The Committee met at 7:00 p.m.

CHAIR (Canning): Order, please!

Welcome to the Resource Estimates Committee. Tonight we have the Minister of the Department of Industry, Trade and Technology and her officials. Before we get started I would like to just have the minutes of the previous meeting approved.

On motion, minutes adopted as circulated.

CHAIR: Welcome to the Resource Estimates Committee, Minister. Maybe you would want to take a few moments to introduce yourself and your officials and we will go through introduction of the Committee members.

MS FOOTE: Thank you, Mr. Chairman. I have to say though it is a little disconcerting to be looking across the way and see one of your members is blushing so much. I am wondering what the member beside him is up to.

CHAIR: That will be forever taken into account in the Hansard of this Province and forever put into the historical record, and say we had blushing Committee members.

MS FOOTE: Thank you. It is an opportunity to be here to present our estimates to the Committee this evening. With me is my Deputy Minister, Mr. Max Ruelokke, and the Director of Financial and General Operations for the department, Mr. Rick Hayward.

The Department of Industry, Trade and Technology has gone through a transformation since the last Program Review. It is now focused on three mandates: one certainly being on attracting investment to the Province; the second one of course is the promoting of export development; and the third is, of course, industrial benefits. We also have a responsibility for industrial benefits. I think as you go through the estimates you will see how each of the estimates factor into all of these three sectors.

I am not going to go into any long preamble about what the department does. I think you are all familiar with what the department does. I leave it to you, Mr. Chair, and to the members of your Committee.

CHAIR: Thank you, Minister. Perhaps Mr. Shelley would want to start with an opening comment and questions.

MR. SHELLEY: I will start with a question. It will maybe put it back to the minister to prolong that introduction a bit. Because before I go into some specifics on the estimates, I would just like for the minister to tell me about, as far as her department goes, the major initiatives and the major positives that you see in the coming year. Maybe a quick review of last year before we go into some specifics on estimates.

MS FOOTE: I think one the keys for us as a department is the industrial benefits section, and that is to insure that we do everything possible to maximize the opportunities for Newfoundland and Labrador that is coming out of all of our development sectors in the Province, but especially our resource sectors. We have been charged with this. We know what has transpired with respect to Hibernia, and that was before my time.

Now we have Terra Nova coming on stream, we have Voisey's Bay coming on stream, we have the Lower Churchill, and all of these initiatives certainly my department will take a lead on, as the department responsible for industrial benefits. In fact, my Deputy Minister will be leading a committee to look at, particularly, the Lower Churchill in terms of industrial benefits there.

That is a major undertaking for us. Clearly we want to do as much as we possibly can, within reason, in terms of insuring that the private sector that is involved in all of these developments recognize it as a provincial concern. We are insisting that the maximum benefits accrue to this Province. We obviously have to be careful in terms of the impact that we have with respect to their position, because obviously if we want companies coming in here to work with us to develop our resources we have to make it reasonable, but at the same time insure that we get the maximum benefits out of those developments. That is certainly a major focus for us.

Export development is really important as well. I have said it time and time again that in a population of 570,000 people we will never get rich selling to ourselves. Clearly the onus is on, I think, my department and other departments of government, but especially this department - and the Department of Development and Rural Renewal in some sense - to work with our local companies to insure they are export ready, and to work with them to help them recognize the opportunities that are out there for them in the world. This is very much becoming a global economy.

I think if you look at the success stories we have had in terms of our local companies being able to sell worldwide, then the benefits that can accrue to this Province, and to our people in terms of jobs, if they can enhance their export potential they will end up making more product and thereby employing more people. There are a lot of success stories out there. I could go on and on in terms of the companies that are doing very well.

Brookfield Dairy Group is one. They are selling their ice cream now in the SkyDome in Toronto. You have Superior Gloves in Point Leamington doing very well on an national basis. You have Rex Philpott, Cottlesville, with his homes, doing very well, selling into the Japanese market, and now tremendous potential with the German marketplace. He also signed an $80 million contract, $30 million of which was his component for homes in Chili.

There are any number of opportunities out there. A lot of our companies are doing very well, but some of them in rural Newfoundland still need to know what is required of them in terms of export development. Some of them think they are ready and they are not, so I think the onus is on us to work with them to insure that they are export ready. Because the worst thing they can do is go on any of these trade missions with us, get out there, commit themselves, and find out that they cannot meet the demand. We are working very closely with companies in that vein, and you will see as you go through the estimates each of the sectors that are involved in that. In fact, we are looking at doing a little bit of restructuring in the department to insure that we really do focus more on export readiness and making sure that we are very focused with our companies.

Attracting investment, whether it is capital or attracting businesses to the Province, it is a challenge. I will tell you, I recognize that, and I think particularly it is a challenge to attract companies to rural Newfoundland, which is of course what we are all about in a great sense. With what has happened with the collapse of the groundfishery it has left a lot of our communities out there devastated. Trying to attract companies or even capital to go into projects in rural Newfoundland is not easy.

One thing is they ask about the infrastructure. Do they have access to this, to that, to a airport, to a port? What is there in terms of the labour force? How skilled is the labour force? These are all questions that we have to answer, and even though we have this wonderful KPMG study that came out - which is fabulous for our Province, promoting St. John's as the most cost effective city in which to do business out of forty-two cities in Europe and North America -, the fact of the matter is that while I say when I go around - wherever I go, in fact trying to attract business to this Province - that survey can be applied to any part of this Province, in reality I suppose that is true with some of the factors that were looked at, but not with all.

We really need to work with our people to get them to understand that we are never going to see economic growth or economic activity taking place in every community in this Province. Instead we are probably looking at growth centres, as it were: so if you are looking in the Grand Falls-Windsor area, Bishop Falls, those areas, if you are looking at Corner Brook, if you are looking at Marystown. I could never in my own district point to Fortune as a major economic centre, it is not going to happen, but Marystown could very well fill that bill. What it means is that people may have to drive half an hour to go to work.

These are issues for us in terms of attracting capital, but we are having success. I will just mention to you my trip to China. I made reference to this in earlier interviews that there are opportunities there, particularly in Taiwan. I met with the Premier of Taiwan and clearly he was encouraging companies in Taiwan to invest in stable economies like Canada. When you ask him what he knew about Canada, and you ask anyone in China, they know about Vancouver and Toronto. You immediately say that does not count. Then I proceeded to tell them about Newfoundland and Labrador. At least if we did nothing else on such a mission, we created an awareness that there is more to Canada than Vancouver and Toronto.

We were very fortunate on that trip to be able to meet with some very good people who have the ability and have the money to invest in Newfoundland and Labrador. The gentleman who we worked with out of Toronto who is Taiwanese arranged the meetings for us with the Premier, and with the Premier's director general and with the owner of the third largest computer company in the world. These people are planning on coming here. The guy who arranged those meetings for us in fact will be here next week, and we will be pursuing with him opportunities in Newfoundland and Labrador as well.

The department has its hands into a lot of areas, but in terms of a focus, the focus would be the three mandates that I outlined at the beginning.

MR. SHELLEY: I will go with some of these and then some specifics.

No doubt there is a lot of potential for things that are happening. To a small degree, I guess, from a small bit of experience, I've been travelling quite a bit - not so much on business, but a few times dealing with business and industry -, I know what you are up against, to a small extent, as far as attracting people to this little Island out in the middle of nowhere that people fly over all the time when they are on trade missions back and forth between North America and elsewhere. They do not even notice we are here, so they are not just going to land here out of curiosity. We are going to have to get them to land here.

I have always believed in that philosophy. That is why I have always encouraged that our government officials always go and get those people, encourage them to come here. I think that is how it has to work. I have an old saying of my own: If the ship doesn't come in, then swim out to it. It happens, that is the way it is. It is not going to come to places like Newfoundland and Labrador, but we have the resources here and we have to turn people on.

Because I have done it. I can tell the minister that I have talked to business people, I had a little experience a couple of years ago with the Italians, I don't mind saying it. I learned a lot from that experience. You would not believe how just a bit of conversation with people to encourage them can get their eyes to open up and to come here. Of course, that did not work out, but it was for a lot of strange reasons. It could have worked, it had potential.

Now we are dealing with another big project in my area, just for an example, with the magnesium and so on. I still have the attitude that if that fails we will go after something else. That is the way it happens with business. It is risk, it is time. Some fail and some succeed and so on.

MS FOOTE: You may land one out of ten.

MR. SHELLEY: Exactly. That's the way it is with business. You hear the stories all the time. I was listening to Mr. O'Dea give his speech to the entrepreneur students over here the other day and he has some good points. This is a man who lived on skid row in Toronto and right now really owns Second Cup. What a success story that is, and it's a real story.

Opportunities come along if you go after them I believe, so I encourage that. I have never criticized any government, at any time, for going out and getting the business and for travelling for those things. As far as your Iceland trip, China and all of those, they are certainly things that you needed to do for the Province, and continue to do them as far as I am concerned.

The one I mentioned to you, and actually I would like to talk to you extensively on it sometime, because I started to study it about three to four years ago, is Ireland. As a matter of fact, I did an interview with Jeff Gilhooly, which he reminded me about a little while ago, the second year I was elected - that is three to three-and-a-half years ago now - about Ireland. I started to read about it and what they were doing with their economy, the changes there in rural Ireland, how it was taking part and how they were getting the groups together and so on. I think we are very similar to that, and I think the minister would agree. There are some things that we can do in Newfoundland that would I suppose be equal to what they are doing in Ireland. So I am just going to ask you on Ireland itself and what you have been thinking. Can you just give me your views on what you think Ireland has to offer us on things to do here?

MS FOOTE: Interestingly enough, Ireland has a lot I guess from which we can learn. I am sure you have heard that I was involved in an announcement just a couple of months ago, where in fact NewTel is involved in providing Ireland with technology. It is a relationship that can work both ways.

We have been very fortunate through the IDA in Ireland to really have them share with us their methodology in terms of attracting companies to Ireland. In fact, they allowed us to send one of our employees over to spend three weeks in their environment, and really were very forthcoming in terms of their strategy, and knowing full well we would not be competing against them. They have been able to attract the headquarters of most of the major financial houses in the world to Ireland.

One of the things that people keep talking about is the focus on education and how important that is because we have an educated workforce, and that is part of the solution. I think that is something we have to look at here as well. We have to make sure, as they are doing, that we work with industry to insure that whatever programs we are offering are certainly in keeping with the types of jobs that will be required for the businesses looking to come here, or certainly in anticipation of those businesses coming here. Ireland certainly has done that as well.

Of course, the fact that Ireland gets $300 million a year from Brussels in which there is no claw back is helpful as well. They are able to put a lot of money into doing things like building buildings, for instance, in anticipation of attracting a company to that country. For us that is a stretch. We do not have the resources to do that. There are some things they are doing that we can only dream of, but I think we certainly can learn in terms of methodology. I think we certainly can learn from their approach. We certainly can gain from their insight into what has worked for them and what has not worked so we do not end up repeating mistakes that they may have made. They have been very forthcoming in terms of sharing information with us.

In fact, the Irish business partnerships - which I think the value in them has been led by the private sector - has really lent credibility to that particular initiative we have entered into. A lot of things are happening on that front both from an education perspective but as well from private sector joint initiatives. I am really pleased with what is happening there. I think the more we can get the private sector involved as well - I think that is where the value is.

MR. SHELLEY: Yes. I am going to mention one particular situation, just to use as an example, but I think it is something we need to look at here. It probably relates to Ireland; I think I spoke to you about it before.

Especially in rural Newfoundland areas now, with vacant fish plants, mine sites and everything else, this particular example I will give you is the marine centres in this Province which were leased out and so on. I have a down home example. I have a fellow who has forty or forty-five people working - more than that, I don't know the numbers now - in Triton and La Scie, (inaudible) making high speed boats. He is making a deal with this Icelandic group now. He said I could talk about it here, I asked him about that, and it's fine. He sees government doing things for internationals that want to come in - Mr. Lee is an example -, which may be a good thing or whatever. That's fine, nobody has a problem with that.

When our own local Newfoundland and Labrador people who are proving themselves - this guy is on the go now for three years, about to go into a huge contract and triple his capacity, using this marine centre which was a liability to the Province. It was losing money. Why I related this to Ireland is because I know in Ireland they not only they give you a vacant building, but if there is neither one there they will build one for you, and the only criteria is that you create jobs.

Here is this man, creating forty-five or fifty jobs - I might be wrong on the number, I am just using an example -, he can go to 120 jobs next year if he gets this thing. He wants that marine centre for a dollar. He has proven himself, he has a good business plan, he has his market set and everything else, but of course, he has been told by the government: No, I am sorry, make a nominal thing. It is worth this much, which is right, but it is hard to tell that man. I have tried to discuss it with him the other day when he said: You gave Marystown, a big company there and that, for a dollar, which is fine. He commends that they are going and so on. I am talking about the mentality of trying to convince our own Newfoundland business people. Why can't they get that same break if they have proven themselves? He said: The only criteria I want government to tell me is: Sir, you keep 120 jobs there and we will give you that bloody building for $0.50. I told him forget the dollar.

It is something that needs to be addressed, Minister, I really think it does. I do not know if it is that we are just stuck with marine centres. Are we stuck on something there? If it is going to be a consistent policy across the board for Newfoundlanders and Labradorians, there are lots of good business people in Newfoundland and Labrador that need that break too. I would just like to hear how you would address that to that gentleman, or for anybody else in that situation.

MS FOOTE: Clearly there are two departments involved in development in this Province: one is the Department of Development and Rural Renewal, and the other is the Department of Industry, Trade and Technology. Clearly our focus is an international focus. I am out there trying to recruit companies to come into this Province.

I think where we have drawn the line between the two departments is that I will bring them in, you work with them. You work with them to see where they are going to locate, you work with them to see the types of incentives they require. I do not have that pot of money that is in `D2R2.' When companies come in looking for a loan, that is the department to which they apply. The only incentive we have is EDGE, and of course then there is an independent board that the companies have to go and apply to. That does not involve any money. What that involves is a tax holiday, as you know. Clearly there are two departments involved here, and then there is a third department when you are talking marine centres.

MR. SHELLEY: The Department of Fisheries and Aquaculture.

MS FOOTE: The Department of Fisheries and Aquaculture.

MR. SHELLEY: That is where the problem is, from what I can understand. It is really time to get together on it, I think, and at least discuss it again. This gentleman is not going to be turned off if he do not get it for a dollar. He will go and push the money, like he said, but that does not solve the problem for the next guy who comes along, another Newfoundlander who is willing to put in millions of dollars which he has, or whatever it is, and maintain those jobs out in rural Newfoundland. It is the perfect situation.

MS FOOTE: Is part of the issue that they have unloaded some marine centres in other locations for a substantial sum of money? Are they holding that up maybe as an example of what they can get for them?

MR. SHELLEY: I can understand that and being consistent with it, but at the same time if they made a mistake of selling those, maybe you will have to go back and negotiate with those people, if they got jobs in those other marine centres that they might have sold for $100,000 or $200,000.

MS FOOTE: I do not think they would consider that a mistake, if they got $100,000 or $200,000 from a centre.

MR. SHELLEY: It is not a mistake as far as the fiscal point goes, they might have gotten $100,000 or $200,000, but as far as industry and development goes I think it is a mistake. Because it may have turned off some other people that might have leaned that way. This guy is a good example of that. I think it is something that still should be addressed.

Your department, the Department of Development and Rural Renewal, and the Department of Fisheries and Aquaculture should get together and say: This is a guy who is going to put 120 people to work. If he can do that, and he has proved himself for the last two years, what a perfect time to pat a Newfoundlander on the back and say keep it going.

MS FOOTE: You and I have had this discussion, as you know, and I think you are raising some valid points.

MR. SHELLEY: I think he just recently got a letter back saying they would not, but I still think they should be considered if you put all the questions in there. That is one thing.

Another one is this. They overlap, I think, but they are still good things to talk about. I have talked about it many times. You do not hear me as much as Mr. Efford, but I say it as often as I can. The seal oil industry, and the seal industry as a whole, but especially the seal oil, because I'm telling you I studied that, the potential for that is incredible. It is more valuable, this is my quote, than the oil offshore, in the sense that if it is done right it is hundreds of years. Not in price at the time or current, but it is a renewable resource. The timing is critical, over the next year; not a couple of years, but this next year is going to be critical. It is happening right in my district. It is critical, Minister, and that is all. I will get to a question on it as far as your department is concerned.

I think it is important that we have to have a good market development. I think the government can help out with that. Because I am telling you, what they are producing in Baie Verte now and also in Catalina and so on is top quality. Mr. Quinlan, who is there, is set on doing not a big amount this year, just market samples that are perfection. Clean. The plant is fantastic down there - Mr. Efford has visited - but they still are not into the market part of it, and I think that is where your department, in China and Korea and so on, can go out with a good quality product and help develop those markets, because they are not developed.

MS FOOTE: I think you will be pleased to hear that in fact we have funded under the Comprehensive Economic Development Agreement the Seal Development Council. The whole idea is to do just that. It is to development seal products for exporting. Tina Fagan will be involved with that council as well.

MR. SHELLEY: Yes, I saw that video.

MS FOOTE: That is one of the initiatives that has been developed or funded under CEDA. Clearly there is a recognition that that is a natural resource we really have to take advantage of, and we are certainly interested in doing that. In fact, the gentleman who has been here the last little while, even though we are focusing on the garment industry with him in the first instance, he certainly has expressed an interest in all seal products, but particularly in seal meat because of the protein value.

A simple thing like taking a beater and cutting it up including the bone, I mean, we are deboning it. He asks: Why are you deboning it? You can cut it up into two-pound units, vacuum pack them, and send it over to the Chinese market. They will just take it and run with it, you know. There are all kinds of opportunities that we are missing. In fact I had Tina Fagan meet with Arthur Lee to discuss opportunities in the sealing industry.

MR. SHELLEY: Yes, that is good because what I am getting at is the end product. It is a real chance for us to do something right here. Because the way I can envision it and very soon - if not next year, the year after - is the seal being shot, brought into this site in Baie Verte, the meat taken and canned there, the hide taken and tanned there, and the oil taken and capsulized there, without moving off the Peninsula. It is real, you can do that. As a matter of fact, the product of seal oil they are doing now is so refined and so pure that if they had the $750,000 for capsulizing they could do it right there on site. Three-quarters of a million dollars is what it costs for one of those capsulizers, but if the markets were solid and they knew they had that, I think that people like Mr. Quinlan and others would move to the next step, the last end of it.

MS FOOTE: You are right. There are so many opportunities. This has nothing to do with seal oil or seal products, but I toured Labatt's the other day, went through the plant downtown. In going through they were showing me all the different stages. One of the things I noticed on the floor was there were boxes of crowns. Now I asked: What are crowns? You know, 60,000 crowns in a box, and these are caps. They import 60 million bottle caps a year, Labatt's, and they tell me Molson does the same, so you are talking 120 million bottle caps being imported. It does not take a genius, I wouldn't expect, to make a bottle cap. They were telling me what is required: probably a piece of machinery, you have to have the raw material, and it cuts out the bottle cap and requires a liner to go inside.

MR. SHELLEY: Where are they imported from, do you know?

MS FOOTE: Montreal, other places.

MR. SHELLEY: In Canada.

MS FOOTE: I called Burf Ploughman and said: Burf, what does it take to get someone here making the bottle caps? One thing Labatt's told me was that even if it costs a little more to make them here they would be willing to pay the extra to have them made here. That is an issue I've suggested to AMEN that they should take up and look into as an opportunity. You are right. In terms of identifying opportunities there are a lot of them and we have to be more persistent.

MR. SHELLEY: Two other ones. One is on call centres. Can you update me on some of those? I have had heard some bad things about the response that we have received on call centres. Even our language and stuff being used in call centres, that was a deterrent.

MS FOOTE: Let me tell you that in the call centres we have in operation now language is not an issue. In fact the Bay - and you know it is the Bay Portrait Studios - have found, through the work of the call centres here, that the results have doubled compared to their expectations. They find that when someone from Newfoundland is on the phone making the call, their easy manner, the way in which they try and sell the service, and the response they elicit, is one where even if you did not want to buy they keep a conversation going to the point where someone says: What was it you were selling again? Sure, I will have one.

We are finding the response is tremendous, and the company is finding their sales have doubled through use of the call centre here. I think what you are referring to was the CIBC call centre. I will tell you that when the site selectors were looking for a centre to establish that particular call centre - it was Wadley Donovan out of New Jersey -, they in fact identified Newfoundland as a number one location. The VP of CIBC was from Nova Scotia. They came up with every excuse and they did use our accent.

MR. SHELLEY: Are there any more on line now to come here?

MS FOOTE: It is actually Network Newfoundland and Labrador that is out there doing this, and that is a partnership between Newtel and the government. There was an allocation of money given to them to actually run Network Newfoundland and Labrador. They are the ones that plan the strategy, get out there and do the marketing, attend the trade shows and the exhibitions that involve call centres from all over the world, and talk about our capability in the call centre field. Network Newfoundland and Labrador in fact take the lead on that initiative.

MR. SHELLEY: My next one is about Mr. Lee. There is so much going on about it, it is almost like he is on wheels. I came in here on Monday and I read Saturday's paper because I missed it, and of course Clarenville was announcing about Mr. Lee. It was funny, because when I was on the way in on Monday morning, on the front page of The Western Star Corner Brook was announcing Mr. Lee was going there. I said, I better not pick up The Nor'Wester home because he is probably going there too.

Actually, I want to know a little bit more about him and how far advanced is it, or if it is just a thought now? There is no business plan or anything as far as I know. That is one part of the question. The second part, because other councils are calling, so I might as well be fair to them, my own council in Baie Verte has called, and I want to know (inaudible). They have a small presentation to put in, the same thing. If there is anything there, or whatever. It is a two-part question.

MS FOOTE: I think it is fair to say that when there is any suggestion of an opportunity like Mr. Lee presents, that probably every community in the Province would like to make representation to him.

I met Arthur Lee back in January. I had gotten word he was looking to expand. He has five plants in Scarborough and he is into making millions of t-shirts that he exports all over the world, but he is also into things like Nike. He is doing Nautilus products, Polo, you name it. By the way, Arthur Lee is a gentleman who paid $400,000 for the McCrae medals.

MR. SHELLEY: For what?

MS FOOTE: McCrae, remember, who wrote In Flanders Field? He is the one who paid the $400,000 for those medals and donated them back to Canada. He paid it because he thought the medals would probably go out of - it was at an auction. He was afraid they would leave the Province, so it is an interesting story, which I am sure you do not have time to hear.

Anyway, my ADM, Keith Healey, Jeff Mercer, the EDGE facilitator in our department and I went up and met with Arthur. We had heard that he was looking to expand, but we heard that he was looking to go to Nova Scotia. We went up and did a presentation. We looked at the KPMG model, we looked at his financials, and Keith Welland in my department actually worked up a model for us. We did a presentation to Mr. Lee that showed in fact he would be better off doing business in Newfoundland than he is now in Scarborough.

He was impressed with what he saw and what he heard. We proceeded then to set up an opportunity for him to come here. We were having some discussions with him about exactly what it was he wanted to do. When Mr. Lee confirmed he had never been to Newfoundland, I said: Then to be fair to you, the first thing you need to do is to visit the Province. You need to come and see what we have to offer.

MR. SHELLEY: He has never been to Newfoundland?

MS FOOTE: He had never been to Newfoundland or Labrador before. I said to him: In fairness to you, I mean, I can be here and I can tell you all the wonderful things, and I can present a model to you that shows you how financially you would be better off in Newfoundland and Labrador, but I think to be fair to you, you need to come visit Newfoundland and Labrador. He agreed to do that.

Of course, one of the things I talked to him about was the labour force and the availability of labour, and the fact that if you look at what happened to Superior Gloves - and I used this as an example when I spoke to him - they were an act in Ontario, and when the Newfoundland contingent of the company left and came back home, Frank Genge was having difficulty finding people to stay on.

One of the problems that a lot of the companies have is the productivity level drops with the constant turnover. Just as Superior Gloves was finding it very difficult, Arthur Lee is now finding it difficult to hold on to people in his plant. So he is looking where there is a loyal workforce, where there are hard working people, people who are looking to go to work, who really would prefer to stay where they are. I think he recognizes that is the case in Newfoundland.

He came in and we set up an itinerary for him, knowing first of all that his requirements were for a building that has at least 35,000 square feet. In a building with 35,000 square feet he can, I guess, have about 100 to 150 employees in that building. Or as Arthur says, if you have more than that they have to back out and breath and then come back in. That was one of the requirements. He also said he needed to be near a port, obviously to ship their product, and then of course he had to look at the transportation costs and all of these factors.

This was his first visit to Newfoundland and Labrador, and even though the focus was, and still is for me, on this garment industry, he has been talking other opportunities, but I mean those are other opportunities that will be touched on later. As I said to Arthur, the point now is to focus, if you are interested in coming here, certainly to set up a plant, a manufacturing facility, and show how successful you can be here. I know you can be, based on the labour force that is available, based on the fact that you want to be here and that you can reach your markets easily from here.

We knew, for instance, there was a building in Argentia, because Silver Linings was another company that was going in there. Something happened and that fell by the wayside, so that building was there. One of the issues I think that people are finding with respect to Argentia was the smelter going there. That is an issue for some companies. There were buildings at the airport in Gander. With Gander, of course, the airport was there, and it wasn't near a port. Coming out of that visit, even though Arthur has not indicated whether or not he will go there, one of the things he certainly looked at was that he is very much closely aligned with a company in California that ships their clothing all over the world, and they are looking for a major distribution centre. There is no reason why that could not happen in Gander.

In addition to all these other things happening there are other opportunities creeping up, but again I get back to focusing on the garment industry. He was to look at a building in Deer Lake, and he looked at buildings in Corner Brook. He went down to Argentia after he came back from Corner Brook, and he was supposed to look at buildings in St. John's and Mount Pearl as well. All of these buildings are where we put out feelers to my staff out there and to others to say: What do you have in the area that is at least 30,000 square feet, and where he will be close to a centre where he could export his product? Clarenville - and boy, I tell you, I have to take my hat off to them - they, within a short frame of time, when they called me to find out what the requirements were, came through with a very comprehensive, very professionally done proposal. I undertook to make sure that Arthur had a copy of that. He read it, and being the businessman that he is he was very impressed with what he read. While he did not have time to go to Clarenville, we suggested that two members of the chamber of commerce meet with him in here, and they did that.

There are still communities out there that are sending in information saying: How can we get a message to Mr. Lee, or how can we make sure that he is aware of us? I am saying: If you have anything that you want to go to Mr. Lee, we will make sure he gets it. I mean, this man reads. Ultimately the decision will be his. Where he locates will be based on his best case business analysis, now that he is out of town. He looked at the Province, he likes what he sees, he is very impressed with the hospitality that he received. There are some transportation issues that he feels need to be addressed. Apart from that I think he is convinced that he would like to do business here. If he is going to expand anywhere, he will come into Newfoundland and Labrador.

I said to him: The point we are at now is we need a business plan from you. For one thing, I can expect that he will want to apply for EDGE status, and I said that will be done by an independent board. You will have to apply, and you have to meet the criteria, but there is no money involved in that. If you want to access TJF money, for instance. Because clearly, for the number of people he is going to be looking for - because while we talked one hundred jobs in the first instance in some central location, I think he envisions certainly other operations in the vicinity, where people would be employed to sew where he may in fact provide the sewing equipment and things. Those are all things that have to be worked out in the business plan. People will have to be trained, and this is why he may want to access the TJF. I do not know, I have not seen the business plan. He may want to access ACOA funding. I do not know, because we do not have the business plan.

He is working with a local consultant in coming up with a business plan that we expect to have from him in the not too distant future. This man is anxious to move and needs to have things turned around quickly, and I have assured him that we will do that. We certainly will, then we will have to bring some pressure to bear on the federal government, because obviously ACOA and TJF are federal funding.

MR. SHELLEY: If there is a community that has something they want to present, there is no big rush, I don't think.

MS FOOTE: I would suggest they should get it in, yes.

MR. SHELLEY: I am talking about a couple of weeks is fine, or whatever, not (inaudible), and get it to your department, and you will get it -

MS FOOTE: That is right. We will make sure that he gets it.

MR. SHELLEY: A couple of specifics here now. 1.2.02.12, Administrative Support, Information Technology. For 1997-1998 the budget was $129,600 and you revised it to $455,600. Could you tell us what that jump was all about? Was that computers? It is not that much in computers, is it?

MS FOOTE: In fact, the allocation, the revised, was looking at client information system. That is, trying to bring together a lot of the information I think we require as a tool to do our job, in terms of having a very updated client information base, and not just through the Department of Industry, Trade and Technology, but the Department of Finance and Treasury Board has been involved in this as well.

In fact, we have been involved with the majority of the departments, it fair to say, in pooling together a really comprehensive database which we think is important for us to have to do our business. In fact, to make sure that all departments of government know what we are doing, and anyone can access it. In fact, I guess it was $300,000 that was spent on that?

MR. RUELOKKE: Yes, $455,600 was a projected revised amount prior to the year end. When we finally did the tally it turned out to that we had spent a little under $300,000.

MR. SHELLEY: Three hundred thousand dollars. That was for this new database (inaudible).

MS FOOTE: Yes.

MR. SHELLEY: In 2.1.01.10, Business Analysis, Grants and Subsidies, I have just one question there. You had $1.2 million there and you used $300,000. Now you have budgeted another $700,000 for this year. What were those -

MS FOOTE: These are EDGE companies.

MR. SHELLEY: That is EDGE, is it?

MS FOOTE: Even though we have dropped up the $2,000 per job - contrary to what was in The Evening Telegram two days ago, that has been dropped -, but there are still some companies out there that would be eligible for it, because they would have come in under the guideline before it was dropped. We have to allocate an amount of money in the event that they do in fact meet the criteria and create a number of jobs.

MR. SHELLEY: They have not used that yet. You are saying that is what happened there. There was $1.2 million budgeted for, but that is EDGE status.

MS FOOTE: That is cash flow. See, we used the $300,000, right, so now we are budgeting $700,000.

MR. SHELLEY: That was for the $2,000 wage -

MS FOOTE: Yes.

MR. SHELLEY: That is where it is. I wondered where it was. That is it right there. In 2.1.02.06, Trade and Investment, Purchased Services -

MS FOOTE: That is our agency of record.

MR. SHELLEY: Pardon?

MS FOOTE: That is funding for the agency of record, Bristol Communications.

MR. SHELLEY: That is how much in advertising?

MS FOOTE: Yes, for advertising, and for services that the agencies would have provided, like the `Think Again' campaign that was run in The Globe and Mail. Do you remember that one?

MR. SHELLEY: That is all contracted though, isn't it?

MS FOOTE: Bristol.

MR. SHELLEY: Yes. Is that all contracted, is that an open contract?

MS FOOTE: Yes. It is an agency of record and we go to tender for it, right.

MR. SHELLEY: Yes. That is all tendered?

MS FOOTE: Yes.

MR. SHELLEY: In 3.1.01, Technology Development, I just want this explained, that is all. The .01 under Revenue-Federal for the offshore there, could you brief me a bit more on what that is spent for?

MS FOOTE: This agreement is cost-shared with the federal government, it is 75-25, so the $540,600 would have been the federal contribution.

MR. SHELLEY: That is for getting companies for acquiring expertise (inaudible), consultants and -

MS FOOTE: Yes. Can you give some examples of some of the companies?

MR. SHELLEY: More specifics. Some examples, (inaudible).

MR. RUELOKKE: That is a fund called the Offshore Technology Transfer Opportunities Programme. That fund was an original block allocation under the Offshore Development Fund designed to provide funding subsidies to companies which are entering into joint venture relationships or other arrangements where they wanted to upgrade the skills of their employees.

I will give you an old example. Marystown Shipyard entered into an arrangement with Kvaerner Rosenberg to establish Vinland Industries a number of years ago. They accessed funding under this program to send some of their welders over to Norway so that they could be trained and qualified to weld to offshore standards. More recently we have had people involved in weather forecasting, we have had people involved in the kind of testing programs, some quality assurance programs, that are currently in use by a company called OIS Fisher on the Hibernia platform. They received a subsidy under this program to allow their employees to be upgraded so that instead of having to have Norwegians come over and do the work for a period of time over here at Hibernia and then gradually be replaced by Newfoundlanders, these people did training prior to the project start-up offshore so that they were able to go employ Newfoundlanders immediately.

MS FOOTE: It is that important component of technology transfer that we say must happen here in growing the industry.

MR. SHELLEY: Can you update me with what is happening in Port aux Basques with the project that you have out there?

MS FOOTE: ASIL, is that the one? I think they in fact had some success in attracting an investor.

MR. SHELLEY: That is what I understood.

MR. RUELOKKE: The involvement we had with them was back when the original joint venture was formed, and we provided them with some training assistance. We have not had any direct involvement with them since that time, and that is quite a while ago. I am not sure what the status is of the relationship with the Norwegian partner. I believe the prime driver at ASIL is the local partner, M and M. Most recently they have been pursuing the opportunity to build some power barges for a project over in India, the Far East.

MR. SHELLEY: Because I have had some people calling about work down there, welders and this type of thing, and they said they kept being put off. They were supposed to start Christmas, now it is supposed to start in the spring, and I do not know where it is.

MR. RUELOKKE: No, and we are not certain either. I think they have had some start-up difficulties trying to finalize the contractual arrangements.

MR. SHELLEY: Who is out there? I guess Mr. Ramsay from Port aux Basques would know.

MR. RUELOKKE: I can tell you who the prime contact is. There is a gentleman named John Brake who heads M and M Engineering here in St. John's. John is also either chairman or president of ASIL, I believe.

MR. SHELLEY: John who?

MR. RUELOKKE: John Brake.

MR. SHELLEY: Brake.

MR. RUELOKKE: Contact M and M Engineering in St. John's.

MR. SHELLEY: I will contact him. One last estimates question and that will be it for me. It is on 3.3.01.01, Industrial Benefits, under Salaries. You budgeted $523,600, spent $553,700, but the budgeted estimate for this year is $721,200. Are there new positions?

MS FOOTE: Remember we went through Program Review, and clearly the focus on industrial benefits was a significant one for us. Don't forget now we have Voisey's Bay coming on steam and the whole industrial benefits component of that. Clearly we needed more support, and that is where the additional salary will come from there.

MR. SHELLEY: So there are new positions, are there? Okay. That is it for me minister. I might have one at the end but I will let somebody else have a go.

CHAIR: Thank you, Mr. Shelley. Ms Thistle.

MS THISTLE: Thank you, Mr. Chairman. Those were interesting questions, Mr. Shelley. Some a little humorous, but very interesting all the same. We will fill you in on the humorous part later on.

Minister Foote, your portfolio is a very exciting one. Most people in the general public when they see the budget of the Department of Industry, Trade and Technology, they look at it as - it is definitely a good news portfolio. Some people do not realize that you have to set the stage for things to happen. They just do not happen automatically, and setting the stage lots of times takes a great deal of time and effort and money. I remember when I used to be on the town council and we toyed with the idea of removing the economic development officer - the salary - and it was a big issue, but we came to realize that we really could not do without an economic development officer. Today business does not come at your doorstep, you have to hustle for it. I think we Newfoundlanders and Labradorians are just now realizing that.

It was interesting for you to explain to us here in the Committee meeting how you are trying to attract investment and so on to our Province. I am particularly interested in the export readiness. I think we talked about your department now designing a portfolio of business here in this Province: what they do, what they manufacture, how they do it, and what their markets might be. Have you collected much of this data, and would you be encouraging businesses throughout the Province to contribute? Do you have a set format? How is it done?

MS FOOTE: We work very closely with all of the industry associations. We have, as I mentioned today, the manufacturers' association, we have the Newfoundland Association of Technical Industries, we have NOIA, we have NEIA, and of course we work very closely with all of them. We are aware of the companies that exist there. We also have a petroleum directory, so it has a listing of all of the oil companies, the offshore companies.

I suppose what we are doing compliments what the Department of Development and Rural Renewal are doing as well, but one of the things we do is try and pull together a list of companies and know the capabilities that exist within those companies, especially when it comes to industrial benefits. We want to make sure what companies are out there and what capabilities they have, so that if they are looking to hire we know what exists, and we know whether or not they have actually gone after local companies for that hiring. Because we know what experience there is out there in the Province.

I don't know, Max, if you want to speak to any of the other directories or anything.

MR. RUELOKKE: We generally break down the opportunities for export in terms of the export of goods and products and the export of services.

With respect to the products, we work very closely with the Alliance of Manufacturers and Exporters Newfoundland in trying to insure that their member companies, who represent probably in excess of 500 firms around the Province that are involved in manufacturing products, that they are aware of the kind of constraints they might face in terms of exporting, in terms of quality control, and the need to have sales relationships with distributors in different countries and those sorts of things.

We take selected companies who are really export ready on trade missions, and we have had some really great successes that have bubbled quietly to the surface in that. One that comes to mind is what used to be a small company down in Bay Bulls which was producing fish handling equipment, CNW Welding in Bay Bulls. I am sure it did not escape anybody's attention in the last little while. There was a vessel in loading the first shipment of an order of forty-five small patrol vessels that they built for South America. The only credit for that initiative we will take for it is that it got started when Terry Crane, the principal of the company, accompanied the minister of this department on a first trip to South America. The minister's own mission to Iceland and Ireland, and the mission that the Premier went on with the rest of Team Canada down in South America, has led to some very impressive export development opportunities.

It is a big focus for us. I take the point that Mr. Shelley made in terms of working with local industry. The export development side of the portfolio that we have is, well, we call it `growing your own' exercise. We believe that is very, very important, developing to the fullest extent we can the capabilities of our own companies to meet the demands for both import substitution and for export developments. It is a very big initiative for us.

MS FOOTE: I just wanted to say, on the Iceland trip -

CHAIR: Order, please!

As the officials respond to questions, perhaps for the sake of Hansard, and those who will have to transcribe the minutes, just identify yourself.

Madam Minister.

MS FOOTE: Just as another example of how important - and you alluded to it, Anna - it is that we go out there and actually sell ourselves and work with the companies, those trade missions - Mother Hubbard's, for instance. They went to Iceland with us, and Chris Hewitt of Classic Woodworks went to Iceland with us. Mother Hubbard's was obviously trying to sell their cupboards because there is such a shortage of trees in Iceland. What you see is not good quality. For someone like Chris Hewitt, who went over there and looked at the types of mouldings that are available, he came away saying what they were producing was actually similar to lobster slats, and costing five times as much as what he actually sells his very exquisite moulding for.

He blew them out of the water. He took in a video of his product and he came away with a major contract. He was able to sell them these very nice mouldings and rosettes and everything else for one-third the price of what they were paying for something that was nowhere near the quality. That's the value of taking someone with you and introducing them to a market and making sure that they have an opportunity to present themselves. Chris had never been on a trade mission before, so for him it was a real eye-opener. Now he knows he can do it. It enabled him to build his confidence to the point where he is ready to go again.

MS THISTLE: Minister Foote, how would a business out there in rural Newfoundland or urban Newfoundland actually get to a trade mission? Do you have a catalogue of companies, and do you contact them, or can they contact you? How does one go about that?

MS FOOTE: It depends on the focus of the mission. What I would like to see happening, and what we have been doing, is certainly prior to a mission identifying opportunities. Rather than opening up and saying anyone can go, and then taking someone there and there is no opportunity for them, what we have done in the past is hired a consultant, someone who is familiar with the area. For instance, Rodrigo Delgado, when we were going into Chili, and who knows that country very well, was able to identify so many opportunities there that when the Premier went on that mission, in fact, Newfoundland signed the most contracts of any other province on that mission.

We had done our homework. Rodrigo had gone in and had identified opportunities. He came back to Newfoundland and matched those opportunities up with companies back here, so that in fact when they went, the three or four months of homework that had been done resulted in contracts, or contacts that resulted in contracts at a later date.

What we really like to do is to make sure we have done our homework, so that we are not just saying to a number of companies: We are going to Chili, or Iceland, or Scotland, or England, or anywhere, and would you like to come along? We think it is important to do the research, to do the homework, so that if a company is going along they are pretty well assured of it being a profitable venture for them.

MS THISTLE: Minister Foote, would you encourage companies around the Province to profile their companies and send their profile to your department for further contact?

MS FOOTE: Certainly. Working with `D2R2' we know most of the companies that exist anyway. Any new company that is coming on stream, it would be really valuable for them to let us know what the capabilities are.

We also encourage chambers of commerce, boards of trade, anyone out there, to put together proposals for us that tell us as well what they have in the way of infrastructure in that vicinity, what they have in the way of skill sets, for instance, what they have that would be an asset to anyone who is looking to come to do business in Newfoundland and Labrador. This is why I say the proposal that Clarenville put together, if Arthur Lee never goes there, it is invaluable to me when I am out there and trying to attract companies which may say to me: What about this or what about that? If I have a proposal there that I can share with them it makes all the difference in the world.

MS THISTLE: Thank you.

MS FOOTE: Thank you.

CHAIR: Thank you. Mr. Osborne.

MR. T. OSBORNE: I have just a couple of quick questions. Mr. Shelley went through most of the estimates. Minister, your transportation budget.

MS FOOTE: Mine?

MR. T. OSBORNE: When I look at that compared to the transportation budget of other departments - I mean, you look at Government Services and Lands, for example, which has the same transportation budget as your department. There is nobody that can convince me that the Minister of Government Services and Lands does as much travel as you do. What I'm asking is, are you going to the econo-lodges? How are you travelling for that budget?

MS FOOTE: That is the budget, and what can I say? I am not about to comment on another minister's travel budget.

MR. BARRETT: Do you want me to answer the question? Why the Government Services and Lands budget is as it is? It is because Mr. McLean is the regional minister for Labrador, and it is very expensive to travel in Labrador. There is more to the skidoos and trikes that you have to go by planes, and a lot of this chartered aircraft that you have to go and travel around Labrador in. You are taking the wrong department when you are looking at Government Services and Lands because he is also the regional minister for Labrador.

WITNESS: Thank you, assistant.

WITNESS: There are no school buses in Labrador. (Inaudible) Torngat Mountains.

MS FOOTE: I tell you, the last camel ride I had was not very easy.

CHAIR: Go ahead, Mr. Osborne.

MR. T. OSBORNE: Minister, the consultation process that your colleague from the Department of Works, Services and Transportation has done on manufacturing and processing, can you give us an update as to how those have gone? Can we expect to see some legislation or bills brought in to amend the procurement act in this sitting of the Legislature?

MS FOOTE: I think, as you would certainly understand, given your interest in this, there was a great deal of interest in that process and it was, as you said, led by the Department of Works, Services and Transportation. There is a draft Cabinet paper that will be going forward, the timing of which I think is probably within the next couple of weeks, so I know they have moved on it very quickly and the paper should be in the system.

MR. T. OSBORNE: So hopefully we can see something in this sitting.

MS FOOTE: I would like to think so.

MR. T. OSBORNE: Any indication of what changes are going to be suggested?

MS FOOTE: I think I should let the paper go to Cabinet first.

MR. T. OSBORNE: No hints.

MS FOOTE: None.

MR. T. OSBORNE: That is pretty much it. I think my colleague has gone through most of the Estimates. Other than the transportation, there is not much there that we can ask.

CHAIR: Thank you, Mr. Osborne. Mr. Woodford.

MR. WOODFORD: I will pass, Mr. Chairman.

CHAIR: Thank you, Mr. Woodford. Mr. Barrett.

MR. BARRETT: Okay, it is 8:05 p.m.; we have an hour and fifty-five minutes.

I guess first starting off I have to compliment the department, the minister, and particularly Mr. Ruelokke and the other officials in the department, about the positive feeling that is happening on the Burin Peninsula, and the great job they did - and Judy and Max. I know Max spent a lot of time and a lot of hours. To be on the Burin Peninsulas today as compared to a year ago, the positive type feeling and the beehive of activity that has taken place is just tremendous. The minister mentioned it in her opening comments, and I think in response to Mr. Shelley about it being a service centre, we cannot expect to have industries in every nook and cranny in Newfoundland.

People are leaving my district - were leaving a year ago - in droves to go to Alberta to look for work. Well, people today are driving in droves from St. Bernard's, Bay L'Argent, Terrenceville, English Harbour East, and Grand Le Pierre, commuting daily to go to Marystown to work in the shipyard, which is a bit different. It is really turning things around. I was up there a week or so ago and the whole positive feeling there is just tremendous. Credit has to go to Max, and people like you, who spent a lot of time and a lot of energy, and a lot of frustrations. I was opposed to some of what happened, and there were times it did not look like it was going to go through. For the hours that the minister and you and the other people in the department - I think you are to be complimented on a job well done.

In addition to that, I want to come down on the Isthmus of the Avalon and the beehive of activity that has taken place in my district and is soon to take place in Bull Arm and the Whiffin Head Transhipment Terminal. Two years ago there were 6,000 people working at Bull Arm but we did not even really know they were there. They were out there, tucked away, and the economic spin-off in terms of the communities was relatively little. There were some businesses that did get some business from Bull Arm, but where everything was housed on site there was no economic spin-off whatsoever. I guess we could probably look back and say that if we did not have the camps on site there might have been all kinds of other social and economic problems that would have been caused.

I think the new model of Bull Arm is a much better one. I think we will feel a much greater effect within the communities. We are seeing it already with just thirty or forty people out there. As a matter of a fact, the thirty or forty people out there are probably having more effect right now than the 6,000 people who were out there before. The model with the Whiffin Head, the way they did it, the number of people working out there...

I said in the Estimates of the Department of Mines and Energy the other day, one of the highlights of my being in politics was about a week ago when I heard that nine well-trained young people from my district had secured permanent jobs at the Whiffin Head Transhipment Terminal. These are young people who are building houses and settling in and having families within those rural communities. It is just a start of the great things to come. More and more people said it was just a phase of the hiring at Whiffin Head, but they are committed to hiring people from the local area because they want people to settle next to the Transhipment Terminal who can be on call in relatively short notice.

All of these sorts of things are putting a strain on the communities, and the infrastructure is just not there. We spent a lot of money in Bull Arm. I do not know if it was a wise move (inaudible) a lot of things that are there. You have a lot of paved roads, water and sewer, and all of these sort of things on that site. Up to this point, the Bull Arm site was using municipal dumps. Some of the areas we are going to have to address pretty soon. We are going to have to provide some more infrastructure in that area to accommodate the developments that are taking place, because we do not have the infrastructure there now to sustain what is going to happen, or what is happening in the area.

Even the road system there, the road system going in through Arnold's Cove, and the intersection there, we are going to have to - that is why I want to get to (inaudible) the Offshore Development Fund. I notice there is some money there. Are we providing any more money for infrastructure? It is going to have to come from somewhere. Some government source is going to have to provide it, and it may not come out of the regular transportation initiatives but it may have to come out of some area like the Offshore Development Fund. Is there any money there for that sort of thing any more?

MR. RUELOKKE: All but approximately $8 million worth of the original $3 million Offshore Development Fund has been allocated and spent in some of the activities you see here occurring this year. Most of them will result from prior commitments that are being completed. There was a proposal that was approved by the Cabinet of the Province and is now resting on the desk, I believe, of the Natural Resources Canada minister, to reallocate the $8 million that is available. Unfortunately, of that, there is not an allocation, I do not believe, that can be used for infrastructure. There is a significant portion of it that is dedicated to the Marine Institutes for new facilities on the south side. There is a small industry development fund that might be available for specific industry-related initiatives, and we are thinking particularly of some of the new technologies that will be required off the Coast of Newfoundland and Labrador for floating production and those sorts of things. It is very unlikely, I believe, that we will find any flexibility to provide infrastructure funding from the Offshore Development Fund.

MR. BARRETT: Because originally there was money allocated for a waste disposal system out there, and it was allocated out of the Offshore Development Fund. I guess that has not been utilized. So that is still committed, I would say.

MR. RUELOKKE: The Offshore Development Fund made a contribution of $95 million towards the site development of the Bull Arm site, and the Hibernia Management and Development Company funded the rest of it to the tune of about $380 million, of about a $475-million site.

We were not directly involved in the negotiations with the municipalities in the region, but I do understand that very early on in the days of the site development it was planned that there would be a solid waste disposal facility on site, and I think an access road was started just over the first hill.

What had happened was, I believe there was a successful negotiation between HMDC and the Town of Southern Harbour that saw the municipal ice facility in Southern Harbour being used. There has always been the expectation in the region, in my time at Bull Arm - I spent a considerable amount of time with the Bull Arm area coordinating committee - that some of that money which had been set aside for that site would have been made available to them; but they were never successful in reaching a conclusion with HMDC on that, so I am uncertain as to whether or not that is a dead issue between HMDC and the municipalities in the region. The site itself still sits there - the proposed waste disposal site - and the access road is pushed into it, or nearly into it.

MR. BARRETT: We are looking at the Bull Arm site not in the next three years; we are looking fifteen or twenty years down the road. That is why I am saying we may have to rethink some of the infrastructure and services that need to be provided in that area, because that is not in any one municipality so the towns are not responsible for the waste disposal. So the company that is there now is going to have to come up with some kind of a proposal. They are going to have a lot of solid waste, too, that they are going to have to get rid of. The dumps there now are getting taxed to the limit in terms of - pretty soon they are going to be full and there is no place for the municipalities to dump. So the discussions, I guess, would have to take place with the new company that is in there. We don't have the responsibility for it, do we? These agreements do not say anything about that.

MR. RUELOKKE: The lease between the Bull Arm Site Corporation and PCL requires PCL to take care of all their own servicing arrangements; and, while it is not specified, it would automatically include waste disposal. So it would appear to me they have a minimum of two options: one would be to try and negotiate an arrangement with a municipality similar to that which HMDC did, or, failing that, to develop their own capability.

MR. BARRETT: We don't have the responsibility for it. Like I say, in terms of the other infrastructure there, if there is no money in the Offshore Development Fund, I guess we are going to have to look at the Roads for Rail Agreement and that sort of stuff because there are incidents of accidents. You have a lot of tankers and trucks with the refinery, the Whiffin Head Transhipment Terminal, and the Bull Arm site; and the new Bull Arm will mean there will be much more traffic leaving the site. So I guess we are going to have to look at beefing up the infrastructure in that area to accommodate the excess traffic that is involved.

I don't think I have any other questions.

CHAIR: Thank you, Mr. Barrett.

Mr. Shelley, you had indicated you had a question or two?

MR. SHELLEY: Just two more left, that is all. Just for clarification and explanation, really: 2.1.04, Atlantic Investment Fund. We pretty well know what that was for, but just the way it worked out in the Budget, there is $722,000 and then nothing has been put in for this year. Is that where that fund ran out?

MS FOOTE: No, we were obligated, along with the other Atlantic Provinces, to invest a certain amount of money into this fund. We are obligated to do it again this year, but we have not been happy with what has transpired since that fund was set up. Out of the $1.5 million - no, out of the total amount that was invested by the four Atlantic Provinces - only one investment was made to date. That was for a project in Fredericton.

We have expressed our frustration with the process and, in fact, we have asked to have substantial review take place. Max, of course, sits on the board. We are reviewing the file. Clearly we want to see something happening and if nothing happens soon, as we have indicated should happen, we are prepared to withdraw from it. Rather than forward another amount of money to have it sit in a pot there, we have said: No, we will wait and see what happens with the money that has already been allocated.

MR. SHELLEY: Okay. What was the basic concept between - the Atlantic Provinces, from what I understand, has one fund, and that fund would help in the set-up of any major industry to any of those provinces, is that right?

MR. RUELOKKE: Minister, if I could just...

MR. SHELLEY: Just an explanation briefly.

MR. RUELOKKE: The Atlantic Investment Fund is a kind of unique initiative, a joint initiative, between the four Atlantic Provinces, ACOA, and four of the chartered banks, whereby each of them contributed a certain amount of money to something called ACF Equity Atlantic, which is an Atlantic Venture Capital Fund. The purpose of that fund was to make equity investments in growth industries in the Atlantic region. It got up and running about fourteen or fifteen months ago, with a small staff.

We have not been very pleased with the results of the first year, as the minister has said, so we have given them 1998 as, I guess, a year of trial. If the model does not succeed, then we will have to look at other options. Perhaps they might include establishing our own Venture Capital Fund. The concept is a very good concept. You get the banks and governments sharing in the risk in high growth potential companies, but the delivery has been somewhat less than we would, as owners and investors, like to have seen.

We did not feel it was appropriate to pull the rug from underneath them without giving them, I guess, a rather severe criticism of their previous year's performance and to set some targets for them for this year. We are hopeful those targets will be met. We are very hopeful that there might be a significant investment in a Newfoundland company very shortly, but if that does not happen then we are quite prepared, I believe, to recommend to ministers that we would withdraw.

MR. SHELLEY: Just try to go on our own with our own Venture Capital Fund, that is an option, a possibility?

MR. RUELOKKE: That would certainly be an option and a possibility.

MR. SHELLEY: It might be a good one.

MS FOOTE: The value, of course, right now is that the banks are involved in this one, and ACOA is involved in it.

MR. SHELLEY: We are all there. If we could work it, it could be good. The concept is good.

Okay, one last one, 3.2.02, I just have a few questions. Under Strategic Investment and Industrial Development there was nothing budgeted, and all of a sudden there was Transportation and Communications, $8000; Supplies... It is not a lot, but what happened there? Was something created there, something new that happened, that you were not planning on? There was $36,000 for Purchased Services and so on: 03, 04, 05, 06, those there. There was nothing budgeted for it, as you can see, in 1997-1998, but all of a sudden... Did something new happen, something created, a new position?

MR. RUELOKKE: One of the final initiatives that was taken under that program, which expired on March 31, 1998, was to establish the very first trial of the Ambassador Program. So we re-profiled a little bit of the money, because originally it had not been intended that we would actually get involved in the purchase of services or professional services, but it was decided to try this ambassador approach to see if it would work. It did, in fact, prove to be successful, of course, and we are continuing it today; but that was its origin basically.

MR. SHELLEY: That's what that is, the Ambassador Program? Okay.

Those are all the questions I have, Mr. Chairman.

CHAIR: Are there any other questions from any members?

Thank you, Minister, for your presentation, and thank you to your staff. I really appreciate you spending the time to answer questions and give an overview of your department; but, before I close and call the motion, I just want to express my own appreciation for the work and activity in Labrador West. I know that the deputy, Max, and fellows like Byron Hynes, put in tremendous effort to move along this file on the silica. They have some of the sample down there now at the smelter and it is some of the purest material this facility has seen, so things look encouraging. These are private investors. These are private people in the west who are putting their money down to try to create opportunity and jobs in the local area. There is no government money, as I understand it, or very little, if any, involved with this. It is strictly some people who are trying to really do something positive, and I appreciate all the effort and time that you have taken to push the file along.

Having said that, I would want to call a motion to accept, without amendment, all the headings from 1.1.01 through 3.4.02 inclusive.

On motion, subheads 1.1.01 through 3.4.02, carried.

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

CHAIR: The next meeting will be next Tuesday evening, with the Department of Development and Rural Renewal. Thank you very much for being here.

MS FOOTE: Thank you.

On motion, the Committee adjourned.