The Committee met at 9:00 a.m. in the House of Assembly.

CHAIR (Mr. Walsh): Order, please!

Good morning. I would like to welcome you this morning to the Estimates Committee meeting for the Department of Fisheries and Aquaculture.

Before we begin, I want to just cover the minutes from the last meeting. The minutes, as written, list off the members who attended. It lists off the minister and the staff of the Department of Tourism, Culture and Recreation. On motion, the minutes of the previous meeting were read. The Committee reviewed and approved, without amendment, the Estimates of the expenditure of the Department of Tourism, Culture and Recreation. On motion, the Committee adjourned at 5:00 p.m.

On motion, minutes adopted as circulated.

CHAIR: Minister, my normal process is to allow this to be a little freewheeling. If you like, by all means make an opening statement. We will introduce the Committee Members who are here and, Minister, I ask you to introduce your staff.

Also, for the record, when you speak, I would ask that you identify yourself for the sake of Hansard. Most of our voices, at least those of the members, are sometimes recognizable by the Hansard staff; but in terms of our guests here today, I would ask you to please identify yourselves.

Minister, if you would like to introduce your staff, then we will get the Committee members to introduce themselves and we will go back to you for an opening statement.

MR. REID: Thank you, Mr. Chairman, and I thank you all for coming here today, under the circumstances.

To my right is the Deputy Minister, Mike Samson; to my immediate left is Mike Warren, Executive Director of Policy & Planning; and David Lewis, Assistant Deputy Minister.

I am not going to go into a big preamble or a lengthy preamble. Oh, I am sorry. Behind me, I have: Elizabeth Matthews, PR Director; and Brian Meaney, Assistant Deputy Minister, Aquaculture.

When I came to work with the Department of Fisheries originally, as an executive assistant back in June, 1989, the biggest problem we had that year, early in June, was setting up a Glut Desk, and that summer we had cod being dumped around the Province.

Since that time, we have undergone quite the transition. As you all know, with the collapse of the groundfish fishery in 1992, we had thousands of people thrown out of work around the Province. A lot has happened since then. Last year, for the second year in a row, we topped $1 billion in the fishing industry. Last year, we had a landed value of somewhere in the area of $581 million and an export value of over $1 billion, so a lot has happened. Having said that, employment figures are down somewhat because, while we have a higher landed value, it is because of our shellfish industry: crab and shrimp, mainly. They are a higher priced commodity. So, a lot has happened.

In 1999, we had 22,600 individuals employed in the fishing industry:12,200 fishing and 10,400 processing. We had an additional 6,000 individuals who were employed indirectly in service support, so I consider the fishery to still be the backbone of the economy in Newfoundland and Labrador. It certainly would be in rural Newfoundland and Labrador. We have to do our best to try and ensure that it continues to be. We have to be conservative and watch for conservation in terms of our stocks. We also have to do a more vigilant job with our quality. We have come a long way in the last few years in that respect, but we have to continue as well to be vigilant in here.

With regard to the stocks, the FRCC recommended this year that the quota be reduced in 3Ps to 15,000 tonnes. We are still waiting for advice in the Northern cod stocks. We have not heard anything directly about the crab resource, even though it seems to be the general consensus out there that there is some decline. We are waiting to see what the actual Total Allowable Catch will be for this year.

In terms of shrimp, the panel is recommending to the federal minister that it should be increased this year by 19,200 tonnes. The shrimp looks to be in pretty good shape, even though I think we fished the biomass at 12 per cent last year. We only fished 12 per cent of the biomass last year and what we are hearing is, that has not affected the biomass whatsoever; in fact, the biomass has increased.

Without keeping you too much longer, if you have any questions, feel free to ask.

CHAIR: Before we begin questions, I would ask the members to introduce themselves if they would, please, for the record.

MR. TAYLOR: Trevor Taylor, MHA for The Straits & White Bay North.

MR. ANDERSEN: Wally Andersen, MHA for Torngat Mountains.

MR. EFFORD: John Efford, MHA for Port de Grave.

CHAIR: I would ask the Clerk to move 1.1.01.

CLERK: Subhead 1.1.01.

CHAIR: So moved.

Trevor.

MR. TAYLOR: Minister, as you know, I am pretty knowledge of the actual fishing side of it, but when it comes to the Estimates side of it, this is all foreign territory to me. Wally will help me along here anyway.

MR. REID: Trevor, it has been my understanding that all of your questions do not have to be strictly related to the figures in this.

MR. TAYLOR: No.

CHAIR: Minister, as I said at the beginning, we are pretty freewheeling here and we allow people to discuss as much as they can. There is a point where the Chair will ask us to come somewhere close to the Estimates, but it has been pretty loose in allowing members to discuss virtually any issues they want pertaining to that particular industry.

MR. TAYLOR: I do have a few questions on the Estimates and, I guess, a few questions that are not related to the Estimates. I will start on the Estimates first, I guess.

Under subhead 1.3.02.10., Resource Policy, Grants and Subsidies, there is $300,000 in your mark there. Probably there is a piece of paper somewhere that I have not seen which identifies what this is for. "Appropriations provide for participation in the resource assessment and management processes of the Federal Government and international bodies responsible for fisheries assessment and management." I am just wondering what that $300,000 was for, specifically, I guess.

MR. REID: I think, if I am correct, the Chair for the University was set up back in 1996 and we put an additional $300,000 in there this year. It expired this past year, so that is the $300,000.

MR. TAYLOR: Okay.

MR. REID: If you want further explanation, I can give it to you.

MR. TAYLOR: That is George Rose.

MR. REID: That is right.

MR. TAYLOR: Okay, good enough. Thank you.

Again, 2.1.01.10., under Grants and Subsidies, I see last year the budget was for $350,000 and the revised was for $650,000. I was wondering what happened there, I guess, basically.

MR. REID: The original budget for that - you know those special grants that we give to fishermen's committees basically to buy materials? They provide their own labor or get labor through HRDC. The original budget for that has fluctuated somewhat over the past ten years. We were down to as little as $100,000 or less one year. This year we have $350,000 earmarked in the budget for that. Last year we spent somewhere in the area of $600,000, but I guess the government was a bit generous with us over the period of a year, but all of that went into the small grants. Most of them were in the area of $3,500.

MR. TAYLOR: Okay.

MR. REID: I think it is the best program we have in government, by the way, Mr. Taylor.

MR. TAYLOR: Well, it certainly helps a lot of the smaller communities who do not have access to Small Craft Harbours money and stuff like that, for sure.

Under Aquaculture Development, 3.1.01.01., Salaries, there is just about a $400,000 budget increase this year. I wonder if you could give us a little bit of information on it. Under Purchased Services there is a huge increase as well, and also under Property, Furnishings and Equipment. Maybe you could just run through the Aquaculture one a little bit there, please.

MR. REID: I will let Brian Meaney handle that one.

MR. MEANEY: Those increases are due to the regionalization process that is ongoing within the department. Fourteen staff will be relocated from St. John's office to a new office to be located in Grand Falls-Windsor. The Salaries costs reflect an increase of approximately $320,000. Those are staff who were originally funded under a cost-shared agreement and are now brought over to the department's general salary vote.

The additional costs shown there in Purchased Services and the other components include the staff relocation costs and fiscal costs of moving employees and their families to Grand Falls, and the relocation of office equipment and supplies that are located here in St. John's to the new office. There is transition and training costs and some furniture purchase costs required there. Also included there is the lease cost for the new building to be located in Grand Falls, as well as some Information Technology costs there to wire the building for access to the government Internet service and e-mail service.

MR. TAYLOR: Okay.

MR. REID: I want to speak to that as well. As you know, Trevor, most of the Aquaculture in the Province is in the Notre Dame Bay area and in Bay d'Espoir. When the Aquaculture Division of Department of Fisheries was set up some five or six years ago, it was the understanding at that time that it would be located in Grand Falls-Windsor, so we just moved in that direction. That was the original intent when the division of the department was set up.

MR. TAYLOR: While we are on Aquaculture - this is not related to the Estimates, I suppose, but just a bit of information for myself. The Coast of Labrador: how much work has been done on evaluating potential prospects for Aquaculture in a lot of those fairly big bays on the Southeast Coast of Labrador?

MR. REID: I know there have been some studies done on sea urchins and the like. Maybe, Brian, you can tell them if there are any more than that.

MR. MEANEY: We had an extensive study done in 1987 called the DPA report, which was a four volume study that looked at the Aquaculture potential of all the Province, including Coastal Labrador. The issues with the areas of Coastal Labrador really lay in terms of the temperature profiles. In general, Aquaculture species require considerably higher temperatures to get a product to market in the shortest possible time to meet the market prices. In general, on the Labrador Coast those temperatures do not exist, and because of the ice cover would delay getting equipment and gear in there.

In the meantime, we have done some experimental work on mussel culture, on lobster culture and on cod culture in several of the bays in the lower Coast of Labrador in the last number of years. Unfortunately none of those studies, none of those undertakings, ever resulted in any commercial operations. Generally, it was due to the slow growth of the animals due to the water temperatures in that area.

MR. TAYLOR: Okay. It just looked like a place where it might work, that is all. I am just curious, actually.

Under 3.2.01., the Canada/Newfoundland Agreement on Economic Renewal, I am wondering if you could just give a little bit of an overview on that. I see on Salaries, for example, there was $304,000 last year and there is none this year. Maybe I should know this, but I do not. The budgets have gone up on most items there, certainly on Transportation and Communications, and Supplies. On Grants and Subsidies, it is up a bit from what was revised last year, down a lot from the budget, and there is nothing for Salaries. Maybe this is something I should know, but I do not.

MR. REID: Under Salaries, the reason for that is, that agreement expired this year and the staff has been picked up in our regular budget. That is the reason we have the increase - and Transportation and Communications, and the Purchased Services and stuff.

MR. TAYLOR: Okay.

MR. REID: What happened is that agreement expired last year.

MR. TAYLOR: Like I said, I know the fishing side of it but I am not too -

MR. EFFORD: (Inaudible) here now.

MR. TAYLOR: What?

MR. EFFORD: (Inaudible) fisheries critic.

MR. TAYLOR: I am taking your name in vain now, John.

I will just move off the Estimates for a second and ask a couple of general questions - I do not know about general - on shrimp, since it was brought up. I know you have a plant in your area that is certainly having lots of trouble getting active. There are lots of them around the Province, certainly, and there is one in my area as well. Maybe this is a question for the House. I wonder why we cannot do something with the industrial shrimp that is coming off the offshore. The export tariff, I know, is problematic and is, in large part, the reason why none of that, or very little of that, is going through our plants. Isn't there anything the provincial government can do in lieu of movement from the federal government or the European Union?

MR. REID: I addressed that with Mr. Dhaliwal on the weekend. He said that the federal government will continue to push to have that tariff reduced or eliminated.

As for the industrial shrimp, as you know, the licenses for those vessels are given by the federal government. If that shrimp were landed in the Province, we could bring in some rules and regulations to prevent it from being shipped out the way it is right now, but you are right. Every one of those seventeen or eighteen offshore quotas that are fishing the Northern shrimp, almost all of it is being caught, processed on-board, and shipped directly to the marketplace. We have to try and find a way to prevent that.

I think FPI took some of the industrial into Port au Choix last year, and I think some of it was landed as well in St. Anthony. The problem in St. Anthony, I think, is that they had to pay world price for that shrimp. That is absolutely ridiculous, when you stop to think about it. The quota is owned by SABRI isn't it? I don't know why they would have to pay world market for their own shrimp. Obviously, they can make more money and that is the reason they are doing it. They can make more money by harvesting it and processing it offshore. The fact remains that these licenses are owned by a Canadian company, a Newfoundland and Canadian company, and they care very little about employment onshore.

MR. TAYLOR: Yes, FPI have - to fill in the slow times - put some of their products through Port au Choix and Catalina, I believe. Like you said, the Clearwater, the SABRI allocation, their percentage of industrial has been shipped out primarily, except for the little bit they have, but they cannot afford to buy it.

If we have to wait, I guess, until the European Union reduces the tariff, I expect we will be waiting awhile. It would seem to me that, without getting into a trade war, like we are potentially with softwood lumber, tit for tat, or anything like that, I wonder why couldn't the federal government put an export tariff on unprocessed fish to sort of tag this industrial that is going out. I don't know. It is just something that comes to mind as a possibility. I don't know if anyone has explore that. Maybe it has been explored and was seen to be unviable.

MR. REID: There is a working group established with the industry and the federal and provincial government to look at that tariff issue.

You are right, Trevor, about that fish going out unprocessed. The problem we have, I guess, is that in Nova Scotia, for example, they can do that any time they want. For example, they don't even have the restrictions that we do about unprocessed fish going into the U.S. It certainly galls me, and I am sure everybody in the Province, to know that there are thousands of tons of product being harvested and processed offshore when we have thousands of people looking for work on the land here. It is a hard situation to be into, and I would certainly like to see it changed. I will push any way that I can, or come up with any idea that I can, to prevent that from happening. I would just wish that these - I know it is crazy to even suggest it - Canadian companies would have a little more social conscience; but, as you know, the bottom line means everything to those people. As you have said, you have a plant in St. Anthony that could certainly use the work. To have that shrimp being caught offshore and left offshore is absolutely ridiculous.

MR. ANDERSEN: I have just a comment on agriculture, which my colleague raised. I am interested to hear the answer about the cold waters and so on. Almost every species of fish in Labrador (inaudible). Off the Coast of Labrador there is no doubt probably one of the best turbot fisheries, in Greenland, done through the ice.

Just a comment, Mr. Minister, and I am sure that the questions that will come my way, I will raise with you and your department regarding Torngat Mountains. I guess the part about the budget, when you have a prep budget, it is very difficult for the Opposition, I am sure, to question the Estimates.

MR. REID: Well, the budget for the Department of Fisheries, as you know, has changed very little this year. I think one of the major cuts here would be in travel for me.

CHAIR: Decreased?

MR. REID: Yes.

CHAIR: Are there any other questions or comments from members?

MS JONES: I am just wondering how the new program is working, Minister, that you put in last year for developing new or underutilized species? Is that being accessed very much? Is there much new activity taking place?

MR. REID: That is working very well. As you know, there was basically $10 million put into that program. Right now, we have about $4.5 million left for this year. The program has received somewhere in the area of 360 applications for assistance. Eighty-five have been approved and there have been nine recommended. There are thirty-four proposals that are now in the assessment stage, so it has worked very well.

MS JONES: What are some of the things that are being done under those programs? Just out of curiosity.

MR. REID: Well, some of the programs were for cod grow-out and that certainly seems to be an interesting one. It is my understanding that - and it always has been my understanding - the fisherman can take the cod and put it in his holding pen and feed it for a bit, and not only does it double its weight but it at least doubles its value. So you basically have a four-time increase in what you can receive for that product.

There have been a number of other projects that were funded dealing with underutilized species in terms of mussels, sea urchins, and we have put a fair dollar into marketing and things like that as well.

MS JONES: Good. I am just wondering if we maintained our export value of fish products this year, as a Province, as we have in the past year? We exceeded $1 billion last year, or reached $1 billion?

MR. REID: For the second year in a row we exceeded $1 billion, which is good. The question is: Are we going to be able to do it this year? Right now we do not know what the crab quota is going to be. There are rumours out there that there might be some cuts but then there are others saying that DFO is going to leave the quota the way it is. I guess it will also depend on the market with the downturn in the economy in the United States and Japan. It is not looking good right now because, as you know, crab and shrimp are high-end products. They are expensive, and if there is a downturn in the economy, people stop purchasing what we would consider to be the upscale items, and we are bit concerned about that in the marketplace.

MS JONES: Okay.

No other questions, Mr. Chairman.

MR. OTTENHEIMER: Mr. Chairman, just one question.

Thank you, Mr. Chairman.

Last summer we spent some time in the Bonavista North area, and in particular in the Valleyfield-Badgers Quay-Wesleyville area. Of course, there is a significant beehive of activity. I mean, the Beothic plant is very successful and, in fact, I was told by one employee that they were looking for workers. You know, that is the situation that exists in that part of Bonavista North. A few days later we were in Twillingate, and I know that is very dear to you, of course, because that is a part of your district, and we had almost the opposite situation where there is complete silence, the plant is closed and many people on Twillingate Island are obviously genuinely concerned what the future has in store. My question, I guess, Mr. Minister, is: What is the likelihood of activity in the plant in Twillingate? And what do you foresee as it being restored to what it once was, in terms of it being the focal point of the community?

MR. REID: Before I get into Twillingate, you are right about the Valleyfield area. Beothic seafoods is one of the best companies in the Province and I think they had 2,200 employees last year: fisher persons and plant workers. I visited that area in early June last year and actually they were waiting for the kids to get out of school because they needed extra workers. That company has done a tremendous job on that whole peninsula down there.

The same happened, actually, on Fogo Island last year. They pretty well had full employment in the crab plant in Fogo, their groundfish plant in Joe Batt's Arm and the shrimp plant in Seldom. Like I have said before, I went out there when the moratorium started in 1992 and I did not think there was any hope for that Island that depended so heavily on groundfish, and to see basically full employment. As you know, in the fall of the year we brought in a job creation program. Being in touch with my district on a daily basis, I have asked people who needed some work to qualify for EI, to submit their names, and in the Twillingate-New World Island area, I had somewhere in the area of 600 names submitted, whereas on Fogo Island I think there were roughly twenty names.

With regard to Twillingate itself, as you all know, Twillingate was in the fishing industry since we arrived here; and, growing up in Carbonear, that was one of the ports that you heard of. There were a lot of ports between Carbonear and Nain that you did not hear of, but you always heard of Twillingate. It has been a victim of circumstance over the past twelve or fourteen years. FPI owned the plant and, in the restructuring back in the late eighties, they closed it. In fact, there was a crab license on that plant when FPI owned it. They never utilized it, and they transferred it to Comfort Cove. The people of Twillingate area did not realize that, or crab was not what it is today obviously.

From 1988 until 1997, they never had a crab license, and from that same period it went through five different companies. The last group that purchased it back in 1998 - the consortium of six of the larger processors in the Province - the word in Twillingate is that they purchased it to keep it closed. It had a crab license and I think it had a shrimp license for a short while back in 1997 or 1998. They actually cooked some shrimp there in 1998.

Right now there are three proposals on the table to operate that fish plant. We are reviewing those now to make sure the right company gets that, because we do not want to have continue in Twillingate what has happened there for the last twelve years. It is absolutely ridiculous, with 4,000 to 5,000 people on that Island. That is the backbone of the economy. Without that plant, there is not a lot going to happen there. They have an excellent tourist trade going on there. In fact, Twillingate is certainly a destination for tourists in the Province. It is one of the largest east of Gros Morne. We have far in excess of 20,000 individuals who come through Twillingate every year, and from all over the world.

I met a group there last summer on motorcycles, and I stopped and asked them where they were coming from. Believe it or not, they said Austria. They had their BMW motorcycles shipped over there. The problem is, that is only what I consider to be the gravy. If we could get that plant up and running, there is a lot of fish landed in Twillingate. There is a lot of fish landed by fishermen in Twillingate, somewhere in the area of eight million pounds of shrimp and crab. I cannot understand, if you look at the geographic location of Twillingate on the Northeast Coast of this Province, all the fish stocks are right off its shore. To see last year, when I went to Twillingate for a rally with 1,500 people who were asking for work, basically crying and begging for work, and that afternoon, when I was driving up over the Island, to meet five transport trucks entering that town to pull fish out of there.

I am not saying that we should open fish plants in every community, but I do not think there is anyone in this Province who would deny that Twillingate should stay in the fishery. I am not just arguing that because I am the MHA. I think all of you would agree that the Twillingates of the world and the St. Anthonys of the world should remain in the fishery, and I am going to do my darndest to make sure that it does.

MS JONES: The fish that is landed in Twillingate, where is that going?

MR. REID: All over the Province.

MS JONES: All over the place.

MR. REID: All over the Province.

There were 400 and 500 people employed for eight months a year in that plant at one time, and last year they would have settled with forty or fifty just to make the start-ups, and yet we could not even get the owners to agree to that. We had meetings in Gander where forty people were being discussed, and at the end of the day they walked and said: No, we cannot make a dollar on it.

Again, it goes back to the bottom line, like your colleague was talking about just then. These owners and processors are business people and for business people, at the end of the day, the bottom line means everything, unfortunately. I do not feel that way. I am a government member representing that area, and there has to be something more than a bottom line, because if we go by the bottom line in the fishing industry we can harvest and have processed every single pound of fish that we are eligible to catch harvested in one community in this Province. No problem. All you have to do is make the plant big enough and have your landings come in when it should come in. If you follow Peter Fenwick's train of thought in an editorial that he did a little while ago, you would not even need a fish plant. What you would do is, you would harvest it with huge factory freezer trawlers, and you would process it on-board and go directly into the marketplace. Because, believe it or not, and you all know this, that is where the highest value is. If you catch it and deliver it directly to the market, you know, do not pass go, do not collect your $200, right; you just do it offshore. I mean, if you follow that through, where are we going to be? Where is this Province going to be? So, we have to strike a balance between the bottom line and our social conscience and do what is right for the people in Newfoundland and Labrador. That means we are going to have to pick the areas in this Province, and basically we are going to have to ensure that the regionalization follows through and that there is at least an economic engine in these places to keep the areas alive.

MR. OTTENHEIMER: The picking of those areas is the challenge, isn't it?

MR. REID: It certainly is. It certainly is a challenge, definitely.

CHAIR: Any other questions or comments?

Trevor.

MR. TAYLOR: One is related to that, that certainly, like you said, there are a number of areas throughout the Province that face the same dilemma as Twillingate area. Just for the record, I suppose, I will speak up on the Englee area which is the biggest area on the Northern Peninsula, I would expect, that finds itself in that same predicament. I am not going to go into it in any great detail right now, but suffice it to say that it is not unlike Twillingate.

I have a question. I guess over the past couple of years the industry, the department, has moved down the road a fair distance, I would suggest, towards dealing with our quality problems that we were plagued with in the past. I give credit where credit is due. However, I guess, I have been just recently getting some - and being skipper of the fifty-five footer, landing shrimp and crab for the last three years, and seeing a number of inspectors you see on a wharf, some days you do not like to see them but most days they are - well, they are always alright. Anyway, when you get away from the wharf and it appears that there is not that same intensity - I am not suggesting that the inspection needs to be as intense and as regular as it does at a dockside, but it seems to me, and I guess it sort of has been confirmed - I should not say confirmed. The rumor that I have been picking up recently is that there needs to be a bit more inspection on the plant end and when we are actually looking at what we are putting in our boxes and shipping to market. I do not know if you have heard this or not - it is bad when you are talking on rumor - that some of our crab that went out of Newfoundland last year went out in, how I would put it is, a less than grade pack; that we had a Grade A stamp on it and we were Grade B. I am not sure if that is exactly the right way of saying it or not, but that was what I understood just recently. I was wondering if you knew anything of this and, if so, what you are planning on doing with it. As I alluded to, I would suggest that there needs to be a bit more of a refocusing of the provincial inspection people to some extent away from the wharf because I do not think there is much of a problem at the dockside now. I would not suggest that it all cleaned up, but it seems to me that money would be better spent and you could probably save money by targeting plants on some of these quality matters.

MR. REID: You are right, Trevor. We have come a long way in the last few years with regard to quality. We will have thirteen inspectors back again this year to go along with the complement we have, so we are somewhere in the area of close to thirty inspections.

As for the quality issue, yes, there was problem. It is being corrected in the marketplace, but we have to be very vigilant. I met with the vice-president of Sisco Foods in the United States when I was in Boston on Wednesday. That company sells $28 billion worth of food to restaurants and institutions in the United States. Of that, there is in excess of $2 billion dollars in seafood products. That is double our export value. They purchase and sell $2 billion worth of seafood products.

We did have a problem with our product and you are right, they were with the pack; because, from what I can understand from him, what used to be the case is that you would sell a box of sections to a restaurant or something, you would open it up and you would have a couple of crab on the top that were not red, obviously. Even though the quality of the product was not probably in question, it was just the presentation that it was brown instead of red. These people mistook this for being spoiled and, of course, they did not want to see it.

There are other things too, like: you open that box of sections and the top two layers are prefect, and you get down to the bottom and some processors have tried to sneak in some less than perfect crab. These people are paying for Grade A; they want a Grade A product. We are going to have to be very vigilant, because it only takes one. You know the old analogy: It only takes one bad apple to spoil the whole barrel. They do not even look at it as Newfoundland and Labrador crab; they look at it as Canadian.

In the U.S., this guy told me the other day that they have been working on trying to convince the people there that Canadian crab or Canadian product is as good as Alaskan. He said, it is coming around and they are beginning to convince people of that; but, you are right.

I know when I worked with Walter Carter back in 1991, there was a fish broker in this Province who exported head-off, gutted cod to Scandinavia, a one-time deal. We got pictures back from that country of what was shipped in there - cash before the product went in there - and boy, I am telling you, it would turn your stomach, just the pictures. It was rotted, just the same as if you left it here on the floor for two or three weeks to rot. That is what we shipped into that country and we have the photographs of that, along with a letter saying they would never buy a product produced in this Province.

Why these companies would even try to do this - well, I know why they do it: for the quick buck. Then we have to be vigilant. We have to ensure that not only is the quality that the harvester is bringing to the wharf is good, but we also have to ensure that the product that is going out is the best - because we are competing. If you went to Dominion or Sobeys or the Price Club tonight and bought a product, and when you got home it was not what you paid for, would you just say: Oh, that is fine; I will buy it again next week.? No.

MR. TAYLOR: Yes, I agree. I guess the question still is, when it comes to the inspection, from a provincial prospective, how are you planning on dealing with it? Are you going to move people more towards spot checks of what is coming out of the plants?

MR. REID: Definitely.

MR. TAYLOR: It would seem to me that something like that would be appropriate.

MR. REID: There has to be a balance there. We have to ensure that wherever the product, or whatever stage the product is in, that we can ensure the quality of that product.

MR. EFFORD: Mr. Chairman, can I make a comment on that?

CHAIR: Yes.

MR. EFFORD: We have to be careful of what we are saying here.

MR. REID: Yes, I know.

MR. EFFORD: This is not a quality issue. If you put Grade A and Grade B crab in the same box, that has nothing to do with provincial inspection. That has to do with a company exporting under the guise of a certain grade.

MR. REID: Exactly.

MR. EFFORD: When company A exports to a company down in the United States, in the case of Sisco Foods, then Sisco is not going to come back and buy off a company who took them for a ride when they paid for all Grade A and got half Grade A and Grade B. So, Trevor, it is not the quality that is going into the fish plants.

MR. REID: The individual company.

MR. EFFORD: The provincial inspectors are on the wharves, in the trucks, and in the fish plants in the holding rooms, but once it goes through the processing line it is impossible to have 100 per cent Grade A. You are going to get Grade A - hopefully more Grade A than Grade B - and you are going to get some Grade B and some Grade C. If that company takes that, mixes it and packs it as Grade A, that is not an issue of provincial fisheries, that is an issue of marketing and purchasing. If the marketing company comes back to the minister of the provincial Department of Fisheries and reports what this company did, then there are two governments that it should be reported to, the federal food inspection export act and the provincial. The provincial government has a right then - if a company is doing this and breaking the law or doing something that is not ethical - to remove his license; but it certainly has nothing to do with provincial inspections as far as quality is concerned.

MR. REID: We had over 100 million pounds of crab last year. How do you inspect every single pound of that as it goes through a fish plant along the various stages that it goes through? What really irritates me, and I am sure it irritates John, is the fact that there are companies here in the Province who would even try to do it.

MR. TAYLOR: Yes, I understand that it has nothing to do with the quality, but my question still stands. I guess I have it answered. What do you do with it? It will affect our return from the market one day if much of this goes on. That is all my point is.

I know you cannot inspect 100 million pounds of any fish and every pack, but spot checks and putting processors on notice and so on just as was done with the fishermen. You cannot inspect 100 million pounds of shrimp coming over the side of a wharf, but you do have spot checks and you do charge if temperatures are not right, so on and so on, if shelving is not right and whatever. The fact of the matter is that no matter if it is quality or if it is grade, the bottom line is if you are paying for Grade A and you get Grade C then that reflects on Newfoundland fish, and the Province should be doing something about it. If that means you get a report back and you say: Okay, we are going to lift your license. Then fine, I can live with that. I am not suggesting that you put an inspector on every plant gate when it is going on-board or from the gate out on-board a tractor-trailer and say: I want to see every box that is there. I know you can't do that. I am just wondering how you plan on dealing with these incidents, that is all.

MR. REID: In the last two years there has been more done in terms of quality enhancement with the inspectors and things, then we have had in our history. We have made great strides in that direction and we are just going to have to continue.

MR. TAYLOR: Yes.

CHAIR: Any further questions or comments?

MR. ANDERSEN: I have a comment for the minister. The Labrador Inuit Association was given a quota by the federal government which they have given out to eight crab license holders from the north coast. They have been fishing now for a few years. I think it is the only place in the Province where the size of the crab has not decreased, and we were involved in that cut. The federal government has done very little or no scientific work up there. This past summer it did have a big effect on the plant. As a matter of fact, for the first time in probably ten years - and John would know just as much. It was the first time in Makkovik that I had to get out a make-work project so some of the people could qualify for their stamps.

Again, when you are talking to Ottawa, just north of fifty-four forty - they are the only people who fish there and there has never been a decrease in the size of the crab; the only place in the Province. I guess, knowing full well our federal cousins are willing to work with us, Minister, that we should have no problem in asking them to change that.

MR. REID: The problem with DFO is that they have been cutting the budget for DFO all through the 1990s, and the science branch never escaped the axe, along with the rest of the divisions of that department. I mentioned it to Mr. Dhaliwal - and I know that John always mentioned it - that we have to have more scientific capability. I mean they have boats, they could easily be doing surveys but they are tied on down at the wharf because they cannot afford it. They do not have the money in the budget to operate them. It is a billion dollar industry in this Province alone, and we depend on it so much. Here we are, April 1, and we do not know what the quota is going to be for crab or shrimp yet. It is absolutely ridiculous.

You hear the rumours throughout the industry about the state of the crab stock and every stock that we have around the Province. What do they know about it? Go to Iceland! We are a joke internationally in terms of what we spend on scientific capability with the federal Department of Fisheries. It is absolutely ridiculous.

On motion, subheads 1.1.01 through 3.2.01 carried.

On motion, Department of Fisheries and Aquaculture, total heads, carried.

CHAIR: Thank you, Minister.

MR. REID: Thank you.

CHAIR: I would like to advise the Committee that our intentions are to proceed again at House closing - I guess that will be at 5:30 p.m. today - with the Department of Works, Services and Transportation.

On motion, Committee adjourned.