Pursuant to Standing Order 68, Gerry Reid, MHA for Twillingate & Fogo, replaces Judy Foote, MHA for Grand Bank, for part of meeting.

Pursuant to Standing Order 68, Wallace Young, MHA for St. Barbe, replaces Charlene Johnson, MHA for Trinity-Bay de Verde.

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

CHAIR (Mr. Harding): Order, please!

Good morning, everyone. I would like to welcome you all to our first Committee meeting of the Estimates for this year.

We have a little formality first, to nominate and elect a new Vice-Chair, so I call for nominations for that.

AN HON. MEMBER: (Inaudible).

CHAIR: It is normally the second name on the list.

MR. REID: Who is it, Judy Foote?

CHAIR: Yes.

MR. REID: I will.

She is ill today, Mr. Chairman.

CHAIR: Judy, okay.

MR. REID: What salary is attached to that?

CHAIR: Judy Foote has been nominated for Vice-Chair.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Motion carried.

On motion, Judy Foote elected Vice-Chair.

CHAIR: We will try to follow the same procedure as we have done other years. After the first clause is called, the minister will speak. At that time he can introduce his officials and give an overview of his department's Estimates for the year.

Following that, then, a member from the government members' side may speak and ask questions for up to fifteen minutes. Following that, we can alternate questions or the first speaker may carry on.

For the purposes of Hansard knowing who is speaking, especially for the government departmental officials, if you would say your name prior to any time when you are requested to speak so that they will know who is answering or commenting.

First of all, I would like to ask the Committee members to introduce themselves by name and district.

MR. REID: Gerry Reid, MHA for Twillingate & Fogo.

MR. JOYCE: Eddie Joyce, MHA for Bay of Islands.

MR. BAKER: Jim Baker, MHA for Labrador West.

MR. HUNTER: Ray Hunter, MHA for Windsor-Springdale.

MR. YOUNG: Wally Young, MHA for St. Barbe, sitting in for Charlene Johnson.

CHAIR: Thank you very much.

I am Harry Harding, Chairman.

I guess we are ready now, so I would ask the Clerk to call the first clause.

CLERK: Subhead 1.1.01.

CHAIR: Clause 1.1.01. of the Estimates 2007-2008 for the Department of Fisheries and Aquaculture.

Minister Rideout.

MR. RIDEOUT: Thank you, Mr. Chairman.

Good morning to everybody. It is my understanding that we are going to consider the Estimates of the Department of Fisheries and Aquaculture this morning, as well as the Estimates for the Aboriginal Affairs side of the Department of Labrador and Aboriginal Affairs, since that responsibility falls with me as well.

I will introduce the officials who are with me at this time. On my immediate right is Alastair O'Rielly, Deputy Minister of the Department of Fisheries and Aquaculture. On my immediate left is Robert Coombs, Deputy Minister, Department of Labrador and Aboriginal Affairs; David Lewis, Assistant Deputy Minister of Fisheries and Aquaculture; Mike Warren, Executive Director of Fisheries and Aquaculture; Brian Meaney, Assistant Deputy Minister, Aquaculture, Department of Fisheries and Aquaculture; and Lori Lee Oates, Director of Communications.

Mr. Chairman, by concurrence or consent, I guess, I am not going to go into a long preamble. I understand that our colleagues would just as soon get into asking questions and debating the details of the Estimates for Fisheries and Aquaculture first, and then Aboriginal Affairs whenever they want to get to it. I will just make this point, and that is it, and we will move on.

Since I appeared before the Committee last year, I just want to point out that the financial commitment to Fisheries and Aquaculture in this department, from a gross expenditure perspective, has doubled. It has doubled to just over $30 million from last year and it has tripled the allocation, the expenditure heads allocated to this department, from the year before in 2005-2006. Obviously, we are pleased with that in the sense that the programs of the department are expanding. We are certainly expanding rapidly on the aquaculture side, and I am sure we will get into some detail on that today, but we are also expanding in other areas: fisheries renewal, cod recovery, ocean strategy. All of those activities are expanding in the department, and with them we are bringing in expanded programs, additional resources in terms of people where necessary, and certainly the dollars to put those programs into place and bring them to reality.

That is the only point I will make in introducing the Estimates of the department, and I will be happy to deal with questions as they come up and as we go through the exercise.

Thank you, Mr. Chairman.

CHAIR: Thank you, Minister Rideout.

Mr. Reid.

MR. REID: Thank you, Mr. Chair.

I want to thank the minister for coming today, and his officials. It is good to see them. I have worked closely with some of them over there. I have worked with them and against some of them at different times, I guess. I am referring to your deputy minister. We have interesting times in the fisheries, but that is nothing new.

Minister, it appears that your budget has been increased by some $19 million since I was the minister over there. Can you give us a breakdown as to how you are going to spend those additional dollars? I know you are putting more money into aquaculture and you also mentioned the Fishing Industry Renewal Initiatives. Can you just give us some outline as to how this spending will be done?

MR. RIDEOUT: Sure.

Thank you, Mr. Chairman.

Yes, the member is correct, there has been a significant increase in the gross budget of the department over the last two years, actually. Part of the new expenditure will go into the Fishing Industry Renewal Strategy, and I can give some detail on that.

We are committing funding in the amount - in the 2007 budget, to implement the Fishing Industry Renewal Strategy - of $5 million annually over a three year period for a total of $15 million. That is new funding, obviously, and it demonstrates, hopefully - I believe, at least - our commitment to try to bring the renewal exercise to fruition.

The highlights of the renewal strategy and some spending associated with it, I will briefly run down through it if the member wishes.

MR. REID: Yes.

MR. RIDEOUT: We are proposing to strengthen the fish processing licensing board and the policies under which it operates. The three-year budget for this initiative is $300,000. The boards leeway will be tightened up in the sense that they will be operating with resource thresholds. The policy criteria will be made more stringent and made - policy will be made operative, and rather than guidelines, will become strict operating guidelines.

Under this head as well, licensing transfers would be publicly advertised but they would not occur unless they meet the resource thresholds that have been established. We are going to attempt to institute a regional balance in terms of plant processing capacity in regions of the Province.

On the marketing enhancement side, which is another initiative under fisheries renewal, we are setting up a Newfoundland and Labrador Seafood Marketing Council and we are allocating $1 million annually over the next three years for the work of that council. So, that is a $3 million initiative in total. We are expanding the technology and new opportunities through research and development programming. This will include funding of about $2 million annually as part of our three-year commitment in new research and development leading to technology and new opportunities. We are proposing to implement a fish auction, voluntary fish auction on groundfish, first on the South Coast. It will be implemented as a pilot project, hopefully for shrimp as well. We are in discussions with the industry now on how best to go about that. We have earmarked $500,000 annually over the next three years to implement this auction system.

Fishing industry workplace health and safety, we are setting up a fishing industry safety council and we are funding it with $250,000 annually for the next three years. We have in place a worker adjustment program as part of renewal as well and we are committing $850,000 annually over three years to it.

I can go on. We are also investing more money into seafood marketing. We are targeting key international markets over and above Boston. We are spending more money in the cod recovery program. We are contributing $300,000 a year as part of a five-year commitment to this, and we have entered into a partnership of $1.3 million doing inshore cod surveys in Smith Sound in Trinity Bay, mid-shore surveys and offshore acoustic surveys, tagging projects in the Gulf of St. Lawrence and so on.

I do not know how much detail the hon. member wishes. I can keep going or he can stop me when he wishes if he has questions that he wants to zero in on.

MR. REID: Let's talk about the last one first, $1.3 million for surveys and science in Smith Sound and on the West Coast. Isn't that a federal jurisdiction and a federal responsibility?

MR. RIDEOUT: Well, yes, and the federal government is doing that. What we have done, of course - I think it started back some time ago actually - we have partnered with institutions in the Province here, like the university, the Marine Institute, DFO and industry itself to do some of this work. So, the Province is taking the position that this is - well, jurisdictionally, yes, there is no question, it is exclusively the responsibility of the Government of Canada, but it is to our long-term advantage and to the long-term advantage of the industry that we support science, support research, and support this kind of thing, and we do, through a partnership arrangement with DFO, and the university, in particular. Dr. Rose has done a lot of this work for us, as the member would know. So, we could take the attitude that we are not going to put anything into it, but we think it is good public policy that we promote and expand the scientific research part of this because it will pay dividends to us in the future years.

MR. REID: I do not have a problem with that but my concern is, I think you did the same thing with the river guardians a couple of years ago for salmon.

MR. RIDEOUT: Yes.

MR. REID: The Province went out and spent some money because that was a federal jurisdiction up until that time. We have taken that over and I think that the feds have now backed away from it. Is that correct? I know that is not your department, but my concern is if we continue to put additional funding into science, that the federal government will just cut by that amount. We certainly would not want to see the federal government get off the hook and I know that we could never, as a provincial government, afford to pay for scientific research on any stock of fish in the Province.

MR. RIDEOUT: We have been very strategic, Mr. Chairman, on how we do this. The member is correct. There is no evidence that we can see, that the federal government is cutting their scientific work, by the amount of funding that we are investing. We cannot see any evidence of that. As a matter of fact, if you take the numbers in their recent budget, they have increased the amount of money that is dedicated to science.

In terms of the river guardians, the member is correct, it is not part of our departmental responsibility, but speaking from a government perspective, again, it is moving in where the federal government has not done enough, and we could take the attitude that we are not going to do this and to hell with the resource and whatever happens, happens. Perhaps the result of it might be, and I think it is happening in terms of river guardians, that by taking action ourselves we shamed them into not backing away and being more responsive, and we have seen some evidence of that in terms of the river guardian program for sure.

MR. REID: The $850,000 for the workforce adjustment, what are you going to be doing there?

MR. RIDEOUT: Well, that is in the renewal exercise. For example, when FPI announced that they had no future plans for Fortune, then we brought in a program that would allow the government to respond to the needs of people in Fortune, in the sense that we would go in there and set up an office, do an assimilation of what the worker requirements were, what their training was, their education level, their skill level, what training programs could be brought to them to provide them with a transition period; one fourteen-week rotation at a little bit better salary than the regular job creation program to help them along the way of making decisions as to where they look to see their future as a result of that plant closure.

This program is meant to deal with that kind of situation. We used it in Marystown, and Marystown was closed for more than a year. So in that context, it met the criteria. We are all hopeful and optimistic that Marystown is not a permanent closure, and neither does it appear that Fortune will be now as a result of other interests, particularly by Cooke Aquaculture. The program is there to assist communities where plants, for whatever reason - whether it is economic reasons, whether it is bankruptcy, whether it is just somebody getting out of the business - close and the indication are that they are permanent closures. This program is meant to respond to that kind of a situation and offer a suite of options and services to the people affected, not to help them move off somewhere else or leave the Province or whatever but to help them in whatever they deem the help that they require for their particular situation. It worked very well and was very well received in Fortune - and Marystown, too, as far as I know - and we believe it is a program that is useful and one that we should have available if it is needed.

MR. REID: How much did you spend last year on that?

MR. RIDEOUT: Last year, I think the funding was actually in Municipal Affairs. I cannot actually tell the member, but I think - was Fortune a million-and-something and Marystown was a million-and-something? Do anybody -

WITNESS: I am not sure.

MR. RIDEOUT: It was through Municipal Affairs where the funding flowed. I believe both of them was something over $1 million in total in the amount of support, and that would include the job creation side of it as well.

MR. REID: Yes, that is the reason I asked because that is what I thought, it all came from Municipal Affairs.

MR. RIDEOUT: It did, yes.

MR. REID: You are putting $850,000 in there for this year. Obviously, when you said over $1 million last year that also included the make-work that was taking part in those communities, make-work programs, the community development aspect. You know, the JCP projects.

MR. RIDEOUT: That is still staying in Municipal Affairs. The job creation funding component of it is still, as I understand it, going to be funded out of Municipal Affairs but the cost for setting up the office, offering training programs, going down and meeting - or out, wherever it is - with the people affected, determining what their needs are. The initiative for the program and everything - except the job creation funding component of it because that is going to come, as I understand, it if it comes, from local community initiatives anyway in terms of what they say is best to do in their community.

MR. REID: But the funding for that would come from Municipals Affairs (inaudible)?

MR. RIDEOUT: Yes, that component would still come from Municipal Affairs.

Alastair, do you want to add something to that? That is correct, isn't it?

MR. O'RIELLY: The minister is correct in as much as, the intent is to continue to work with the existing program, similar to what it was in short-term job creation for communities that have circumstances where people do not achieve sufficient employment to quality for EI benefits. That is the normal program that has been in place for some years, community development.

Last year, the extraordinary systems for Fortune and Marystown was kind of a template for what we are doing here, in the event of closures that are likely to be of a permanent nature, as demonstrated by a closure by at least a one-year period with no immediate prospects for reopening.

In that circumstance, this money is really to spearhead some of that work with those who may be directly impacted in terms of permanent loss of employment through counselling and through - as the minister pointed out - short-term employment at a slightly higher wage rate to qualify for benefits, plus extraordinary support and counselling services. This is done in collaboration with Municipal Affairs, with Human Resources and Employment and also with INTRD in a joint effort to respond to these circumstances. We do not have an expectation. Maybe we are being overly optimistic, but we do not have an expectation of significant closures forthcoming in the coming year and we believe that this will be an appropriate and an adequate level of response to deal with that.

MR. REID: Given that Municipal Affairs will still be funding any make-work programs.

MR. O'RIELLY: That is correct.

MR. REID: I still cannot see how you are going to spend, or did spend $850,000 from the Department of Fisheries under that budget heading.

MR. O'RIELLY: This is the proposal going forward in the event -

MR. REID: What kind of things would you offer or pay for out of that $850,000? For example, if Fortune were to go down - just to use Fortune, if it was open today and it went down tomorrow, Municipal Affairs is going to kick in the make-work programs. So what is the Department of Fisheries going to get for the $850,000, or how are they going to spend the $850,000?

I know you said you would go down there and set up an office and things like that. Would the Department of Fisheries be hiring people to work in that office, and how many? For example, I know it is speculative and hypothetical, but how would you spend $850,000 in a community when Municipal Affairs is going to provide the money for make-work?

MR. O'RIELLY: What we anticipate is that this template of what happened in Fortune and in Marystown gave us an estimate of what it would cost to establish a vacated office, provide counsellors for the workers there, engage in the short-term employment creation initiative on their behalf and respond accordingly.

It is a difficult thing to project in terms of what the final cost would be, depending on the individual circumstances and the size of the plant that might be affected, but it is a contingency that gives us a mechanism to respond in a more significant way if there is the risk or threat, or indication of a permanent closure. The costs are really based on what the experiences were in Fortune and in Marystown, which, in both cases, were fairly consistent, I think, in terms of the response requirements, the participation rate of those who availed of the services, which actually was roughly 50 per cent in each case. Fifty per cent of the total workforce availed of these counselling services and the support afforded through the program. So, based on those estimates, we feel we have an appropriate contingency to respond at the level of $850,000 - and, as you said, plus the program funds that are available through Municipal Affairs as well.

MR. REID: So you are not anticipating spending that money this year, I take it.

MR. O'RIELLY: We hope not.

MR. RIDEOUT: The funding that we are talking about here is part of the $5 million block dedicated to fishing industry renewal. We hope we do not have to spend it in terms of the workforce adjustment, that there are not any significant plant closures. That would be the hope.

Our experience has been, particularly emanating from Fortune and Marystown - and there could have been, for example, when you had the Daley bankruptcy last year, a requirement to have done something similar in other communities if those plants had not gotten picked up as quickly as they did. We think it is an appropriate safety measure to have in case there is such an unfortunate occurrence in some community out there, to be able to respond to it.

MR. REID: Little Bay Islands -

MR. RIDEOUT: Little Bay Islands is a possibility, that is right. The member just put his finger on it.

I am sorry to interrupt. Did you want to say something further?

MR. REID: No, that is -

MR. RIDEOUT: That is a prime example. The operator there has indicated publicly that he does not intend to operate this year. The community is looking to attract somebody else. Whether there is somebody else at this point, I don't know, but it may well be that some kind of an adjustment program may have to be available to the people on Little Bay Islands.

MR. REID: So you have $1.3 million for basically science; you have $850,000 for workforce adjustment. The $2 million for research and development that you mentioned there, what is that going to be spent on?

MR. RIDEOUT: Alastair, do you want to begin?

MR. O'RIELLY: Over the years the department had, in the past, some significant R and D funds available to it. Most of these funds, in the past, were available through federal-provincial funding arrangements. These have all but dissipated. There was NIFDA and CAFID and a number of other initiatives over time, so the program resources available to the department for R and D initiatives were at a very low ebb in the last number of years. Now, with the renewal exercise, the decision was taken to provide additional monies there for research and development activities.

Now, that would include everything related to harvesting and processing, gear development, and there are a lot of issues there with respect to appropriate use of gear and bycatch mitigation, and mitigation of adverse impacts in terms of gear on the bottom, that kind of thing. We see some research going into that area. Avoidance of bycatch in a number of fisheries is indicated.

On-board handling systems for vessels is an important area in which to do some work, and now with the changes in federal policy on vessel size we expect that harvesters are going to be much better positioned to look at on-board handling systems, items such as slush ice and other kinds of technologies, so we have funds available to research some of those and to see what the applications are.

Vessel design is another area where we have done some work, from a safety point of view and an operating efficiency point of view, and we see that continuing.

In the plants, quality is an issue but we think a lot of the funds are probably going to be more directed towards technology in terms of efficiency, process improvements, product development, and those types of initiatives, to try and extract more value from the fishery. That funding, we think, will be quite significant compared to what we have had in the past, and should spur some investments by the private sector, and perhaps also some federal funds.

MR. REID: This is similar to the old NIFDA programs, I take it.

MR. O'RIELLY: Fundamentally. The only difference, of course, is that it is not a federal-provincial fund.

MR. REID: No, I know. So you are talking, if somebody wanted to do something with on-board handling, you would subsidize him, for example, an individual fisherman or individual plant owner, if he wanted to put in additional equipment?

Like, back in the late 1980s or early 1990s, for example, under the old NIFDA program, if someone went out and bought a baiter or splitting machine, the Province and the federal government, under NIFDA, kicked in a portion of the money. Are you saying that you are going to do that again, or are you going to put money into fish harvesters to improve their vessels or the handling systems on their vessels?

MR. O'RIELLY: Yes, except the intent would not be to subsidize the use of that technology. The industry, we feel, will be able to carry that themselves if it is a good investment. The monies would probably more likely be directed to adapt technologies to the use of the vessels here or to demonstrate it, where people are not using certain types of technology, and to pay down the cost, or help pay down the cost, of bringing it into the fishery, allowing it to be evaluated in a commercial context, and demonstrate its value. To the extent that we are successful at doing those kinds of initiatives, the industry, we would expect, would take up the charge themselves.

So it is not the intent, really, to establish a program that would offer some percentage - 50 per cent or some other percentage - of the cost of doing this for everybody who wants to do it, because of a couple of issues. It would be very expensive to do it that way. Also, it would be offering a subsidy to the industry which probably is not needed and also has countervail implications.

MR. REID: We always worry about this countervail. Quebec doesn't seem to be worried about that, but that is another topic.

Actually, if harvesters nor processors are going to be able to avail of any of this $2 million - $2 million, is it, for research and development? - give me an example of who might avail of this besides the Marine Institute.

MR. O'RIELLY: Actually, any processor or any harvester in the Province will be eligible to submit proposals. We are still at a very formative stage in terms of designing the criteria to how that is going to work this year. Up to now, or in the past, we have had a very small budget for these types of things, so the initiatives were largely driven either within the department or some extraordinary collaboration with industry.

Now that there are some additional resources, we are going to be looking at ways of communicating to the industry as to the availability of the money and seeking their proposals for participation, so that will probably work out over the next few months.

Some of the specific issues on how to do this, and at what level of support, we need to do a little more work with the industry and we are consulting with them further on that specific point.

MR. REID: I have an individual in my district who is a sea urchin harvester, along with other things. He is having difficulty finding divers, so he is looking to the federal government for some help to develop a new technology for sea harvesting, or sea urchin harvesting. Would that qualify, for example?

MR. O'RIELLY: Notionally it would. I obviously do not know what it is, specifically, to the extent of, if it has been used before or if people are familiar with it. That is the kind of thing - new technology for harvesting, new techniques and approaches - that will improve operational efficiency or reduce cost or improve quality. Those are the kinds of -

MR. REID: So, you have no guidelines for this program yet?

MR. O'RIELLY: We have draft guidelines, but we really need to spend some time talking to the industry about what they feel is the appropriate and best use of it. What we have is a global allocation of the $2 million, which is part of the $5 million funding for the next three years. The specific criteria is probably not going to be available to the industry in terms of application forms and processes for another couple of months or so.

MR. REID: Under 1.4.01., Fishing Industry Renewal Strategy, is that the budget there, $3.4 million in Grants and Subsidies, $1.5 million in Purchased Services?

MR. O'RIELLY: That is our estimated, yes.

MR. REID: What are you buying for $1.5 million under Purchased Services?

MR. O'RIELLY: That will depend on how the profile of the program works, but if we need to provide consultants or technicians to apply to any of these initiatives, that would help pay for some of these types of costs; and, of course, it applies to the entire program in terms of the $5 million.

MR. REID: Do you really anticipate spending $2 million this year when you do not really have the program defined yet?

MR. O'RIELLY: It is really difficult to predict what the take-up rate is going to be. We are kind of at a difficult time right now because the fishery is under way and this is the last time in the world when people want to have a conversation about an R and D initiative. They want to continue their fishing and complete that fishing activity, so that is one of the challenges that we have in terms of timing.

The other thing that is difficult to predict is what the take-up rate is going to be. The industry has not had an opportunity to avail of a program like this now for some years, so we really feel that there is a certain amount of pent up demand and interest, and we are looking forward to seeing what kind of feedback we get when we present it to the industry.

MR. RIDEOUT: I think the other thing that needs to be added is that this is a three year funding commitment and that the intention here is - if it is not possible and appropriate the expend the funds, we roll them over.

We did that in the aquaculture program this year and, as a result of not being able to cash flow some of the funds, we put in our new amount of commitment that we committed from the previous year and added on what was left to it, so we have a $12.5 million program rather than a $9.5 million that we would normally have had.

So, if there are funds left in this initiative - it is a three year commitment - we will just roll it over and hopefully the program, as it gets more experience and the industry becomes more acquainted with it, will start to achieve more of the objectives for which it was established.

It is new in many respects, and it will take some time, but, from the consultation process, we think it is something that could be useful and will, in fact, be useful.

MR. REID: Can we go to aquaculture now?

MR. RIDEOUT: Aquaculture, of course, yes.

MR. REID: You just mentioned that you are going to have $12.5 million; $3.5 million of that was a carry-over from last year.

MR. RIDEOUT: Well, I think it was cash flow debt.

Brian, do you want to speak to that?

MR. MEANEY: There was a total commitment last year of $7 million, $3.5 million which will be carried over into the current fiscal year. A total commitment of $6 million, sorry, will be carried over into this -

MR. REID: All right, so you budgeted $3.5 million for that last year, did you?

MR. MEANEY: Yes.

MR. REID: None of it was spent.

MR. MEANEY: No, we were concluding the contracts. The contracts with the company could not be concluded before March 31.

MR. REID: What company are you talking about?

MR. MEANEY: Cooke Aquaculture.

MR. REID: So that is the $10 million that you are putting into Cooke Aquaculture -

MR. MEANEY: Yes.

MR. REID: - that you announced last year. So you allotted $3.5 million for that year, and how much for this year and next year?

MR. MEANEY: There was an additional $3.5 million allocated for this year, to be carried over with the $6 million from last year, for a total of $9.5 million flow for this year.

MR. REID: So, what is your total budget for aquaculture this year?

MR. MEANEY: The total budget under that program would be $12.5 million.

MR. REID: So, $12.5 million. How much of that is going to Cooke?

MR. MEANEY: In the current fiscal year we anticipate roughly $9.5 million.

MR. REID: Where is the other $3.5 million going?

MR. MEANEY: We currently have proposals under review by two additional companies. We anticipate there are some other companies who have an interest in this program and that we would see some applications towards the program in this coming fiscal year.

MR. REID: So, when you made the announcement last week about the $10 million investment in aquaculture and stuff, that was the Cooke Aquaculture thing that was announced last spring?

MR. RIDEOUT: Elucidate a little further what you are talking about.

MR. REID: Did you say hallucinate?

MR. RIDEOUT: Explain a little further.

No, I didn't say hallucinate.

MR. REID: It was my understanding, when you came out in the Budget with $10 million, is it, or $12 million in aquaculture, I thought that was in addition to the $10 million that was gone into Cooke, but obviously it is not.

When Cooke made the announcement last year, along with the federal government, and the Province said they were kicking $10 million into this plan, I thought the $10 million that was announced in the Budget last week was in addition to the $10 million that was already committed to Cooke. I thought it had been spent, actually.

MR. RIDEOUT: Well, it obviously all did not get spent, and Brian has explained that. I think the contracts were late getting signed - not through anybody's fault. It is just that this project got announced late last fall and by the time the legal documents were put in place - I mean, Cooke went ahead on its own, on the strength that this program was coming into place, and spent significant amounts of money on its own before the program was actually even announced, let alone the legal details completed and the sign-offs done.

So, yes, there is some additional cash flow required to take up our commitment. I think, when we made the announcement, we said cash would flow over a two year period.

MR. REID: So, the total budget for Aquaculture this year, Brian, is what in terms of grants, if you include what we are going to give to Cooke Aquaculture this year? You said that is going to be $9 million or something?

MR. MEANEY: The total budget for that program is $15.5 million, which $9.5 million would flow, hopefully, to Cooke this year based on expenditures.

The additional money, as I said earlier, for a total of $12.5 million would look at potential new applicants and new projects upcoming. The total program commitment over the three-year period is now $15.5 million.

MR. REID: How much are you committed to this year over and above what you are giving Cooke?

MR. MEANEY: There is an additional $3 million.

MR. REID: All right, and the $3.5 million that was left in the Budget from last year was for Cooke?

MR. MEANEY: Yes, it was carried over into the current -

MR. REID: All right. So, what will you spend an additional $3.5 million on this year, the $3.5 million over and above what you are going to pay Cooke?

MR. MEANEY: As I indicated, there are a number of companies who are looking at this program for new capital expansion, the addition of new capacity to expand the industry, particularly in the South Coast, the Fortune Bay area. There is some interest in the Placentia Bay area for new site development and new production.

MR. RIDEOUT: We are currently assessing a significant application from the Barry Group, for example, in terms of a significant new investment in aquaculture on the South Coast. They have a significant ask before us now that we are considering. Whether it will be all, some or none of it funded at the end of the day, the decision is not yet made, but it is a significant ask for a significant expansion of their activity on the South Coast.

Grey aquaculture, I think, is it, out of New Brunswick?

WITNESS: Grey

MR. RIDEOUT: Grey's are in looking to set up and start getting fish in the water on the South Coast. We have a number of mussel aquaculture producers that are looking to either start up new sites or expand current sites. The take-up on the program is certainly positive and will, over time as more proposals come forward, I think, get taken up.

The Cooke one was sort of late in the fiscal year, but the commitment that the Province made to Cooke will certainly be paid out over the balance of this fiscal year, I anticipate.

MR. REID: So, of the $28 million in this year's budget, $9.5 million is going to Cooke, right?

MR. RIDEOUT: About $9.5 million. That is correct, isn't it, Brian?

MR. MEANEY: Yes.

MR. RIDEOUT: There was a total commitment to Cooke of $10 million over a two-year period.

MR. REID: Your predecessor brought in a program, I think it was a loan guarantee program for aquaculture, was it?

MR. RIDEOUT: For feed, yes.

MR. REID: It was not announced as feed originally, was it?

MR. RIDEOUT: I think so.

MR. O'RIELLY: The minister is correct, I think inasmuch as, primarily as feed because that is the lion's share or the working capital requirements, too. That program is administered through ITRD, in collaboration with our department.

MR. REID: Okay. How much of a take-up did you get on that program?

MR. O'RIELLY: The most significant has been the activity, of course, related to the Barry Group in the Natures Sea Farms.

MR. REID: Barry got an $8 million loan guarantee, yes. Did any others get a take-up on that, because I asked that question last year, I think?

MR. RIDEOUT: Any others, Brian?

MR. MEANEY: We have three applications under review right now for working capital, one for mussels -

MR. REID: He announced that two years ago because I think you were the minister last year, weren't you minister?

MR. RIDEOUT: I was last year, yes.

MR. REID: So you did get any take-ups on that last year?

MR. RIDEOUT: Barry took up the year before that, didn't he?

MR. O'RIELLY: Yes.

MR. RIDEOUT: And Barry's loan guarantee is still in place?

MR. O'RIELLY: Yes.

MR. RIDEOUT: What is it?

MR. O'RIELLY: It is $7.2 million, maximum.

MR. RIDEOUT: Under the new proposal that Barry has before us, that we are now considering, there would be a significant expansion of that exposure under the Loan Guarantee Program if it is approved.

MR. REID: There were no other loan guarantees given to any other individual or company, besides Barry, in the last two years?

MR. RIDEOUT: No, and Cooke did not look for any and did not want any.

MR. REID: When the minister announced that a couple of years ago he did not specify that it was for feed. I know that when you are talking about aquaculture you are not just taking about fin fish aquaculture, I say to the deputy minister.

Are there any other loan guarantees put out for any other types of aquaculture? Obviously not.

MR. MEANEY: The primary use of the program is for working capital, which on a finfish operation or a salmon operation would be - 90 per cent of that cost would come to feed.

MR. REID: On finfish? Yes, I am sure.

MR. MEANEY: Yes. We have some people looking at it from the mussel side as well, but no applications.

MR. REID: No one has ever come forward and asked for a loan guarantee on any of that?

MR. MEANEY: No.

MR. REID: It has always been feed. If you go back to your previous years in the Department of Fisheries, minister, in the 1980s, the money that was going into Bay d'Espoir, basically through the federal and provincial governments in terms of grants, subsidies and outright pay outs at the end of the day because of default on loans, it is all associated, for the most part, with feed.

MR. RIDEOUT: Yes.

MR. REID: Is there any way that we can overcome the problem we are having with the cost of feed in that region, because it has always been a problem and that is usually what has bankrupted these companies?

MR. RIDEOUT: Mr. Chairman, the hon. member is correct. Feed has been and is a big, big cost of any aquaculture operation and financing the feed over the period of time that it takes to grow out the fish and be able to repay whoever the supplier is, whether it is a loan guarantee from the Province or whether it was Shur-Gain or some other supplier who were big suppliers of aquaculture feed, has been a real big problem. Some of the contracts that some of the operators entered into previously, I suppose they would be considered usury today under the interest rates and the way things went if there were defaults and all that kind of stuff, I mean it would make the hair stand on your head. That was one of the problems that - what was the name of the company that Barry bought out?

MR. REID: North Atlantic.

MR. RIDEOUT: North Atlantic, right. Well, they were actually in receivership when Barry went in there and took them over. That was one of the very significant problems that they faced, was the arrangement they had with suppliers for feed. At the time, we looked at the Loan Guarantee Program that was operating in New Brunswick. That appeared to make sense and we brought in a program that was very similar and it has worked very well. Now, the only one from that perspective that is using it, is Barry. Cooke has plenty of working capital, plenty of lines of credit with their consortium of banks. The program means nothing or has no value to them. They told us that right from the beginning. They needed other support, and that was that aquaculture equity investment program, which fitted their needs.

Now, the other point I want to make is now that Cooke is in and the critical mass that is associated with feed is starting to change and there is now competition in the industry, people are coming in here and storing feed; bringing it in by barge, not a few truckloads at a time, like used to happen when the industry was in no more of an infancy and growing itself. Things are starting to change and you are getting more competition. You are getting suppliers bringing in and storing larger amounts and that kind of thing. Hopefully, as the industry grows you are going see feed suppliers set up down on the Connaigre Peninsula, in particular, about where the finfish industry will very likely be associated, and that will bring feed costs down again. By bringing it in by barge and things of that nature, there have been improvements made and the Loan Guarantee Program is one of the factors that helps larger operators get over that hump.

MR. REID: Yes, it has always been a problem, minister. I went in over there working in 1989 and it was struggling then. It struggled when a new owner took it over. Maybe Brian remembers when North Atlantic took it over. I think the government paid the outstanding fee that was owed to Shur-Gain or somebody for the feed from the predecessor of North Atlantic before they moved in. Am I correct, Brian?

When North Atlantic came in there was money owing down there for feed and stuff, and I think the government - because it was just before I became the minister over there - stepped in and paid off some of that debt. My understanding, and yours and everybody else's, was that North Atlantic was going to come in and that was not going to be a problem for them. Once we wiped the slate clean they were not going to have any problem with feed. They were going to make a go of this. We had lengthy discussions about whether or not that would happen. Then, obviously, they went bankrupt as a result of feed costs. I am praying that it will not happen again with the company that is down there now because it has always been a problem. I think if you trace it back through the various owners that it has had, at least since 1989 when I became acquainted with the department, what has bankrupted every company since then has been feed cost. Until we can get a grip on that, my fear is that some of it will go the same way. Cooke, being a large company in New Brunswick, maybe they have the wherewithal to change that around, but as one operator, I am sure it is going to experience the same problems that all its predecessors did. I am not talking about Cooke. I am talking about if Mr. Barry and his group are down there alone, and I would assume that they are going to face the same difficulties that their predecessors did. So, maybe Cooke will help out in that matter.

Let's back up a few things here now. You have $9.5 million in this budget that is going to Cooke and you have $5 million that is going to the diversity program, some of it which may not be spent this year. So that is $14 million of the increase in your budget. You have gone from $10 million, when I was Minister of Fisheries, to $28 million now. Fourteen of that twenty-eight, or $9.5 million of it goes to Cooke Aquaculture, a one-time payout. There is another $5 million for the fisheries diversification; some of which will be spent this year, some of it will not. Am I correct so far?

MR. RIDEOUT: Carry on.

MR. REID: No, I am just doing a tally here of the increase in the budget.

MR. RIDEOUT: Yes, we want to see what the result of your tally is going to be.

MR. REID: No, no. I am just adding it up as I go because I am somewhat surprised, minister, and I do not mind telling you. I am somewhat disappointed, because when I heard originally - maybe it is because I did not listen properly or maybe there was not enough information out there. When I heard the new investment of $10 million this year into aquaculture, I thought that was going to be a new program.

MR. RIDEOUT: It is a new program.

MR. REID: Yes, but -

MR. RIDEOUT: It is built on from last year.

MR. REID: Yes, but is $10 million of that going to Cooke Aquaculture? That is what I am saying.

MR. RIDEOUT: Well, $5 million from last year and $5 million from this year.

MR. REID: Yes. So, $10 million of that increase in your budget this year is going to Cooke Aquaculture. I find that somewhat disappointing because I thought that was -

MR. RIDEOUT: I do not know what would be disappointing about that.

MR. REID: No, no. You are reading me wrong, minister.

MR. RIDEOUT: Okay. Maybe you are saying it wrong.

MR. REID: I know that we have to play politics with it and stuff like this, but what I am saying is when I heard the announcement this year of an additional $10 million or $12 million for aquaculture, I thought it was in addition to what we had paid or were supposed to have paid Cooke Aquaculture, because Cooke Aquaculture was announced when, last April? When did we make that announcement on Cooke Aquaculture?

MR. RIDEOUT: Just before Christmas, wasn't it?

WITNESS: (Inaudible).

MR. RIDEOUT: It was just before Christmas, yes.

MR. REID: Just before Christmas, yes. Anyway, that is clarified now.

I am going to ask a few more general questions and then I have to go. You are talking about increasing the loan portfolio for vessels. What is it currently?

MR. RIDEOUT: What is it Alastair? I had the number but I just do not remember it now.

MR. O'RIELLY: It is $30 million-odd, $36 million. I think it is something in the order of that. Finance administers it, but I think it is in the order of $36 million that is under loan guarantee at the moment.

Now, the forecast in terms of what might happen in the next few years with these changes in the program, between ourselves and DFO, the projection is that in the next five years we could have $250 million of new investment in vessels and in the industry in terms of combining enterprises and so on. Our estimate is that if that happens, if that level of investment is made then we project approximately $100 million of that would probably be submitted for loan guarantee under the Province's program. That is where the $100 million forecast is from, and that is the basis for it. There is significant eligibility. The larger vessels are going to drive costs considerably, moving to a size - it is eighty-nine feet, but all fleet sectors are allowed to move up. So it will cascade down through the entire profile of the harvesting sector in terms of new vessels or replacement vessels of a larger size.

Then, combining of enterprises is something we have to work on with the banks, of course, in terms of finalizing the details as to how that would work, but that kind of financing also will generate significant additional costs.

The other cost forecast that we see is being able to refinance existing debt that is held by harvesters - that is held by processors or others. They will now be able to refinance that, if they wish, under the program, and avail of maybe a better loan rate or perhaps a greater level of financial independence.

MR. REID: But they would have to go to a bank first and be approved for a loan by the bank before we co-sign it, am I correct?

WITNESS: That is correct.

MR. REID: Well, why would an individual go to a processor if he could afford to do that - the current ones who have done it? What I am saying is, why do you expect a lot of these people to leave the processor now and go to a bank and then be guaranteed by the Province?

MR. RIDEOUT: We expect it because that is what they tell us. They told us that is what they would do if they could do it under this program when we were out as part of the fisheries renewal exercise.

MR. REID: What sent them to the processor in the beginning? One thing might have been - correct me if I am wrong - their inability to negotiate a loan with the bank, so they were forced to go with a processor. So, what would increase their ability to go to the bank now, if they are in debt to a processor or if they have their loan with a processor?

MR. O'RIELLY: That is a matter that, I guess, the proof will have to be in the pudding in terms of what kind of take-up arises from it. Many harvesters have said that they have had no choice in terms of they were unable to find financing with banks, or unacceptable terms, but the most frequent criticism is not that they could not get funding; it is that they cannot get it fast. The administrative procedures of dealing with a bank and getting the loan guarantees were too cumbersome and would take a month or more to do it, which, for some of us, maybe does not seem like a long period of time, but I think in the context of how things happen in the fishing industry, in the buying and selling of vessels, people want to be able to act when there is an opportunity. The procedures and processes that are in place, the necessary due diligence and so on, just takes time.

It will be interesting to see how this unfolds in terms of take-up, but the fact that the program is there and available for that purpose will obviously give harvesters considerably more bargaining power.

MR. REID: The program was always there.

MR. O'RIELLY: It is, but the opportunity to refinance - there was a window, I think, in the past, for a short period, to do that, but typically refinancing is not an eligible item under the program.

MR. REID: Under the Loan Guarantee Program there is probably $100 million worth of loans out there for vessels.

MR. RIDEOUT: No, (inaudible).

MR. REID: No, that is what the government's exposure is.

MR. RIDEOUT: That is what I mean.

MR. REID: What I am saying is, we only guarantee a certain portion of the bank's exposure.

MR. RIDEOUT: Twenty per cent.

MR. REID: Yes, and I am not aware that the government was asked to pay out much in the past years when I was minister.

MR. RIDEOUT: You are right.

MR. REID: Has that increased in the last few years?

MR. RIDEOUT: No, the payout, Mr. Chair - this is a program that works very, very well; there is no question about it. While we have to carry a contingent liability on our books, and that might look big with Standard and Poor's or whoever looks at those items, in reality the payout on it is very, very small. I believe it is less than 1 per cent now, isn't it?

WITNESS: Approximately 1 per cent.

MR. REID: If it follows through with what you are proposing with the vessel size and stuff, how much are you proposing to increase the Province's exposure, do you think? Right now you are saying the Province's exposure is around $30 million.

MR. RIDEOUT: Up to $100 million, we think, might be possible. Therefore we have built in, of course, in our financial projections, using the same default ratio of around 1 per cent of that additional money, if it were to happen.

MR. REID: Yes.

MR. RIDEOUT: The program has been a very, very solid program and very little take-up by the taxpayer to support it.

MR. REID: Do you have a list of what we would have paid out on that in the last couple of years or three years?

MR. RIDEOUT: I don't have it at my fingertips.

MR. REID: Is it available to us?

MR. RIDEOUT: Well, I would have to ask; I don't know about the confidentiality aspects of this, because -

MR. REID: I don't know how much confidentiality a person has, once the government has to pay their loans.

MR. RIDEOUT: I agree, but all I am saying is that I would have to ask. I would think that it would be Finance who would have paid out the deficiency amounts.

MR. O'RIELLY: There is nothing recent, that I am aware of.

MR. RIDEOUT: We are not aware of anything recent, the deputy says.

MR. REID: That is on the boats.

What about the loan guarantees that were outstanding on the fish plants, for example, the one in Herring Neck? Has that ever been written off, or has it been collected?

MR. RIDEOUT: Herring Neck? Dave, can you give us some -

MR. LEWIS: Herring Neck?

MR. REID: Yes.

MR. LEWIS: That was written off eons ago, I think.

MR. REID: No.

MR. LEWIS: It wasn't? I thought it was several years -

MR. REID: It wasn't written off when I was there; there was still money outstanding.

MR. LEWIS: Oh, you mean the outstanding loans to the department?

MR. REID: Yes.

MR. LEWIS: The receivables of the department?

MR. REID: Yes.

MR. LEWIS: It was written off within the past year.

MR. REID: Was it?

MR. LEWIS: Yes, that and Coley's Point Fisheries for St. Lawrence or something, I think.

MR. REID: Can you give me the details on the amounts on that, please?

MR. LEWIS: The department was owed, I believe, around $80,000 or $90,000, somewhere in that order, $89,000 or somewhere thereabouts.

MR. REID: Can you get the details? Because I thought it was more than that, actually. Was that the two of them combined, or just one?

MR. LEWIS: That was the two combined. My recollection is that is was around $89,000 or somewhere thereabouts. Maybe I am wrong, but I will certainly get them for you.

MR. REID: Can you get me the figures?

MR. LEWIS: Yes.

MR. RIDEOUT: We will get them, yes. That will be compiled for the member, Mr. Chair.

MR. REID: All right, that is it for me, Minister.

There are lots more there, but I have another meeting and my colleagues will ask you some now.

MR. RIDEOUT: I thank the Member for Twillingate & Fogo, the Leader of the Opposition, for his participation, Mr. Chairman.

CHAIR: Thanks very much.

Mr. Joyce.

MR. JOYCE: First of all -

MR. RIDEOUT: Eddie, before we get going, can we take a couple of minutes?

MR. JOYCE: Yes, not a problem.

MR. RIDEOUT: If you don't mind.

CHAIR: We will take a short break of five minutes, maybe.

MR. JOYCE: Perfect.

CHAIR: I think we are about ready to begin again.

Mr. Joyce, are you ready?

MR. JOYCE: I will just be a few minutes; but, Mr. Chairman, that fifteen minute rule didn't last with Gerry Reid around. You were supposed to enforce that fifteen minute rule.

CHAIR: The flow was going so good that I didn't want to interfere.

MR. JOYCE: Well, Mr. Chairman, if you set the rules you have to stick by them.

CHAIR: Now you can have your turn.

MR. JOYCE: I am just going to go for awhile to some line item, Minister; it shouldn't take too long.

First of all, I know, with Labrador and Aboriginal Affairs, Yvonne Jones was supposed to be here, but she is at the hospital with her mother who is having an operation, so that is why she is not here, but I will ask a few small questions on this.

WITNESS: (Inaudible).

MR. JOYCE: I am not sure, but that is why she is not here on Labrador and the fishery.

In 1.2.01. -

CHAIR: I wonder, could we finish the Fisheries and Aquaculture first, and then -

MR. JOYCE: That is what I am going through, Fisheries and Aquaculture.

CHAIR: You are talking about page 119?

MR. JOYCE: I am just going through what is in the Budget, line item 1.2.01., Fisheries and Aquaculture.

CHAIR: Okay, page 119.

MR. JOYCE: There is an increase there of $72,300. What new position is that, Minister?

MR. RIDEOUT: Can the member tell me exactly where he is?

MR. JOYCE: Item 1.2.01.

MR. RIDEOUT: Yes.

MR. JOYCE: It is Executive Support, Salaries.

MR. RIDEOUT: Right.

MR. JOYCE: There is an increase of $72,300.

MR. RIDEOUT: Yes.

Executive secretary reclassification accounts for $33,800. Anything else, David?

MR. LEWIS: That is all, plus there were some minor salary increases. Budgeted last time was $731,000, and the new budget is $777,000, so it is actually an increase of $44,000. There was a reclassification of executive secretaries across government, and that accounted for around $33,000 of it. The rest is just a standard salary increase.

MR. RIDEOUT: So it is not for any new positions; it is just reclassification of positions, that increase in Salaries?

MR. LEWIS: Yes.

MR. JOYCE: In 1.2.02., Property Furnishings and Equipment, last year you budgeted zero but you spent $80,000, and this year there is an increase of $658,100.

MR. RIDEOUT: Last year we did not budget for it, but we ended up transferring funds to buy two pickups for the veterinarians in aquaculture, and inspections people. We are also planning - in the Property, Furnishings and Equipment, there is $613,000 budgeted for the design of this new facility in St. Alban's on the South Coast, so the design fees for that, $613,000. They are purchasing a disinfection truck, $75,000, for aquaculture purposes. There is $60,000 budgeted for aquaculture vehicles, and $40,000 budgeted for inspection vehicle replacements.

MR. JOYCE: So it is $613,000 -

MR. RIDEOUT: Oh, I am sorry, I didn't mean to mislead the hon. member.

When I said the design fees for the South Coast, I said $663,000. I misread the figure; it is $563,100.

MR. JOYCE: For design?

MR. RIDEOUT: Yes, for the design of the new aquaculture facility at St. Alban's.

MR. JOYCE: On 1.3.01. there is an increase of approximately $220,000 for Salaries this year. Is this mainly due to the increase across the department?

MR. RIDEOUT: There was a delayed recruitment from last year. The director of fisheries adjustment, seal communications, trade analysts, those recruitments went ahead but they were later coming on stream than we could plan for by the time we went through the recruitment process, so that would have delayed the amount of funds that were actually expended.

There is a trade development position, I believe, $59,500, that is included in the global amount there of $663,100.

WITNESS: That is a one-year temporary position.

MR. RIDEOUT: That is a one-year temporary position, the trade analysis position.

MR. JOYCE: Are all of those positions filled now?

MR. RIDEOUT: Is trade development filled now, Mike?

MR. WARREN: No.

MR. RIDEOUT: We are in the process of hiring?

MR. WARREN: (Inaudible).

MR. RIDEOUT: The rest of the positions are filled?

MR. WARREN: Yes.

MR. JOYCE: Okay.

Under 03. under the same subhead, Transportation and Communications, there is an increase there of approximately $50,000 or $60,000. What was that for, Minister?

MR. RIDEOUT: The increase, as I see it, is about $35,000, and it was additional funding to be spent on trade development promotion, transportation costs for sending our booth and that kind of thing to the various trade shows that we attend.

MR. JOYCE: Okay.

Under 05., Professional Services, in the Budget last year it was $180,000 but very little of it was spent.

MR. RIDEOUT: Yes.

Again, we were anticipating spending an additional $80,000 in trade development under that head for Professional Services.

WITNESS: Eighty thousand less.

MR. RIDEOUT: Eighty thousand less, yes. We budgeted $180,000 last year and didn't spend very much, as the member pointed out, but we are budgeting $100,000 for that expenditure this year.

MR. JOYCE: What kind of professional services? Just setting up the booths, or...?

MR. RIDEOUT: Dave, is that your shop? Do you want to speak to that, or Mike?

MR. WARREN: That is actually the trade development analysis work that we are going to do over the next year. It is a big issue for us. There are a lot of trade barriers, and we are going to hire somebody. This will assist in hiring the consultants that we think we will need to support that. The legal stuff, the international business consulting services, we are working our way through that, but these are the kinds of things that we would expect that our work and trade analysis will require.

MR. JOYCE: Okay.

In 06., Minister, Purchased Services, once again there is a decrease. You budgeted $124,000 and there was only about $49,000 spent, about a $75,000 difference there.

MR. RIDEOUT: Do you want to speak to it, Mike?

MR. WARREN: The reduction from $124,000 to $49,000 was related to the delayed recruitments of the positions we just mentioned.

MR. JOYCE: The same thing, okay.

MR. WARREN: Yes.

MR. JOYCE: Last year, when we were speaking, I mentioned - and I went through last year's minutes - it was fisheries grants for groups. I mentioned last year that there was some money available, and I know some groups wrote in. Was all of that money spent last year, the small grants and subsidies for slipways and...?

MR. RIDEOUT: Yes, it was all spent.

MR. JOYCE: Can I get a list of who got funding for that?

MR. RIDEOUT: Yes.

MR. JOYCE: I remember bringing it up at the Estimates last year.

MR. RIDEOUT: Special Assistance Grants, yes. In the hon. member's district there was a request from Lark Harbour, $3,000, that was funded. That is the only one I see here.

The whole thing - but we can get the list - in Bellevue there was $21,000 spent; Bonavista North, $19,000; Bonavista South, the number is not totalled there, about the same thing. They are all within the same range. In Burgeo & LaPoile there was $9,900; Burin-Placentia West, $9,700; Cartwright-L'Anse au Clair, $14,800, so I have a list. We will have the list available for the member.

MR. JOYCE: Thank you.

Regional Services, 2.1.01.

MR. RIDEOUT: Under 2.1.01, yes, okay.

MR. JOYCE: There was an increase of $137,000. Was that new positions?

MR. RIDEOUT: Do you want to speak to that, Mike or Dave, when you get the head open here?

MR. JOYCE: Under 2.1.01.

MR. LEWIS: You are looking at what? Salaries?

MR. JOYCE: Yes.

MR. LEWIS: The actual increase from last year's Budget is only $26,000, and that would have been accounted for by just salary increases, just normal salary increases.

There was about $100,000 less than the Budget spent last year because there were some delayed recruitments.

MR. JOYCE: Okay.

In 2.2.01., once again Salaries, my estimation here is an increase of $121,000. Is that the same thing, just normal...?

MR. LEWIS: Again, the Budget last year was $895,000 so the increase was only $27,000, and that would have been accounted for by salary increases.

We had a savings last year of about $90,000 because there were two positions that were vacant, that did not get filled until - they still have not been filled, but they will be in the near future. Those vacancies accounted for the savings of $90,000 last year.

MR. JOYCE: Okay.

Transportation and Communications, $135,000 last year and there is an increase this year of about $80,000. What would that be used for, in Transportation and Communications?

MR. LEWIS: This particular division deals with market development and also with fisheries development projects and diversification projects. The Transportation and Communications in that area would include the implementation of fisheries development projects and it would also include our trade promotion activities, including attendance at the Boston Seafood Show, the Brussels fisheries exhibition and so on. Those are the main initiatives.

MR. JOYCE: In 05., Professional Services, what type of Professional Services would be needed there?

MR. LEWIS: Most of the Professional Services money in that particular subhead is spent for market intelligence and research in support of the collective bargaining process; so, the John Sackton reports and the others that we collect to support collective bargaining.

MR. JOYCE: Licensing and Quality Control - and I know the department is aware of some instances. The crab inspectors - was there, or was I told that there is some kind of education program for them this year? Because I know a lot of them were taken off the street - a one-day program - and shoved in a crab plant, and it caused a lot of problems.

MR. RIDEOUT: Alastair?

MR. O'RIELLY: Maybe, Minister, Dave would be best equipped to talk to that. The nature of it is quite significant.

MR. LEWIS: Yes, we have had, over the years, some complaints about the consistency and, of course, we have hired new recruits so therefore the experience level varies across the inspection force - or it has.

This year we have developed a comprehensive training program in consultation and in conjunction with the College of the North Atlantic. It is a seventeen module program. Each module is about ten days, and we commenced delivery of it in the spring. All of the inspection staff will be taking that program at the College of the North Atlantic. The program is mirrored on the one that has been developed for wildlife officers, that has been implemented over the last three or four years, and we believe that training program will certainly ensure consistency and professionalize our inspection force.

MR. JOYCE: That is a good program, by the way, because I know some of the quality control people going out were not qualified the best and that caused a lot of problems within the industry. It is great that the department recognized that themselves and did something about it.

That is it for me. Wally, do you have some Labrador and Aboriginal Affairs questions?

MR. RIDEOUT: First of all, perhaps we could ask Mr. Andersen whether or not he has anything on Fisheries before we go and start the Aboriginal. Is that okay with you?

MR. JOYCE: Yes.

I may be leaving soon, so thank you, Minister and officials. Thank you very much.

MR. RIDEOUT: If Mr. Andersen is dealing with Aboriginal Affairs then we can dispense with Fisheries.

MR. JOYCE: It is up to him.

CHAIR: Yes, we have finished the Fisheries.

MR. ANDERSEN: I do have (inaudible) to sign.

MR. RIDEOUT: I will sign it for you.

MR. ANDERSEN: Okay, sure.

I am acting as critic.

MR. RIDEOUT: Sure, just pass it over and I will sign it.

CHAIR: Are there any further questions from Committee members now on the Fisheries and Aquaculture Estimates?

Mr. Andersen.

MR. ANDERSEN: Minister, I had a conversation with you a few days ago, and I will raise it again here this morning, and that is the EI benefits for the Aboriginal fishermen on the North Coast of Labrador. At that time, I outlined to you that these people have the smallest quotas and the shortest fishing season. As we speak, as I mentioned the other day, to be fair to you, their EI benefits have run out. Yet, anyone from government, any level of government, can travel to the North Coast. We can go on Ski-Doo and say this is where I am setting my char nets in two months' time. We can drive out from Nain, stop in the middle of the harbour or the ice and say, in two months' time this is where I am going to drag for my scallops. Yet, their EI benefits are cut off. In these small communities, where there is very little or no employment, for them to gain employment has been a struggle over the years.

I have approached the federal government on different issues, and certainly, I guess, from the Aboriginal standpoint, as I mentioned to you today. I know what your response was. Again, just for the record, would you support these people, the Aboriginal fishermen on the North Coast of Labrador, to agree that, yes, they do fish extraordinary circumstances when it comes down to ice conditions?

MR. RIDEOUT: Thank you.

Yes, Mr. Chairman, I acknowledge the representation made by the hon. member a few days ago on that issue.

Look, nobody takes - I certainly don't take - any exception to it. The fishing season, because of ice conditions, is going to be vastly different on the North Coast of Labrador most times than it is going to be off Twillingate or in White Bay or whatever. The opening of the fishery, the normal opening of the fishery, in that part of the Province, and the EI benefits consequent thereto to fishermen, to harvesters, should reflect that, so that the closing and the opening, the beginning and the ending of EI obviously should be different, a different time frame all together for the North Coast of Labrador than it would be - under normal circumstances - for any other part of the Province.

I have no difficulty in supporting that proposition. I understand that the member has spoken to my colleague, the Minister of Intergovernmental Affairs, on that matter and we certainly will support, in any way we can, representation that he plans to make to the Government of Canada in terms of putting in place a more equitable program to reflect those environmental conditions in Northern Labrador. No question about it.

MR. ANDERSEN: Thank you.

The second part on the fisheries, every year - or not every year but quite often - when the new shrimp allocations are allocated, the Torngat Fisheries, which operates on the North Coast of Labrador, have been trying for quite some time to get an adequate quota that could supply a shrimp plant on the North Coast of Labrador. So far we have not been able to get the federal government to agree. At the same time - again, this is coming from, probably, the Aboriginal community with regard to fisheries, is that the last allotment went to a whole bunch of different people within Labrador and people on the Island. Yet, a large portion of the shrimp today, in abundance, is off the North Coast of Labrador. On a clear evening in the winter there are times when people can go up on the hillside, particularly in Hopedale, and see the lights of the draggers about thirty-five miles offshore dragging for shrimp.

Again, minister, I have been asked by the Torngat Fisheries for any support that you could lobby the federal minister for when the next allocation of shrimp comes out.

MR. RIDEOUT: Yes, we are certainly prepared to do that, Mr. Chair. I think last year, if I remember correctly, we did indicate our provincial support for additional allocations to Torngat, in particular. I know there have been allocations given to groups that have not had them in the past at the expense of legitimate Aboriginal requests. So, we would hope that the federal minister would keep that in mind, if there is going to be any increase in allocations this year. On the basis of the Aboriginal historic right to participate and share in the resource and their adjacency to it and every other principle that one can think about, they certainly have the case to be made and we support that.

MR. ANDERSEN: Minister, a very sticky question when it comes to Aboriginal Affairs, but one which I have been asked to ask again, and that is the Metis find it very difficult that the Province has not recognized them. I know, probably more so than anyone else, that really the federal government sets the stage for the basis of land claims and recognition than the Province follows. I know that quite well. That has happened with the Innu and the Inuit.

I know there were talks by the government in 2003 that they would carry on a dialogue with the Metis. They feel today that the dialogue has not taken place and they feel left out. I guess, in a nutshell, would the Province offer full support to the Metis if and when the federal government recognize them as having status for a land claim basis? I know right now they have certain benefits, like education, health and so on. Would the Province fully support the Metis once the federal government says: yes, you have the basis for status as a people and we set the grounds for negotiations for a land claims deal?

MR. RIDEOUT: Mr. Chairman, let me make it absolutely, abundantly clear on the Metis question raised by the hon. member opposite. The Province's position has not wavered one iota from the beginning from this. The process, as the hon. member correctly outlines, is that an Aboriginal group who feels that they have the basis of a claim, submit an application to the Government of Canada. The Government of Canada assesses that claim and if they agree that the claim meets the laid down criteria, like the Inuit had to meet, like the Innu met and like Aboriginal groups across the country in province after province and territory after territory have met. If the federal government - and they are the first hurdle you have to get over, as the members knows - agrees that your group meet that criteria, then they will say that and the federal government, the group concerned and the Province will engage in a negotiation. Now that negotiation may take years - as it did, unfortunately, in the case of the Inuit - but the negotiation process can and will only begin once the federal government determines that the group making the application meet the basic criteria for an Aboriginal claim.

If the Metis meet that test, let there be no doubt about it, Mr. Chairman, that this Province will engage with the federal government and the Metis in negotiating that claim. We have never said anything other than that we would. We are bound to, there is an honour that we do it, if the Metis meet the test.

In the interim, whether they meet the test or not, we have said clearly from the beginning that we would support the members of the Labrador Metis Nation having access to non-insured benefits from the Government of Canada. As a matter of fact, I wrote Andy Scott and supported that position back in 2004, and to this day - Andy Scott is long gone and there have been other ministers since - the federal government have never responded to the written correspondence from us requesting that the Labrador Metis Nation be permitted to share in the non-insured benefits, even though no claim has been negotiated, no decision has been made on a claim or on the application or anything of that nature. Why wouldn't you allow them to? We know they are Aboriginal. The degree to which they may end up having a claim is something that we can put off for now and talk about letting them access uninsured health benefits and education benefits and so on. That has never been addressed. We are prepared to address that if the Government of Canada would agree to address it. We have also taken the same position as that in terms of the FNI here on the Island in particular, the Federation of Newfoundland Indians, who still do not have any settlement.

So, that is the position we have taken. We maintain that position. If the Metis are judged to have the basis of a claim, we will be engaged. We will be there and we will begin the negotiation just as we were there with the Inuit and just as we are there now with the Innu. I do not know if I can make it any clearer than that, Mr. Chairman.

MR. ANDERSEN: Minister, one of the biggest concerns, I guess, in the Aboriginal communities is housing. We look at the Aboriginal communities of Sheshatshiu and Natuashish. The community of Natuashish, a brand new community built by the federal government - but housing is a great concern.

When the Inuit were relocated years ago, one of the things that they were promised was better housing. Even today, in the community of Hopedale and Nain, we still face, not a housing shortage but more so, a housing crisis.

For example, while the Innu in the new community of Davis Inlet can get federal funding again this year for an additional thirty houses in Sheshatshiu, the five Inuit communities on the North Coast of Labrador get funding for nine to ten a year and they still continue to fall further and further behind.

I know in 2000 the Province built an additional thirty houses over a three- year period. Would the provincial government, through Aboriginal Affairs, consider such a program to help alleviate and help the Nunatsiavut government catch up to a standard where they could probably progress then on a yearly basis?

MR. RIDEOUT: Mr. Chairman, we are prepared to engage in that type of dialogue with the Nunatsiavut government, no question about that. There are funds available for the Inuit communities under their off-reserve trust funds, as they are referred to by the federal government, and there is a share of that which comes to the Province, and we are engaged now with Nunatsiavut in trying to determine how those funds can best be dispersed.

Yes, I am certainly cognizant of the tremendous strain on housing. Those are growing communities. The only growing communities that we have in our Province really are Aboriginal communities. So, the housing strain is a real stress issue, a real social issue, one that we want to address and we are prepared to address in any way we can in co-operation, in the case of the Inuit communities, obviously with the Nunatsiavut government. The day is gone, not that it was ever right, when we make those decisions and say this is what is going to be done and how it is going to be done. We will engage with the Nunatsiavut government and work with them. If we can make things happen faster, quicker with a better result, than that is what we are there to do and we will certainly be part of that.

MR. ANDERSEN: Minister, my last question, I guess, is not one that your department is responsible for in general but I guess in some ways, particularly from the Aboriginal standpoint. The people on the North Coast of Labrador, about 95 per cent or 96 per cent, are Aboriginal people. These people depend upon the marine service more so than anyone else in this Province. I have already talked to your colleague, the Minister of Transportation, and asked him - the concern is this: He has outlined the ferry rates all across the Province except for what is considered the long haul freight rates, and that would be from Lewisporte to the North Coast. He has announced from Makkovik to Postville or Nain to Hopedale for containers which people very seldom ship. As you are aware, 99 per cent of their stuff, at the present time, comes from the Island portion of the Province.

With the closing down of Lewisporte Wholesalers and moving to St. John's, when people work out business with the wholesalers on the Island, many times included in the price that they are given is the cost of transportation, whether that would be - well, both from Lewisporte to Makkovik or to Nain, and sometimes the transportation from the wholesaler in Corner Brook. You know, the cost from Corner Brook to Lewisporte now is all in there.

Until the people know the long haul rates, really, they are almost in limbo. Again, my question would be: Would you, as the minister who holds the portfolio for Aboriginal Affairs, do what you can to get the Minister of Transportation to, as soon as possible, come out with the long haul freights, as it affects the people on the North Coast of Labrador and the people I represent.

MR. RIDEOUT: Yes, absolutely, Mr. Chairman.

We are in discussions on that matter now, and hopefully it will be one that will be resolved fairly soon, but I will certainly undertake to raise the matter quickly again with my colleague, the Minister of Transportation, who is also the Minister of Labrador Affairs and has a very good handle, as does the hon. member, on the impacts of this for particularly the North Coast, as he outlined. Yes, we will make sure that stays in front of us.

MR. ANDERSEN: I guess the last thing is a comment.

Minister, let me say that the previous government did a lot of work on the land claims for the Labrador Inuit Association. Then, in 2003, when your government became the government of the day - I just want to say to you, thank you for the manner in which you carried on and did the necessary work, as Minister of Aboriginal Affairs, to complete the land claims deal for the Inuit. I just want to go on record as thanking you for the work that you have done to make that deal become a reality as well.

MR. RIDEOUT: Mr. Chairman, I thank the hon. member for his kind remarks and, likewise - and I have said it before in this House when we were in session as a Legislature, not a Committee as we are this morning, and I have said it publicly - this could not have happened without the dedication of a lot of people, particularly that particular gentleman, the hon. Member for Torngat, who has dedicated a lot of his adult life and adult work to making sure that the Inuit land claim became a reality.

It was right and proper that we pick up where the previous government left off, and make sure that it was concluded. I am just pleased and thankful, I suppose, that I had a little role and a small part to play in it; so, thank you very much.

CHAIR: Any further questions on the Fisheries and Aquaculture Department Estimates from anyone?

No questions.

I will ask the Clerk now to call the first subhead.

CLERK: Which department?

CHAIR: Fisheries and Aquaculture.

CLERK: Subheads 1.1.01. to 3.1.02. inclusive.

CHAIR: Shall subheads 1.1.01. to 3.1.02. inclusive carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, subheads 1.1.01 through 3.1.02 carried.

CHAIR: Shall the total carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Total carried.

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

CHAIR: Shall I report the 2007-2008 Estimates of the Department of Fisheries and Aquaculture carried without amendment?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, Estimates of the Department of Fisheries and Aquaculture carried.

CHAIR: We will do the Estimates for the Department of Aboriginal Affairs, which we just did back on page 53.

MR. RIDEOUT: Which we just did.

CHAIR: Which we have already discussed, but we have to approve them.

MR. RIDEOUT: I am only kidding.

CHAIR: I ask the Clerk now to call the subheads for the Aboriginal Affairs Department.

CLERK: Subhead 2.1.01.

CHAIR: Subhead 2.1.01.

Shall the subhead carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, subhead 2.1.01. carried.

CHAIR: Shall the total carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, Department of Aboriginal Affairs, total heads, carried.

CHAIR: Shall I report the Estimates of the Department of Aboriginal Affairs for 2007-2008 carried without amendment?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, Estimates of the Department of Aboriginal Affairs carried without amendment.

CHAIR: That concludes this Committee meeting.

I would like to thank the minister and his officials, as well as the Committee members and House of Assembly staff.

I just want to mention that our next meeting is this evening at 7:00 o'clock here in the Chamber and we will be dealing with the Department of Environment and Conservation.

Again, thanks very much.

I ask for a motion to adjourn.

MR. JOYCE: So moved.

CHAIR: Moved by Mr. Joyce.

This meeting now stands adjourned.

On motion, the Committee adjourned.