The Committee met at 5:15 p.m. in the House of Assembly.

CHAIR (Reid): Order, please!

Before we start, you have the minutes from the Department of Mines and Energy that we did last Thursday in the House of Assembly. If there are no errors or omissions, could someone move that they be passed?

On motion, minutes adopted as circulated.

CHAIR: Mr. Minister, tonight we are going to do the Estimates of the Department of Development and Rural Renewal. What we usually do is give the minister fifteen minutes to introduce his officials and to say a few things about his department. Then we pass it back to the members of the Committee who we usually give fifteen minutes to, and then we go into the headings.

Before we do, I would like to introduce the Committee. We have Mr. Collins for Labrador West, Mr. French for Conception Bay South, Mr. Rideout for Lewisporte, Mr. Hunter for Windsor-Springdale, Ms Jones for Cartwright-L'Anse au Clair, Mr. Parsons for Burgeo & LaPoile, Mr. Joyce for Bay of Islands and Mr. Sweeney for Carbonear-Harbour Grace. I'm Gerry Reid for Twillingate & Fogo. So without further ado, Mr. Minister, you can take it away.

MR. TULK: Mr. Chairman, let me first of all -

CHAIR: I am sorry, Minister. Before we do I would like to call the head, please.

CLERK: 1.1.01.

CHAIR: 1.1.01.

MR. TULK: Mr. Chairman, let me say it is a pleasure to be before the Committee. Let me introduce first of all, on my right, Mr. Bill McKenzie, ADM of Field Operations with the department. To my immediate left is Mr. John Scott, the Deputy Minister of Development and Rural Renewal. On my far left is Mr. Ken Curtis who is the Budget Analyst officer with the department and I believe several other departments. Fisheries and what else?

MR. CURTIS: Municipal Affairs and Government Services and Lands.

MR. TULK: We have combined three or four for budget purposes

Mr. Chairman, I will probably will not take all of the fifteen minutes. Let me just say very quickly that in the early 1990s the government of the day decided to take a fundamental shift I guess in the way we were tackling the economic challenges (inaudible) around the Province and they put together twenty regional economical development boards.

One of the mandates of this department that we are a part of is to stimulate and foster economic development and rural renewal in each of the twenty economic zones by working with them. We are engaged in that side of economic development, working with broad-based community groups, regional groups, to promote regional economic development and to promote business.

The other thing we do is that we foster the development and growth of small- and medium-sized businesses right throughout the Province, and that is the aim of our budget, obviously. This year I think it is over $54 million that we have committed towards an economic renewal agenda, an economic growth agenda as expressed through the department. I think that is $24 million more than was provided in the 1998-1999 Budget.

The budget also provides for some $28 million in the coming fiscal year for the federal-provincial Post-TAGS Economic Development Program. As you know, that has a total budget, I'm sure you have heard, of some $81 million over three years. That is meant of course to develop and revitalize economies in the areas of the Province that were directly affected by the downturn in the groundfish industry.

I just want to say at this point in time that program details are being finalized and it is being done in consultation with ACOA and the Regional Economic Development Boards with implementation, we hope, to begin very shortly. I understand that we hope it is about to go before the federal Treasury Board within the next two or three weeks. In actual fact, I guess it is safe to say, John, that we are ready to go. It is a matter of getting it through the federal Treasury Board and getting it off the tables with the federal government.

I want to say something else to you about another initiative we have undertaken within the last year that we believe is fairly important. Some two years ago, we undertook to establish a Newfoundland and Labrador Film Development Corporation, and at that time we put in place a program called a Telefilm Equity Program. Up until last year it was $750,000. It is increased to $1 million this year.

Also, members who were in the House last year will recall that in the Budget Speech - not this year's Budget Speech, the year before - we announced that we would put in place a film tax credit or telefilm tax credit (inaudible) program. I want to say that we did that last year. We felt that in order to attract people to Newfoundland and Labrador we should make it the most competitive in the country. We did that. It is designed to help grow the Province's emerging film industry and in the process generate new economic activity and create new jobs.

Contrary to what most people might think, the film industry develops jobs, not just for movie stars, actors and people who can use microphones and all that kind of stuff, but in the process of setting up sets and so on it is very labour intensive. It is somewhat ideally situated to a lot of labour that you find in Newfoundland, because it requires a lot of labour work, a lot of carpenters and I don't know, a number of other people that we would have around this Province.

The programs are administered by the Newfoundland and Labrador Film Development Corporation which we have been attempting to get at arm's length from government and just pass the budget as long, as we have the right structure in place to make sure that the money is spent as it should be spent.

Prior to the formation of the Film Development Corporation in 1997, film industry revenues in the Province totalled approximately $2 million. Last year production revenues reached some $9 million, so there was an increase in a little over two years of some $7 million.

I also want to point out something else that might be of interest to members, and that is that there have been some budgetary measures taken to improve access to financing for small boat inshore fisheries. We have removed the $50,000 minimum loan amount under the Fisheries Loan Guarantee Program. If members will recall, first when the loan program was out, until last year, anything over $50,000 was guaranteed by the Province through the Province's commercial banks. That has been removed and now, I think, John, any amount at all below the $50,000 and whatever is also subject to the Fisheries Loan Guarantee Program.

We have allocated some $6 million in the budget for what we call the Strategic Enterprise Development Fund. This fund provides capital financing to assist in the establishment and growth of small business in those sectors of the economy that show real growth potential.

I want to say one other thing to you and that is this. We have just recently, I guess under the auspices of Dr. Rob Greenwood - who is no longer with the department; he has moved to Saskatchewan - developed a small scale manufacturing strategy for the Province which we hope to - obviously it has to go through the Cabinet process - shake out pretty shortly. I am pretty impressed with the kind of work that is done. It shows clearly that if we choose our areas correctly and if we zero in on what we can do best in the Province, then we have a good chance at increasing our employment in the whole area of manufacturing. As a matter of fact, it is one of the fastest growing areas that we have in the Province.

I want to tell you - and then I am going to try to stop here - that all the twenty regional economic development boards are now fully operational. Last year, members will recall, there were some eighteen. There were two that we were having some trouble with. One area had to be split I think, and the other area we were just plain having trouble with.

The Cabinet committee on rural revitalization, which I chair, is made up of various ministers. We have met with most of the RED boards in their zones. We are now preparing, over the summer, to go back and meet with them and help evaluate where they have been. Each one of those zones have economic development officers. If you are interested in picking up this, you might want to use it for your own use. This very well lays out what we do, the kind of services that we provide as a department, to stimulate growth of the small- to medium-size businesses in the Province and to show what we have to help people develop their economies on a regional basis.

We don't have a Page, do we? Yes, here he comes. Maybe we could distribute both of those items to members so that they can use it for their own use. I guess if they want some for their own districts they are available as well. Could you distribute this? (Inaudible). Can you distribute these two items to members, please?

I am going to just say to you that through the Strategic Enterprise Development Fund over the past three years we have invested some $20 million in over 550 projects. That has helped lever an additional $77 million from other sources and helped us to create and maintain more than 3,700 jobs in small- to medium-size enterprises in the Province.

I want to just move on and say that, in conclusion, we have much hard work ahead of us. We have gone though, in this Province, one of the worst scenarios you can imagine when we saw the shut down of the groundfish industry in 1992, and we have gone through one of the worst upheavals you could have, but the economy is growing. That is not my prediction, it is the prediction of a number of organizations in the country. Employment is rising and the unemployment rate is falling. I hope, as I am sure everybody else does in this Province, that the trend we have seen in out-migration in the last little while holds true. Although if you look at the forecast in today's paper it seems we are still going to suffer a population loss in Newfoundland and Labrador over the next twenty to thirty years. The figures we get from Stats Canada show us that out-migration is slowing. It is not where we want it, obviously. Obviously, we want in-migration if we can get it. The social services caseload in the Province has fallen significantly and the fishery has been reborn. As I said, there is a great deal of work to be done but we believe we are moving in the right direction.

By the way, I want to address this issue of the old rural development authorities or associations, whatever they were called, if I could. Those people felt, obviously, when government put the regional economical boards in place some two or three years ago that they were being thrown to the wolves. As a matter of fact, some thirty-five of them have survived, and they have survived, basically, by carrying out projects for both the federal and provincial governments: silviculture projects, job creation projects and so on.

I think it is fair to stay that they have now come to recognize that the real rule of the REDBs - the Regional Economic Development Boards - is to draw on the various sectors to plan strategies and for them to be implementers of specific projects for their own small areas. I think that rule has shaken out, if you will, from, I suppose you could say, what they felt were the ashes of the day. To that end, I think John Efford, when he was the acting minister, met with them. They have come a ways and I believe that at the end of the month I am supposed to meet with them again to look at how we can improve their role in the economy.

Again, thank you for having us. If there are any questions you want to ask us after, I presume, Mr. Rideout, the Member for Lewisporte, is finished, feel free to do so.

CHAIR: Thank you, Minister. Mr. Rideout.

MR. RIDEOUT: Mr. Chairman, (inaudible) like the minister I doubt if I will take the fifteen minutes to get into the heads and go down through the various heads of the department.

I want to take the opportunity though to say to the minister that there are more people I believe out there in rural Newfoundland and Labrador today looking with expectations to this department than any other department in government. The name lends itself to that kind of scrutiny - Development and Rural Renewal - but the areas of the Province that are hurting the most today are the rural areas. There is so much expectation out there about this post-TAGS program that the minister made reference to that I would like for him to give us more detail as we go down through the heads.

Am I hearing correctly that about $40 million of that money was spent between January and March? I think I heard that in one of the media reports today.

MR. TULK: Forty million dollars of the $81 million?

WITNESSES: No.

MR. TULK: It is not $40 million of the $81 million. There are two components to this program. There is the economic diversification - well, there are three or four components.

MR. RIDEOUT: Right.

MR. TULK: There was the Early Retirement Program, there was a Job Creation Program. Then there was the Post-TAGS Economic Development Program, licence buy-outs and so on. There has been no money spent in the $81 million which is the economic development fund.

MR. RIDEOUT: I thought it was announced in January.

MR. TULK: That sits there. As a matter of fact, there has been no basic overall agreement yet on how it is to be spent.

I would not be at all surprised if under the Job Creation Program and through various other HRD programs that there probably was some $40 million spent, but that would have been under the Job Creation Program that was put in place last fall to take people from last August to this year.

MR. RIDEOUT: That has nothing to do with the $81 million?

MR. TULK: No. That is sitting there. None of that has been spent. As I said, it is about to go to Treasury Board in two weeks. It should be in Treasury Board in two weeks. We hope it is, anyway, because we have a lot of things that we want to get done with it.

MR. RIDEOUT: I would like for the minister to take a moment and tell us what the vision is for this particular program. I mean, I've read the statements that were made at the time when the program was announced in January and what it was meant to do, but as I understand it, it is meant to be geared toward diversification of the rural economy and supporting economic developments that would do that. In other words, are there going to be funds spent from that program, say to support developments in the agricultural industry, for example, in rural Newfoundland, or some other particular areas? What exactly does the government expect to achieve with this program and with those funds?

MR. TULK: I will tell you, we have put forward a number of areas. One area obviously in the Province is this: there is still room for some fisheries diversification. We also put forward that we would like to see some manufacturing. We have a strategy in place and we need some funding for that. We have also asked them to put forward some initiatives in tourism. There is a number of general other areas that we will deal with along those lines.

There is dimension stone, for example. There is the great potential in this Province for that. Last year the department looked at a dimension stone strategy and we developed a strategy. I do not know whether members are aware of it, but this Province has all kinds, colours and everything else of dimension stone. It has a tremendous potential if we can get the market straightened away and get our people into it.

We have also asked them to put some funds into a specific sector called wood products whereby we can diversify wood products in the area of agrifoods, in the area of tourism. I am particularly keen, to be frank with you, on the area called small-scale manufacturing. I am not talking about hockey stick factories and chocolate bar factories or anything like that, but components and stuff.

Today, as you know, the economy of the world is geared to not having one big factory any more to build, for example, an airplane. It does not happen any more that you have one big factory to do it. What you do is you do a component here and a component somewhere else, and a component somewhere else, and then you assemble in one particular area. A strategy that was developed, not by us but a group of other people, shows that there is a great deal of potential in that area, a area of small scale manufacturing for small areas of the Province. I mean, you see it.

The other thing we want done is to encourage entrepreneurship among our young people and our people generally. As you go down into Centreville, Wareham, Trinity, for example, in that area in the Province, you will find you have Indian Bay Frozen Foods there. Bill Noble is there with wood manufacturing, (inaudible) mouldings for all over the place. You have Brian Pickett there with fibreglass products: small, ten, fourteen and fifteen jobs. You have Woodbine Waterman there selling smoked salmon to every CP Hotel in the world, selling all kinds of stuff to Japan. Most of us would not eat it. Some of us still have a job getting it down, but it sells well.

There seems to be an area there, in that one area for example, where they are game to try or do anything. That is the kind of attitude - not do anything, but increase the risk. Get into something that is risk-oriented. Not reckless, but risk-oriented. That is one of the things we see ourselves trying to do with young people. To that end, we decided to do it with our older people who are for example - everybody has seen this thing on television by now called: We Are Doing It Right Here. I was the minister at the time we put it out. I said: I am not putting the name, the Government of Newfoundland and Labrador on this, Hon. Beaton Tulk, Minister, and all this crap. Because if you do, the first thing people say is: That is another government advertisement. You just put it out and let it fly. We have gotten some good comments back on it.

The other program that we do - I know I am off here a tiny little bit - is a program called "Getting the Message Out" to our high schools. How many people are we having this year? How many groups? Over 400?

WITNESS: Yes.

MR. TULK: We are putting off over 400 sessions this year. Last year it was a little over one hundred or something, or 200, and now we are up to 400. That again just is trying to encourage young people.

The truth is, as I said to a group of students in

New-Wes-Valley on Saturday in my own area, a group that was put together by HRD out there, one of the things we have done in this Province is to educate our young people to leave the outports, believe it or not. That is not a criticism of the education field, and that is not a criticism of our mothers and fathers.

I remember quite clearly growing up in Ladle Cove, as Tom you did, and I know you grew up in Fleur de Lys, didn't you?, where your mother used to say to you every night: Get at your books so you can get a good job. She certainly did not mean for you to go into the fishing industry. She certainly did not mean for you to go into the woods industry. She meant for you to either become a clergyman, a teacher or get a government job. I couldn't be a clergyman. I would not fit.

The point is, we have educated our people. I think we have to say to our young people: Take a look back over your shoulder just before you leave because there might be something here that you can stay here and make a living at and use your brains at. If they do, then we have to try to up and do it.

Anyway, to come back to the TAGS program, Tom, there is no expenditure on that $81 million, but those are the kinds of areas we are looking at. It is suppose to zero in on communities that were hit by the groundfish moratorium, and the people on the REDBs are supposed to be part of the process of deciding what we do and where we do it.

MR. RIDEOUT: On the subject of the REDBs for a moment, could you take another bit of time to tell us - I know you said earlier, Minister, that the thirty-five or so of the old rural development associations are still around and in existence. In my district was one of them, the Lewisporte Area Development Association, LADA. It is fairly active and it continues to exist by managing projects, as you said. It gets some kind of administrative fee for doing that, so it keeps itself alive and afloat.

What I am hearing though is some criticism of the interaction between the REDBs and the development associations, or the lack of it. Those zone boards tend to be - at least the one that is in my area, people say it tends to be a bit aloof. You don't have a good communication process between the development association and the REDBs. Is there anything to that? Is the minister aware of it? What kind of a bureaucratic operation are they?

I am relatively unfamiliar with them. I will become more familiar with them over the next few months, I'm sure. They were something that was created since I was here the last time around and I am not totally familiar with how they are, in theory, supposed to operate.

MR. TULK: Let me just say to you that I have been around for most of that process through years as the minister. Let me say that I am very much aware that that problem exists. There is no point in hiding your head in the sand and denying it.

I guess it is similar to if I come in and you detect that I'm replacing you, then that tends to create some distance between us and if we interact it might not be the best interaction, or we might not interact at all. I think that was there, but I believe we are seeing a movement where the two are going to mesh again. It will take some time. I keep saying this, and all the officials in the department keep saying it, to the various REDBs: Your job is not to implement.

For example, if a REDB wants to apply for a project to implement themselves, I suppose we don't tell them not to, but close to it. Your job is to try to pull together people's development strategy. On the other hand, we are saying to the other community groups, like the old RDAs: You can be implementers. They are. I think that role is there. Has there been a lack of communication? Yes.

The other thing you have to keep in mind is that there are twenty REDBs and they cover a wide geographic area, and they pull into their organization a diverse group of organizations. There has been some difficulty with the RDAs but it is our belief that is breaking down. I am hoping within the next year, to be frank with you, to pull them all together in the same area just to see what kind of fight we have. I'm hoping to do it so that they iron out some of their obviously what I call historical differences.

MR. RIDEOUT: How are zone boards made up? Do they have representatives on them from the development association?

MR. TULK: Yes. I do not know what the exact breakdown is on it. John, you might know. Bill, you know better than that. What is the exact breakdown of most of those REDBs?

MR. McKENZIE: Each of the boards has a different composition but it is all from stakeholder groups. For instance in zone 14, which would cover your area, there is at least one rural development association rep. Certainly, Mr. Anstey from Twillingate is there, and there may be another one. There are also municipalities, labour groups, education and so on.

In theory, those various members should bring back the concerns to their municipalities, development associations and so on. It does not always work that well on the ground but that is the theory. There would be RDA representatives on the board.

MR. TULK: If I could, it might help the Member for Lewisporte if I pointed out to him that I have a breakdown here of the representation by organization for the regional economical development boards. RDAs make up 11.1 per cent of them; educators, 8.8 per cent; women, 1.6 per cent. Although that is not 30 per cent of women on the boards -

WITNESS: (Inaudible).

MR. TULK: That is women's organizations, okay.

WITNESS: Yes.

MR. TULK: Business, 16.8 per cent; labour, 5.1 per cent; municipal is 20.9 per cent; tourism organizations, 2.4 per cent; youth, 3.9 per cent; they elect a group at large, 11.4 per cent; and others is 14.4 per cent. Municipal people would be the biggest, other would be the next largest, and the RDAs would be the third. There is a representation on them. As Bill says, in some districts you might find two or three representatives on a zone board and on some other occasions you might find one.

MR. RIDEOUT: Tell us a bit about your Cabinet committee on rural revitalization.

MR. TULK: We saw that Cabinet committee as having two roles, actually: to communicate with the REDBs. First of all, the REDBs went through a process of putting together a strategic economic plan for their area. Then the purpose of the Cabinet committee was to do two things, in our estimation. First of all, it was a broad policy issue for us, that we deal with policies in various areas. It is made up of five or six different departments that would be concerned with rural development. As the minister, I chair that.

In some cases there might be a day when I will call a minister or a deputy in some other department about something that is happening in rural Newfoundland. The idea was, and is, that the REDBs would put together strategic economic plans. which we would then sit down and discuss with them, come to a conclusion, and draw up a contract with them. So there is now a contractual agreement between the whole twenty now, John?

MR. SCOTT: (Inaudible).

MR. TULK: Between the whole twenty and the federal-provincial governments. If they had some projects and it gave them a chance to communicate to us from that level, from a group of ministers, if they had some projects or strategies they wanted to develop - not necessarily projects but strategies - or if they wanted some projects that they wanted support from other organizations for, they would feed into that group of ministers.

For example, Ernie McLean is the Minister of the Government Services and Lands. If the REDB found there was some problem in their area with Government Services and Lands, then that gave them an opportunity to put it directly to the minister. The same thing applies to Forest Resources and Agrifoods, Energy, Education, Tourism, ITT, and my own department. I think that is most of them.

It provides an opportunity for us to mesh with the REDBs and at the same time to get our views to them and to get their views back to us. I will be frank with you, I think it works well. I'm not saying that from a political point of view but I just think it works well. It is still growing, but (inaudible).

WITNESS: (Inaudible).

MR. TULK: Oh, yes. This is the other thing we did last year, and John has just pointed it out to me. Last year the first thing I decided to do to try to zero in on some things was to ask them for five of their top priorities in their region. First of all, some people thought I was asking them for five projects. I wasn't. I was asking them for the five top strategies that they wanted developed, their five top areas of development that they wanted to undertake. That was the first thing we did as a rural revitalization committee. We went around with them and talked about those. I think most of them are coming along fairly well, actually. I think most of them are moving along.

There has been a fair amount of money spent in this Province on regional economic development, not only by this government but by other governments as well. I think we have to focus it more on small-scale diversified industry: manufacturing, fisheries, tourism or whatever. I do not believe either that you can put a job in every place. Maybe you can put one, but I do not think everybody is going to be employed in their own home town. The truth is that Newfoundlanders and Labradorians were never used to it anyway. People drove to work and went and stayed for a week, and came home from work always in Newfoundland and Labrador. That is nothing strange to us. We have approached development basically on a regional level, and that is the reason why they are called Regional Economic Development Boards.

CHAIR: Mr. French.

MR. FRENCH: Mr. Minister, on this $28 million from the federal government after TAGS -

MR. TULK: The $81 million?

MR. FRENCH: Yes, on the $81 million. Did I understand you right, that there would be $28 million spent each year for three years?

MR. TULK: The forecast is $28 million for this year but it is spread over a three-year period, right? Bob, I guess you would end up with $28 million, or probably $27 million or $26 million, but it is basically $28 million.

MR. FRENCH: Who is going to administer this money? Is this going to be done by our provincial government or is this going to be done by ACOA?

MR. TULK: I think this is a structure that has been put in place and submitted to the federal Treasury Board, that hopefully it will be done by a combination of federal and provincial, very similar to the SRDA Boards. Am I correct?

WITNESS: (Inaudible).

MR. TULK: Also, in consultation with, in this particular case, the Regional Economic Development Boards. What percentage are we putting into it?

WITNESS: Twenty per cent.

MR. TULK: We are putting in 20 per cent. The federal government puts in 58 per cent and we are putting in 23 per cent?

WITNESS: (Inaudible) sixty-five per cent and 16 per cent.

MR. TULK: It is 65 per cent and 18 per cent, 16 per cent, 17 per cent or 18 per cent, something like that, the breakdown. We have our foot in there as well.

MR. FRENCH: Because I have a lot of concerns, and I raised this in another committee some time ago, on ACOA funding. I think it was in Industry, Trade and Technology. I do not like the way ACOA divvies up its money in aid to businesses in this Province. I have seen too many times when ACOA has come out and said: We cannot fund you because Bob French is up the street and he is in the similar business as you. Which to me is utter garbage because I know of industries that are in the same business that they have funded.

I mentioned it in Industry, Trade and Technology, that they funded a business in Labrador and they would not fund one in my area. The guy in my area lost the bid on a public tender, only to find out that the company he bid against was funded by ACOA. They both buy their raw materials from the same company. I have grave concerns over ACOA and the way ACOA -

MR. TULK: How was your buddy set up? He made his way in the world himself, did he?

MR. FRENCH: Did it himself. Now he is talking about expansion. That leads me into my next question. I think you mentioned there would be a manufacturing agency within government. Is that to assist businesses that already exist and which wish to spend?

MR. TULK: You misunderstood me. I said we are developing a small-scale manufacturing strategy. It is not necessarily going to be an agency in government. It might very well be administered through the Department of Development and Rural Renewal or ITT. We are developing a strategy and we are saying: Alright, out of that find we would hope that there is a portion set aside - I don't know if you have the figure or not - to implement that strategy. It could be done through the Department of Development and Rural Renewal or through ITT. I suspect it will be done mostly on our side, through the Department of Development and Rural Renewal. There will not be an agency, Bob.

MR. FRENCH: I'm sure as MHAs we all have people coming to us asking us from time to time: Is there anywhere within government where we could go and look for assistance to expand or to do whatever?

MR. TULK: Yes.

MR. FRENCH: I know of some of these cases. I just wonder if your department would be the right department under this manufacturing thing to be sending these people to. I will not send anybody else to ACOA because they make me sick and who knows, you know. I just cannot figure them out at all. I know of this one particular incidence, and I could rhyme off fifteen businesses that they have helped, and somebody else goes in and they say: No, we cannot help you. To me that is very bothersome.

As well, you mentioned that you are trying to get your message out to schools. Who would do that?

MR. TULK: I think what we do - and Bill, you know this better than I do, I guess - is hire a couple of people from the university.

MR. McKENZIE: Yes. There are university students -

CHAIR: Excuse me, Bill. Before you speak, could you give your name for the purposes of Hansard.

MR. McKENZIE: Bill McKenzie, ADM Field Operations. We have a program called "Getting the Message Out," often shortened to GMO, which uses University students so they are a year or two older than the high school -

MR. TULK: From the business school (inaudible).

MR. McKENZIE: Yes. So there is a better rapport, as opposed to old bureaucrats like us going out and speaking to school kids. There is a program developed, a CD-ROM, and they give quite an upbeat presentation on good news stories and the future of the Province. The whole point is to have the message delivered by younger people who can generate better communication with the high school students.

MR. FRENCH: You mentioned Dr. Greenwood, I think.

MR. TULK: Yes.

MR. FRENCH: You say he is no longer employed.

MR. TULK: No, he has moved on to Saskatchewan. When he left he said he is coming back and forth for awhile. He is coming back in May for a conference in the Province. He has accepted a new position in Saskatchewan for his own personal betterment, I guess, or that is what he felt anyway. We did not fire him. He left on his own. I can assure you he left on his own.

MR. FRENCH: I have heard in the community that he was a man who knew what he was doing. Somebody, a while ago, made a point to me to say that we have lost probably one of the best people that we have ever had.

MR. TULK: I do not know that we have lost him, but he is gone, yes. As I said, he is coming back to a conference. He was certainly a good asset to us, there is no doubt about that. I would hope that he is not indispensable, though. I hope that we can find somebody.

MR. FRENCH: I would hope so. There is nobody indispensable.

MR. TULK: No, but he was a great asset, there is no doubt about that. He has developed what in my opinion - it is not only my opinion, but I think it is the opinion of other people - a small-scale manufacturing thing that he has done, and this whole Island's program that he has been part of. I think he has done a great job for us.

MR. FRENCH: I have heard his name in several circles recently and (inaudible).

MR. TULK: Rob was from Kelligrews, was he? I didn't know that. That is what he just told me.

MR. FRENCH: His father lived in Kelligrews some years ago.

MR. TULK: Okay.

MR. FRENCH: His mother used to live out there. I have no idea where she lives now.

WITNESS: I had a letter from him last week, actually.

MR. TULK: We had a little party for him just before he left.

MR. FRENCH: It is too bad. I lost a constituent. If he still lived out there I lost a constituent. I don't think he did, just the same.

MR. TULK: I think he lived in town, actually.

CHAIR: Mr. Hunter, (inaudible)?

MR. HUNTER: Minister, do your Estimates have any funding for municipalities to enhance infrastructure for existing businesses? I.e., a water line to a fish plant or something like that.

MR. TULK: You are talking about Triton?

MR. HUNTER: To the point, yes.

MR. TULK: I think it is safe to say, whether this will fit the criteria or not, there is under this Post-TAGS Economic Development Program a section for strategic infrastructure - come on John, you are better at this than I am. I just put in the water line. What is it you call it?

MR. SCOTT: It is called the Strategic Infrastructure Program, and it is intended to make selective investments in areas of the Province where basic infrastructure to municipal capital works would lead to further economic opportunity, ideally in more than one sector, but the fishery is targeted as well. So where the argument and the business case can be made, there is the flexibility built into the Post-TAGS Economic Development Program to apply it selectively.

MR. TULK: I'm sure we will not do everyone in the Province, but we will look at them. There is a portion there. There is nothing in my provincial budget per se that we could turn towards looking after - we would have to go and persuade the Department of Municipal Affairs to somehow cost-share it with the town or with the fish company.

MR. HUNTER: Also, do -

MR. TULK: There is $900,000 in Triton, isn't there? You don't know? I think it is that.

MR. HUNTER: Close to it, a little over, a smidgen over. In these Estimates now, what type of areas would you say would be enhanced through tourism? Is there anywhere in your Estimates there that you will enhance the tourism sector in Newfoundland and Labrador?

MR. TULK: There is a section built into this new Post-TAGS program within our budget. We have what you call a $6 million Strategic Enterprise Development Fund which I guess could be applied to private enterprise for tourism, but in terms of the community infrastructure it is not a program that is meant to do that. I think we have $125,000 or $150,000 or something like that.

Other than that, it is usually done through private enterprise. As Bob said, there is the competition clause that is always built in there. If there is somebody there that started off on their own and built their own, we would be hard put to go in and build something that would compete with them. ACOA does the same thing. I think what you are saying, Bob, is that ACOA has funded some of them that then built up their industry and they will not fund the person that is coming behind.

MR. FRENCH: That is right.

MR. TULK: Right. In our particular case, we say that if somebody has built their bed and breakfast, or their own grocery store - but we don't go into grocery stores anyway - then we do not think we should.

MR. HUNTER: What about the existing parks like the former provincial parks? Will there be any funding available to enhance the park facilities?

MR. TULK: There might be, I guess depending on the two things like competition and whether the business plan made good sense. We try to sit down and evaluate it to see if it makes good sense. We also put out higher risk money than businesses do. Otherwise, why the hell are we there? The risk has to be higher risk money than the banks otherwise somebody would go to the banks. It is not usually grants. It is loans. Depending on certain things, it might take an equity position under the old ENL program. We do not do that as a practice. We have some $6 million there which we like to invest in areas, I guess, under $75,000, certainly $100,000, because if you get into too many large projects it does not take long before your $6 million is gone.

MR. RIDEOUT: Minister, I have a question about the Fisheries Loan Guarantee Program that was introduced in the budget for loans under $50,000. I guess it is a bit early, but do you have any indication that the banks are enthusiastic about that change?

MR. TULK: I think they are fairly enthusiastic. I did not deal with them. It was John Efford who dealt with them on this thing.

MR. RIDEOUT: Yes.

MR. TULK: We had started it when I ran into my good friend, Mr. Woodrow. I think John Efford finished off the negotiations with them. I think they are fairly enthusiastic about the thing.

I guess you would probably know this too - I am not sure what the state was when you were there as the fisheries minister, because then it was under the Department of Fisheries - but one of the things that we found out is that with the Fisheries Loan Guarantee Program at the bank, when it was over $50,000, I think the collections on it, the faulted loans, was less than 2 per cent.

WITNESS: Three per cent.

MR. TULK: It was less than 3 per cent, whereas as you know, under the old fisheries loan program the defaults on that, the small boats, were horrendous. Gerry knows it better than anybody.

MR. RIDEOUT: People did not believe they had to pay the government back.

MR. TULK: No, they never did, and I think that is the whole point, to be frank with you. It became a bank loan, over $50,000. I do not believe you will see the same kind of defaults. We do have millions of taxpayers' dollars that are outstanding, under $50,000. What was the exact figure, John, about $25 million now? It was over $30 million last year. It is about $25 million now but under the $50,000-and-above guaranteed loan program it was less than $250,000, was it? Less than $250,000.

MR. RIDEOUT: In default?

MR. TULK: In default.

MR. RIDEOUT: Under $50,000 you said it was how much?

MR. TULK: It is still about $25 million I think.

MR. RIDEOUT: Owing?

MR. TULK: Yes.

MR. RIDEOUT: I know that the department, when Mr. Efford was acting minister, was putting on a fairly big push in terms of trying to make arrangements on and/or collections, and/or writing off if those were the individual circumstances -

MR. TULK: Getting rid of it, in other words.

MR. RIDEOUT: Pardon?

MR. TULK: Getting rid of it one way or the other.

MR. RIDEOUT: Yes, getting rid of it, getting it off the books one way or the other. Can you bring us up to date on how that is going? If you don't know maybe one of your operations' people know.

MR. TULK: John, do you know? John can tell you.

MR. SCOTT: I can give you an update. Our objective is, by the end of the calendar year, to have gone through every single small boat fishery loan. There is in the order of 3,000 of them. It is a big task but we are committed to doing that by the end of the year, and we have to judge each case on its own merits in relation to ability to pay, where the fisherperson has been, and other assets they may own. We are about 20 per cent of the way through it. We have the full cooperation of the FFAW. We have engaged in a fairly widespread communications effort to ensure the fishermen understand that we are trying to deal with this on a good faith basis.

As I said, we are about 20 per cent of the way through it. We are doing a combination of write downs, write-offs and rearrangements. In some cases where fishermen want to get out of the business altogether and are prepared to dispose of their assets, any residual balance is written off. It is too early to tell yet where all that will come out. Our objective is to take that $25 million largely liability right now down to a business portfolio where it can return and perform properly.

My guesstimate at this point in time of where we will be at the end of it is probably in the order of $15 million in terms of residual balance at the end of the year. The response we have had to date from fishermen has been positive. Our objective is to basically clean up the portfolio in a realistic, practical manner in terms of what can be sustained on a longer term basis. Then on a go-forward basis, of course, any new investments in the fishery will be managed through the bank loan guarantee program where that business participant applies and we are risk-sharing with the banks the actual investment.

MR. RIDEOUT: Do you have a lending board of any sort in your department?

MR. TULK: There used to be the old ENL board, the old Fisheries Loan Board. We have just passed legislation last fall to reduce that number to five?

MR. SCOTT: (Inaudible).

MR. TULK: The one board, five people?

MR. SCOTT: Five members.

MR. TULK: Five members on the board. What is the name of it? (Inaudible) this morning.

MR. SCOTT: Business Investment Corporation.

MR. TULK: It is called the Business Investment Corporation, which would deal with all of those things. It is made up of three people from the various sectors of the community and two civil servants, isn't it? - yourself and the Deputy Minister of Finance. I think the old ENL board at one point was eleven or thirteen?

MR. SCOTT: Yes.

MR. TULK: It was eleven or thirteen people. We have cut it back to five. It is more manageable, I think, to be frank with you. It is more businesslike too, I might say. There is no Fisheries Loan Board and no Farm Loan Board.

MR. RIDEOUT: No, there is no Farm Loan Board or Fisheries Loan Board any more. It is just one board, is it?

WITNESS: Dealing with business investments.

MR. TULK: Yes.

MR. RIDEOUT: Of course, now there are no fisheries loans under $50,000, so that goes to the bank as well?

MR. SCOTT: Yes, the responsibility in terms of the statute before the Fisheries Loan Guarantee Program, though, is still with the board of the Business Investment Corporation, co-signed by the Minister of Finance; but that board, operating arm's length from government, takes all investment decisions.

MR. RIDEOUT: Minister, we want to take a more detailed look at your Estimates now, starting on page 91.

CHAIR: Before you do that, I think Mr. Parsons has a few comments.

MR. PARSONS: I had a meeting with John Kennedy, who apparently is the ACOA person who is going to be distributing the monies coming down. They have a program, I believe it is called FRAM-ED - that is the acronym they have stuck on the new program - $65 million federal and $16.25 million provincial. I have also met with Rick Comerford and had him out to my district. Those gentlemen have explained that 100 per cent of those funds must go into long-term, sustainable economic development projects as opposed to job creation.

MR. TULK: That $81 million.

MR. PARSONS: Both have indicated that zero dollars of that FRAM-ED program will be going to any job creation. I raise the question because I do not know of -

MR. TULK: Any short-term job creation.

MR. PARSONS: Yes.

I do not know if I represent a hotbed of protests or rebels between nurses and teachers. I understand that tomorrow, as a result of that meeting that Mr. Kennedy held - and there was a subsequent meeting amongst the people who had been receiving TAGS. Now that they have been told there is no short-term job creation monies coming from that pot, and that pot is not likely to hit the ground anyway, even for sustainable stuff, until August sometime - and that was the words of these gentlemen; they estimated August would be a touchdown date...

MR. TULK: Well, you know how fast the federal government moves.

MR. PARSONS: I understand there has been a protest organized out there exactly in reaction to this situation, where none of these FRAM-ED monies are going to be used. I did not know if that was the provincial government position on that. I just do not know what to tell them.

MR. TULK: Those are HRD funds. It is my understanding that there was well over $40 million allocated for that last year. I picked this up this morning on the news, to be frank with you, from your area, that HRD officials have said there was supposed to be some $8 million kick in next week; so you may not get the protest.

MR. PARSONS: Sounds good if it is there.

MR. TULK: I just heard that myself this morning on the radio, to be frank with you, that the protest was planned and that it was coming on the Southwest Coast.

MR. PARSONS: I have had confirmation of it late this afternoon that it is taking place tomorrow.

MR. TULK: Oh, it might still be going on, I do not know, but the HRD official said that the remaining funds that are left for TAGS job creation - the $8 million - will kick in next week. I heard that this morning on the radio.

MR. PARSONS: So, there is $8 million?

MR. TULK: There is $6 million to $8 million. I think there is $8 million.

CHAIR: Ms Jones.

MS JONES: Thank you, Mr. Chairman.

Actually, I have a question along the same lines. Last year HRDC, when they implemented those job creation initiatives, started a lot of projects around this Province that are not complete.

MR. TULK: Did they?

MS JONES: I know in my district alone, I have six facilities that were started under short-term job creation initiatives through HRDC money that are half completed and I am concerned as to how these projects are going to be completed. Is HRDC going to come up with the rest of the money to do it under the TAGS job creation initiative?

What I heard this morning - the same broadcast, I guess, that you heard - is that they are down to like an $8 million budget for the Province.

I do not know if there is anything your department can do in terms of putting some pressure on HRDC, having some discussions with them or whatever, to at least complete the projects that have been started.

MR. TULK: Yvonne, I do not have any immediate answers for you. You would have to examine every project on its own merit. Let me just say to you that there is another program called the LMDA program. You are familiar with that.

MS JONES: I am, yes.

MR. TULK: The Labour Market Development Agreement program. I think there might be some options there for those kinds of programs. Certainly, the job creation side of post-TAGS is just about strung out. There is only $8 million left.

MS JONES: Well, Mr. Minister -

MR. TULK: I can tell you that the Province does not have it.

MS JONES: No, I am well aware that the Province does not have it. I am also aware that if I was going to the Department of Municipal Affairs, or Development and Rural Renewal, for monies to do a project in a community in my district, I would have to show 100 per cent funding for that project before anybody could buy in.

MR. TULK: End-funding.

MS JONES: Yes. My concern is that HRDC did not use this practice.

MR. TULK: Did not?

MS JONES: No, they went out and gave money to community groups to build a rec centre, for instance. Right now we have a foundation, four walls and a roof, okay? My concern is: Where does the money come from to do the job? I do not really care if it is the LMDA agreement or Canadian Job Strategy, TAGS, long-term, short-term job creation or whatever.

MR. TULK: You are looking for somebody to champion it, is what you are saying to me we should be doing.

MS JONES: Yes. My concern is that they have started something that they have a reluctancy to finish. I feel comfortable in saying that because I met with the coordinators of these programs, I met with the manager of the regional office in Goose Bay, and I sense they have gotten themselves in a position where they do not really know where they are going to go right now.

MR. TULK: Let me just give you a commitment. I am not sure how much of that is around the Province, but just let me give you a commitment that we will pursue it with HRDC to tell them that they do have those - I will start calling them eye sores if I have to - left around the Province to finish up and see what is possible. We will do that. We will chase that down.

MS JONES: I would really appreciate it if you would do that.

If I could, I would like to make a couple of other comments.

I am certainly a very strong supporter and believer in rural Newfoundland and Labrador. I want to say that I think and I know, through the Department of Development and Rural Renewal, that you have done some good things in this Province.

I was involved in economic and rural development ever since I finished college. I have worked with the regional development boards, I have worked with the new board process when it started, so I have been first-hand at the grass roots level. I know the things that are being done.

I think that all too often we, in this Province, seem to paint a picture, not only in our own homes but in our own communities and in our own minds, that we are not going to go any further, we are not going to do any better, this is a dead loss, so let's everybody give up and throw it all aside.

I think what we have done in the last few years is really challenge communities and people in our Province to do better, to be more innovative in how we think, to be more innovative in what we have to do in order to make a living here. We have seen some tremendous results from it. I have seen it in the communities across my district, things that have been done that ten years ago I never dreamed could even happen.

I think there are a lot of good things happening in rural Newfoundland and Labrador and, obviously, policy changes have to be made to accommodate it.

I want to talk to the Fisheries Loans Program because the changes that were made in that program were very good for small communities in this Province. I had thirty-two applications from my district in the system at one point before this regulation was changed. I know first-hand how it affected those fishermen.

MR. TULK: How has it worked out?

MS JONES: I think that something like almost twenty of them now have been through the system and have their vessels ready to fish this summer.

MR. TULK: Good.

MS JONES: Which I think is tremendous. The only thing I would say on that particular issue is that we still have a ways to go in terms of educating the banks even as to the fact there is still a viable fishery in this Province and that the fishery is a business, and it is a very good business which generates a great deal of money.

I think that some bad experiences in Atlantic Canada, not just in Newfoundland but also in Nova Scotia just a few years ago, have really caused the banks to turn their head in terms of dealing with fishermen; but I think, through your department and Fisheries, we have to keep trying to instil in them that this is a viable opportunity and to largely -

MR. TULK: Well, if you do not have 150 per cent of what you need for collateral, banks are not - you would be surprised at the first initial meeting. Actually, John Efford and myself had the first initial meeting with him because he was then the Minister of Fisheries and I was the Minister of Development.

MS JONES: Yes.

MR. TULK: The way that we did it, I think, John, was to meet with all the VPs of the banks and get them all together. I think they are very positive towards this, what we have on the go now, but certainly the banks, as you say, for the last four or five years, look at the fishery kind of - as my mother used to say - askew.

MS JONES: Exactly, but that is changing luckily.

MR. TULK: I think so.

MS JONES: The other thing I wanted to mention is the program that you are doing in the schools - the Head Start Program, is it?

MR. TULK: GMO.

MS JONES: Pardon?

MR. TULK: GMO is it?

WITNESS: GMO (inaudible).

MS JONES: Okay, yes.

MR. TULK: Getting the Message Out.

MS JONES: Yes, that is the one I am talking about. I think that was a great idea, whoever came up with it, because I find that - especially in small communities - our young people sometimes become overwhelmed with a lot of pessimism in communities, and a lot of this feeling and thought that because our fishery is gone that we are not going to be able to do this or do that. I think it is good that we are able to target young people and allow them to see other opportunities and more innovative opportunities that are happening right here in our Province.

I am not saying that all people in all communities have this attitude, because if we did we would be in a very difficult position but we are not. I think that we are changing in rural Newfoundland and Labrador and I think that we are growing in this Province in the rural sectors in a way that a lot of us do not realize.

I think that this program, in targeting our young people, in letting them see first-hand - and I know the results because I had co-op education children from the Coast of Labrador in St. John's this year. We placed them with companies like Hibernia, with Voisey's Bay, with engineering companies, and they went out there and saw first-hand the new industries that are happening in this Province, and how I can still live in a small community, as long as I am well-educated and well-trained, and still work in these particular sectors.

I think they are one of the groups that we really have to concentrate a lot of our time and energy on in focusing the message and certainly future possibilities, because there is no doubt in my mind that this Province is not only changing but is growing in a way that in ten or fifteen years from now we will look back and it will be hard to surmise the position we were in, in 1992.

I hope your department will continue with the good work that it is doing, and I certainly have a lot of confidence in the revitalization of this Province.

Thank you, Mr. Chairman.

CHAIR: Thank you.

Before we move on to the headings, Tom, I want to make a comment on the $81 million from the federal government under the post-TAGS agreement. I hope they don't have regulations on that like they did on the job creation money they had out this spring, or this winter, whereby none of it was to go into the fishery in the Province.

MR. TULK: No, no. As a matter of fact, I think there is one - I think part of the arrangement is to have $10 million set aside for fisheries diversification on its own.

CHAIR: Good, because I think it is ludicrous the way they handled it in the winter and back in the fall.

MR. TULK: It is not going to be job creation.

CHAIR: No. In my district, for example, the only sustainable development you can do in that district is in the fishery.

MR. TULK: By and large.

CHAIR: To say there is no money to go into primary processing is ludicrous, as far as I am concerned, so I hope there is some money available.

Anyway, do you want to start, Mr. Rideout?

MR. TULK: They have more fish plants than they know what to do with down there.

CHAIR: Who, me? We know what to do with them.

MR. RIDEOUT: We will have a look at page 91 of the Estimates, in my book. I don't know what the minister has over there.

MR. TULK: What heading is that?

MR. RIDEOUT: Starting off with the Minister's Office.

Unlike previous oppositions that I ran into during my time as a minister, we don't spend a lot of time talking about ministers' travel because we think ministers should travel. Every dollar that the ministers can spend promoting the Province, we think is a dollar well spent.

Having said that, Mr. Chairman, I notice that the minister was well over his budget last year. He proposed to spend $60,000 in travel and he actually spent $92,000. The beauty of it all, though, is that he is going to cut himself back to $60,000 this year again.

MR. TULK: I doubt that.

MR. RIDEOUT: I doubt that, too. Therefore, I have two questions -

MR. TULK: To be quite frank with you, right up front, I doubt that.

MR. RIDEOUT: I doubt it and I have two questions for the minister. Number one: Can you explain to us what the additional travel was last year? Number two: Why would you cut yourself back if you needed that much last year and you know you are going to need more, or about the same amount, this year? Why wouldn't you budget that amount?

MR. TULK: Mr. Rideout, let me answer your last question first. I believe if I had been back in the Cabinet when this Budget was prepared, I do not believe I would have been so foolish as to cut myself back.

The other thing is - let me just say, in regard to the $92,000, I Chair the Rural Revitalization Committee and I also took on, as the minister, to Chair a Committee of Ministers and MHAs on the Use of the Outdoors. As a result of that, a lot of that transportation and communications can very well be attributed to the fact that you were taking four or five people with you out of your department and the minister, the poor old minister, was paying for it.

I am not a person who has travelled a great deal outside of Newfoundland so it is not foreign travel. I think last year I made two trips outside of the Province. I probably should be making more but I kind of leave that to IT&T because they are supposed to be out prospecting for the Province. I am supposed to be working within it. I think there were two trips last year and one the year before. I think in the two years that I have been in this portfolio, drawing upon it, that is what has happened.

Basically the increase - I would say I probably spent more than $60,000 myself - can be attributed to the travels around the Province by the Cabinet Committee on Rural Revitalization, of which I picked up a lot of the expenses under that head, and the Committee of Ministers and MHAs on the Use of the Outdoors. I think we had something like twenty-one meetings of that group. I believe it was twenty-one meetings. That is where, largely, the overrun is.

To answer your second question, again, if I had been in the Cabinet, it I had been around when that was put in, I think I would have - because nothing looks worse than to budget $60,000 for yourself and have to come in and then defend that you spent... I would say that $60,000 has probably been around, Minister, since you were in the Cabinet.

MR. RIDEOUT: No, it was a lot less then.

MR. TULK: Yes, I am sure it was.

MR. RIDEOUT: Except for Hal Barrett.

MR. TULK: Except for Hal Barrett.

Seriously, I would have had that figure up to about $85,000 because I think it is necessary if you are going to take a group of people around this Province.

I will tell you something else that is happening. It is as cheap, or cheaper - if I want to go up to Goose Bay today, I am going to pay a ticket of what, $1,000?

WITNESS: Twelve hundred.

MR. TULK: Twelve hundred.

MR. RIDEOUT: It is just as cheap to go to Ottawa.

MR. TULK: It is cheaper.

Labrador West is $1,400, I think you told me today, on a regular trip. Air travel in this Province has gone right to hell. To be frank with you, no minister is going to travel today by car when he can travel by air, because he does not have the time; although I am tempted to get my own airplane.

MR. RIDEOUT: Under Purchased Services, Minister, you budgeted $10,000 and spent $22,500. Can you tell us what that was all about?

MR. TULK: Again, tied to meeting costs and advertising, et cetera, of those two committees that I Chaired and that I worked on. That is the increase there.

MR. RIDEOUT: Okay.

MR. TULK: Primarily in this case, the deputy tells me, the Outdoor Rights Committee - the Outdoor Resources, I am sorry. The Outdoor Rights is another crowd, the crowd we were trying to talk to.

MR. RIDEOUT: If anybody else has any questions now while we are moving through those, just indicate to the Chairman, okay? I am not going to question them all.

CHAIR: What was that, Mr. Rideout?

MR. RIDEOUT: I said to other members, if anybody had any questions just indicate to you.

CHAIR: Okay.

MR. RIDEOUT: The Industrial Outreach Program (NRC), on page 93 of the Estimates, 2.1.02., there is a significant vote for Professional Services in 05. It was budgeted at $218,000 last year, you actually spent $307,500, and you are planning to spend $315,000 this year. Can you give us some idea, Minister, what those Professional Services are and what the money has been spent on?

MR. TULK: I am going to ask the Deputy Minister to do that for you.

MR. RIDEOUT: Okay.

MR. SCOTT: At one time, the agreement that we had with the National Research Council of Canada, and which by the way dates back some twenty years, involved federal civil servants being on the provincial payroll and being paid as part of the salary vote. Over time that became a cumbersome process for a variety of reasons, and over time, as staff changed, we have moved from a paid salaried position inside the department to a contractual professional services contract arrangement, which is the preferred way of operating within the National Research Council of Canada right across this country. I would suggest 80 per cent of those costs are actually salary related costs but through a professional services contracting arrangement. It appears that you are externally contracting with consultants. Consultants are paid staff who are on staff at (inaudible).

MR. TULK: It was not my legal fees or anything like that.

MR. SCOTT: There are five staff in total across the Province dedicated to this program.

MR. RIDEOUT: Is the same thing through, Deputy Minister, up under .06 in 2.1.01, Business and Economic Development Services, where Purchased Services were budgeted at just slightly over -

MR. TULK: Which one? (Inaudible)?

MR. RIDEOUT: Just up in the previous head, in 2.l.01.06, Purchased Services.

MR. TULK: From $1,042,700 to $961,300, is that the one?

MR. SCOTT: No. That is accounted for by a different reason. Part of our efforts over time as a department has been to decentralize our operations from St. John's in the five regional centres that ENL was clustered around into the twenty economic zones. Part of the benefit of that is collocating with federal agencies and community development agencies. Through those partnering arrangements we have been able to reduce our lease costs and rental costs over time. We are just bearing the fruit of those collocation costs so that we can save on expenses of leasing and put them into direct support programs for business clients and our clients generally in the Province.

MR. RIDEOUT: Under 3.1.01, Regional Economic Development Services, .10, Grants and Subsidies, we budgeted $121,500 in Grants and Subsidies last year, we spent $161,500 and we are budgeting $121,500 this year. Can you give us some idea -

MR. TULK: Are you talking about the extra $40,000?

MR. RIDEOUT: Pardon?

MR. TULK: You are talking about the extra $40,000 there?

MR. RIDEOUT: Yes, last year (inaudible) -

MR. TULK: Forty thousand dollars of that was provided to cover the department's contribution to the provincial women's centres. We made a contribution. I think there were four or five ministers.

MR. SCOTT: Yes.

MR. TULK: Last year we said: Alright, we will contribute so much from each department for provincial women's centres. Our share of that was $40,000 in the department. We were one of five or seven?

MR. SCOTT: Approximately seven.

MR. TULK: Seven that put together a fund to take care of the provincial women's centres, so (inaudible).

MR. RIDEOUT: What other kinds of things did you give grants or pay subsidies to under that vote last year?

MR. TULK: Pardon me?

MR. RIDEOUT: What other kinds of activity did you support last year?

MR. SCOTT: Some examples that we have supported over time, including last year, for example, is a cost of a business development officer for the Bell Island Industrial Adjustment Services Committee; the same in regards to the town of Harbour Breton; in Ramea, similar types of support to allow it to go through a transition process and develop its own plan of adjustment. We have provided a micro lending program for women entrepreneurs. There are various grants throughout the Province in that regard.

MR. TULK: I do not know if you are familiar with (inaudible), NLOWE, the Newfoundland and Labrador Organization of Women Entrepreneurs. They have a micro lending program. You were familiar with micro lending, were you? We get together as a group and we lend to each other basically, say $200 or $1000 to start up a business.

MR. SCOTT: Another example of what we funded is down in Cape Race-Portugal Cove South. There are a number of clustered tourism opportunities down in that area of the Avalon Peninsula and we have seeded that to the tune of $5,000 to develop those concepts to the actual proposal stage and looking at the feasibility of them. They are tending to be miscellaneous grants to support community based organizations going through transition and adjustment to start to see -

MR. TULK: Also doing some research and marketing and that kind of stuff.

MR. SCOTT: They are modest grants in the order of $3,000 or $5,000. The one notable exception -

MR. RIDEOUT: The $40,000 one, would that have been the biggest one last year?

MR. SCOTT: That would be the most significant one last year.

WITNESS: Yes, it was by far actually.

MR. SCOTT: By far, and that was a one of arrangement. I do not know if members are aware of it but the provincial women's centres across the Province were funded at one time by the federal government. The federal government decided to get out of that business and the Province picked up part of the responsibilities financially to keep them moving until some other options could be considered for the longer term, and that is what the $40,000 -

MR. TULK: I am not sure if it was five or seven departments that agreed that we would provide $40,000 each through the Women's Policy Office to take care of it.

MR. RIDEOUT: Okay, thank you for the information. 3.1.02, Strategic Regional Diversification Agreement, SRDA. In .10 there is a provision for Grants and Subsidies. It was budgeted at $703,100 last year, and we spent $655,500. It is only budgeted at $5,000 this year. Is that something that has been phased out?

MR. TULK: The program has run out.

MR. RIDEOUT: The program is over with, is it?

MR. TULK: Some of it is being picked up by another program called Community Economic Development Agreement, CEDA, which is over in ITT.

MR. RIDEOUT: What was the Grants and Subsidy money spent on last year then?

MR. SCOTT: It is the operational support to the Regional Economic Development Boards.

MR. RIDEOUT: Okay.

MR. SCOTT: The twenty Regional Economic Development Boards get an annual grant averaging, approximately, $300,000 a year. Up until this past year all that money through federal-provincial agreements was channelled through SRDA. SRDA has now expired, but the Comprehensive Economic Development Agreement has picked up and the money now budgeted operationally for REDBs are now (inaudible) for under a new subhead called CEDA, which is on the next page.

MR. RIDEOUT: Which is 3.1.03.

MR. SCOTT: Right. You will see the numbers growing - (inaudible) taken from the next page - from what we actually spent last year of $2,850,000 to $4,500,000. In a go forward basis starting this fiscal year, you will see CEDA providing 100 per cent of support through federal-provincial agreements to REDBs.

MR. RIDEOUT: That is what that is, for the REDBs.

MR. SCOTT: That is right.

MR. RIDEOUT: Comprehensive Labrador Agreement Initiatives, 3.1.04. Is that program run out as well?

MR. TULK: It terminated March 31, 1999 so there will be no expenditures this year under that program.

MR. RIDEOUT: Is there a plan to try to negotiate another agreement? What is happening with it?

MR. TULK: John, you are going to have fill in this because I know that when I was in the department last year we were trying to move through Intergovernmental Affairs at that time to get some movement underway with a new Comprehensive Labrador Agreement, or to find some funds to - I do not know if you would call it the Comprehensive Labrador Agreement or not - do the same things that you were doing in Labrador with the Comprehensive Labrador Agreement. I do not know what is happening with it at this point, to be frank with you, because I just got back.

MR. SCOTT: This agreement dates back ten years. The federal government put all provinces in Atlantic Canada on notice approximately two years ago that they were no longer willing to enter into sectoral or geographic agreements. They were collapsing all their federal-provincial cooperation agreements into one. Now the Comprehensive Economic Development Agreement has to pick up where Comprehensive Labrador Agreements were in place some years ago, tourism agreements, fishery agreements. To the extent that there are initiatives to be supported in Labrador, the source of funding is to create by federal policy is the Comprehensive Economic Development Agreement.

The Province, I think it is fair to say, Minister, has made strong representation to the federal government that we think greater flexibility is needed, particularly to deal with the needs of Labrador but to date there has been little headway made on that front.

MR. RIDEOUT: The next section, 3.1.05, is the Inuit Agreement. That is still operating, is it?

MR. TULK: Yes.

MR. RIDEOUT: How much time is left in that agreement?

MR. SCOTT: This agreement is renewed year to year. There was a parrel agreement called the Innu Agreement. You will notice from the Estimates that this is virtually a flow through agreement through the Province from the federal government. There is actually only $200,000 net cost to the Province. In the case of the Innu communities, the federal government is now dealing with that directly with the communities. The intent of the federal government is to deal with the Inuit communities directly but it is taking them longer than anticipated. So these agreements are being renewed year over year until the federal government and the Inuit communities can reach that understanding.

MR. RIDEOUT: The decisions on the spending in that agreement, I guess, are basically made by the Inuit community itself, is it?

MR. SCOTT: Yes, there is a tripartite arrangement: the federal government, the provincial government and the communities themselves.

MR. RIDEOUT: The Canada/Newfoundland Agreement on Economic Development and Fisheries Adjustment, 3.1.07. Is that the $18 million there, Minister, in Grants and Subsidies -

MR. TULK: What one is that, Tom?

MR. RIDEOUT: 3.1.07, the Canada/Newfoundland Agreement on Economic Development and Fisheries Adjustment. I notice there is $18,670,000 in the Estimates there. Is that the flow through or -

MR. TULK: That is the Post-TAGS.

MR. RIDEOUT: Pardon?

MR. TULK: The Post-TAGS Economic Development.

MR. RIDEOUT: That is the Province's share.

MR. TULK: Yes, that is our expenditure.

MR. RIDEOUT: Actually, there is $14 million coming in from the federal government in revenue so we will be spending about $3.7 million, is that correct, as our part of the agreement this year?

MR. SCOTT: On current account. There is a capital account (inaudible).

MR. RIDEOUT: Yes, on current account, I understand.

MR. TULK: That's not where the money is.

MR. RIDEOUT: Pardon?

MR. TULK: That's not where the money is. I say that is not where the money is for projects. That is (inaudible).

MR. RIDEOUT: 3.1.09.10, the Canada/Newfoundland Agreement on Economic Development and Fisheries Adjustments, capital, $9,330,000, that is where the money is, is it?

MR. SCOTT: That is for strategic infrastructure projects, capital projects themselves. Monies to support small businesses, small-scale manufacturing and so forth and so on would be under current account. The major capital projects such as perhaps a Triton type of example - I'm just using that for illustrative purposes - would fall into the capital account.

MR. TULK: That would be heading 3.l.09, is it?

MR. RIDEOUT: Yes, 3.l.09.

MR. SCOTT: The two numbers will add up to the $28 million, approximately, that is budgeted for this year.

MR. RIDEOUT: For this year.

MR. SCOTT: Yes.

MR. RIDEOUT: 4.l.02, Strategic Enterprise Development Fund, capital. Can you tell us a bit about that program, Minister?

MR. TULK: The Strategic Enterprise Development Fund, as I said to you earlier, is a fund we have in place to - and the officials can probably fill you in far better than I can in terms of the detail of it - but it is a fund that we renew every year, and we have $6 million in this year to help small business. Not to put them in any way in competition with any other business. We prefer, to be frank with you, that the type of funding we give them be in areas of marketing and so on, but we will provide loans to them so they can lever other money maybe in the TJF funds and so. It is a fund that we have there basically for a small business investment in the Province, to help people start up new businesses. There is that competition clause that Bob was talking about just now, that we will not fund (inaudible) competition.

WITNESS: (Inaudible).

MR. TULK: Yes, for example, you spoke to us just now about Lewisporte. If we were to get into that for example, that might be where would take some of those funds to probably to try to lever some others and so on, right?

MR. RIDEOUT: Yes, I understand.

MR. TULK: It is for small-scale business, small- to medium-sized business.

MR. RIDEOUT: Under the Grants and Subsidies vote in 4.l.01, Portfolio Management, there was $550,900 budgeted and you actually spent about $300,000 last year. How was that money spent?

MR. TULK: I think John, if I am correct, that the department's interest subsidy program funds that basically for fisheries loans and so on. As you know, the prime interest rate last year was less than what was forecast in 1998-1999. It was expected to be higher. You will notice that expenditures are down on that. It is believed that the prime interest rate for 1999-2000 - we may come back. Hopefully we come back with that lower again next year, but I think you build in the same amount, believing that it might edge up. It is a hedge against yourself I guess, but that is what that is. It is the interest subsidy, the prime interest rate forecast.

MR. RIDEOUT: Okay.

The next head is Strategic Business Development, 4.2.01.10, Grants and Subsidies. Can you give us some idea what kind of projects were supported by that particular head?

MR. TULK: Is this the crafts development program?

WITNESS: Yes.

MR. RIDEOUT: Crafts? Okay.

MR. TULK: You notice it went down from $500,000 to $350,000. There was $150,000 in there for that that was reallocated to other expenditure accounts so that we could cover program costs directly rather than via third parties, such as craft producers and associations and so on. So it was reallocated.

MR. RIDEOUT: I notice there is a Grants and Subsidies vote in 4.2.02.10 down in the next section, in the Newfoundland and Labrador Film Development Corporation. There was $500,000 and you gave out $550,000. How was that applied in the film industry, to individuals or companies?

MR. TULK: I think this is the operating and marketing cost of the Newfoundland and Labrador Film Development Corporation, the one that we talked about just now.

MR. RIDEOUT: Yes.

MR. TULK: I think they had an increase of some $50,000 last year in the marketing side of their efforts. I think that is the reason you saw it go from $500,000 to $550,000. I guess we are predicting this year it will be up to $600,000. Are we, John?

WITNESS: Yes.

MR. TULK: We think, if you look at the cash flow of both federal and provincial agreements, that that is in line for this year coming, because we expect far more activity there.

MR. RIDEOUT: On the capital side, 4.2.03, you are putting $1 million into the Corporation this year for .08, Loans, Advances and Investments?

MR. TULK: Yes.

MR. RIDEOUT: That is what you spent last year as well, right?

MR. TULK: No, we spent $750,000 last year, wasn't it?

MR. RIDEOUT: You budgeted $750,000. I believe you spent $1 million according to the Estimates.

MR. TULK: Yes, we did.

MR. SCOTT: There was a one of investment made on an extraordinary basis toward the tail end of the fiscal year. That was seen as a one of special investment, not part of the ongoing telefilm equity program. From a budgeting accountability point of view, it is recorded here. On a go forward basis, the actual resources available to the Newfoundland and Labrador Film Development Corporation, and to do telefilm equity program business on a normal course, is actually $250,000 greater when you discount that.

MR. RIDEOUT: Thank you.

CHAIR: Mr. Collins.

MR. COLLINS: Just a couple of things. Mr. Minister, with the telefilm industry, if you want, are there any numbers as to how much employment that probably creates in the Province? I ask that just out of curiosity more than anything else.

MR. TULK: I don't have it in front of me but I can certainly get it for you. I tell you, the amount of employment that comes out of the film industry is tremendous. I do not remember exactly what it is but we will certainly get that. I will get the Deputy Minister to get you the information.

MR. COLLINS: Okay.

MR. TULK: There is a tremendous potential in this Province. The truth is that Newfoundland has a very rich culture. It has some very moving episodes in its history and of its people. We are finding, for example, that people are becoming more interested in this area, especially since we put the film tax credit in place last year. We made it the best. We intentionally set out to make it the best because we felt that we had to catch up with Nova Scotia in particular. What did they do last year, John? What was the numbers that we had?

MR. SCOTT: (Inaudible) $85 million dollars.

MR. TULK: About $85 million in production revenues. We felt that we had to increase ours so that we could catch up with them. In other words, to try to attract people to come here. I think theirs is 35 per cent of local labour. We did ours on the basis of 40 per cent. I have to say to you that we are finding a tremendous amount of interest in doing filming in Newfoundland. We think it is one of the areas where we can grow a fair number of jobs. As I said to you, there are tons of jobs. Besides the acting, and Newfoundlanders are good actors as well, what I am saying to you is that we have - we all know this - a large semi-skilled and skilled workforce in the Province. It fits in very well if you are building backdrops and - what do they call them?

WITNESS: Stages.

MR. TULK: Stages -

MR. COLLINS: Props and everything else.

MR. TULK: Props and all that kind of stuff. It creates employment, believe it or not.

MR. COLLINS: We can even go to double daylight sayings time again, and they won't even need electricity for lighting.

MR. TULK: Bring back John Butt, was it, Tom?

MR. RIDEOUT: That was great until Labour Day.

WITNESS: It started getting bad then.

MR. TULK: I tell you, it has tremendous potential in this Province, I think.

MR. COLLINS: On the 4.1.02 - I will go backwards now from -

MR. TULK: By the way, John just reminds me that last year Nova Scotia was over $80 million. Three years ago it was just $20 million in expenditures. Sorry about that.

MR. COLLINS: Yes. On the loans, 4.1.02, you talk about competition for people to avail of small loans. Is that direct or indirect competition or sort of in any form? What I am trying to get at is this. Say, for example, a person wants to start a small business specializing in aluminium welding and (inaudible) welding when no other businesses in the area does that, but there is a welding shop down the road just doing traditional arc welding. Would that be considered a conflict because it has the potential of going into other areas?

MR. TULK: Let me tell you one that just came to me. It is hard to say how it works out, to be frank with you. This whole idea of compensation, I think we have to reexamine it too. I am not saying we examine it with a view to doing away with it completely. I just had an application come to me from a fellow who wanted to establish a junk-yard. I guess it was a junkyard, spare parts. He was going to take the parts off cars and all this kind of thing. The next thing I know you have four or five letters from four or five garages in the community saying: If you fund this fellow you are really funding somebody to be in competition with us, because in a year's time he is obviously going to put a hoist in the garage, a blow torch, and all that kind of stuff. In a year's time that will be a garage so therefore, indirectly, we have created competition for me that I have built my own garage on.

There is an argument there. It will not be my decision, but I am not sure if the fellow is going to get funded or not. It is out there. The people are dead opposed to you doing that kind of thing in competition. I think it goes to hell with it sometimes, to be frank with you.

I had a young fellow in my own district last year apply to an outfit called GADCO - the Gander and Area Community Development Corporation - for funding for a cabinet shop, and that was in Wesleyville. They would not give him the funds because they said he was in competition with a cabinet maker in Gander. Now, I do not know how far you have to be, whether you have to be in Russia so you cannot compete with some in England or what. That is carrying it to that extreme. It is a very touchy area and as you know, there have been mistakes made. For example, I know that in Labrador -

MR. COLLINS: I know a fella who has a can of paint out every time somebody comes around.

MR. TULK: What did you say?

MR. COLLINS: I know a fella who has a can of paint out every time somebody comes around. It is the same can now for about six years.

MR. TULK: What did he do with the can of paint?

MR. COLLINS: The can of paint? Oh, he just opens it when certain people come around, that is all.

MR. TULK: Okay. It is something you have to be very careful about. I know that in Goose Bay, for example, a few years ago there was a prime example of - I do not think government did it intentionally - but it is a prime example where governments funded a fella who is directly competing with another fella. They did not even know it. I don't think government (inaudible). You can judge each case basically on what comes in front of you (inaudible).

MR. COLLINS: The procedure is that someone would apply for funding and then it would be examined with the details, and they do that through the local offices?

MR. TULK: Yes.

MR. COLLINS: There is an application there and they just apply for it?

MR. TULK: Yes.

MR. COLLINS: Under 1.2.02, Policy and Strategic Planning, .03 and .06 actually. There was budgeted $30,200, revised at $30,200, and now budgeted for $130,200.

MR. TULK: What is that for?

MR. COLLINS: It is for 1.2.02.

MR. TULK: I think there is some thought being given to revising the Strategic Economic Plan in the Province. Whether that comes about is another question. There has been an increase for that. We may have to take a look at reviewing that or reviewing the Strategic Social Plan. That is put in there. It may change or it may not.

MR. COLLINS: Purchased Services falls under the same -

MR. TULK: Yes, (inaudible) that kind of thing we might have to do.

Actually, I think it was announced in the Throne Speech that we were going to review the Strategic Economic Plan or take a look at the Strategic Economic Plan. It was seven years ago, in 1992, that the original Strategic Economic Plan - I think it was announced in the Throne Speech that there would be a review of it this year, and that would be some increased cost.

MR. COLLINS: Okay. Thank you, Mr. Chairman.

CHAIR: Any further questions?

MR. RIDEOUT: Yes, Mr. Chairman, before we conclude here and give the minister his salary and all that kind of thing, there is one district matter I wanted to raise. The minister is familiar I know with the Gateway Developers and the marina project in Lewisporte.

MR. TULK: Yes.

MR. RIDEOUT: This particular year, there is a fifty American yacht flotilla coming into Lewisporte, and that place is going to be promoted on an international basis this year. A lot of work has been done there, as the minister knows. I believe the minister was out there for the start of it a couple of years ago or whenever, but a lot remains to be done. A travel lift is required out there so you can service the yachts, and marine electrical work needs to be carried out. It is still the kind of thing that you (inaudible) -

MR. TULK: The electrical was the big problem there, I believe.

MR. RIDEOUT: Yes, and it is the kind of thing that you cannot cut corners on, because marine electrical has to be done to spec or not done at all.

I'm hopeful that the minister will keep that particular project in his mind as the next few weeks and months go by. Because I think Notre Dame Bay, Exploits Bay and the Lewisporte area have a tremendous opportunity to grow in that tourism way, and the minister's department, I think, can help make that happen by supporting projects like this. I think this year, with a flotilla of fifty yachts coming in from the -

MR. TULK: Are they staying there over winter?

MR. RIDEOUT: Pardon?

MR. TULK: Are they staying over winter?

MR. RIDEOUT: No, no, they are doing a tour.

MR. TULK: No, last year they were -

MR. RIDEOUT: Oh, are the people berthing out there over winter?

MR. TULK: No, but last year they were hoping that the fifty yachts were going to come up from the United States, overwinter in Lewisporte and get their maintenance done there, and then go up the Labrador coast next year. It never turned out like that?

MR. RIDEOUT: No, I don't think so.

MR. TULK: Okay.

MR. RIDEOUT: Because they are not in a position to service them yet see, Minister, not in terms of lifting them out of the water for example. That is one of the requirements of the travel lift. The travel lift and the marine electrical are certainly two areas I think your department could support, and legitimately support, in terms of developing that project which will again, as you were saying earlier, create service jobs on that site for a number of people.

MR. TULK: Eight people, I think.

MR. RIDEOUT: Yes. The Gateway themselves are going ahead with their HST rebate now and putting in the showers and all that kind of thing for this summer. So it is a kind of project I would hope that - I think it fits very nicely in rural Newfoundland, and is one that this department could be supportive of.

MR. TULK: Yes. We supported it last year and I see no reason why we would not continue that. We certainly cannot find all the money ourselves that they need but where it is necessary we support that council.

MR. RIDEOUT: They will get more support, I would expect, from federal programs.

MR. TULK: That's what I am saying, and we usually delve into those as well.

MR. RIDEOUT: We kick in with it, right?

MR. TULK: Yes.

MR. RIDEOUT: That is all I have. I don't know if any of my colleagues on the Committee have anything else. Based on that, we are prepared to pay the minister for another twelve months and keep him on probation.

CHAIR: Thank you.

MR. TULK: The minister has been on probation for twenty years.

On motion, subheads 1.1.01 through 4.2.03, carried.

On motion, Department of Development and Rural Renewal, total heads, carried.

CHAIR: Without further ado I would like to ask for a motion to adjourn. Thank you Minister, and your officials, for coming tonight.