another one, so it was carried forward. That is why you see it was not exactly the total amount which was spent last year. So this year we will attempt to spend it and if there is a small carry-over, and some project does not get finished, that is a different story.

MR. OSBORNE: Okay. Now, I am a little curious to see that the Salmon Enhancement Program is also mentioned in Tourism, Culture and Recreation. There is a $36,000 salary allotment in that. Is there any duplication of services here? And why would the salmon enhancement be budgeted for into two different departments?

MR. TULK: Let me just say this to you, in terms of tourism and anything that affects tourism will be dealt with by the Tourism Department so it is probably in the outfitting. I don't know what the amount would be in our budget for, but it probably has to do with the licensing of tourism establishments or something to do with the tourist industry in regard to salmon enhancement.

Moe, may be able to answer better than I can, so I will pass it on. I don't know if you can or not, can you?

DR. NAZIR: There was one position which originally was part of the - it was paid out of the salmon agreement. And when the inland fisheries was with the Department of Fisheries and Agriculture that was the arrangement. But since the inland fisheries management moved to the Department of Natural Resources and now to the Department of Forest Resources and Agrifoods, the arrangement was made that that position could be left there and budgeted there and still it will be counted towards the provincial contribution in the overall agreement. So there is no duplication there.

MR. OSBORNE: Okay. Thank you.

CHAIR: The Member for Humber Valley.

MR. WOODFORD: Thank you, Mr. Chairman.

Under the AACs for this year, Mr. Minister. Has there been a reduction in the total AAC paper companies or has there been an increase? I have been hearing that Kruger had a bit of an increase with regard to their annual allowable cuts this year. Is that true or is it not?

DR. NAZIR: There has been a decrease in the case of Kruger, not an increase as compared to the calculations five years ago.

MR. WOODFORD: So it has been a decrease this year as compared to five years ago.

DR. NAZIR: That is correct.

MR. WOODFORD: Has that been approved for this year?

DR. NAZIR: The total allowable cut has been calculated and the company has been advised about those figures. They are preparing the new operating plans on the basis of that revised figure. And those operating plans, five-year plans, when they will be ready then the minister will be approving those. But the operating plans are now being based on that revised figure. That is the reason they are reducing their harvest, let us say, in the Baie Verte area.

MR. WOODFORD: What was that last statement?

DR. NAZIR: They are reducing their harvest in the Baie Verte area because they have to abide by a new reduced level of allowable cut.

MR. WOODFORD: Was there any emphasis this year when you looked at the annual allowable cut for both companies, Kruger and Abitibi-Price, with regard to bug-killed and overmatured stands?

DR. NAZIR: Most of the budworm-killed or hemlock looper-killed wood has been harvested. It was salvaged. A lot of it was on the Baie Verte Peninsula. Part of it was on the Northern Peninsula. Most of those areas have been harvested. There have been some areas which were lost because there was no access to them, in the St. George's area. But they are so far gone that it will not be feasible to harvest them. They are deteriorated to the point that it will not be viable; they cannot be used. And there is plenty of degeneration in some of those valleys, so it is not our intention to force the industry to harvest those.

MR. WOODFORD: Some years ago now before they had any so-called bud-picking program by forestry - is there any talk of that coming back this year - the so-called bud-picking program that forestry used to have?

AN HON. MEMBER: What is he saying?

MR. TULK: The bud picking program.

MR. WOODFORD: You know, where they used to pick the buds.

DR. NAZIR: Oh, cone-picking, you mean?

MR. WOODFORD: Yes, we call it the bud-picking program. I don't want to get off that.

DR. NAZIR: Oh, I see.

MR. WOODFORD: We don't use the word `cone'. You talk about ice cream out our way when you talk about that.

MR. TULK: You talk about what?

MR. WOODFORD: They think it is ice cream. So you just talk about the bud.

MR. TULK: You wonder if it was chocolate or vanilla. Anyway, go ahead. Is it chocolate buds or vanilla buds?

MR. WOODFORD: Soft-serve.

DR. NAZIR: Yes, you are right we had a large- scale cone collection program from which we collect seed for our reforestation program. A few years ago we had a good seed crop. We have some money from social services available to create some jobs and we collected a lot of cones. In fact, our bank has a lot of seed. We don't have a specific program for this year but if in certain areas there is a need, what we do is, we collect the seed according to various zones; so if, in certain zones, the seed is less, then we will collect. But there is not a large scale program as we had a few years ago.

MR. WOODFORD: Are you using mostly spruce now, in your cone-picking program?

DR. NAZIR: That's correct.

MR. WOODFORD: Pardon me?

DR. NAZIR: Black spruce, some white spruce.

MR. WOODFORD: A couple of questions on agriculture. Your limestone program for this year, you say it is pretty well ready to be signed. What is the tonnage you have allocated for this growing season? Is it 5,000 to 5,500 tons, in that area? Is there a decrease or an increase?

MR. HOWLETT: It is 5,500 tons of bulk and 250 tons of bagged.

MR. WOODFORD: Now would the bagged come from outside or are they going to bag it here?

MR. TULK: What?

MR. WOODFORD: Will the bagged limestone come from outside as it did before or will it be bagged here?

MR. HOWLETT: In all likelihood it probably will come from outside.

MR. TULK: I might say to you, Rick, that there has been attempt by the department to drastically cut down on the amount of bagged limestone that we are using - Is that correct? - and the trend is towards doing away with bagged limestone. I noticed when we were going through the contracts, the quantities, as compared to other years that it was used, is being reduced substantially. I guess what I am saying is that most of the limestone now being used is coming from inside the Province, although in a different form from bagged. Again, that depends on what you get priced. It depends on the price that comes in the tender.

MR. WOODFORD: Yes. The Farm Loan Board, last year it was integrated - I think it was last year or the year before it was integrated with ENL, fisheries and all of that. The Farm Loan Board - in fact, over the years, history has shown that it has one of the highest repayment schedules and records in the Province as it pertains to any lending institution or any department, including fisheries, Enterprise Newfoundland and so on. This year, has there been any thought - or any changes with regard to the loan structure itself or with regard to the interest rate charged?

MR. TULK: To answer the first part of your statement, the Farm Loan Board and The Fisheries Loan Board, as you know, went with ENL and it is still part - it has now been transferred back to the department of rural revitalization. I think the loans now - Marty, what are they, 3 per cent above prime? Is that where they are running?

MR. HOWLETT: I think, but I'm not sure.

MR. TULK: I think it is 3 per cent. I will have to check the figures for you. As a matter of fact, I don't believe there is anything to be gained - or is it prime plus one? I am not sure, Mr. Woodford, I will have to check it out. I did look at it earlier on this spring, and I know my reaction to it was that in terms of the economic deal that you are getting, there is not much to be gained from using the Farm Loan Board for farmers. It is a discussion that we will have. There is a Cabinet committee, as you know, of that department of rural revitalization. It is a discussion that we will be having as to whether indeed the Farm Loan Board should stay with that department or not. There are some discussions ongoing which I don't want to get into because it is a Cabinet matter. But there are some discussions ongoing as to whether the Farm Loan Board will be staying, or whether it will come back to the Department of Forest Resources and Agrifoods. Because there are those of us who see it as a tool that you use in the development of agriculture in the Province, and it should perhaps be more readily available to the department that needs to use it as opposed to some department that, shall we say, is secondary to the agricultural industry itself.

So there is some discussion ongoing about that, but the exact rate I would have to get to you. I know that when I looked at it, my own opinion was that there is not much of a deal here.

MR. WOODFORD: Getting back to the question that was brought up before me -

AN HON. MEMBER: (Inaudible).

MR. TULK: (Inaudible). I've had it, I have seen it.

MR. WOODFORD: - that was brought up as it pertained to Kruger getting away with this eight-centimetre versus five-centimetre, Kruger versus Abitibi. Is there anything the department can do there to sort of force Kruger to take that wood? If an individual is caught with a three-inch top, I know exactly what happens, or a two-and-a-half inch top with regards to the individual for domestic cutting or anything like that. They are fined immediately. Why would Kruger be allowed to get away with that? Or is it just (inaudible) over-matured stand?

MR. TULK: Can I just say this to you? As you said to me just now, and as you have said in a number of places, there is a problem brewing in the forest industry as far as the workers with Kruger is concerned, and I guess as far as Kruger is concerned. We are having ongoing discussions with Kruger at this point. I'm not in a position to tell you exactly where we are, but believe you me, we are having some discussions with Kruger as to some of the things that are happening in their woods operation on the West Coast.

Now, how much of it we can control is another question. We will do our best to try to take care of the people who make a living on the ground, shall we say, out of the forestry industry. But there is a problem. There is a problem with the eight and five, but we are having discussions with them on those issues, so look forward to something from us in the next three to five days.

MR. WOODFORD: I'm hearing, and I don't know if there is any truth to it or not, that the last agreement signed with the unions with Kruger, they have an agreement for no new harvesters in the life of the agreement. I'm wondering if the ongoing discussions with Kruger and Abitibi-Price with regard to the short wood and long wood harvesters that both companies have now, would that be included in it?

DR. NAZIR: As far as we are aware, the agreement they have is it guarantees a number of weeks to the unionized workers. I think it is eighteen weeks. That is predicated on a certain percentage of wood being harvested by mechanized harvesters versus non-mechanized operations. There is one of the reasons that Kruger are trying to streamline their operation in such a way that they can utilize the existing harvesters economically, and at the same time provide the eighteen work weeks they guaranteed in the union contract. That is the most recent contract. It has the disadvantage of affecting the non-unionized loggers who are not protected in this job stability and job security, because the total amount of wood, what they need to harvest, is approximately the same. The non-unionized wood harvesters are affected. But it has been only a very recent agreement and it is good for three years, I believe.

MR. WOODFORD: Yes, that is right.

MR. TULK: I think the point is that we are in for a great deal of upheaval in that whole area.

MR. WOODFORD: Yes. That is why I am bringing up some of it, because I think that over the next little while there is going to be some real problems -

MR. TULK: Yes.

MR. WOODFORD: - with regard to it. I mean, the pricing system as well for union versus non-union, $39 per union versus probably $23, $24 and as low as $22 for a jobber - that, to me, is ridiculous. I don't know how it is going to be addressed. I know the companies are private and you can't go out and tell them what to do and what not to do. The only thing the government has control over, I suppose, is approving the annual allowable cut. Other than that, I suppose they are on their own. But there is no doubt about it, as far as I'm concerned, there are problems coming up in the industry.

MR. TULK: There is no doubt what you are saying is quite correct and there are limitations that you have with the pulp and paper industry. Most of the problems that we are having have come about I think in two areas; it is in total allowable cut yes, the annual allowable cut, but it is primarily in the area of the harvester and the amount of wood that the harvester requires to be economical as opposed to having that much wood for people to cut by other means. I can say to you that there is an ongoing dialogue between the department and Kruger, and I am sure, as you said, that over the next two or three weeks we are going to be hit with people really being upset because of what is going on in the forest industry. And I guess you can expect nothing else from them, because they are being displaced out of a livelihood that they have come to enjoy primarily, I might add though, as a result of some surplus wood being around, and surplus in the sense that it had to be salvaged, I should say salvaged wood. But it is still there and the harvesters are replacing people on the ground. So where it comes out nobody knows at this point.

MR. WOODFORD: Last fall, I had some talks with Abitibi-Price regarding their short-wood harvesters versus ordinary, say, chain-saw wood. They said then that they were going to include in their negotiations with the unions, that if they could come down four to six dollars per cord, that they would probably take some of the short wood harvesters out of it.

Now my understanding is, that Abitibi has a contract signed as well with the unions. Is there any indication that that happened.

MR. TULK: No, is there?

DR. NAZIR: I am not sure whether they have it in the agreement or not, but we were advised by Abitibi-Price that they are moving more towards more labour-intensive harvesting of wood as compared to mechanized operations, so they are moving; whether they are moving with the agreement of the union or on their own, they feel that they can get the wood more economically by moving towards more labour-intensive techniques as compared to Corner Brook which still believe that their mechanized operations are cheaper than there non-mechanized wood harvesting. So the two companies seem to have different philosophies; it also depends on what type of organization they have in managing their mechanized versus non-mechanized operations.

MR. WOODFORD: It is hard to believe that you have two paper companies in the Province, one with all kinds of wood and the other with only two-and-a-half years supply left. And some of the things they are doing - you'd think they would be on the same wavelength regarding mechanized - because that is the one of the arguments that Kruger always used, that their companies and mills in other parts of North America, were using mechanized equipment up to as high as 58 per cent to 60 per cent and they were always 45 per cent to 52 per cent of mechanized use in order to keep their mills going. But, at the same time, Abitibi-Price is looking to go the other way and come back into a more labour-intensive woods operation than Kruger.

MR. TULK: Let me just read a paragraph from an official in a letter to Dr. Nazir to emphasize what you are saying. It is the last paragraph of the letter, and it says: ... since 1991, about 50 per cent of our annual harvest has been mechanized. We require a minimum of 50 per cent mechanization to maintain our fresh wood newspaper quality, better winter utilization, wood cost and inventory control. We cannot - and this matches what you are saying, about the kind of arguments that they use - ... we cannot reverse this trend for a number of reasons but especially since almost all of our competitors are up to 100 per cent mechanized and for the same reasons we need to be mechanized.

CHAIR: Mr. Byrne, the MHA for Kilbride, has asked if he could ask some questions here, he is not a member of the committee so he asks leave. By leave?

AN HON. MEMBER: By leave.

CHAIR: Go ahead, Mr. Byrne.

MR. E. BYRNE: Thank you. I appreciate the opportunity just to ask a few questions and should first of all, Mr. Howlett, congratulate you on your return to Agriculture. I know it sends a positive note throughout the community and I would like to articulate that publicly.

MR. TULK: (Inaudible).

MR. E. BYRNE: No, he is not, he is in the -

I just have a couple of questions; certainly just to preface a couple of questions by saying if there is any department in government, in my opinion, that has the potential for growth and to provide employment, it is the Department of Forestry and Agrifoods, particularly in the Agrifoods Branch. The food industry in the Province last year was about $1.5 billion, I think only about 10 per cent or 15 per cent of which we produced here ourselves. But I will get into that in a second.

I would like to ask somebody about the Agriculture Shows and Exhibitions, on page 156, in subhead 4.7.01. I know that the Food and Livestock Show for the St. John's area has been cancelled altogether. I would like to know the reasoning behind that. Also, what other shows is the department still funding?

MR. TULK: Let me try to answer that for you.

MR. E. BYRNE: Based upon the heads you have eliminated about $40,000. You have saved $40,000 there.

MR. TULK: Yes. Let me try to answer that for you. I don't think the answer is going to be entirely satisfactory to you, to be honest with you. But it was a matter of, not that the show is not considered to be valuable. The St. John's Food and Livestock Show, to be quite frank with you, has provided an education to many people in this area, including the kids who visited it.

MR. E. BYRNE: A tremendous impact on the economy.

MR. TULK: Yes, a tremendous impact on what people thought of agriculture in the area. As a matter of fact, I can say that for the past three years I have made it a point to go to the agriculture show myself, and I had very little connection with agriculture at the time, except for the few potatoes I used to grow out in my own back garden. But it has had tremendous potential. It had a tremendous impact. So the point is not that we cancelled it because we thought it was useless. I will be quite frank with you, that was not the case at all. But it boiled down, I guess, to having to find money somewhere. That is what happened to the St. John's Food and Livestock Show.

I will say this to you, we have not completely at this point given up on the St. John's Food and Livestock Show. We are looking at the present time to seeing if indeed that can be perhaps done by somebody, shall we say, in private business - although business perhaps is not the correct word to use. We still have not given up on it. And in fact, the rest of the cuts that are here in the budget will not affect the agricultural fairs and shows around the rest of the Province.

MR. E. BYRNE: Looking at the Salary details, it seems to me, all you really cut there is the Salary unit.

MR. TULK: Yes.

MR. E. BYRNE: What about the remainder of the shows around the Province? Where is the remainder of the money being spent, the $44,200?

MR. TULK: Let me just say to you that the real cost of the St. John's Food and Livestock Show is not necessarily shown under this subhead. I think Marty said something to me today to the effect that the St. John's Food and Livestock Show in terms of overtime of our employees here in the Avalon region may indeed have cost us well upwards of $200,000 to $250,000. So this is perhaps not a real figure when you look at it in terms of what we are going to save and what we have cut out as a result of cancelling the St. John's Food and Livestock Show.

MR. E. BYRNE: No, the question is where is the remainder of the $44,200 going to be spent?

MR. HOWLETT: With the Food and Livestock Show, I guess like the minister said, it is not that it was not a good show. It came down to having to make, I guess, some hard decisions. In agriculture when we looked at having to come up with our share of the required savings, we have very few programs that are not broadly based across the industry, like the limestone program, the pasture program, the safety nets and so forth. So we never had a lot of programs to cut, to take savings from.

The show was certainly a good benefit to agriculture. But it is one that was mainly in the St. John's region done by the department and the Shriners. The subhead here which included, just say, part of the salaries and the other overtime will come from savings and other areas in each division to cover off costs of overtime. And the overtime, at times, has been probably anywhere from $40,000, $50,000 to $60,000. So the real cost of that show is probably $200,000-plus in cost.

On top, with savings, we also had to take some cuts in other staff areas, so we were down, I think, about ten staff overall in the department plus the show, and some other small areas. So it came to a situation of a hard decision having to be made. It is an area that hopefully, if things improve, we can look at revitalizing at some other point in time, probably in some other different form. Because there was certainly a lot of effort on behalf of the department put in here in conjunction with the Shriners and the industry.

MR. TULK: That wasn't your question, was it?

MR. E. BYRNE: No. How is the $44,200 remaining going to be spent?

MR. HOWLETT: Oh, okay.

MR. TULK: Where are we spending the $44,200?

MR HOWLETT: The $44,000. There was $7,200 because there were salaries to be carried on. Up to the end of June, I think, our salaried people will be paid. Transportation and Communications: there was an amount left in there because we are involved with some of the other shows. We have another seven or eight shows across the Province, smaller shows. Supplies and Purchased Services: At the time the budget was done, we didn't have a really good handle on what costs were there that we would have to pick up anyway because of getting out of the shows. An amount of money was left there so that we wouldn't have some supplier of either Supplies or Purchased Services - like, for instance, the Stadium and whatnot, which we had to look into to see what we would owe those people. The $15,000 in Grants, that is for seven or eight more shows - Harbour Grace, Deer Lake, Green Bay, and so forth across the Province - that we give a small operating grant to, probably anywhere from $1,000 to I think $3,000. That makes up the full $44,000, to answer the question.

MR. E. BYRNE: Fair enough. I just have one more question. I'm not going to belabour it because I'm not a Committee member. There has been much said about the promotion and marketing of especially root crops. I've heard some of the questions asked tonight. I don't know what went on before. Does the department have any plans to look at further land development in areas where farmers right now are looking for further land development to expand their own ability to produce more, and thus expand their own ability to supply more products, particularly in the root crop industry, to the local marketplace, not even considering outside our local market, outside the Province. Because there are good opportunities there as well. If we had taken advantage of some of them in the last couple of years, we probably would have had an established market in the Toronto area now for, say, turnips.

Does the department have any plans for further land development that would look at expanding the amount of land available for local root crop producers to produce more and thus get more Newfoundland products to the marketplace?

MR. HOWLETT: Mr. Byrne, in 4.3.04, Agriculture Safety Nets, there is an area in there of Grants and Subsidies of $1,200,500.

AN HON. MEMBER: What page, Sir?

MR. HOWLETT: Page 154. That is the Agriculture Safety Nets. Part of that funding there - that is a cost-shared program - will be used for some initiatives as -

MR. E. BYRNE: How much, Marty? You say part.

MR. HOWLETT: The amounts -

MR. E. BYRNE: There is no set amount right now, it is just - is there $600,000 of that $1.2 million used for that, or will it be $200,000, or will it be all of it?

MR. HOWLETT: There probably could be $600,000 or $700,000 of it used -

MR. E. BYRNE: Okay.

MR. HOWLETT: - for areas like market development, marketing skills, strategic market planning, development diversification - and some of that could be in the land-based area for some improvements - product quality measures, feed efficiencies and so forth, for non-supplied managed commodities. That basically says for your vegetable industry. There will be some initiatives there, but all the details on the amount we don't have split out.

MR. E. BYRNE: Fair enough. Alright, those are all the questions I have. Thank you.

CHAIR: Thank you, Mr. Byrne. Are there any other questions?

Roger.

MR. FITZGERALD: Thank you, Mr. Chairman.

Pages 146 and 147, 3.1.04 and 3.1.05. It shows an increase in Salaries from the revised 1995 to the Budget of this year; does that mean that there will probably be more wildlife officers hired to carry out surveillance in the Province this year?

MR. TULK: Let me just say to you that the - I will leave Moe to answer the details - but the bent of the department and the bent of the government is, we will, inasmuch as possible and where it is necessary, try to ensure that there is an adequate supply of front-line workers; and nowhere, in my opinion, is that need greater than in the area of monitoring and enforcement in all areas of wildlife and Inland Fisheries and Forestry. As to the details and salaries, I leave that to Moe to answer just exactly what that is, but just let me say to you that there is not a plan at this point in time, I don't think, to put any more numbers into the monitoring and the compliance side of wildlife; we may be shifting personnel but I doubt if there is going to be any more great numbers people-wise. But what it is Moe? What is the difference?

DR. NAZIR: Ministers could act, in case of 3.1.04, there were three positions which were moved into this activity from 3.1.06. They were supposed to be in this one last year but there was some restructuring and last-minute Budget adjustments the year before and the salary was left in 3.1.06, but this year it has been correctly put in the right subhead. So the people are already there, there is no increase; in fact, we lost one person, one temporary person, so there is no increase.

MR. TULK: There is no increase in the overall budget but there is a move from one section to the other (inaudible).

MR. FITZGERALD: So there is no hiring of staff there.

DR. NAZIR: Yes. In terms of the enforcement staff, it has not been affected with the exception of the original eastern office being amalgamated with the centre. There is no impact on the number of employees on the enforcement side in Wildlife.

MR. FITZGERALD: Mr. Minister, I wonder if you are looking at changing the way that harvesters report royalties? I have a real problem, as you know, and as I have explained to you, in my district and it is prevalent on the whole Bonavista Peninsula whereby people just fill out forms and report the amount of wood that they cut. Then I have Forestry officials coming saying that the Bonavista Peninsula is 115 per cent overcut, but in the meantime, 50 per cent of them are probably working out at Hibernia, another 10 per cent are at Come By Chance, and in order for them to keep their quotas, they are reporting this cut every year, and that is a real problem. We had a Forestry committee to travel around this Province and it was not only heard around my district but it was heard pretty well right across the Province. I am wondering if you are looking at addressing that problem, and is there a different way of reporting people's cut and paying royalties?

MR. TULK: I think I understand what the problem is. As you say, there are people - and I think it is the sawmilling licence more than anything. They want to keep their licences -

MR. FITZGERALD: Well, maintain their quotas.

MR. TULK: - keep their permits, keep their quotas, shall we say, or their allowable cut, really, but we will call it quotas.

MR. FITZGERALD: Yes.

MR. TULK: It is a word that has been tossed around a lot lately. But what you are saying basically, is that people falsify their reports.

MR. FITZGERALD: Yes, and a lot of people suffer because of it.

MR. TULK: They may not even cut it, they may not even be near the wood, but in order to keep that thing up where they want to keep it and not have somebody say: Well, you didn't use it last year so you don't need it this year, they send in a certain report and they never even have seen the woods. I recognize from being in your area and being down actually on the Northern Peninsula, those are the two areas that I have been in to talk to people about those kinds of problems. And I recognize that it is a problem but I have not had, at this point in time, a chance to discuss it with officials in the department but it is certainly something that - I mean, I think if you paid attention to some of the reports that come in, if you add it up, I don't think you can come to any doubt that the Bonavista Peninsula must be as bare as -

MR. FITZGERALD: There should be no trees there.

MR. TULK: There should be no trees left down there. So it is a problem that we have to address, and at this point in time I don't have an answer for it, but I would welcome any suggestions that you or anybody else might have. I don't know if Moe has anything to add to that or not.

DR. NAZIR: That is true probably in the case of small operators who try to protect their allocation, because their allocation is based on the average of the last three years production. But the larger operators who had the opportunity of balancing it over three years, they don't do that, I don't think. Another demand is from the domestic cutters who always under-report. For example, if they are supposed to cut six cubic metres, they may cut more. In fact, we have a mechanism of cross-checking in the case of commercial operators. When they sell there is a requirement for buyers to record their license number and the amount they paid. Under the new legislation, new regulations which were brought in a few years ago, we can check those records. In fact, overall, I think if you add up the guys who over-report just to protect their location, some of the smaller guys, the larger operators who pay a significant amount of royalty and the domestic cutters, our assessment is that overall they may be under-reporting instead of over-reporting.

MR. TULK: That's total?

DR. NAZIR: Total.

MR. TULK: But not the small guys?

DR. NAZIR: Not the small guys.

MR. FITZGERALD: Is forestry looking at changing the way that they control domestic woodcutters? It is another particular problem certainly in the area that I represent where some domestic woodcutters would like to go in and harvest dead firewood or blow-downs. They are not allowed to do that in fear that they may go in and cut standing timber. As a result of that, many people are deprived of a place to cut wood and I suppose the forest, in turn, is probably held back from regenerating because of the blow-downs and the length of time it takes for it to rot and go back to nature. Is forestry willing to take a look at that and allow people to go in over cut-overs and extract those types of wood?

DR. NAZIR: A lot of people who want burned wood, they want to burn green wood. It is an unfortunate part because they don't like to burn the rotten wood or soggy wood.

MR. TULK: And they want to burn green spruce, too.

DR. NAZIR: And in fact, some of the commercial operators who cut firewood to sell insist on trying to get favourite of green wood, although we try to put them into areas which are over mature, dead or dying, that type of thing. The suggestion you have made, in fact, we have investigated, to some extent, for the last two years. We tried to institute a thing called, `gathering permit.' That means people who want to gather wood which is dead and dying. They could go - and in fact, we have tried to give them a free permit, experimented in a few areas, trying to see if there are people who can be directed into those areas, where they will get this deteriorated wood. It is not their preference because they would like better wood to burn but if you reduce the permit fee or give them some incentive, maybe it is worthwhile. It may work, because in some of the States there is a permit, in fact, a weekly permit and yearly permit where the wood is too scarce. In fact, they charge on a day basis, but in Newfoundland I think the tradition has been that the domestic cutters want equal variance as compared to commercial operators. You are aware, in the King's Cove area and in your area, some of the domestic cutters, prime areas they want them to be set aside for domestic cut only and they don't want any commercial operators. On the other hand, they don't want to go into areas where they would be faced with deteriorated wood. But we are experimenting with that and hopefully we will make some inroads.

MR. FITZGERALD: Is forestry looking at -

MR. TULK: If I could just add one thing to that before you come back. In a case of some of the paper companies, Abitibi-Price, for example, they now have a program in certain parts of the Province, and I think some of it is in the Bonavista North area and in the Gander area, where, if you want to cut a load of softwood, they would exchange that with you for a load of birch. So there are different kinds of programs that are being tried.

But it boils down to one simple problem, to be honest with you, and it is how do we best manage a resource that is scarce on the Island portion of the Province? We have domestic cutters who are competing with commercial cutters, commercial cutters who are competing with domestic cutters. The price of the lumber industry has rebounded somewhat, as you know. And in spite of the fact that those people are using, shall we say, the log, the timber better than it has ever been used before, there is still a demand for wood in this Province that is above what the forest can stand, the Island portion of the Province, for both domestic and commercial cutters.

I tell you, since I have become the minister, eight meetings out of ten have been with people who have come in from various areas of the Province, some of them large, some of them small, looking for more wood. It is becoming extremely difficult, more and more every day, to try to find it for them. We try to maintain a balance between helping people that we know of - we did one out in your district last week that I felt had a legitimate concern; we went out and went over the problem with him and we tried to help him. But it is becoming extremely difficult to find more and more wood for the competition that is going on between domestic and commercial woodcutters and various sizes of the commercial cutters as well. Because we have people now, as I said, who are in the - and I will use Cottle's Island Lumber - you have a couple in yours now, Jamestown, I think the Sextons are now looking at putting in another mill that will indeed use every last bit of sawdust. In the case of Cottle's Island Lumber, I think they use more than the sawdust, they are using the bark, they are using everything.

MR. FITZGERALD: No wastage whatsoever.

MR. TULK: No, and that is where it's at. Rex Philpott tells me, for example, that he has increased his revenue threefold over the past three years and he is using - and I can guarantee you, only last week I signed his permit, he still has the same allocation of wood. So where we have to start looking, and the truth is, that in that process maybe it is proper that our push bench and our carrier disappears. Maybe that is appropriate.

Now, there are people in this Province today who would smack my mouth if they heard me say that. But we have to use and we have to produce secondary processing, we have to carry on a secondary processing that creates jobs and that uses that resource. To do otherwise is to do what Paul Shelley has been talking about for the past three or four years, that is, to set up a situation where you will not be able to find a bit of wood to cut for firewood, in other words, you will not be able to have a food fishery, you will not be able to have a wood industry, if you want to, and you will have people being laid off. We have to be very, very careful over the next eight, ten, twelve years. And as politicians and as governments, we are going to take some flak unless we can access - and that is not easy to do - access some of that wood that is in Labrador.

MR. FITZGERALD: Probably one of the biggest reasons that push benches and carriers still exist today on a commercial - they will always exist domestically because, you know, people are probably more interested in a piece of two by four than what the wastage is, and they usually use it where they will for domestic purposes.

MR. TULK: Oh, yes.

MR. FITZGERALD: But it is the fear of them selling their logs round, which most mills want today anyway, but they still insist on squaring them in case they lose their sawmill licence. So if you people would change your rules and regulations, you may do away with that particular operation. But until you do, then that will not disappear.

I am also wondering if you are looking at changing the way your department issues domestic cutting permits? I had a real problem, or you people had a bigger problem than I did, in my particular district there some time ago, where you took some people to court on a case, and took their equipment for cutting commercially in a domestic lot. At that particular time, I think it was a situation where there was a fellow moved in there with his harvesting equipment, and there were, I don't know how many, but there must have been dozens of domestic cutting permits issued for this one particular area. Correct me if I'm wrong, but I can be a partner on every one of the permits that was issued. Rick Woodford can go and get a permit and put me in as his partner, you can go and get a permit and put me in as your partner. Only one person has to show up. I can show up every day and cut what I want and take it and away to go. The same as a moose licence, but the only thing is, you are only allowed to take one of those. This is what is happening.

To me - and I'm no rocket scientist - but, to me, it is easy to control. Everybody has to go to the same place to get their permit, so surely, they must detect, when the same fellow is issuing the permits, that there is something going on that isn't right. If it is only the same particular area, why would somebody issue 200, 300 or 500 permits for that particular area, knowing that the area can't sustain it? Are they looking at, I suppose, putting in a limit on the number of domestic permits for a particular area, number one, and number two, only allow one person to be a partner on one permit? which to me would solve the problem.

MR. TULK: I haven't had a chance to break this up yet, but let me just say to you that I don't know whether you people are familiar, I don't know whether you are familiar or not, as a member, with the fifty cords of firewood permit. There was a time in the Department of Forestry in the last three or four years - and again the reason, I don't know, it might not have been anywhere else - where you could go and pick up a permit to cut I believe it was fifty cords.

DR. NAZIR: No, it was twenty-one.

MR. TULK: Twenty, was it?

DR. NAZIR: Twenty something.

MR. TULK: Twenty cords of firewood, and you could get as many of those as you wanted. That happened. Those kinds of practices, yes, we have to take a look at them.

DR. NAZIR: It is down to six now.

MR. TULK: Down to six now. We have to take a look at them. We have to take a look at whatever is happening. There will always be some of them. You won't stop all of them. We have to take a look at all of the practices that we follow in our licencing and our permit-issuing area as well. We are going to do that.

MR. FITZGERALD: People who need eight cords of wood for firewood, I have no problem with that.

MR. TULK: (Inaudible).

MR. FITZGERALD: I was one of the ones who argued for it. But I don't think you should have one person having his name on a dozen permits.

MR. TULK: No. Because what happens is you end up with a commercial cut.

MR. FITZGERALD: That's right. I will pass to somebody else now.

CHAIR: Any further questions?

MR. WOODFORD: Yes, I was going to say to Roger that the Lieutenant-Governor couldn't even burn twenty cords in his place down there.

MR. TULK: Couldn't even what?

AN HON. MEMBER: The Lieutenant-Governor.

MR. WOODFORD: The Lieutenant-Governor.

MR. TULK: Couldn't what?

MR. WOODFORD: The Lieutenant-Governor wouldn't burn twenty cords in his place down there.

MR. TULK: No.

MR. WOODFORD: He loves that subject, that is why I brought it up.

Anyway, one other question, Minister. My colleague here just brought it up. It is one I've been meaning to ask Wildlife people about for some time, and I'm sure everybody here tonight can associate with what I'm going to say. With regard to the moose licence, the partner system, I've seen time and time again, and I'm sure everybody in the House tonight has seen it, people, for argument's sake - for instance, if I had a licence with Gerry this year, a partnership, and then all of a sudden he is off to Alberta, which has happened in the last few years here in the Province, a lot of it, and then his name is on it next year, I'm still his partner but he still puts in for his licence.

It is going on. Four and five members of one family putting in licences, and they aren't even in the Province. We have 24,000, 25,000 licences out there, but there are fellows having licences every year because of the fact that the other partner gets it. It is one thing if he is in the Province. Or she.

MR. TULK: You have to be careful. Be careful, now.

MR. WOODFORD: There are a lot of them out there. I see it around my area, buddy, I tell you.

MR. TULK: Be careful, Anna, smack him there.

MS THISTLE: Yes.

MR. TULK: "He".

MS THISTLE: Yes.

MR. WOODFORD: "Or she," I said.

MS THISTLE: (Inaudible).

MR. WOODFORD: That the -

SOME HON. MEMBERS: Hear, hear!

MR. WOODFORD: No, but it is a real problem. It is the same thing that he is talking about with regard to the domestic cutting. If I can see it around my area like that - and I'm no Mother Theresa when it comes to being nice and good, especially when it comes to -if I had the chance I would probably put one in, but I don't have a buddy who is willing to do that with me, you know.

MR. TULK: Be careful now.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: But it is done.

MR. TULK: You have no buddies in Alberta, have you?

MR. WOODFORD: I've seen it, and I'm sure it is a real problem. I mean, they are all away.

MR. TULK: What are you saying, Rick? Are you saying that - I will note this, because I'm not aware - and excuse my ignorance - I'm not aware if it is going on. Are you saying that there are people now in Alberta who are still showing up in our -

MR. WOODFORD: Oh, yes. I know of people this year who put in the licence, it is in their name, and they are in Alberta or Saskatchewan or wherever -

WITNESS: (Inaudible) can still shoot the moose.

MR. WOODFORD: That's right, their partner can still shoot the moose and -

MR. TULK: And they won't come home at all?

MR. WOODFORD: No, they don't come home but they get their moose.

MR. TULK: Well let me say this to you, I was not aware before that it was on the go but it is something that I will note, and -

MR. WOODFORD: Oh yes, nobody is going to admit it but it is on the go.

MR. TULK: Yes, I don't mind admitting it.

MR. WOODFORD: Is there anyone else -

CHAIR: May I just say that tomorrow is going to be an extraordinarily long day for this particular committee. I just want to clear up a bit of housekeeping here before we go any further. Tomorrow we were scheduled to deal with the Department of Development and Rural Renewal in the committee room on the fifth floor and that has changed. We will now sit here tomorrow morning. And that has changed because the Department of Education have moved their time slot. So everybody should remember that the hearing will be here in the morning.

Now, there is one other issue I should deal with, with respect to an offer made by the minister. I should have said it at the beginning of the night but I felt we would wait until the end of the night. Given that we have a very long day ahead of us tomorrow, he has offered to take us to dinner tomorrow evening between 5 p.m. and 7 p.m. So after the House closes we can go off and have a bite to eat and come back in time for the night sitting.

MR. TULK: Also, Mr. Chairman, I think perhaps it will give you another chance to discuss some issues that you might want to discuss with them over dinner because they are just as hard-working as we are. I don't say that to them very often.

AN HON. MEMBER: Harder, Minister, I would submit.

CHAIR: Are there any further questions?

MR. FITZGERALD: I just have one quick one. Just very quickly, I think you mentioned in your opening statement that there were some extra moose licenses issued this year for outfitters. Did you say that or did you say that there were extra licenses issued? I was wondering if they were for - if the outfitters were awarded any extra licenses?

MR. TULK: Let me just say to you, there are two sides to this story, and it bothers me sometimes in that, I think what we do is set the total number of moose licenses that are available to private individuals, to outfitters, and the Department of Tourism, Culture and Recreation is the department that allocates them to outfitters. We draw for moose licences. There is an overlap there in the regulation that we carry on. I will let Moe answer in detail about the extra moose licences, but keep that in mind, that in terms of allocation you are talking about - while we set out the total number, I believe, of moose licences that are available for outfitters, the Department of Tourism, Culture and Recreation allocates them to outfitters as part of their -

MR. FITZGERALD: Yes. Is there an increase in the allocation to outfitters this year?

DR. NAZIR: Yes, there was an increase in both moose and caribou. In the case of caribou there was an increase for residents as well as non-residents. Because the overall population of caribou is higher, therefore there was an increased quota for caribou. For residents it went up as well as non-residents through the outfitters. Similarly, on the moose side there was some increase but not as much as caribou to the outfitters. They were also given a five-year plan, whatever was decided, so that they can market their product over years instead of yearly changes. It was established as a five-year quota. So this department establishes the overall quota. Then jointly, between the two departments, the Cabinet decides how much should go to the outfitters. Once that is decided, then as the minister indicated, we depend on the recommendations from Tourism, Culture and Recreation because they licence and regulate the outfitting establishments. On their advice the individual allocations are made.

MR. FITZGERALD: Moe, do they go to new outfitters, or were they add-ons to existing outfitters?

DR. NAZIR: They were given to the existing outfitters. There were no new outfitters.

MR. TULK: Let me just say to you again that I'm not - just to throw this in, Mr. Fitzgerald. We are going to be, over the summer again, taking a look, not so much maybe on the Island, and not as much with moose, but we are going to be taking a look at the outfitting business, particularly in Labrador where there is a large increase, I believe, in this - the herd is perhaps too large in the George River. We are going to be taking a look, over the summer, at whether we are using some of our wildlife and fish resources to their greatest economic capability.

MR. FITZGERALD: It is too bad they were given to existing outfitters, because most of those fellows seem to have been doing very well. I know of fellows who have invested quite heavily in getting involved in the outfitting business and have been trying very hard to get a quota of moose licences and have not been able to do it.

MR. TULK: I have a tendency, believe it or not, to perhaps come down somewhat on your side, but that is a discussion I have to have somewhere else at another time.

MR. FITZGERALD: Not now with three minutes left.

CHAIR: Thank you, Mr. Fitzgerald. I will now call upon the Clerk to do what he is most proficient in doing, that is calling the headings.

MR. WOODFORD: Mr. Chairman, I move the acceptance of 1.1.01 to 4.7.03 inclusive.

On motion, subheads 1.1.01 through 4.7.03, carried.

On motion, Department of Forest Resources and Agrifoods, total heads, carried.

CHAIR: We have the -

MR. WOODFORD: (Inaudible) before you go any further, the Minutes of the last meeting, I think that Mr. Fitzgerald's name is left out of it. I am sure he was at the meeting.

CHAIR: Mr. Fitzgerald?

MR. WOODFORD: Before you put adoption of the Minutes.

CHAIR: That is correct. May we have a motion to approve the Minutes of the last meeting, with this amendment?

On motion, Minutes adopted as circulated, with amendment.

CHAIR: A motion for adjournment is in order now.

MR. TULK: Mr. Chairman, before you adjourn let me, on behalf of the department and my officials, thank you for your questions. I would invite members over the next little while, if you have some suggestions about any of the topics that we have raised or talked about in the notes that I have passed out to you - there was a reason for passing them out to you, in that you might want to make some suggestions to me or to the officials in the department about ways that you think we might be able to improve services to the public of Newfoundland. We would welcome those over the summer and if you want to come in and sit down and have chat about them, please feel free to do so.

I thank you for my salary, and on that basis, I am not sure yet (inaudible) we are going to dinner tomorrow (inaudible) tomorrow evening in the House. Thank you very much.

CHAIR: Let me just say, Minister, that the Committee appreciates your time. We know you to be very approachable; your officials are very approachable, as from my own point of view. I have had great access whenever I wanted it, just walk in and ask whatever question there was to ask. I appreciate your time tonight. Thank you very much.

On motion, Committee adjourned.