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

MR. HARDING: Order, please!

Good evening everyone. I would like to, first of all, welcome everyone here this evening. Our first chore, I guess, is to officially elect the Chairman. That is the responsibility of the Clerk.

CLERK: Is there a nomination for Chairman?

MR. O'BRIEN: I nominate Harry Harding.

MS JONES: Seconded.

On motion of Mr. O'Brien, seconded by Ms Jones, Mr. Harding is elected Chair.

CHAIR (Harding): Thank you.

The next issue, I guess, is the Vice-Chair. I call for nominations now for Vice-Chair.

Moved by Yvonne, seconded by Kevin O'Brien, that Gerry Reid be Vice-Chair of the Committee.

On motion of Ms Jones, seconded by Mr. O'Brien, Mr. Reid is elected Vice-Chair.

CHAIR: Welcome, Mr. Vice-Chair.

The members of the Committee, I guess the next thing is for them to be introduced. I would like for each member to state his name and the district that he represents. Probably, we can start with Kevin on the far end.

MR. O'BRIEN: Kevin O'Brien, MHA for the District of Gander.

MS JOHNSON: Charlene Johnson, MHA for the District of Trinity-Bay de Verde.

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

MS FOOTE: Judy Foote, MHA for the District of Grand Bank.

MS JONES: Yvonne Jones, MHA for the District of Cartwright-L'Anse au Clair.

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

CHAIR: Harry Harding, MHA for the District of Bonavista North, Chairman.

The next step is to outline a few of the procedures for this evening. The normal process has been for the minister to speak first. There is a time limit that they try to stick to, that is fifteen minutes. Then the critic, or the Vice-Chair, would have fifteen minutes on the member's side. Following that then each member could have up to ten minutes to speak and ask questions of the minister. It is my understanding that the questions are to be asked only of the minister and not of the departmental officials, that he can direct questions himself to any of his officials for answers.

How long we are going to be here tonight, I guess that is up to the members, I imagine. They say it is normally three hours, or up to three hours, but whether we go beyond that, I guess, depends on how many questions are asked and how long the answers take and things like that.

At this point in time I would like to welcome the Minister of Fisheries and Aquaculture, the hon. Trevor Taylor. I would like to ask Trevor now to introduce his officials and their titles.

MR. TAYLOR: Thank you, Mr. Chairman.

On my right is Mike Samson, Deputy Minister of Fisheries and Aquaculture. On my left is Dave Lewis, Assistant Deputy Minister of Fisheries. Mike Warren, who is the Executive Director of Policy and Planning with the Department of Fisheries and Aquaculture. Up on my far left is Alex Marland, Director of Communications with the department. Shawn Robinson is behind me, he is the Director of Aquaculture Development. Up over my right shoulder is Sean Dutton, he is the Assistant Deputy Minister of Labrador and Aboriginal Affairs. I guess we will get into the Labrador and Aboriginal Affairs side of it after we conclude Fisheries and Aquaculture, if that is okay with everybody.

CHAIR: Thank you very much.

I would also like to welcome Elizabeth Murphy who is acting as our Clerk tonight, and the other officials here, welcome.

The proceedings - as members who have been here before are quite aware of - are recorded by Hansard, so it would be appreciated if you would identify yourself before you speak. The mike will be on as well. That will make it a lot easier for the recorder.

Now, I guess, we are about ready to proceed. I would like to call on the minister first to make his opening statements.

MR. TAYLOR: Thank you, Mr. Chairman.

I do not think I will take the full fifteen minutes, but I would like to say I am pleased to present to the Resource Committee the Budget Estimates of the Department of Fisheries and Aquaculture for 2004-05.

I will just run over a little bit of a high level, since I think everybody here is fairly knowledgeable of the department, considering there are two former ministers here. I will not need to go into any great detail I don't think, but the Department of Fisheries and Aquaculture is responsible for promoting the harvesting, processing and marketing sectors of the fishing and aquaculture industries and for providing input into fisheries and aquaculture science management.

The department's scope of activities is at the local, provincial, national and international level. The six main activities of the department are: licencing of fish processing operations, buyers and aquaculture facilities; fishing industry and aquaculture development and diversification; quality assurance, inspection and enforcement; infrastructure support; policy development and planning; communications, advocacy and information services.

Some of the key strategic objectives for the department are: to balance the processing capacity with resource availability - which I am sure everybody can appreciate is a challenge; maximizing the value of fisheries and aquaculture resources on a sustainable basis - which is indeed another challenge; improving the production of premium quality seafood products; supporting strategic community-based fisheries infrastructure; safeguarding the Province's access to and allocation of fish resources; pursuing co-operation with the federal government on bilateral and multilateral fisheries management issues; promoting fish stock recovery and conservation, and industry professionalization.

The Newfoundland and Labrador industry, in 2003, had a value in fish landings of approximately $560 million with a total production value exceeding $1 billion. Approximately 301,000 tons of sea fish - sea fish, what other kind of fish are there, says you? - of fish were landed compared with 580,000 tons prior to the moratorium of 1992. According to a labour force survey, the total annual average employment in the fishing industry was 15,200 individuals, a 6 per cent decrease from 2002. This was for the 2003 season.

Peak employment decreased to 25,000 in 2003. That was a reflection of lower employment levels in the processing sector, primarily related to decreased landings in the shrimp industry and reductions in quotas in the crab sector. Annual average employment in the processing sector decreased to 6,400 person years, down from 7,900 person years in 2002. The annual average harvesting employment increased 6 per cent to 8,800 individuals. The increased availability of palagics - primarily mackerel, caplin and herring, combined with increased shrimp, yellow-tailed flounder and turbot landings - contributed to higher harvesting employment.

The groundfish sector registered further declines in 2003 with landings falling to 57,473 tons, due primarily to the closures of the 2J+3KL and the 4Rs+3Pn cod fisheries. Despite the decrease in landings, the landed value grows from $63 million to $66 million in 2003, due largely to strong prices for turbot. Shellfish was, again, the dominant force in the fishery in 2003, representing 83 per cent of total landed value, with snow crab and shrimp continuing to be the dominant species. Landings increased 10 per cent to 173,915 tons, with a 13 per cent increase in landed value to $465 million in 2003. Despite a slight drop in snow crab landings to 58,351 tons, due to minor quota reductions, the landed value increased to $277 million from about $220 million in 2002. The increase in landed value was a reflection of more favourable market prices for crab, and we anticipate that will be the case again this year.

Shrimp landings increased to 87,040 tons in 2003, due to increased allocations. The landed value of shrimp in 2003 was approximately $141 million, down slightly from 2002 due to a higher Canadian dollar, resulting in a lower price to fish harvesters.

Seal pelt markets remained strong in 2003. Again, we anticipate that in 2004, based on our experience this spring. The total harvest decreased slightly to 289,000 seals in 2003 from 310,000 in 2002. Prices declined in 2003 from $60 per pelt to $45 per pelt on average. The market value of the seal fishery in 2003 exceeded $40 million.

Fisheries development remained a priority for the department in 2003. A range of projects were undertaken by the department in association with industry partners. This work was coordinated by the regional offices throughout the Province and focused on resource surveys, fishing gear development, vessel design and the quality.

In Aquaculture; the aquaculture sector recorded another strong year in 2003 with total production exceeding 3,900 tons, down from 4,663 tons in 2002. The export value of approximately $16 million was down from $20.5 million in 2002. The lower volume and value were a reflection of lower market prices for mussels, increased competition from Chili and a strong Canadian dollar. The focus continued on Atlantic salmon, steelhead trout, blue mussels and Atlantic cod.

The federal-provincial aquaculture sector development program funded several companies in extension services, aquaculture health services, investment prospecting, technology transfer and human resource development. This program concluded in March, 2004.

Blue mussel production decreased from 1,700 tons in 2002 to approximately 1,300 tons in 2003. Overall production value of the salmonoid sector declined from $15 million in 2002 to $13 million in 2003, primarily due to the smaller steelhead size preferred by the market. The number of fish harvested remained on par with 2002 and the value per ton increased by 4 per cent. The salmonoid sector achieved a production value of 2,603 tons in 2003.

Cod grow out production was hampered in 2003 by the sector's dependence on federal-set quotas for starting stock, mainly the cod grow out program. Activity was limited to the South Coast of the Province in NAFO area 3PS. Egg to plate cod development moved forward with continued work on the commercial hatchery in Bay Roberts in 2004. The Ocean Sciences Centre produced 150,000 juvenile cod which were stocked in the sea cages at a site in Fortune Bay. The first egg to plate cultured cod were harvested from Hermitage Bay in 2003. Market tests were completed and the initial response has been very positive. The Department of Fisheries and Aquaculture continues to provide assistance in the industry in the form of infrastructure grants and services. That is throughout the whole industry.

On special assistance grants; the department assists community-based organizations with the repair and maintenance of fisheries infrastructure through its special assistance grants program. These grants are essential for many communities to complete necessary infrastructure work that would not otherwise be done without the department's help. In recognizing the value of this infrastructure, the department's 2004-05 budget for the program will be $200,000. The department also provides support to the industry through its operation of fifty-two baited trawl holding facilities. The current budget provides for an ongoing annual expenditure of $100,000 to upgrade and replace chilling equipment in a number of these facilities.

I will skip along, I am not going to go through all of this. I will just hit on a couple of highlights here, things that have been very much in the news recently.

The Fish Processing Policy Review, otherwise known as the Dunne report, was commissioned in 2003 to conduct a policy review of the Province's management of the fish processing sector. We released the final report of this commission on February 4, 2004. The recommendations of the Dunne report were designed to achieve four policy objectives: to provide the regulatory conditions for a stable and competitive processing sector to exist with minimal public support - these are objectives that were recommended by the Dunne report - to ensure employment levels that provide adequate incomes; to promote cooperation in the industry that enhances product quality and optimizes total returns from processing available fish resources; and to seek a degree of balance between regional resource availability and regional processing capacity so that viable fish processing activities contribute positively to rural economic conditions. I suppose that would fall very much in line with the stated objective of this government and previous governments on adjacency.

The Dunne report recommends the development of a new policy framework in 2004 to be more open and transparent in an attempt to eliminate latent capacity in the industry and make processing plants more accountable to government. The Commissioner recommended this framework include: the establishment of an arm's-length fish processing licensing board; the creation of a formal industry government policy advisory committee; the elimination of inactive and cancelled processing licenses, the adoption of a species licensing system linked to resource thresholds; the establishment of criteria for new licenses and license transfers; a requirement for processors to submit annual processing plans; and an annual requirement to report corporate shareholders in fish processing companies.

The development of a pilot project for sharing a raw material by the processing sector was also recommended by the Dunne report; the continuation and strengthening of the quality assurance program was another recommendation; a review and revision of the department's legislative and regulatory framework as set out in the Fish Inspection Act and its regulations; increasing the requirement for crab processing development enforcement program; monitor crab exports and implement a ticketing system for enforcement purposes was captured in that piece, by way of example. That is something that we have committed to and are pursuing. I think that the legislation related to that will be brought forward, hopefully. Our plan, anyway, is to bring that forward in the fall sitting of the House.

A new policy framework, including the licensing board, will be implemented in 2004. In response to the quality recommendations, the department will be expanding its inspection enforcement capabilities through the hiring of ten additional seasonal inspectors in 2004. In addition, a new division called Enforcement and Compliance will be created to ensure consistent and effective delivery of the quality assurance program. All costs associated with this initiative will be recovered through proposed increases in licence fees and production surcharges.

On the initiatives and challenges, I guess, for 2004-05, this fiscal year, we will continue our efforts to achieve more valuable and sustainable fishing and aquaculture industries. Some of the initiatives and challenges we will address are - in fisheries development we have identified an allocation of $450,000 to build on the fishing industry development and diversification. The fishing industry supports the continuation of the department's lead role in fisheries development and we are working with industry to identify the best development opportunities.

In Aquaculture: The provision of aquaculture extension services for the industry will be a priority for 2004. Key areas are fish health, environmental monitoring, site selection and programs to increase innovation and human resource development. The department will invest $550,000 in these activities in 2004-05. In 2003, the aquaculture branch adopted a strategic approach to attracting capital investment in the Province. An investment prospecting package and a geographic information system were developed to highlight the considerable potential in this Province. These tools were used to raise the profile of our industry in Norway and in other parts of Canada. This effort has attracted the attention of salmon companies in these countries and some of these have concrete plans to establish here. One of the major challenges in 2004 will be assisting these companies with site selection and licensing and access to financing and investment.

Cod egg to plate aquaculture will continue to develop in 2004. A small number of juveniles will be produced at the Ocean Sciences Center and stocked in sea cages to continue improving the growing techniques. The key challenge will be to work with industry partners to identify financing avenues and options for full-scale commercial development.

The gross expenditure allocation for the Department of Fisheries and Aquaculture for 2004-2005 is $10.4 million. This compares with the gross expenditure of $9.6 million in 2003-2004. Our net expenditures for the current fiscal year will approximate $8.2 million.

In conclusion, Mr. Chairman, as everybody can appreciate, our industry faces some major structural challenges. I think that was acknowledged by the previous administration in their commissioning of Mr. Eric Dunne to have a look at sectors of our industry that are involved with the wild harvest. We are attempting to move on those recommendations. I think everybody would recognize that we need to make some fundamental changes in the way our industry is run in this Province, and that is going to require a great deal of co-operation between government and the various participants in the industry, both in the processing sector and the harvesting sector. That has not been very easy to facilitate considering that there is a great deal of bad blood, for lack of better way of putting it, between the various parties. However, we are remaining focused on moving that agenda forward, and I think that we have made some, maybe, baby steps in that direction.

Over the past six to seven months we believe that we have laid the ground work for a restructured industry. We have facilitated, in the past couple of weeks, an arrangement between harvesters and processors to settle price on crab and we have made, I guess, what would be considered a fairly radical departure from what we have normally done in the Province in the form of price setting with our decision to go down the road of an auction, a hail-at-sea electronic auction for shrimp. We believe that will allow people to make the decisions that they need related to their fishing operations, both in the harvesting and processing sector, and will reward people for increasing quality, for fishing at appropriate times, and for landing at close proximity to the processing facilities, which have always been a challenge for the various parts of the industry to address in the previous price setting regime.

On that note, I think I will wrap it up there. I am sure there will be a number of questions related to some of our policies and the Estimates. I do not try to fool anybody that I can answer all of the questions, not by a long shot, but I think between us all here we will manage.

Thank you.

CHAIR: Thank you very much, sir.

I guess the normal procedure is to take a head in the Budget, deal with that one, and then move on to the next one. That has been the normal practice, I think. If it is acceptable to everyone to follow that procedure, then we will go that way.

I will ask the Vice-Chair now - he probably observed that the minister had more than fifteen minutes, so you are certainly entitled to your twenty minutes or so as well.

It is the understanding that after the members all ask questions, that you can keep going around until you are finished asking questions. There will be plenty of time, but we try to keep it structured somewhat. We will have the Opposition first, followed by a government member, and alternate like that.

Mr. Reid.

MR. REID: Thank you, Mr. Chairman.

A quick question to start with: What did you say the gross expenditure was this year compared to last year?

MR. TAYLOR: Ten point four million, I believe it is, $10.4 million versus $9.6 million last year.

MR. REID: Mr. Chairman, I am going to speak about some general issues first.

CLERK: I have just called subhead 1.1.01.

CHAIR: The Clerk has just reminded me that we have called subhead 1.1.01.

MR. REID: Okay, we will do that, subhead 1.1.01. Anything to get her started.

CHAIR: Go ahead, sir.

That will not come out of time either.

MR. REID: Thank you.

We have lots of time, I think, anyway, Mr. Chairman, don't we?

To get started on the general issues about the Dunne report and some of the problems that the minister talked about that they are experiencing in 2004, I want to talk about plant quotas. I do not know what Eric Dunne called them, sharing arrangements or something or another, but the plant quotas or production quotas.

The minister is on record as saying that there will be no cod quotas for this year. How does the minister feel about plant quotas himself?

MR. TAYLOR: How do I feel about them? I think that we all have to make a decision on what type of an arrangement we want for the fishery. What I feel, I suppose, is really not important, but I will say that I have no fundamental objection to plant production quotas. I am prepared to engage in a discussion with all sectors of the industry on the establishment of it, if that is the route that they would like to go. However, my stated preference, from the beginning - you will probably remember when you were the minister that I did, on a number of occasions, advocate for an auction system. I am open to either of those scenarios. I think that if we are going to have collective bargaining and it is going to work, whereby people can negotiate the prices for fish, then we cannot have a negotiation for fish and, in effect, an auction on the head of the wharf afterwards. We have to make up our mind which way we want to go, is what I would say.

I do not believe that we should entertain plant production quotas at all if we are not going to have some very serious discussions on the conditions under which those would be implemented and the conditions under which that arrangement would carry on, such as we have to have, I guess - issues related to corporate concentration would have to be addressed, issues related to competitive impacts would have to be addressed, and issues related to full disclosure for everybody in the industry on cost of production, market value, and so on, would have to be addressed so that there could be a fair and equitable negotiation for prices. Those are just some that I throw out there, but there are a significant number of issues that would be have to be addressed before we would be prepared to go down that road. However, as I said, I am not fundamentally opposed to it, but there are a lot of questions that would have to be answered before we would go there.

MR. REID: So, we do not have production quotas for crab this year, right?

MR. TAYLOR: No, we do not.

MR. REID: The reason I am raising that, and I have not raised it in Question Period even though I have meant to, is because it is sort of difficult in exchange of debate in Question Period, especially when the Speaker is telling you to sit down and stop.

There is a serious issue that is occurring in my district, as we speak, and I am sure that you are probably aware of it in other districts in the Province. In fact, I heard a bit about it on the broadcast this afternoon. I caught the tail end of an interview with Derek Rowe concerning what I would consider to be, somewhat, production quotas or an illegal activity that is going on out in the fishery today, as we speak.

Let me give you an example. Last Wednesday and Thursday, fourteen fishermen from the Twillingate area called me, and last year they changed plants and offered their crab for sale to another processor who was not from my district. He promised them premiums at the end of the year, bonuses, but they did not get them. These same fishermen, this year, heard that this individual might be in some financial trouble and therefore decided they wanted to try and sell their crab elsewhere. Well, they offered their crab to other plants, not only in the area but around the Province, and they were told: I am sorry, we cannot buy your crab. To me, that is not an open and free market.

I am also of the understanding that each of these plants - I do not know if it is all of the plants in the Province but a number of them - have contributed a certain amount of money to a pot and that if any one of those processors, who are involved in this, breaks ranks and buys crab from someone that he did not buy from last year, then the money in the pot would be used to put him out of business. Now, this is very similar to what you and your leader were talking about two years when you called in the competition bureau. I know I was the minister at the time and I certainly was not aware, at that time, that it was as blatant as it is today in the Province.

I had another call this afternoon, the same thing, just after I left the House of Assembly, from another individual in another area of my district. He said that he did not want to sell to the processor that he sold to last year. He contacted four or five today and he was told: No, cannot buy your crab. Not, do not want to or anything else: Cannot buy your crab.

Derek Rowe was asked a question on the Fisheries Broadcast this afternoon about this and he said: It is certainly not our corporate policy to interfere in stuff like this. But, when asked the question directly - I do not know if any of you fellows heard him - when asked the question directly, so your plants are open to buy crab from any fisherman who wants to come forward, his answer, I do believe, was, you should not have asked me that question, and he did not answer it. I know that FPI were contacted by a number of these fishermen in my district, and they were told: No, we cannot buy your crab. He did, in fact, make a call to someone above him who made that decision for him.

To me, and maybe you can give us a comment and maybe you can suggest what needs to be done, but to me if that is not a cartel and that is not some kind of subversive activity that is going on out there, I do not know what it is. It certainly was not as blatant - and these individuals worked with me in the department, when I was there two years ago - it was not that blatant at that time. To me, today, they have production quotas, because if you cannot sell your fish to anybody else and they are not buying it, then there is something happening out there. They have production quotas today by another name. Certainly, when you have to go to an individual who promised you one thing last year and did not pay up, and now you are forced to sell to him this year even though you feel that you may not get your money, I think there is something drastically wrong with the system.

If you have any comments or any suggestions you can offer to the fishermen in my district and others around the Province, on how to deal with this - because these are small boat fishermen, they only have 12,000 pounds, I think. Like I said to them, are you going to get paid up front? He said: Well, we get paid at the end of the week. He said: I might have all my crab got in a week. I might lose my whole season if this fellow does not pay me, yet I am forced to sell to him because no one else will buy my crab.

If that is the case, then I would say to you, Mr. Minister, that you either issue licences for whoever wants to buy the crab or we open the doors. God forbid, I am not suggesting that we allow crab to go out of this Province, but I still do not believe that individuals should suffer and take the chance on losing their income for this year because they cannot sell their product to someone else.

MR. TAYLOR: Well, I did not hear the broadcast. I can say that I have received calls similar to that, suggestions that maybe somebody might be having financial difficulties or whatever. I do not know. I cannot speculate on financial-

MR. REID: That is the reason I did not mention his name, because it is hearsay right now.

MR. TAYLOR: That is fair enough and I will not get into it either. I can only say, from our prospective and from my prospective, we were clear right from the beginning, that we were not - the people here, as you said, who you have worked with, heard me, from the first time I met with the processing sector back before Christmas, that we were not going to get plant production quotas, that we were not going down the road of plant production quotas in crab in 2004. Whatever about engaging in a discussion on it for implementation at some future date, whether or not we would do that, is another issue. We would not be implementing or endorsing plant production quotas in crab in 2004. We have not done that. That was the stumbling block back about three weeks ago when we initially sent a mediator in to talk with the union and the processors. It went nowhere. I came out and again, I believe, I wrote a letter to the parties at that time and said: I do not know why you are hung up on this because it is not going to happen. I said publically again that it was not going to happen, consistent with what I said right on through. If the industry has some arrangement it is unbeknownst to us. That is all I can say on that. It is not endorsed by us nor condoned by us.

As for the issues related to The Competition Bureau, you are right, it was actually just about three years ago, now, not two years, since we brought the issue related to collusion or potential collusion in the industry to The Competition Bureau. As far as we know that investigation is still ongoing. We met with some people in the processing sector as late as last week and I again said to them: Boys, you know, I do not want to see the fishery shut down this year. I do not want to see it shut down by you and I do not want to see it shut down by harvesters, so don't anybody screw up along the way here. I guess if anybody is doing this, then they are potentially playing with fire. Beyond that I really cannot speculate on what they might be doing or might not be doing.

MR. REID: The problem I have is that they are doing it, or at least that is what a group of individuals are telling me, and obviously there are some telling you, as you admitted. I do not think that we can turn a blind eye to it. I think you need to say something, at least, to these individuals, that if they continue then do not permit a free and open market. There have to be some ramifications for them, because I cannot see for one minute how this could be actually legal. As for The Competition Bureau, I have never heard anything from the individuals and I do not know if we ever will.

Again, I think it is far more serious today than it was three years ago, when you asked to bring them in here, because there are lots of examples of this happening. At least at that time there was a far amount of competition still going on in the industry. It was not such that a fisherman was tied to a plant, like he is today. I am not aware of any fishermen who have tried to move to another plant and could not do it. In fact, I had another individual from my district who sold his crab and his shrimp to the Labrador shrimp company last year. He is from my district and he fishes off your hometown up there somewhere, up near St. Anthony, and he is going to land his crab and his shrimp to the Labrador shrimp company in Labrador. He was leaving from my district and he was going to put into Twillingate, at the marine centre, and ice up for when he headed north, and then after he landed his crab in Labrador he would be iced up at the plant, obviously. He was told, according to him, that the individual who owns the marine service centre could not supply him with ice because of the threat by other processors that if this individual was going to sell back into Labrador this summer, then do not ice him up because if you do I will not buy any more ice of you this year and we will not have our boats that we control hauled up on the slipway. Those are serious allegations, Mr. Minister, and I think that they warrant, very quickly, some type of an investigation into it, at least a warning shot fired across their bows, supposing you go on Open Line and do it, saying, if it continues then obviously something is going to have to be done about it.

If this so-called cartel exists in the crab fishery, today, I cannot see, for the life of me, how your auction system for shrimp will work. If these fellows are colluding right now on crab and not raiding each other's fishery, then how do you expect fair and open competition under an auction system, when these same fellows are sitting around a table like we are saying: Now, I am not taking your fish and you are not taking mine. What benefit is there to these individuals when you open the shrimp fishery later in the summer to offer higher prices. If logic prevails, what they will do is they will sit around the table like this and they will drive their price down to fishermen, rather than up. That is what I sense is happening out there right now. If they are doing what they are doing in crab, I cannot see how an auction system is going to work in shrimp. I would like to see an auction system work in shrimp and in all species, as it does in some other countries, because in a fair and open marketplace, fishermen will get the best price if the market so demands the product. When you have a closed shop of only a select few people that can own plant licences, then I cannot see the auction system working, especially if they are colluding with each other, which seems to be the case today.

MR. TAYLOR: All I can say is that we have committed to both sides because there was a concern, I guess, on two sides: one, from the union about the possibility of collusion: and two, from the processors about the possibility of uncontrolled predatory pricing - I think that is the way Eric Dunne referred to it - which we saw last year. We did commit to monitoring the crab fishery this year to ascertain what is going on with it. You know, is anybody trying to shake anybody down. We are in the process of having that monitoring system put in place, pretty much as we speak. We committed to it last week as a part of the deal that got the crab fishery going, got a price settled. I can only say to you right now that we will follow up on this and try to ascertain as to what is going on.

As for the auction, I guess, this is sort of indicative of the problems that we have with trying to, first of all, set a price in an industry that is really not very well controlled or regulated. You know, that is not a reflection on anybody necessarily. As I said in the beginning, and you have heard me say lots of times, we have to make a decision on whether we are going to have an open shop, where the government, in essence, gets out of licencing altogether and anybody who meets Canadian Food Inspection Agency guidelines can establish a fish processing facility, and we sell things through an auction or some similar arrangement; or we have a closed shop where the processing capacity is more closely aligned with resource availability and we negotiate prices. The unfortunate thing about it is that here in the Province now we have sort of a combination of all and it is not working. It is not easy to get out of it, and it presents a whole set of challenges for everybody involved, government, harvesters and processors. That is what we are trying to work our way through right now. That is all I can say.

As for the auction, I firmly believe that it can work, as I believe you do, but the concerns that you have identified there are ones that we share and we will be following up on it and trying to make sure it does not present a problem, but we cannot guarantee against it, I suppose.

MR. REID: I do not envy you your position, believe me, I was in it, and the decisions are not easy ones. In fact, they are impossible at times. The problem I have is that I have shrimp plants and crab plants in my district, and my district is built entirely on the fishery, like my colleagues here and a lot of us here in the House of Assembly, and I do not like to see small boat fisherman, especially, getting screwed. This year, at least the ones who called me in the past week, are getting screwed and they could get screwed royally, to put it bluntly, and I think something needs to be done about it.

As for the auction system, if there is actual proof out there that there is a cartel - I do not like using the word, because I have never had proof, and I am on record as saying that, I never had the proof to suggest that there is one. I find more out there today than I did when I sat in your position. Maybe they were reluctant to call me, like they are calling me now. That is a dangerous situation. I hope that I do not have to sit here, or stand across the floor from you in October or November when the House opens again, and say that fourteen fisherman in my district who I told you about in May month did not get paid for their crab this year, yet they were forced to sell to that processor against their will or not sell it at all.

I think something has to be done. As you indicated, you are hearing those reports from elsewhere. I would just like for someone to go tomorrow and take Mr. Rowe up on what he almost said in his broadcast this afternoon about: Oh no, we do not do those things, it is not a corporate decision. Well, I would like to see FPI buy the crab from the fourteen individuals in my district tomorrow, if it is not a corporate decision. Maybe that is what I should do, phone him myself, maybe, tomorrow and tell him I have fourteen crab fishermen who want to sell their product to him, and see what he says to that. I think something needs to be done. Again, if there is a cartel in the crab fishery, I pity those poor shrimp fishermen, especially in the Gulf this year, those who have nothing else only shrimp.

I have a question for you: Under this auction system, do you have to sell to the highest bidder? Do you have to!

MR. TAYLOR: I did not think that was what you were going to ask me, that is the reason I nodded. I thought you were just going to ask: Do you have to sell through an auction? You do. As for the details, the exact details around whether a boat will have to - initially, that was what we had envisaged. Let's put it that way. It would have been somewhat blind, I guess, for lack of a better way of putting it, so that the harvester would not know who the processor was that he or she was selling to. There was a reason for that. We thought that would give us the best opportunity to guard against that wonderful word, collusion. Right? It a person had to be notified what the highest bid was, and had to sell to that company, then there was no opportunity for side deals to be made outside of the auction, so to speak. Because of the time constraints that we are operating under now, I cannot say with certainly if that is how this is going to proceed this year.

MR. REID: We all know that plants own a certain number of boats, so what you are saying is these plant owners out there today, who normally ice up their boats and give them their shrimp bags, obviously they will not be doing that.

MR. TAYLOR: With the discussions that we had this past winter on it, that can be accommodated easily within the auction, with a requirement that if you buy the load of shrimp you are responsible for icing and provisioning, so to speak, the boat again before it sails. If Notre Dame, for example, bought a load of shrimp from whoever, once the shrimp was unloaded they would be required to re-ice that boat at the appropriate level determined by the skipper and replace the number of bags that were taken off. Conceivably, a fisherman could be responsible for his initial load of ice and initial complement of bags but thereafter the buyer would be responsible.

MR. REID: I cannot, though, imagine, for the life of me, some of the larger companies allowing the boats that they so-call own to be selling their shrimp to another company simply because that company outbid them. I just cannot see that. I have dealt with these individuals long enough to know it is not in their logic, it is not in them to do it, to work that way.

MR. TAYLOR: They will have to if it is a conditional licence that they buy and sell through the auction.

MR. REID: Yes, I know they have to do it, but I still cannot see them. I think what you will see is one price if that is the case. There will be no price offered above a set price that they are going to sit behind closed doors and negotiate amongst themselves. I cannot see processor A, who owns fifteen shrimp boats, allowing that shrimp to go to processor B who owns no shrimp boats, while he is footing the bill, probably at the bank or whatnot, for that vessel, and the skipper is only hired on by him to run that vessel simply because he holds a licence.

The other question I want to ask you about concerns my own district again. The Fogo Island Co-op is owned by the fishermen and the plant workers of Fogo Island. They own that. Most of the fishermen on Fogo Island have shares in the Co-op, and what they are saying is, under an auction system there is a good possibility that they might not be able to sell to their own plant even if they were willing to cut a deal with their own plant to sell them for, say, sixty cents a pound when someone might offer them sixty-two cents. They might rather land their shrimp in their own plant because they own it themselves and their wives and sisters and brothers work there. I do not know how that is going to work for that particular company.

That is why I asked, do they have to sell to the highest bidder, because I am convinced that a number of fishermen on Fogo Island will sell their shrimp to the Fogo Island Co-op regardless of what they are offered over and above, if someone outbids the Co-op on a load of fish, because they have been dealing with them for the thirty or thirty-five years that they have been open. We have a real problem if they go to the Co-op and the Co-op ices them up and gives them their bags and on their way in they radio in to a blind desk, as you say, and someone is told, land in Old Perlican.

MR. TAYLOR: First of all, Gerry, there are a couple of things. Like I said, the final decisions on those details have yet to be determined. I met with representatives from the Fogo Island Co-op earlier this winter when we discussed this initially, so we are aware of their concerns. I guess we will try to accommodate as many people's concerns as we can but we have to be careful that we do not water down the wine so much that it is no good.

I can tell you this, what we have done, once I announced that we were pursuing an auction last week, we wrote both sides and asked their input, their suggestions, on what they would like to see in an auction. We indicated that we wanted to have that response by today. That is not to say that we will be able to use everything that both sides say, because you would expect that, just like anything else, they probably cannot agree on much of it anyway. We will be looking at that.

The other thing that I say, right from the beginning and still now, is that in an auction the boat owner, the skipper, will have to indicate a port preference and processors will bid based on port preference. If a boat identifies Seldom and Twillingate as port preferences then the bids will come back according to that and there will be no scenario under which a fisherman would be ordered to Old Perlican, as an example. It will be in the fishermen's court to determine where he or she wants to land.

MR. REID: Okay, so you cannot tell them that: You have to land there?

MR. TAYLOR: Right. You know, if a person says, I am prepared to land in Seldom or Old Perlican, and is a Fogo fisherman, and the bid comes in highest at Old Perlican, then obviously he would go to Old Perlican.

MR. REID: Then someone in Old Perlican could still say: Okay, we will still buy your shrimp if you want to land it in Seldom. Right? So, you can still buy it -

MR. TAYLOR: Oh, yes, but the competitive advantage obviously will be with the Fogo Island Co-op because it is coming over their wharf as opposed to going on a truck to be hauled 400 kilometers or whatever it is.

MR. REID: I mean, they have hauled shrimp to Port au Choix from there before, and vice versa.

MR. TAYLOR: Oh, absolutely!

MR. REID: I don't see that stopping them.

A final question, before I pass it along. I was not always keen on legislation when I was in your job, but is this all legislatively legal? Seriously, have you looked at it?

MR. TAYLOR: Yes, we have looked at it.

MR. REID: Because to me, we live in a free society, and what you are telling me is that if someone offers me a half cent a pound for my shrimp elsewhere I am legally obligated to sell it to that individual even though I might not want to. If I have a car and I want to sell it to my brother for $1,000 and you offer me $1,001, you are probably not going to get my car. My brother is going to get it because I want to do it for him for a different reason. What you are saying to me now is that, that would not be possible. I am not too sure that is even legal, because in a free society like we are supposed to live in, how can you dictate that you must sell to this individual? Have you looked at that in legislation?

MR. TAYLOR: Yes, we have, and -

MR. REID: I hope you did it better than your Minister of Justice did the other day when we were talking about the strike thing, when he said that he looked at it himself and that was sufficient.

MR. TAYLOR: I do not consider it sufficient for me to look at it. There are issues related to that, we understand that. We can regulate, in the form of conditional licence, the buying of it. I suppose you could argue that we cannot regulate the harvester, but we can regulate the buyer. There will be a requirement, not on that part of it, but there will be a requirement for us to amend the legislation, the Fishing Industry Collective Bargaining Act, to bring the auction clause back into existence. You might recall in 2002, the clause that applied to an auction was removed from the legislation at that time. We will have to reintroduce that, but that would have to be reintroduced no matter what form an auction took, whether it was voluntary or compulsory or whatever.

MR. REID: That has to come in this spring, then. That has to come in before the shrimp fishery starts.

MR. TAYLOR: Well, it has got to come in, depending on how the various sides co-operate. I guess it is like everything, we can have it done by the time we need it.

MR. REID: Legally, if the fishermen from Fogo Island wanted to start shrimp fishing today-

MR. TAYLOR: They can go on now.

MR. REID: - and land their shrimp to whomever they please -

MR. TAYLOR: Absolutely.

MR. REID: Until this legislation comes in, they can sell to whomever they like.

MR. TAYLOR: Yes.

MR. REID: They are not legally bound now by the auction system?

MR. TAYLOR: No. I mean, right now we have asked that everybody engage in the shrimp fishery under the old rules, so to speak.. If a fisherman out in Joe Batt's Arm wants to fish today for shrimp for Fogo Island Co-Op , he or she is free to do it under the prices that were arbitrated a couple of weeks or a month ago. We have asked for input from the parties on how we would implement an auction, again. We asked for that this winter and we got some, but I do not think anybody was in the frame of mind to give us a whole lot of positive suggestions, at that time. I think the frame of mind might have changed a bit.

I guess, Gerry, the issue, from our perspective, is, do we allow this thing to tie up for another month, which I think is what we were staring down, or do we attempt to move it by announcing an auction. By announcing an auction, I think we have seen movement, anyway, that boats are on the water now. I am not going to suggest to you, I am not naive enough to try to suggest to you, that this is going to work without some significant hiccups along the way. You know, as well as I do, that since 1998 there has not been, to my knowledge, a season with some hiccups in the shrimp fishery.

MR. REID: Definitely, but I cannot see how an auction is going to help the system right now when we have processors out there saying they cannot pay any more for shrimp and fishermen saying that they cannot fish for what they are offering them. I do not know how an auction system is going to solve that problem.

MR. TAYLOR: It will allow individuals who think that they can make money either harvesting or processing to make that decision on their own. There are fellows, you know as well as I do, there are people with boats and people with plants, who can make money when some people with boats and some people with plants will lose a pile of money. That is the same thing in all business. There will be people who will be able to adjust to this, very quickly, and their fishing patterns and their buying practices will make them better off under this then they probably ever were. That is not hard considering shrimp has not been a real prosperous business anyway. There are people who will adjust their fishing patterns and will do well under this, and there are those who, if they do not adjust their fishing patterns, will not last, unfortunately.

CHAIR: Thank you, Mr. Taylor.

We are dealing with subhead 1.1.01. Nevertheless, the items raised by the member are certainly important and need to be dealt with.

I would like to move now to one of the government members. I would like to ask the members if we could confine our questions to the subhead that we are dealing with so that we can try and get through this. If you would like to go back to this again, as we go through the resource policy part, then certainly you are free to do so.

The hon. the Member for Windsor-Springdale.

MR. HUNTER: Mr. Chairman, I would just like to make a few comments. I guess it is more with respect to letting the minister's officials know where I stand and what my district is. I would just like to say that the fishery is a very important part of my district. I do have five boat building facilities in my district. Seventy per cent of the mussel production in the Province is done in my district. We do have a major crab processing plant in Triton. It is an area in my district that probably has been doing well over the last number of years, but I would just like for the officials to know that we still need policies put in place and legislation that will protect, not only the future in my district, but all of the districts of the members in this House too. The minister knows because he is quite familiar with my district. He basically spent a lot of time there in his youth. For the officials, I would just like to say that it is the aquaculture part that makes my district an important part of the fishery, not only on the Green Bay side but also in Grand Falls-Windsor. Believe it or not, we have fishermen in Grand Falls-Windsor. We do have an aquaculture department office in Grand Falls-Windsor.

It is very important to me that we do a great job in developing policies involved to address the problems in the fishery. I understand that it is not an easy thing to do with the state of the fishery that we do have. Collusion does bother me and plant quotas do bother me. I am not an expert in the fishery by any means, but from comments that I get from people in my district, it is certainly a very important issue. The Member for Twillingate & Fogo referred to collusion, and it is an important issue. I think your department, Minister, is going to have to make sure that everybody gets a fair chance in this industry, not only the harvesters but the processors too.

I might have a question or two when we get into the Estimates, but I would like to pass it on, Mr. Chairman.

CHAIR: Thank you, Sir.

Ms Jones.

MS JONES: Thank you very much, Mr. Chairman.

I have some questions. Just to pick up where Gerry left off, with regard to the auction system in shrimp, last year there was a situation on the Northern Peninsula, in the minister's district and in the St. Barbe district, where shrimp fishermen felt that the price was definitely not adequate for them to continue into a commercial fishery in the species. I am just wondering if he thinks the auction is going to be helpful in fixing that problem at all, because, as I understand it from my colleague's questions and your own answers, there is some concern about competition being very limited out there. I am just wondering what his view of it will be in terms of how that problem gets sorted out on the Northern Peninsula.

MR. TAYLOR: I cannot, and I guess nobody could, guarantee, no matter what approach we took, that given the current market situation and the situation with the Canadian dollar we could see a price higher than we saw last year. Nobody can guarantee that.

We announced in February that we were going to pursue an auction. We were convinced to pull that off in favour of a different approach, which was in essence plant production quotas and a negotiated price. We all know what that resulted in, a price lower than last year. No, we cannot guarantee that that is going to resolve the situation with the Gulf shrimp fleet nor any other shrimp fleet. The only thing that we can hope to do in this is facilitate a process whereby people can make their individual decisions as to whether they fish or do not fish, and the processor does not process, within the confines of a very serious problem in shrimp markets worldwide.

The problems with shrimp markets have gotten increasingly worse over the past number of years. Issues like the tariff that has been imposed on white shrimp being produced in China has not helped the situation. There is a vast amount of industrial shrimp coming off offshore freezer trawlers, factory freezer trawlers. It has not helped the situation. The Canadian dollar valuation has not helped the situation. The market for shrimp this year is worse than the market for shrimp was last year, and the only way we can hope to struggle along with our industry is to try and be as efficient as we can and as quality conscious as we can. We believe, or I believe, anyway, that an auction represents the best opportunity for rewarding quality and rewarding efficiency.

As I said, people will react differently to an auction. Some fishermen will do better than they did in previous years as a result of it, assuming that it is truly open, independent and competitive, and some people will do worse. There are fishermen, still, who do not focus on quality and there are people who are not as efficient as they might otherwise be and those people will have a difficult time if they do not adjust, but they can adjust.

As I said, no matter what we do this year, barring a subsidy - and we cannot have that - but there is nothing that we can do, barring a subsidy, that will quarantee an increase in the price to fishermen.

MS JONES: Okay. You answered my second question too, on the subsidy.

When you looked at the auction system - we have heard a lot of debate, I guess, publicly by harvesters but we have not heard a whole lot by processors. Has there been a buy in by the processing companies to the auction system in shrimp?

MR. TAYLOR: I would not go as far as to suggest there is a buy in. I would not go as far as to suggest there is a buy in by anybody other than me. Well, that is not entirely true. There are a number of processors who are, I will not say eager, but willing participants, simply because they do have markets that they want to supply and need to supply. If they do not get the supply that they need, they risk being delisted by the people who they sell to, their major markets. I think, in spite of the fact that we only have thirteen plants and eight companies, I guess, that the potential is there to have a fair degree of competition for the product. I do believe that the potential is there to have a better price paid to fishermen than we have seen in the negotiations.

As you can appreciate, as the Member for Twillingate Fogo said, there are processors who have control one way or another over a significant number of boats, and obviously they would not be as willing a participant in an auction, a compulsory auction, as somebody who does not have control over a substantial number of boats.

MS JONES: There is only one shrimp processing plant in Labrador. Have they signed on as part of the auction system, or will they we exempt from that process?

MR. TAYLOR: I cannot say that anybody has signed on. I can tell you that the discussions from earlier this winter - honest, I have not, since we said that we were going to go down the road of an auction this time, to my knowledge, unless I did it while I was asleep, talked to anybody in the processing sector or the harvesting sector. We wrote both sides and asked for their input, but we await that, I guess. Discussions with the shrimp company, back in February, and March, their reaction initially was consistent with everybody else's. They did not know what to think of it, but as time went on they were more open to the concept than probably most others in the industry. They were certainly a lot more open to it than they were to going down the road to plant reduction quotas.

MS JONES: As of right now, then, the Labrador plant will be a part of the auction system?

MR. TAYLOR: Yes.

MS JONES: Okay.

You are expecting to have that system finalized and in place for this fishing season. Is that my understanding?

MR. TAYLOR: By the first of June, we anticipate. I will not say the first day of June, but by late May early June. Let's put it that way. If I say June 1, you will beat me up on June 1 if we do not have it in place.

MS JONES: I am just wondering, because you said you had to make changes to the legislation in order to do it.

MR. TAYLOR: Well, changes to the legislation would be required if there was no co-operation. It would absolutely be required if there was no co-operation. If there is co-operation, it would not necessarily be required.

MS JONES: From the industry?

MR. TAYLOR: Yes.

MR. REID: You would need co-operation from all the industry, wouldn't you?

MR. TAYLOR: I guess. I cannot answer that. It is better for me not to answer that, but I would say that most things in the industry operate on consensus or majority. I am not suggesting that we could get a majority on this, I do not think we can get a majority on anything. I am not sure if we can get a majority of people to agree that today is Tuesday.

MS JONES: In your opening comments you talked about a monitoring system for crab. Do you want to tell me a little bit about that and what you are proposing to do?

MR. TAYLOR: We indicated, by way of letter to both sides in the concluding hours, I guess, of the crab negotiations last week, or the arbitration or the mediation or whatever you want to call it, that we would monitor on a biweekly basis. On a biweekly basis we would want reports from the processing sector, from the various plants as to - an enhanced version, I suppose, of what was there before when it comes to actual buy, who they bought from, when they bought, prices paid, and prices offered, to try and track, I guess, movement of price, movement of material, and movement of boats, to try and guard against some of the stuff that was brought up here earlier tonight.

MS JONES: The processors themselves will do this and submit it to the department?

MR. TAYLOR: Yes, and both sides are aware of this monitoring. I am going to turn it over to the deputy for a second because he was more closely engaged in that.

MR. SAMSON: The way it transpired is, it was a collective agreement or schedule to a collective agreement signed between the FFAW and ASP on behalf of the crab processors, which set out the schedule of prices for the year, market adjustment formulas and those sort of things. Appended to that was a Memorandum of Understanding between FFAW and the processors, that set out the broad parameters of this monitoring program requiring, basically, as the minister has indicated, by-weekly reporting, on a transaction by transaction basis, of who bought what, when, from whom, and at what price, essentially. The department was not signatory, the minister was not signatory, to that MOU, but the minister did acknowledge that MOU in a letter which went to both FFAW and ASP, and has subsequently issued a condition of license to processors requiring that they report these matters or these transactions to the minister on a bi-weekly basis.

On a go forward basis, what will happen is that will be inputted into a database, and essentially serves a couple of purposes, I guess. One, is that it will provide us with a source for the industry, generally, harvesters, processors and the government, with a source of information and data that we have not had access to before. Previously, we required, and will still be requiring this year, crab purchases and crab production to be reported daily throughout the season, certainly as the two previous ministers would be aware. This will provide information around price and who is dealing with what vessels and that sort of thing.

MS JONES: It will come directly to the department?

MR. SAMSON: It will come directly to the department.

MS JONES: Okay.

Just for the record, could you tell us what ASP is and who are members?

MR. SAMSON: The ASP is the Association of Seafood Producers. It is the successor organization, I guess, to the Fisheries Association of Newfoundland and Labrador which made itself defunct in the fall of 2003, for want of a better way of putting it. It is the Association of Seafood Producers. They represent, I think, twenty-seven crab companies, and then there are a number - the balance of the thirty-odd who are actually active are outside, but I believe at this point are signed onto at least the price side of it.

MR. JONES: Okay.

MR. SAMSON: The monitoring program and the requirements to report, that is a conditional license which has been imposed on all crab producers equally, whether they are members of ASP or not.

MS JONES: Okay. Even if they are not in ASP they are still bound by this new requirement to submit -

MR. SAMSON: To report. Absolutely!

MS JONES: Okay. Was there any decision to put monitors in the crab plants this season by the department?

MR. TAYLOR: No. The decision made by us, as a follow-up to the Dunne report, has been to hire an additional ten quality assurance inspectors. There will be an increased focus, I guess, on what is happening in production facilities to try to get a better handle on pack out and those type of things, but there is no decision to station fishery inspectors in fish processing facilities. There will probably be some increased activity around processing facilities but there will not be a twenty-four seven, for lack of a better way of putting it, presence there.

MS JONES: In the MOU or the understanding that was reached between the union and the plants was there any reference made to the types of packaged product that would come out of the plant or any minimum requirement for production?

MR. TAYLOR: No.

MS JONES: No.

The reports that will submitted to the department now, will they replace your original request, or announcement of a while ago to ask for some kind of plan, or does the Dunn Report ask for some kind of plan?

MR. TAYLOR: No, that is a separate matter and will not be implemented this year, but will be operational for 2005.

MS JONES: Okay, and that would be-

MR. TAYLOR: That is the production plan you are talking about.

MS JONES: Production plan, okay.

Mr. Chairman, I am just going to pass it along to someone else for a few minutes. I have some more questions, so I will get to them after.

CHAIR: Okay. Thank you very much.

Move to the government members now, if you have questions.

Again, I would like to confine this to 1.1.01, Minister's Office expenses.

The hon. the Member for Trinity-Bay de Verde.

MS JOHNSON: Mr. Chairman, in my district there are about five or six fish plants and certainly a lot of people rely on those for their livelihood. Being a new member and certainly not having a huge wealth of knowledge in the fisheries industry, and certainly of the terminology - I have received phone calls from the district regarding programs, policies, and what not, and I must say I still do not have a huge wealth of knowledge, but I will say that the minister has been very helpful. As those calls came in I would get in contact with him and he sat down with me on a number of occasions and tried to give it to me in laymen's terms. I just want to say I appreciate that. He has answered all my questions along the way, so therefore I do not have any at this time.

MR. TAYLOR: Now, boy! I have to get a special assistance grant out there.

WITNESS: ( Inaudible)

MR. TAYLOR: You want to call into Open Line tomorrow morning?

WITNESS: (Inaudible).

CHAIR: We have moved to Ms Foote.

MS FOOTE: Thank you, Mr. Chairman.

It is always nice when a minister gets support like that. I remember being on that side and it was always nice to have colleagues on this side not asking questions.

My district is Grand Bank, and I am sure all of you who are familiar with that district would know that, I guess, as much as any other district in the Province, Grand Bank certainly has a history in the fishery. We have four fish plants there but I think every community in my district, and I think there are seventeen of them, have fisher committees, so I am always bombarded with questions and fisherpeople looking for support. Of course, in Grand Bank we have the only surf clam operation in the Province. It is very successful and hopefully it will remain that way. I know my colleague has questions on the Dunne report, because I do have some serious reservations about the implication of that, particularly for one-species plants.

Having said that, my two colleagues who have already spoken, both former fisheries ministers - I can tell you, having a substantial fishery presence in a district, you do not want to be the Minister of Fisheries. It is one role that I never ever wanted. I empathize with you, just from the representation that I get from my constituents with respect to fisheries issues. I do know that my colleagues intend on asking a lot of general questions of you, pertaining to the fisheries.

The one issue for me, I suppose, and it is based on the amount of representation that I do get throughout my district in terms of support for initiatives or for different fisher committees, initiatives that are planned or new initiatives, whether in aquaculture or other species. As I look through the Estimates here and I look at the various headings, in all but one of the headings with respect to Grants and Subsidies, whether I am looking at Resource Policy and Development where, of course, the focus is on planning and coordinating of resource development initiatives in the harvesting sector, or if I look at Administration and Support Services, where the Grants and Subsidies would look at the maintenance and repair of all Government-owned marine facilities in the Province, or if I look over at Processing and Marketing - of course, the Grants and Subsidies there have to do with providing financial assistance and market support to the fishing industry, with particular emphasis on underutilized species, aquaculture products and value-added production. I am a bit concerned that, as I look at all of these headings and look at that particular line, in all cases you see a substantial reduction in the amount allocated for grants and subsidies.

I have to ask, given that the fishery is so important to this Province, at a time when we are trying to grow the economy and looking at the fishery as one area where we really should be focusing our attention, what contributed to that particular decision? Would that not have been an area where we would have, in fact, increased or at least maintained the amount that was there last year? If you look in the revised Budget, in all cases the amount of money allocated was spent. I have to ask, what contributed to that decision, given that it is of such importance to the Province?

MR. TAYLOR: A couple of things, I guess. I will just deal with it generally, I suppose, first anyway. If you want specifics, then I will get into specifics. I guess our view is that the types of grants and subsidies we have been providing - we have had a look at where that money is going and how best to use the money that is available to the department.

On resource development, you know, we still maintain funding for new fisheries development. We had budgeted $450,000 for that. We have budgeted $550,000 for the aquaculture side. You know, when it comes to new species development in the wild fisheries side, when it comes to supporting our aquaculture industry in marketing, human resource development, investment prospecting, and those type of things, we have maintained that and made a significant contribution towards that end. Where we have decided to cut back, for example, in grants and subsidies is on the special assistance grants, which were small, like $3,000 grants to fisheries committees around the Province, to assist them in maintaining some of their infrastructure. It was a difficult call to make, but we had to make the call to reduce that by $150,000. We have still maintained $200,000 there. I think, out of recognition, from my perspective anyway, that the fishery and how it is being run and its placement around the Province is evolving, we just have to focus, I suppose, on making sure that we put the available money where it is best utilized on that one.

On the processing and marketing reduction, for example, as I recall that one is related to - anyway I will not get into that. The sealing industry, the Canadian Sealers Association, for example, did receive $50,000 in funding from the department previously, and that is cut, for lack of a better way of putting it. I asked myself, and we asked ourselves as a government, if we should be supporting industry associations when we have an industry that is worth probably more than it has ever been worth, and when we have no commitment from the industry to support their own industry association. When the previous ministers indicated to the Canadian Sealers Association that funding would be contingent upon them raising money through pelt levies and through funding from the federal agencies, neither of that happened, so then we were the only ones left on the hook in an industry that is worth over $40 million. There wasn't any way that we could provide enough to maintain the operation anyway.

Those were the kind of decisions that we made. We tried to look at it from a strategic perspective, maintain grants and subsidies where we could and where we should, but recognizing that there were some places we probably should not, anymore, be providing grants and subsidies, and maintaining as much of our budget as possible for new opportunity development, I guess, for lack of a better way of putting it, opportunity development in aquaculture and opportunity development on the wild fishery side in new species identification and what have you.

MS FOOTE: Are you suggesting that the money that you have saved in those particular areas you have reinvested in other areas?

MR. TAYLOR: I am not suggesting that but I suppose one could draw that conclusion. We did move from a gross expenditure of $9.6 million to $10.4. A lot of that is related to the implementation of the Dunne report, or certain recommendations, I should say, of the Dunne report, but as you can appreciate there are decisions made to cut spending in some areas in order to invest in other areas. It was easier, from my perspective, to reduce our grants and subsidies in certain areas than it was to compromise our ability to do new species fisheries development and aquaculture development.

MS FOOTE: On the Grants and Subsidies, under Administration and Support Services, the one, of course, that would be talking about maintenance and repair of different marine facilities in the Province, just a general question on that. I notice that it went from $350,000 down to $200,000.

MR. TAYLOR: Yes.

MS FOOTE: Is there, in fact, $200,000 there or is there any carry-over from last year? I am being told that there is some carryover and that, in fact, is about $150,000 in reality.

MR. TAYLOR: Pardon?

MS FOOTE: I am being told that there is some carry-over from last year's request and that, in fact, would be about $155,000 now instead of $200,000.

MR. TAYLOR: The $200,000 is there, but -

MS FOOTE: I am just wondering: Can you entertain $200,000 worth of new initiatives this year or do you have a carry-over of about $50,000 from previous years?

MR. LEWIS: Yes, there is a carry-over. Every year there is a carry-over. What happens is that part way through the year some of the projects that are approved slip and they always go into the next year. Therefore, yes, there is a carry-over that will limit the amount that we can allocate out early in the year, but as we proceed through the year we will be able to pick up the rest. We have always been able to spend the full amount of the budget.

MS FOOTE: Absolutely. Dave, do you know how much the carry-over is?

MR. LEWIS: I do not know exactly, but $50,000 is probably a pretty good estimate. Somewhere between $40,000 or $50,000, I would say.

MS FOOTE: I will pass, Mr. Chair, on to-

MR. TAYLOR: I did not understand the question.

MS FOOTE: That is okay. It is going to be a long night.

CHAIR: Thank you, Ms Foote.

We will go to Mr. O'Brien now, and after that we will probably break for ten minutes or so.

MR. O'BRIEN: I guess, being from the District of Gander I am a minority here tonight in that I do not have any fish plants and I do not have any longliners in Gander, unless you were to include the riverboats out in Glenwood on the Gander River. I do come from Ferryland up on the Southern Shore, so I have, I guess, some knowledge of the fishery. I can also speak about the fishery as it evolves and the challenges that are there, how it affects a district such as mine in urban Newfoundland, indirectly, in that most of the monies that are derived from the fishery, be it the fisherpeople themselves or from the processing employees, the bulk of it is usually spent in a district like my own. When there is a downturn in that industry, we can see it instantly within the private sector and the retail sector. One that shows it very, very quickly is in car sales and in recreational vehicles. We have seen that already this year in Gander, and it has been a concern of my own and a concern of the people of the district.

I do commend the minister and the department on their direction and the challenges that they have faced in the last three to four months or so, especially. I will be keeping an eye on it. I have quite an interest in the department itself with regards to my own district, in what I just spoke about. I have been asking the minister some questions and learning about the industry itself, because he has a vast background in the industry, not only from a governmental position but also from a job position in the past. I look forward to it.

The only other comment I would have is that, Charlene actually leaned over and spoke to me and said: God, this is refreshing as compared to the House of Assembly. We do not understand, being new members, how the House of Assembly is so rowdy and Gerry is always told to sit down and all that kind of thing, and here everybody is so cordial and everything. I am quite pleased with this tonight.

That is all I have to say, Mr. Chairman.

CHAIR: Thank you, Sir.

We will take a short break now and come back at 8:50 p.m., in ten minutes time.

CHAIR: Order, please!

We will reconvene now and start questioning again. I would like to welcome Mr. Anderson. He is the critic for Labrador Affairs. It was decided that we would deal with Labrador Affairs tonight. If you wish, you may start this round.

MR. ANDERSEN: Mr. Chair, the first question I want to ask is on the fishery, subhead 2.1.02, Labrador Fish Plants, but before I speak I want to do the same as some other people did, give a very brief background.

Minister, years ago the provincial government built a fishing village on the North Coast of Labrador in Smokey. It was built for the Newfoundland fishermen. I am not prejudice, I am not against it, but they built wharves, storage sheds, fishing sheds, a wharf to accommodate boats, while the people in Rigolet - by they way, they also hooked up running water - could not get 5 cents from the government of the day for water and sewer nor 5 cents to drive a nail into a stage head. They built a fish plant in Makkovik. It was put there for one purpose and that was to accommodate fisher people from the Island.

Minister, in the mid and late 1980s, I can remember that we had as many as forty to sixty longliners from the Island of Newfoundlander, many from your riding, that were up there fishing at the cod because the cod had failed on parts of the Island. A few years later the cod fishery failed. It failed in my riding first. While the federal government was responsible for the TAGS program - they implemented the program for TAGS, NCARP and so on - where every person in this Province was entitled to monies based on the catches, I do believe, in 1992 and1993, in 1992 and1993 there was not one cod fish to be caught in my riding, and because of that the people in my riding never got one cent, not one copper, for TAGS or anything else.

Now, I want to question, I guess, as to why your government, at this stage of the game, would drop the $100,000 subsidy? Basically that is used, as it says right here, to subsidize certain fish buying. One of the very, very (inaudible) fisheries we have is the scallop fishery. It is a very short season, and because of the small fishery that it is, it is not viable for people to go up there and buy their own boats. What they do is they work a deal with captains on longliners from Southern Labrador and from Newfoundland to go down there, and because of the long run back and forth, Torngat had to find some way to make the price of their scallop and other species competitive, and this is one way that they did it. I can guarantee you that by phasing out this subsidy you are going to put the fish plants on the North Coast of Labrador at a big disadvantage. While $100,000 may not seem much when we talk of a billion dollar industry today, it did provide a level of comfort to Torngat Fisheries and, I guess, they could offer a competitive price for scallops. They also used that subsidy to collect the char that was caught up North, as far as 180 miles north of Nain.

Taking away this subsidy is going to put the fish plants run by Torngat Fisheries at a big disadvantage. It is pretty difficult to understand as to why, at this stage of the day, your government would do that. It is very difficult to understand, at this stage of the day, as to why your government would not continue the subsidy.

Minister, I am sure you are aware of the fish plants that the government owns on the North Coast of Labrador. Torngat Fisheries has done quite well with the upkeep of the fish plants, many times, you know, doing things. Maybe the approach now would be that we will come after you, say that these are your plants, that we want them made safe, we want them upgraded the way they should be, and at the end of the day I think it will cost a lot more than $100,000.

Again, I would ask you and your government, very, very seriously: Would you consider continuing this $100,000 a year subsidy to Torngat Fisheries? If not, it is going to put them at a big disadvantage. That, Minister, could mean the difference between people up there getting their EI or not, because in these small isolated communities we only have a very short season. If Torngat cannot find a way to make the price of scallop up there competitive so that the boats will come up - if the longliners from your area and the South Coast of Labrador do not come up, then we have no way of bringing the scallop to the plants in Northern Labrador. Again, that will mean that these people will not get their hours to qualify for EI. I ask again, for you and your government to reconsider this.

MR. TAYLOR: Wally, I guess I understand, and I will not comment on your initial commentary, I will just deal with the decision on the $100,000. My understanding is that this subsidy was, at one time, as high as $800,000 and it has gradually been reduced over the years to the point where it was previous to this year, at $100,000. My understanding is that in 2001, there was $50,000 drawn down on this subsidy, in 2002, $50,000, and in 2003, the $100,000 was used for repairs on the plant in Nain. While I can see where the subsidy might have been important in past years, it appears to us that it is less important to Torngat Fisheries at this point than it ever was in its history, and for the past three years has either only partially been utilized or was utilized for plant repairs, as you said, on plants that the provincial government owns, namely the one in Nain. We think that Torngat Fisheries have gotten themselves to a point - I mean, a subsidy is used to assist an operation that is either marginally profitable or a losing venture, to keep them going, and Torngat has, through their management over the past number of years, been able to get themselves in a position where they are in pretty good financial shape, or at least it appears that way to us. As a result, we made the decision to eliminate the subsidy. I think it really speaks well for the management of Torngat Fisheries, that they have been able to get themselves to that point where they no longer need subsidization in order to continue. We are confident that, if past experience holds out, they will continue along that line and the subsidy will not be required.

The Government of Newfoundland and Labrador had many subsidies in place over the years for fish plants throughout the Province, and this was, basically, the final one. We have taken the decision to eliminate it. It is based on what we believe is a viable operation there right now. They do have access to significant resources, financial resources, in their offshore shrimp allocation. They are not radically different from the Labrador Fishermen's Union Shrimp Company Limited in that respect, and we no longer subsidize the shrimp company nor any other operation in the Province. I guess, if problems arise with Torngat Fisheries we will deal with those problems as they arise. Right now, it is a viable operation and a viable business, and we are confident that, given the experience of the last three years anyway, they will be able to carry on without this.

MR. ANDERSEN: Minister, there is some truth to what you say, but I certainly do not buy into all of it, because I think for some of it you have been misinformed.

As a matter of fact, it was not $800,000 in subsidies years ago, it was in the millions. Yes, we did bring it down, but the reason why it is more crucial today to have this in place for the char fishery and the scallop fishery is that - what you have to remember is that I was responsible for getting the Nain Banker for Torngat Fisheries for a summer which came with a crab license. Even though they turned the Nain Banker back over to the provincial government, that eventually sold it to the Labrador Shrimp Company, the crab license stayed.

Minister, it is the make and break on our crab, and, as we speak, Torngat is holding meeting after meeting, because as you know the federal government just cut back almost 50 per cent of their crab. All you have to do is look at the amount of crab that is allotted to the North Coast of Labrador. They needed a minimum of a 70 per cent catch of their allowable catch to break even. Last year they came to about 72 per cent of their allowable catch and now they have a 50 per cent cut.

Again, I am sure I will be back with Torngat in the very near future, and over the summer, because our culture and nature, I guess, dictate as to what your take is from the fishery. I can say to you again, the reason why they were able to bring down the subsidy was because of the crab and the crab alone, and now they have a 50 per cent cut. Again, I think some sole searching needs to be done by you and your department..

The shrimp licence for Makkovik: right now the only thing I can say about that, Yvonne, is that we do not have enough of a shrimp allowable catch for our inshore fishermen to make any plant viable; none whatsoever. That was a rule that the federal government made. Anyway, I will leave that there, and I am sure that I will be back.

I am going to take just a few minutes to go to Labrador and Aboriginal Affairs, page 53. The first question I want to ask is on subhead 1.1.01.01. Salaries have gone down to $62,900 from - I guess I was a good minister last year, I did not spend all of the money there. We spent $179,500. Can you tell me the difference? Obviously, there are positions gone.

MR. TAYLOR: What was that?

MR. ANDERSEN: Page 53, subhead 1.1.01, under Salaries.

MR. TAYLOR: Yes.

MR. ANDERSEN: I am asking you who is gone.

MR. TAYLOR: On that, Wally, the reason for the reduction in the salary is, my salary as a minister is charged to the Department of Fisheries and Aquaculture as opposed to the Department of Labrador and Aboriginal Affairs. So, that salary line reflects the compensation for the Parliamentary Secretary and Assistant as opposed to the full complement that would be normally associated with the Minister's Office. Likewise, Minister Rideout's salary is charged to the Department of Transportation and Works as opposed to Labrador and Aboriginal Affairs.

MR. ANDERSEN: If you take your salary out - and we do not have to disclose here today what your salary is - and if you are going to take out Minister Rideout's salary, and if you are going to take out -

MR. TAYLOR: No, no, we only take out one.

MR. ANDERSEN: Okay.

MR. TAYLOR: It is backfilled by a portion of the Parliamentary Secretary's. The MHA's salary still comes out of the House of Assembly budget. The Parliamentary Secretary piece comes out of this budget, and then -

MR. ANDERSEN: That would be $22,000?

MR. TAYLOR: - the Assistance's position is charged to the department here as well. I am right in saying that, am I?

MR. ANDERSEN: What assistant?

MR. DUTTON: Mr. Hickey has an assistant in Happy Valley Goose Bay.

MR. TAYLOR: A Constituency Assistant, his assistant.

MR. DUTTON: The Parliamentary Secretary has an assistant in Happy Valley Goose Bay.

MR. ANDERSEN: He only has what we have here. I am entitled to a worker, Yvonne is entitled to a worker, Ray Hunter is entitled to a -

MR. DUTTON: That is all he has.

MR. ANDERSEN: Mr. Hickey has chosen to have his one in Goose Bay. That comes out of the House of Assembly, it will not come out of your salary's roster.

MR. DUTTON: In the last fiscal year, that salary was charged to the House of Assembly, and this year that salary is being charged to our department under Minister's Office. It is the same individual. There is only one staff person.

MS JONES: Under the IEC, that cannot happen. He has to have a second person for it to be a second salary.

MR. DUTTON: He only has one staff person, and that person is charged under here as Assistant to the Parliamentary Secretary.

MS JONES: So, he has no one here in St. John's, no secretary?

MR. DUTTON: That is correct.

MR. REID: He is not supposed to be there. Every MHA in the House of Assembly is entitled to one political staff member, and it should not be coming out of any departmental budget. It is supposed to be coming out of the House of Assembly.

MR. DUTTON: That position is classified as an Assistant to the Parliamentary Secretary and he has no staff person under the other -

WITNESS: (Inaudible)

MR. DUTTON: Yes, there is only one position.

MR. TAYLOR: The only thing I can tell you on that is, we will follow up on it and provide-

MR. ANDERSEN: All we are saying here, really, is that there is no one begrudging him his worker, but the fact is that through IEC and through the House we are all entitled to a worker. Even though John is the Parliamentary Secretary, he has chosen to have his person in Goose Bay. That is his right, but that should not be charged to the minister's salary. That should be charged to the House of Assembly.

MR. TAYLOR: I cannot speak to that, because I am not sure.

MS JONES: This $62,900, that is what you are talking about, right?

MR. TAYLOR: I assume that is what he is talking about, anyway. That is what I am talking about.

MS JONES: That is just one person?

MR. TAYLOR: That is the combination of the two.

MR. DUTTON: It is to cover the salary and Labrador allowance for his assistant and also for the Parliamentary Secretary salary which is on top of the MHA salary which is charged to the House of Assembly. I think it is a little more than that.

MR. ANDERSEN: We will go on to 1.2.01, Executive Support. Again you have come down from $419,800 to $342,600. Can you explain the difference, as to what positions are gone?

MR. TAYLOR: That is, Wally, as a result, as I am sure you are aware, of the elimination of the ADM's position, and there was one vacant secretarial position also.

MR. ANDERSEN: Executive Support. What other jobs fall under that category?

MR. TAYLOR: The Deputy Minister, the Assistant Deputy Minister and the secretaries associated with that. The Deputy Minister, the Assistant Deputy Minister, and the secretaries associated with the executive also fall into that category.

MR. ANDERSEN: By the way, too, Trevor we have no problem if Sean wants to answer the question.

MR. TAYLOR: I do not either.

MR. ANDERSEN: Employee Benefits, $500 down from $4,000

MR. TAYLOR: Do you want to answer that, sir?

MR. DUTTON: In last year's budget, there was an allocation for $500 and it is the same amount budgeted. Last year there was more spent then anticipated due to additional fees for conference attendance, things like the Voisey's Bay and Beyond Conference and other similar types of events.

MR. ANDERSEN: Under Transportation and Communications, the good old minister last year spent $75,000. Now, as you just indicated, with the number of staff gone, why would there be an increase in Transportation and Communications over last year?

MR. TAYLOR: There is not an increase over last year, there is a reduction from last year. There is a reduction in the budgeted this year from last year because we anticipate less travel. Obviously, there was not as much travel last year. As you said, you were probably a little more of a frugal minister. Much of my travel and Minister Rideout's travel, we are in dual positions so it would not necessarily all have to be charged against Labrador Affairs. When I went to-

AN HON. MEMBER: That is for your staff, not for yourselves.

MR. TAYLOR: Yes, sorry.

Well, there is less staff also, so there are less travel demands.

MR. ANDERSEN: That is my point. Last year, the revised was $75,000, and in your estimates for 2004/05 you have gone to $90,000. My question is: Where an ADM is gone, who used to travel, and some other staff, then shouldn't there be a decrease?

MR. TAYLOR: Maybe there will. Just because we have $90,000 there, that does not necessarily mean that we have to spend $90,000. You had $100,000 when you brought in your budget last year of which $75,000 was spent by your staff and our staff afterwards. It is $90,000 now, but maybe we will come in at $65,000 when we go over this next year. This is just a budget. It is a reduction that reflects what we believe to be the reality, but only time will tell how much of it we will spend.

MR. ANDERSEN: Okay. As you said, you have the ADMs gone and the whole staff from Goose Bay is gone, so again the amount of $90,000 seems high.

We will move along. Labrador and Aboriginal Affairs - well, we will leave the Aboriginal portion to Mr. Rideout later on. Transportation and Works and Labrador and Aboriginal Affairs are providing the administration for the program, but the funding for it is coming out of Transportation and Works.

MS JONES: Do you have one staff person dedicated to administering that program?

MR. TAYLOR: Yes.

MS JONES: You do?

MR. TAYLOR: Yes.

MS JONES: Where is that person based?

MR. TAYLOR: Happy Valley-Goose Bay. Michelle Wood.

MS JONES: The next question is with regard to the trail grants. There is a program that was in place - maybe I should save that for Works, Services and Transportation too. I do not think that is in yours.

MR. TAYLOR: No, that is right.

MS JONES: I have some questions with regard to, I guess, the team of officials and politicians, I guess, within government, who are dealing with the national defense issues at Goose Bay. I understand there is a group who are looking at developing a strategy for maintaining the base in Goose Bay as a centre for NATO training for the long-term. Is there money within the Department of Labrador Affairs to manage that file or is the money coming from another department?

MR. TAYLOR: I cannot say that there is any identified amount of money that is allotted for work on the 5 Wing file. The resources of the various departments are being used as required, I guess, for lack of a better way of putting it. Labrador and Aboriginal Affairs have resources dedicated to this, Intergovernmental Affairs have a significant commitment to this file, ITRD has a role. Is there a specific pot allocated for it? No, but there are significant resources in, probably, three departments as well as the Premier's office who are working on this.

MS JONES: The trip that the Premier and the Member for Lake Melville would be on right now to Berlin, dealing with issues around 5 Wing, that money would not come out of the Department of Labrador Affairs. It would come out of where?

MR. TAYLOR: In all honesty, I cannot answer that question. The Premier's office is the lead on this. Do not hold me to this. Probably the best thing is for me, if you want me to, to get an answer and provide it to you later on that. The Premier's office is engaged in this, so one would expect that some of it will be covered from the Premier's office. Given that the Parliamentary Secretary is involved in the trip, then one would assume that his travel would be charged against Labrador and Aboriginal Affairs, but I cannot give you an honest unequivocal answer to that right now.

MS JONES: That is acceptable.

Also, there was a motion put forward in the House of Assembly by the Member for Lake Melville, passed unanimously and supported by the government, that there would be an all- party committee established to look at 5 Wing Goose Bay and to promote it as a base for NATO training. Can you update me as to where that is, when the committee is going to be appointed, how the committee is going to be funded, and what involvement they will have in any future meetings or activity that will be around the base issue?

MR. TAYLOR: As you can appreciate, that Private Member's Motion was about two weeks ago, as I recall, maybe two or three weeks ago, so all the details around how that is going to be engaged have not yet been worked out. We have had some discussions with officials and some politicians on how all of us, in our various capacities, are going to go forward on this strategy. The all-party committee will be struck in the not-too-distant future, and the decisions related to the funding of that, I guess, will be determined once we know what the roll of the all-party committee will be, how much involvement it is going to have, how much travel is going to be associated with it, and what have you.

That is, for lack of a better way of putting it, a bit of work in progress right now. We have gone a fair ways down the road towards finalizing our strategy, our go-forward strategy on 5 Wing Goose Bay. We are moving on that all the time, but how that is going to engage the all-party committee will become clearer in the near future.

MS JONES: Back in the fall, the Public Utilities Board held hearings based on a proposal put forward by Hydro to increase rates in Labrador, primarily in the Labrador West area and on the South and South Coasts. Did you make any representation to the Public Utilities Board hearings on behalf of the people in Labrador, to ask them not to increase those rates?

MR. TAYLOR: No.

MS JONES: Will you put forward, to your government, the option of freezing the rates in Labrador, especially on the North and South coasts, at the current levels until there is a longer term solution to the energy problems up there?

MR. TAYLOR: All I can tell you right now is that tomorrow there will be a meeting between myself, Minister Byrne and others, on the issue of electricity rates in Labrador.

MS JONES: In Labrador West, I think that is.

MR. TAYLOR: Yes, you are right.

We will be involved in that meeting. Where we go from there, we will see after tomorrow. I cannot say yes or no to that question right now.

MS JONES: Because we did put forward, to the Public Utilities Board and to Newfoundland and Labrador Hydro, an option that would see the diesel rates frozen in the Province at the levels that they are. In the last two applications by Hydro, we were successful in not having rates increased. This time, however, they have made a decision to increase them. Right now the people in those areas pay the highest rate for electricity of anywhere in the Province and now they are going to pay even a higher rate based on this recent increase. I can only urge you to take forward to your government the need to, at this time, do something to stabilize those particular rates at the levels they are until there is a longer term solution found.

The Minister of Mines and Energy indicated in the House a couple of days ago that there was an energy plan being put in place for the Province. Will that plan involve long-term strategy for diesel customers in Labrador and will there be significant consultation in Labrador around that plan?

MR. TAYLOR: Far be it from me to speak for the Minister of Mines and Energy, or Natural Resources I should say. All I can tell you is that the plan, as he said in the House here yesterday I believe it was, the work to develop an energy plan will be fairly broad in scope and will look at issues related to hydro power, wind power and others - well, natural gas was one of the other ones that he has talked about - with the objective being to eliminate our dependance on diesel generated power. How that fits in within the various parts of the Province that may have a few options, I suppose, outside of diesel power, remains to be seen. I think that it might be better if you put that question to the Minister of Natural Resources.

MS JONES: As the Minister for Labrador Affairs, are you consulted by all departments on initiatives that are relative to Labrador?

MR. TAYLOR: Yes.

MS JONES: You are? Okay.

Were you consulted with regard to the Labrador Marine Services before a final decision was taken?

MR. TAYLOR: As you know it was a Cabinet decision, so every minister would have been consulted.

MS JONES: Outside of Cabinet, were you asked to put forward any particular view, perspective, or submission, based on your input from people in Labrador?

MR. TAYLOR: I am not sure that I understand the question.

MS JONES: When it gets to Cabinet usually it is a recommended solution by the minister or the department. Were you consulted prior to Cabinet, as to what your view or opinion was on how marine services should be conducted in Labrador?

MR. TAYLOR: Yes.

MS JONES: You were?

MR. TAYLOR: Yes.

MS JONES: Obviously you support the fact that the Labrador Ferry Service will now operate from the port of Lewisporte, and will be done so at an additional cost of $1.7 million to the Labrador Fund. How do you justify that unnecessary expenditure to the people of Labrador?

MR. TAYLOR: Well, the number is not $1.7 million, the cost to the Labrador Transportation Initiative Fund is not $1.7 million.

MS JONES: Would you like to give me the breakdown of the full cost then?

MR. TAYLOR: I do not have the numbers in front of me right now, but again the Minister of Transportation and Works will be in front of the committees sometime next week, as I recall, and he will be more prepared to have the figures in front of him to answer those questions. With the provision of certain government services, there is always a balancing act, for lack of a better way of putting it, and there are a substantial number of people in Labrador who wanted a reconfigured ferry service, and we have responded to that.

MS JONES: I met with the town of Happy Valley-Goose Bay, the town of Labrador City, the Chambers of Commerce in Central Labrador, Western Labrador, Southern Labrador, and the Labrador Straits. I have discussed it with the Labrador North Transportation Committee, and I have met with all the Economic Development Boards in Labrador, all of which supported maintaining passenger services in Goose Bay and Cartwright, and not at Lewisporte, and also supported the position that there be no additional monies spent out of the Labrador Transportation Fund.

Minister, would you like to justify to me what groups you consulted with in Labrador that supported Lewisporte as an option?

MR. TAYLOR: We had representation from individuals and from organizations in Labrador who suggested that they would like to see an option. I cannot provide you with it right now, but if you listen to the response out of Labrador to the decision that was taken, I think that the response has been generally a positive one for the most part. The Member for Labrador West certainly supported the decision and the Member for Lake Melville supported the decision. As for these organizations, some of them were vocally opposed to it for quite a period of time, prior to the decision and around the decision, but others have decided to oppose it just recently. Whether their opposition was there before I would not be able to say, but it was not apparent anyway.

MS JONES: I have named probably about fifteen groups in Labrador that I have had discussions with, face to face, with the exception of one which was not a face-to-face meeting, and none of them indicated to me any support for Lewisporte, although you are saying that you did have representation. Would I be able to ask you to table the representation that you have so that I may have copies of it, please?

MR. TAYLOR: You can ask, but I am not sure I can provide it. I will have to see, that is all I can say right now.

MS JONES: Okay.

Are you one of the trustees, I should say, to the Labrador Transportation Initiative Fund? Are you one of the ministers that makes decisions on how that money gets spent and then signs off on it?

MR. TAYLOR: Yes. We are on the board, I guess you could call it.

MS JONES: It is my understanding, then, that the ministers of the fund, and you would be one of those people, have rejected the idea of building a road into the community of Williams Harbour at a cost of approximately $5 million. My understanding is that all the engineering work was completed, the environmental assessment was completed, and that the road was due to be tendered this year. Would you like to explain to me why you have denied the construction of that road and rejected it?

MR. TAYLOR: Basically, we came down to a cost item and it did not appear to be a viable option at this time, anyway.

MS JONES: The Labrador Transportation Initiative Fund is a fund that is designed specifically for transportation in Labrador. Minister, how do you justify using money from that fund to subsidize a ferry service in Lewisporte, yet deny people of Labrador roads?

MR. TAYLOR: First of all, the fund, as you said, is for transportation. I do not know that it is transportation in Labrador. It is transportation for Labrador people, that is what the fund is for, and the decision is to provide people within Labrador an opportunity to decide on which route they want to travel. That is the basis for the decision.

MS JONES: It is my understanding that last year that fund grew. The interest accumulated on it was $4.5 million, which was almost enough interest alone to build the road into Williams Harbour. I guess I would ask you now to reconsider your decision and to use the money to connect another community in Labrador by road as opposed to wasting it on subsidizing jobs and an unnecessary ferry service in Lewisporte. I think that if you came to Labrador and sat at the same table with the leaders, as I have, you would get an entirely different message than you are getting from the Member for Lake Melville and the Member for Labrador West. They have yet to provide to me the groups they have consulted with and where they have gotten their support, other than from individuals on the street who would like to have a choice in how they travel. Other than that I have not seen any of those individuals or anyone in your government substantiate where the support came from, out of Labrador, to put this marine service back in Lewisporte. It did not come from the leadership in Labrador, and I think if you came and met with them you would find that out. I ask you to reconsider your decision on the Williams Harbour road.

My other questions are around the Voisey's Bay monitoring. Wally did touch on it. This is a big issue in Labrador. Actually, one of the biggest proponents of it was your colleague, the Member for Lake Melville, when he was the Mayor of Happy Valley-Goose Bay. At that time, he said that he did not want a Voisey's Bay monitor that would be in any way affiliated with government, that it should be an arm's-length person, that they should be independent of government in order to monitor the project. I would like to know from you, minister, what discussions you have had with regard to a Voisey's Bay monitor? How do you see this position playing out in Labrador and when do you think we can have the position in place?

MR. TAYLOR: I cannot tell you exactly when we can expect to have the position in place. We had hoped to have a new position created. I guess I can say we had hoped to have it done by now, but it is not done. I have had a number of discussions with Minister Byrne on that matter. An assessment of what is needed has been done and there have been discussions between various officials, ministers, and the parties involved with monitoring Voisey's Bay Nickel, for lack of a better way of putting it. We hope to have a position in place in the not too distant future that will be, hopefully, more than a monitor and something that we would like to see. I can only tell you what we would like to see, but whether we are able to achieve it or not - obviously, as you know, the agreement, the adjacency principle, is something that was committed to by Voisey's Bay Nickel in the Impacts and Benefits Agreement, as I recall, not in a contractual arrangement between Voisey's Bay Nickel and the Government of Newfoundland and Labrador. That presents a set of challenges, but we, nevertheless, hope that we can have something like a compliance officer who ideally would be independent. That decision and an announcement on that is something that we hope Minister Byrne will be able to make in the not too distant future.

MS JONES: We are getting into the end of May and soon into June and most of the hiring for Voisey's Bay will be completed, in my estimation, within the next thirty days. If we are going to have a monitor there, to try to monitor who is being hired and who is filling those jobs, I think it is getting a little late for that right now, and I am somewhat worried by that.

You made a commitment in Labrador, your government did during the election, that there would be a mining office established in Labrador West. Is that proceeding at all?

MR. TAYLOR: Again, I think you should ask Minister Byrne that. To my knowledge, there has not been any change in government's view on having a senior official stationed in Labrador West, but exactly how that will be done, when that will be done, and who that will be, is somewhat, I guess, like the Premier's office in Happy Valley-Goose Bay, something that we hope to get to in the not too distant future.

MS JONES: We have had a problem in Labrador for quite a while, I guess, with regard to the recruitment and retention of allied health professionals, nurses and teachers primarily. There was a program in place for recruitment and retention bonus that applied to the South Coast and the North Coast regions of Labrador. Is that bonus in effect and does it still apply to the same groups?

MR. TAYLOR: There has not been any change that I am aware of.

MS JONES: So the bonuses will still be provided to everyone from Lodge Bay to Nain? Is that my understanding?

MR. TAYLOR: All I can tell you is, there has not been any change that I am aware of.

MR. DUTTON: Whichever communities were covered previously are still covered and it is the same amount of money, as far as I am aware.

MS JONES: Previous to the last budget, I think they were all covered, teachers, nurses, and social workers.

Just a couple of more questions. I was surprised to learn that the Labrador Travel Subsidy for the High School Athletic Association Federation programs has been cut for Labrador. Do you want to tell me a little bit about why that has been done?

MR. TAYLOR: I would like to, but I cannot give you an answer to that, Yvonne. I can get you an answer, but I cannot give you one right now.

MS JONES: Because I have some real concerns about this program. Prior to 1996, kids in Labrador were unable to compete in high school sports because there was no subsidy program. Actually, we shared a program with the Northern Peninsula, with your district, that was $5,000 a year at that time. Since then, we have increased that program for my district and part of your district to over $50,000 a year. Now, I understand, that there has been a cut in the program. I do not know if the cuts apply directly to my area or if they are to the Labrador West and Lake Melville areas or to the North Coast, but there is a fund that is administered just for Labrador for high school students to get out to sports meets, and they are entitled to go to two mandatory meets a year. My guess is, with the cut in funding either some of the mandatory sports are going to be removed or one of the areas of Labrador will not have their kids traveling to sports meets in the future. I would like to have an answer to it and find out where the cut is being applied.

MR. TAYLOR: I can followup on it and provide you with something on it tomorrow. That is probably the best way to deal with that.

MS JONES: Okay.

My next question is with regard to the auditorium in Goose Bay for the school. It is my understanding that there is $300,000 approved by the federal government for this auditorium. I am wondering if you guys have been having any discussions with the feds, and do you intend on putting any money into doing that project in the next twelve to twenty-four months? I guess that is my question.

MR. TAYLOR: To the first part of the question, we have not had any recent discussions with the feds on that funding, on the $300,000. To the second part of the question, do we hope to do something with it in the next twelve to twenty-four months, the answer to that is yes.

MS JONES: Because I am not sure how the federal funding works, but I was under the understanding that there was a time limit on using the funding.

MR. TAYLOR: Yes. It was implied that there was a time limit, but we are thinking that if we commit our share and if we can see fit to go forward with this, if we are going to commit to $2.5 million, then Mr. O'Brien should be able to scrounge up the remainder, since they did commit to it initially.

MS JONES: In the last Budget you guys cancelled a school in my district for L'Anse au Loup. As the Minister of Labrador Affairs, have you had any discussions with the Minister of Education on that? Have you been approached by any groups in that area with regard to plans and what will happen in the future with that school?

MR. TAYLOR: Yes, and yes. We have had discussions on it. What will happen to the school, obviously, first of all the board will have to - as you know - make that decision and/or recommendations to recognize the sensitivity around it. It is the school that I went to, so I am well aware of the situation there. Given the enrollment and the enrollment projections at this time, it was not something that we could see funding. The decision as to what happens in the short to medium and/or long-term is a separate decision that will have to be taken in consultation with the board.

MS JONES: Are you aware if there has been any costing done on what it would cost to bus the kids from that community to another school?

MR. TAYLOR: No, I am not aware that there has been any. I do not believe there has been any costing done on that.

MS JONES: The Minister of Transportation announced that they were not going to clear eighty-three kilometres of road in my district. They were not going to snow clear it. There is too much snow there apparently.

I guess my question is: Is there any long-term plan that you have been engaged in as the Minister for Labrador to deal with that section of road? Last year there was a tender call to put in a winter road system in two sections as a pilot project to see if it would work, because the problem is in the rock cuts. The problem is not anywhere else. It is an area that when you get into bad weather you cannot do anything there. If you end up with a storm for three days, you have a storm for three days, you just have to stay out of it. But, when the storm has cleared the problem areas are always in the rock cuts. No doubt, it is a problem that occurred with the engineering or the design of the road. I guess my question is: Is there any plan to deal with this in the short-term or is government just satisfied to say we will not clear the road in that area for the next seven years?

MR. TAYLOR: To the last part of the question, no. It is not a matter of government being satisfied to say we are not going to clear it for the next seven years. The decision - again, I think probably you should bring this, and I am sure you will, bring this question up with the minister. But we recognize that this issue has to be addressed and that we cannot have a road closed for a substantial period, a year indefinitely. Suggestions, such as winter roads around the cuts, or widening of the cuts - somebody even suggested that tunnels be built over the cuts, similar to on the Upper North Shore of Quebec, might be options. All I can tell you at this point is that there - Is there a plan to deal with this? No. Is there an intent to develop a plan to deal with this? The answer is yes.

MS JONES: Will that be this year?

MR. TAYLOR: What do you mean?

MS JONES: This construction year, will there be anything done there this construction year?

MR. TAYLOR: Not to my knowledge.

MS JONES: Okay.

The study on the Strait of Bell Isle tunnel, is that being funded through your Department of Labrador Affairs?

MR. TAYLOR: My understanding it is out of Transportation. The provincial share is out of the Department of Transportation.

MS JONES: What do you hope to accomplish in the short term by doing a study on the tunnel?

MR. TAYLOR: Try to determine if we are all foolish or not, for lack of a better way of putting it.

MS JONES: I can answer that for you.

MR. TAYLOR: Yes, but you are short-sighted.

MS JONES: You think so, do you? Go ahead, answer the question.

MR. TAYLOR: In all seriousness, it is to determine whether or not this is a viable option for the longer term. Nobody expects that there is going to be a tunnel built across the Strait of Bell Isle within the next five years. What this is about is determining whether or not this is something in the long term that makes sense for the Province of Newfoundland and Labrador, recognizing that there will, at some point in the not to distant future, be a completed road across Labrador and a completed road along the Lower North Shore of Quebec. When those two things occur there will be significant traffic that is not now moving in either of those places. Given those two realities, when they become realities, would a tunnel make sense?

Suggestions by some people that you are building a tunnel to a dead-end road - obviously, nobody would want to build a tunnel to a dead-end road. We recognize that the only way a tunnel would ever make sense is if both of those pieces of road were completed. I guess that is the basis for the evaluation of a tunnel. If you are going to talk about something of such a size as that, a project of such a size as that, then you do not start talking about it two years before you are going to do it. The P.E.I. bridge was talked about twenty years before it was completed.

MS JONES: I was going to say, I have lived in Labrador for thirty-five years and from the time I can remember this has been talked about for quite a long time.

MR. TAYLOR: But it was not talked about in the context of what it is being talked about now.

MS JONES: Well, it was started at one point.

MR. TAYLOR: It was talked about before, in the 1970s, as a -

MS JONES: It was started in the 1970s.

MR. TAYLOR: - place to haul cables through in order to run hydro electric power from Churchill Falls to the Island. That was the sole reason for its attempt back in the 1970s.

MS JONES: Yes, you are right. It has been started and there is a long history of this in Labrador.

Just on the financial part again. The money is not coming out of the Labrador Transportation Fund, is that my understanding for this study?

MR. TAYLOR: No, not to my knowledge. It is not.

MS JONES: Okay.

You talk about the road on the Quebec Shore. Has there been any discussions between yourself and any officials within Quebec or the Government of Quebec with regard to that section of road?

MR. TAYLOR: No, there have been discussions between the Premier and the Premier of Quebec on roads generally; on the Quebec Lower North Shore, the road through Northern Quebec into Labrador, the Labrador Highway and the tunnel.

MS JONES: Are you aware if they have any intentions of moving on anything with regard to that development in the next couple of years?

MR. TAYLOR: Not that I am aware of.

MS JONES: Okay.

My other questions are with regard to the Lower Churchill development project. As the Minister of Labrador Affairs, have you been involved in discussions around the Lower Churchill development?

MR. TAYLOR: No.

MS JONES: I assume from that, that you would not be prepared to answer any questions on it?

MR. TAYLOR: That would be a logical assumption, I would think.

MS JONES: Actually, that probably concludes most of my questions with regard to the Labrador piece of it. I just want to thank the minister for taking the time to answer those questions to the best of his knowledge. Some of them I will refer to other ministers as we get into those estimates.

Like my colleague before me, minister, I can only emphasize to you the level of frustration that exists in Labrador right now with regard to some initiatives that are being taken by your government. I think people feel that the Department of Labrador and Aboriginal Affairs has given them more of a direct contact and a direct link to government, and I guess somehow made them feel more empowered in terms of being able to make decisions and having their voices heard. I do not necessarily feel the same is true today but hopefully if the department continues with some stability, that those relationships can, no doubt, be improved and there can be a better rapport developed over time.

I think you have some good individuals in that department, not only in Mr. Dutton, who is here this evening, but also in your staff that you have in Happy Valley-Goose Bay. They have certainly taken a lead role in many complicated and very challenging issues in Labrador and have tried to work very well with the people up there. I can only invite you to come to Labrador and meet with the groups and the communities, and hear firsthand how they feel about issues and to say to you that it is always better to consult with them before a decision is made as opposed to after a decision is made. At the present time the people there certainly feel like they are not being consulted and that things which are a priority to them is not being adhered to by the government and they certainly see it as your job to deliver the message. So if there is anything we can do to help make that process a little bit easier for everyone, including yourself, we would be only too happy to do it.

I thank you, Mr. Chairman, and when you are ready we can revert to the Fisheries Estimates.

CHAIR: Thank you very much, Ms Jones.

Are there any further questions with respect to the Labrador and Aboriginal Affairs division? None. Okay, thank you.

We will move back now to the Fisheries and Aquaculture section. Mr. Reid, if you would like to -

MR. REID: Thank you, Mr. Chairman.

Two years ago, I think it was probably in September of 2002 - it was a long weekend, if I remember correctly - you and your leader established, what was called in the media, an all-party committee to deal with foreign overfishing and custodial management on the Nose and Tail of the Grand Banks. I think your officials there will attest to the fact that I found it somewhat strange that you entitled it an all-party committee when I, as the Minister of Fisheries, and a member of the Liberal government at the time, were not invited to be part of that committee or attend the press conference. But it was a big deal, it was established to do something with foreign overfishing. Custodial management was being touted at the time by everybody.

In your Blue Book, which is your election campaign platform, it says under your fisheries commitments, "Organize an extensive campaign aimed at pushing the federal government to secure custodial management of the Nose and Tail of the Grand Banks." That it becomes a reality. I note, or I cannot - or maybe it is there and I do not see it. There is no money in your budget for any campaign to establish custodial management of the Nose and Tail of the Grand Banks, is there? I know when I was the minister, I do not know if it was here with my successor, but there was $100,000 put in that year to fight the foreign overfishing campaign because we were being criticized by the Opposition, the Tory Opposition at the time, that we were not doing enough on the issue. So, is it or isn't it in the Budget?

MR. TAYLOR: No, it is not in the Budget. It was removed because, as you are no doubt aware - the $100,000, I do not think it was ever - the two years that it was there it was never fully expended. Last year I think there was hardly anything used out of it. We are lobbying and pushing forward with the federal government on the issue. As you no doubt heard last week, Minister Graham's comments. For the first time out of a federal cabinet minister we heard the words: We must look at custodial management - I guess for the lack of a better way of putting it. What that means at the end of the day, who knows, but we will wait with bated breath, I suppose, on that. I guess part of the reason - just to shift gears a little bit - is two things. One, this is one of the four or five big issues that the Premier has addressed on a consistent basis with the Prime Minister. Two, these types of issues are the basis - is the basis, or are the basis, whatever I am trying to say here - for our decision to establish a Newfoundland and Labrador office in Ottawa so that we can have greater access and more impact on decision makers up there on a consistent and ongoing basis.

MR. REID: With regard to the fact that I did not spend the budget, I guess it depends on how you want to fight the campaign. I think, and maybe your officials can -

MR. TAYLOR: I was not being critical that you did not use it.

MR. REID: No, no, but to use it is not a reason to put it back in there. It is not a good one. I went to a NAFO meeting in Spain and I think that came out of my own budget, it did not come out of the foreign overfishing campaign. I was accompanied by the Deputy Minister and a couple of officials. I think Mike you were there as well. Were you in Spain with us? There were a couple of other officials in Spain with us at the time and that was all paid for out of the departmental budget. I guess, in hindsight, what we should have done if we wanted to keep it there was to put all of that into the foreign overfishing vote that we had in the budget.

The other thing is, I know I held at least one video conference with Ottawa and Memorial University, and I guess we could have spent ten or twenty grand by traveling to Ottawa at that time to spend that money, rather than doing the teleconference from Memorial, but that is not a reason for taking it out of the budget.

As for the Premier addressing it with the Prime Minister, I would suggest that there has not been a Premier of this Province in the last twenty or twenty-five years who did not address it with the Prime Minister at every opportunity that they could. So, I do not buy it or put a lot of stead into the fact that that is going to do as much.

As for the Minister of Foreign Affairs, Mr. Graham, mentioning it, if you believe that is going to change it, I also know of some good swamp land in Florida for sale. The fact of the matter is, I think - and do not take this personally, because I do not think that it is being directed by you - but I think that your government is getting far to lax on this issue in an attempt to curry favors with Ottawa, by giving the impression that the relationship between Ottawa and the Province is far greater, and as a result of this you are going to see great results.

I mentioned Mr. Graham: When we boarded the Portugese vessel last week, he was quoted as saying, on the day that happened, that he was hopeful the Portugese would allow the vessel to be taken into a Canadian port for inspection. That did not happen.

As for actually believing that we are going to see a change in the behavior of the NAFO contracting parties on the nose and tail of the Grand Banks, well I would say it to you, Minister, they probably have been hoping that in this Province since before you were born and we have not seen any changes, and I do not anticipate seeing any until the federal government gets tough.

I must say, I am very disappointed that you did not put any money in the Budget for that this year. I am also very disappointed in the remarks that you made the day after Mr. Hearn was successful in getting his private member's motion through the House of Commons, when you said - I will paraphrase, I guess, what you said - rather than to push forward to make that private member's motion a bill in the House of Commons, we would allow all the tools that were available to the Canadian government to be used before we did that. I think that is a mistake, personally.

If you would like to comment on any of what I just said there, feel free to do so.

MR. TAYLOR: The only thing I can say, I guess, is that we still continue to support the notion of custodial management for the Nose and Tail of the Grand Banks and the Flemish Cap. If there is a more expeditious way of achieving what we want to achieve outside the 200-mile limit, then we are open to that also. The suggestion has been made, rightly or wrongly, by some, that the EU's ratification of the UN Fisheries Agreement and Canada's ratification of the Law of the Sea could, if used in conjunction with each other, provide us with the opportunity to achieve those same ends. The quicker that we can achieve compliance outside of the 200-mile limit to the regulations and quota levels, then the better it is for all of us. That was the context in which the comments were made, always qualified, both then and in the past week, with the statement that, like in the last week, if we did not see a substantial change in the European Union's and NAFO's approach outside the 200-mile limit with the vessels that were sighted in the past week, then it is time for Canada to admit that this multilateral approach is a failure and to get on with custodial management.

MR. REID: I just think, personally, that maybe one of the reasons the federal government did put a few extra bucks into surveillance and things this year is because of the pressure that all of us, in this Province, have been putting on them for the last few years. In fact, it has been the last fourteen years, since I have been involved with government in any degree, that this has been ongoing. When I came to work here in 1989, Clyde Wells was pushing for it at that time. I think to step back at all would be a mistake right now, because I do not think for a minute that these characters are going to change their habits. If you ever get the opportunity to go to Spain and see how much fish they consume, believe me they are not too worried about us.

I also listened today to some individual on an open line show talking about: Oh, now that they have boarded the ship and we know about the infraction, maybe they will do something about it. Well, your Deputy Minister accompanied me to Spain, and the head of NAFO or the head of the Canadian delegation at the time, Pat Chamut, showed them video tapes.

AN HON. MEMBER: (Inaudible).

MR. REID: Boys, if you are in a rush to go home, feel free. This is a very important issue for this Province. The fact that you came from Grand Falls, you should be interested in the fishery as well.

AN HON. MEMBER: Make the point.

MR. REID: I will make the point. I am just telling the man that they should not slack back on what they have been doing.

All I am saying is that they had lots of proof two years ago about the infractions in overfishing and they laughed at us. We came out of that losing turbot. I guess we came out of that also with a new system of surveillance out there, satellite tracking. If you are thinking that what happened out here last week is going to make any difference to the crowd overseas, you are sadly mistaken. I encourage you to encourage your Premier to keep up the fight and do not rely too heavily on the great relationship with Ottawa to see anything positive happen out there.

To get to the questions now, the Member for Windsor-Springdale - I will start on a few others now.

You mentioned earlier tonight that you are going to be able to recoup some money from processors this year, from the industry, I think you said, for some of the things that you are trying to do. How much more are you hoping to recoup this year than you did last year? I think you are talking about billing them for a number of different things?

MR. TAYLOR: Approximately $1.2 million.

MR. REID: That is over and above last year's?

MR. TAYLOR: Yes.

MR. REID: There is $1.2 million going into fisheries this year that did not last year from the industry. In your Budget speech, the Minister of Finance - by the way, I should -

MR. TAYLOR: It is all related to the implementation of various sections of the Dunne report, primarily as it relates to the Quality Assurance Program.

MR. REID: Yes, I know, but in the Budget speech, on page 21, the Minister of Finance said on Budget day, the cost will be fully offset. He said, "We will also provide $1 million to preserve the province's contribution to fisheries and aquaculture development." That sounds to me like it is an additional $1 million, but if you are saying you are recouping $1.2 million more and your total budget only went up by $800,000, where is the other $1.4 million?

MR. TAYLOR: Well, there have been reductions in other sections of the department as we have already discussed to some extent tonight. The commitment on fishery development and aquaculture development is new money, it is not ongoing money. It is one time money that has to be gotten every year, I guess, basically.

MR. REID: We are talking here, though, and I am talking about this year's budget, not ongoing. I am also talking about the comment that the Finance Minister made in his Budget Speech. The reason that we are going to have to go through these estimates, basically point for point tonight - there is no reflection on you - it is just that your Minister of Finance makes so many statements in the House and he contradicts himself outside the House, that we find discrepancies in what he says, and we are going to have to do that. That is one of them, because it appears-

MR. TAYLOR: There is no discrepancy there. The statement was that we are committing a million dollars, in rough numbers, to fisheries and aquaculture development. That is money that was not previously there.

MR. REID: If it was not previously there, if that $1 million was not previously there, then obviously you took that $1 million out of your budget before you put that $1 million in. You had to. You started earlier tonight by saying that the total budget this year for your department is $10.4 million up from $9.6 million. That is $800,000. The Minister of Finance says he is putting $1 million dollars in. That means that you are two hundred short on that. You just said that revenues to your department are going to increase this year by $1.2 million. So, you are out $1.4 million. Do you understand, do you get what I am saying?

MR. TAYLOR: Yes, I understand, but what is your point?

MR. REID: My point is that your Minster of Finance is saying to the world that he is putting $1 million into fisheries and aquaculture when in actual fact he is taking out $1.2 million.

MR. TAYLOR: He said that we are putting $1 million into fisheries and aquaculture development. He did not say that we were increasing the budget of the Department of Fisheries and Aquaculture by x.

MR. REID: My question is: Is it fair to say, then, that the Minister of Finance said he put $1 million into the budget, but someone took $1.2 million out?

MR. TAYLOR: Well, as part of the budgetary process, all departments identified some areas where, rightly or wrongly, we thought we could have cost savings, and that is it.

MR. REID: I know, but I mean, if anyone in the Province was listening to the Budget Speech they would have assumed that there was an extra $1 million this year going into the Department of Fisheries and Aquaculture, when in actual fact -

MR. TAYLOR: I do not think that.

MR. REID: - there was $1.2 million come out -

MR. TAYLOR: I think that people would see -

MR. REID: - and that you increased fees to the industry which is going to be taken out of the processors and passed down to the harvesters in the Province. No doubt that will happen. So, while the Minister of Finance said he put $1 million in, he also took $1.2 million out of the pockets of the fishing industry. That would be fair assumption, wouldn't it?

MR. TAYLOR: No! That assumes that there will be no increase in the quality of our products and therefore the market value of our product, as a result of the investment in the quality assurance program.

MR. REID: I am talking about out of your budget now.

MR. TAYLOR: When you were part of government you, claimed, rightly I believe, that your government's commitment to a Quality Assurance Program resulted in an increase in value to the industry, and we believe that this additional money will result in a further increase in value to the industry. It is our belief, at this point, that the industry should bear the cost of dealing with that.

MR. REID: Do not get me wrong. I am not saying you should not put the money into the Quality Assurance Program. I am not saying that you should not bill some of that back to the processors and the harvesters in the Province, it is their industry. All I am saying is that, I think the Minister of Finance was misleading in leading people to believe that he actually put an extra $1 million into the fisheries budget, when in actual fact you have already admitted you did have to cut other areas of your budget. In my estimation, that came up to a total of $1.2 million.

MR. TAYLOR: Well, I cannot deal with what you perceive -

MR. REID: No, it is not perception.

MR. TAYLOR: - as misleading or whatever. The figures are the figures and there is an increase in the overall budget. Yes, you are right, the $1.2 million is in cost recovery from the industry, and, yes, you are right, approximately $1 million is into the fishery development and aquaculture funding side of it, and, no, that is not an additional $1 million over and above last year's budget.

MR. REID: I think, if you were to take out the $1.2 million that you are getting from the processing sector or the harvesting sector this year, you would be down to $9.2 million.

MR. TAYLOR: Yes, that would sound right.

MR. REID: That is where you would be, and that would be at least $400,000 less than was in your budget last year, because you had $9.6 million.

MR. TAYLOR: Yes.

MR. REID: Right?

MR. TAYLOR: Right.

MR. REID: When the Minister of Finance says that he put $1 million into Fisheries and Aquaculture this year, you are $1.4 million short. In actual fact, the processing sector and the harvesting sector out there is putting $1.2 million into your budget this year and your overall budget has only gone from $9.6 million to $10.4 million, a total of $800,000. What you are doing is billing off $1.2 million to the harvesting and processing sector and only spending $800,000 of that, actually.

MR. TAYLOR: No, you are wrong.

The $1.2 million is being billed off to the industry, but that $1.2 million is money into the department and money directly out into the initiatives that are coming out of Dunne report, which is directly related to the revenue. The expenditure is directly related to the revenue. That is it.

MR. REID: All I am saying is, and I think -

MR. TAYLOR: You cannot make the suggestion, you would be absolutely false if you said that we were billing the industry for $1.2 million and only spending $800,000 on it, because we are billing them for $1.2 million and we are spending $1.2 million on it.

MR. REID: What I am saying, though, is that last year your budget was $9.6 million.

MR. TAYLOR: Oh yes, you are right. I fully understand where you are coming from.

MR. REID: You are billing the industry an additional $1.2 this year, over and above last year.

MR. TAYLOR: Yes.

MR. REID: That brings it up to $10.8 million when your budget is only $10.4. Any increase in your budget this year is coming from the industry itself and not from government. That is what I am saying.

MR. TAYLOR: I guess it all depends on what way you want to look at it and that is the way you choose to look at it.

MR. REID: What I am saying is that you -

MS JONES: Tell him what was read in the Budget.

MR. REID: I read it. What I am saying is that you have increased your budget by $800,000 this year, yet your revenue from the industry is $1.2 million.

MR. TAYLOR: Yes.

MR. REID: It is just a play on words to say that we have increased the budget, for the Minister of Finance to stand and say we put -

MR. TAYLOR: He did not say we increased the budget. He said he committed $1 million to fisheries develop and aquaculture development. If he said he committed $1 million to it, he could have just as well said that he committed $200,000 to special assistance grants when we used to have $350,000 last year..

MR. REID: That is right.

MR. TAYLOR: The thing is, there was $350,000 in the budget for that item last year, where there is only $200,000 this year, but there is now $1 million for fisheries development diversification. The $200,000 is in the budget all of the time, and I do not know what the different breakdowns are, but your base funding, I suppose, is what we are talking about. The million dollars that is in fisheries development and aquaculture development is not in the base, so it is something that, as you know, you have to go to Cabinet or Treasury Board or wherever to get it, to seek approval every time budget comes up. You have to go for it anyway, I suppose, for all of them.

MR. REID: My only argument is that, if you took out the revenue from the fishing industry this year your budget would have shrunk.

MR. TAYLOR: Absolutely.

MR. REID: Absolutely.

MR. SAMSON: By $101,000.

MR. REID: By how much?

MR. SAMSON: By $101,000, page 122.

The total department, net expenditures.

MR. REID: I do not know how you do math over there.

MR. TAYLOR: On net expenditures. You have to deal with the net expenditures.

MR. SAMSON: Perhaps I could clarify the process.

MR. REID: I know the process. All I am saying is, if you read the Minister of Finance, and that is why I qualified the statements earlier - I am not blaming the minister. I am just saying that the reason we have to go through this Budget item by item is because the Minister of Finance says one thing and we find out, outside the House - and he has gone so far now as to do it inside the House, that he says one thing one minute and something entirely opposite to that the next minute, and this is a case in point. That is the only point that I am trying to make.

Anyway, if you would like we could go through some of the headings on this. Again, it is not because I have any disrespect for the minister or any disrespect for the officials. I worked with them and I happen to have a great deal of respect for them.

If you would like, we could start on 1.2.01, Salaries. You have gone from $543,300 last year to $611,500.

MR. TAYLOR: What was the question?

MR. REID: If you look under the heading of Executive Support, 1.2.01.01, your salary estimate this year for Executive Support has gone from $543,300 last year to $611,500 this year.

MR. TAYLOR: It was budgeted $597,400, and revised $543,300 because of a vacancy for part of the year. It is revised up now because of step progression and salary increases and what have you.

MR. REID: Okay.

Subhead 1.3.01, Planning and Administration: The Salaries have dropped there from $424,000 to $389,000, budgeted $477,000.

MR. TAYLOR: Yes, that is down due to a reduction of temporary salaries because of our budget restraint measures.

MR. REID: I do not understand. Temporary salaries?

MR. TAYLOR: Do you want to elaborate on that?

MR. REID: Subhead 1.3.01, Salaries, Mike.

MR. TAYLOR: The exact detail of it.

MR. SAMSON: It was budgeted at $477,000 last year and it was revised down to $424,000. The reason for that was we had some temporary vacancies during the year. We had people assigned out to the Dunne Commission along the way which resulted in vacancies and salary savings. That gives you the lower revised figure.

MR. REID: So you are not going to replace that person?

MR. SAMSON: This year there are people not going to be replaced.

MR. REID: Okay.

In Transportation and Communications, in that same division there, you have gone from $75,000 spent last year to $106,000 this year.

MR. SAMSON: That is part of the $1.2 million that is allocated to Dunne. You will see a number of these as you work your way through the Estimates where there are increases. We have allocated additional money under certain subheads to facilitate things that will happen in relation to Dunne.

MR. REID: Which one would that be?

MR. SAMSON: This one is in planning, is it? I would expect this has to do with matters related to travel costs associated with the board, the independent licensing board, which will be established, and costs which will be associated with consultations with the industry around the design and implementation of the new licensing system.

MR. REID: Talking about the new licensing board and stuff, where are the salaries and the expenditures for this? Where do you find that in this budget? Under what heading?

MR. SAMSON: It is allocated in Planning. I would expect that you would find that in -

MR. LEWIS: It will fall under Professional Services for the board members.

MR. REID: Under this same heading? You only have $50,000 there for Professional Services, and that is down from $132,000 last year.

MR. TAYLOR: The $132,000: There was an allocation done there from the Special Warrant which had been approved for the Dunne commission, so Professional Services reflects that. It is not anticipated that the independent licencing board will have full-time members. The board members will be paid on a per diem basis, as in accordance with the approved Treasury Board schedules for professional services for the board members and what have you. There will be no additional staff costs associated with the board because the current licencing division of the department will provide the administrative and analytical support to the board.

MR. REID: The extra $30,000 or $31,000 in Transportation and Communication will be for these board members, I take it?

MR. TAYLOR: Will be allocated out, yes, to offset out of pocket expenses for travel for board members.

MR. REID: How many board members?

MR. TAYLOR: The final design of it is not complete but the two options in play are three or five.

MR. REID: I will get back to that one after.

Under Resource Policy and Plan, Transportation and Communication, again, has gone up in that one from last year.

MR. TAYLOR: Is that new?

MR. REID: Subhead 1.3.02.03.

MR. TAYLOR: It is the same as budgeted, it is just that the expenditure was not needed last year.

MR. REID: Down below on Purchased Services there: What is the Purchased Services for there?

MR. TAYLOR: Basically, it is for equipment rental, repair, maintenance and printing.

MR. LEWIS: Resource policy and development.

MR. TAYLOR: Fisheries resource diversification.

MR. LEWIS: Fishery development initiatives are funded though that division, so the Purchased Services could include work that would be done in exploratory fishing and that sort of stuff, like if you go out and contract fishermen to conduct the exploratory fishery.

MR. REID: Okay. Grants and Subsidies there, down from $440,000 to $340,000, a $100,000, which ones -

MR. TAYLOR: That one would be directly related to the Chair of Fisheries Conservation, George Rose. There is a reduction of $100,000 there.

MR. REID: Is that the seat at the university?

MR. TAYLOR: Yes.

MR. REID: What would we normally contribute into that in a year? I thought it used to be $500,000.

MR. TAYLOR: We were contributing $300,000, we are now contributing $200,000.

MR. REID: So that is the $100,000 down there?

MR. TAYLOR: Yes.

MR. REID: That is through the Chair of the university. I think that is against your Blue Book promises as well.

MR. TAYLOR: No, it was not. I was commenting on his comment.

MR. REID: I am going to pass it along there, Mr. Chairman, if you do not mind.

CHAIR: We will give Mr. Reid a break.. Does anyone from the government member's side have a question on the estimates for Fisheries and Aquaculture?

AN HON. MEMBER: (Inaudible).

CHAIR: No questions. Okay, we will go back to Ms Jones.

MS JONES: Before I go to section 2 the estimates, just a couple of questions, because you were talking about Memorial University there. In the Blue Book, you guys made a commitment, I guess, to a fisheries science and management partnership with Memorial University. Is there anything being done on that, because I do not see anything in the budget on it?

MR. TAYLOR: No, not at this point. It is something that we want to get at but, as you can appreciate six months into it, the opportunity has not presented itself at this point to be able to engage in that. It is something that we hope to move on.

MS JONES: There was also a commitment in the Blue Book where $2 million was promised for scientific research to locate new stocks and develop new technologies for aquaculture. I did not see that in the Budget.

MR. TAYLOR: We did not say that it was going to be $2 million in one lump. We did commit to $2 million and we have identified $500,000 in this Budget.

MS JONES: Is that $500,000 over and above what was in the budget last year?

MR. TAYLOR: Pardon?

MS JONES: Is that $500,000 over and above what was in the budget last year?

MR. TAYLOR: On aquaculture, yes.

MS JONES: It is a new $500,000?

MR. TAYLOR: Yes.

MS JONES: Because the estimates only show an increase of $394,000.

MR. SAMSON: What happened was, it was a federal-provincial agreement that was in play that expired on March 31. The money was floated through the old CEDA arrangement and, of course, the federal government being out of the business of cost-shared agreements withdrew its funding and the Province stepped in and reallocated the provincial share of the old CEDA money plus additional funds into aquaculture in the amount of $550,000 for this year. There is an in and out issue there, again, that comes as a result of a necessity to move in to fill the void as a result of the feds pulling out.

MR. TAYLOR: Also, I will just say, where we will go with aquaculture is yet to be determined. As a department, we are reviewing our engagement in aquaculture. As a government, I can only say at this point we will see where we are prepared to go on that in the future.

This commitment now - we committed $2 million on aquaculture. We have part of that commitment identified in this budget, not all of it. We are, as part of our review right now of aquaculture, trying to determine how we best would help the industry in moving forward.

MS JONES: Are you guys still putting $500,000 this year, or any money, into the fisheries development and diversification? That is still there is it?

MR. TAYLOR: Yes.

MS JONES: I might get to it now.

Under the heads 2.1.01, I see the Salaries are up $19,000. Was there someone -

MR. TAYLOR: That is just normal salary increases, that is all.

MS JONES: Okay.

My colleague, the Member for Burin, already indicated some concerns with regard to the Grants being dropped from $350,000 to $200,000. I just want, for the record, to say I think that was a bad decision and will reflect negatively upon a number of communities in the Province that do not meet the criteria under small crafts and harbours and have no other options, only the provincial government, for getting repairs done to their wharves, their slipways, their haul ups and so on. My experience in the department, when I was there as the minister, was that this was a very highly sought after program with a lot of applications coming in. In most cases it was from small, rural communities, small fishing communities, mostly used by inshore fishers and they had no other options or other sources of revenue. I am disappointed to see that and I think it will have some negative impact in rural areas of the Province.

Under section 2.2.01, Salaries increased by $31,300. Was there somebody new hired or what new position has been created in the department?

MR. SAMSON: In the Technical Services division you will see that the increase year over year in budgeted amount is approximately - well, it is less than $5,000. The projected revised is down, that is because there was a vacancy held. We have not filled the position of Director of Technical Services.

MS JONES: Have you filled it?

MR. SAMSON: We have not filled it to this point.

MS JONES: Are you going to fill it?

MR. SAMSON: That would be subject to consideration as we go along. The position remains on the books. It is a funded position, so it would be our intention to fill it at such time as we ascertain that we have the room to manoeuver within a tight salary envelope to do so.

MS JONES: There is no freeze on that position?

MR. SAMSON: I think, as the Minister of Finance has indicated, there is a freeze on all hiring at the present time. There is a requirement for departments to proceed to Treasury Board to request exemptions from the hiring freeze.

MS JONES: The Transportation and Communications budget increased. Well, it did not increase over the budgeted amount, I guess it increased over the revised amount. I guess you just anticipate on spending a little bit more this year than last year, do you?

MR. SAMSON: The numbers would indicate we anticipate perhaps spending more than we did last year but we anticipate spending less this year than we anticipated spending last year, this time last year.

MS JONES: Yes, that is clear as mud.

Under 2.2.02; again, the Salaries have increased by almost $86,000. Have there been any new positions created? What are the positions?

MR. SAMSON: That increase is reflective of a - there has been an additional position added in that division. It came about in an odd sort of way as a result of a settlement of a grievance that occurred in another department. There was a necessity to reassign a staff person from another department to the Department of Fisheries. When Treasury Board and the union settled up the grievance they assigned a person to the Department of Fisheries where they felt they could best suit -

MS JONES: Is this someone from the Department of Labour?

MR. SAMSON: - that person's skills could be best applied and they also provided us the money to fund it.

MR. REID: What department was it from?

MS JONES: Yes, what department was it from?

MR. SAMSON: It was from ITRD.

MS JONES: They transferred the funds?

MR. SAMSON: Yes, they did. The person and the money were transferred to the Department of Fisheries. It is a rare occurrence.

MS JONES: That person is now on the payroll?

MR. SAMSON: That person is now on the payroll and productively and actively employed in the department.

MR. REID: I think that is where Toronto got their hockey team.

MS JONES: Under that same heading, Grants and Subsidies are down by $100,000 in the Processing and Marketing division. Why the decrease? Also, can you tell me normally where these funds would have gone? For the record.

MR. LEWIS: The decrease - I believe the minister mentioned previously - $50,000 of that relates to the Canadian Sealers Association. The remainder would just be a reduction in the ability to deal with miscellaneous grants. There are a number of small grants provided out of that account on an annual basis.

MS JONES: Was there a decision made not to fund the Sealers Association or is it just because they made a decision to fold because of insufficient funds? Did they come to the department and were rejected?

MR. TAYLOR: Yes, they came to the department. I cannot say that there was an outright rejection, but certainly it was relayed that - you know, two things, I guess. We really had to question, as I said to the Member for Grand Bank, our financial support for an industry association that is, by all accounts, doing rather well - the industry that is - in the absence of any real support and meaningful support from the industry itself. If the water on the beans was such as it was twenty years ago, obviously the decision might be substantially different from what it is today. But, the industry is worth over $40 million. We think, or I think anyway, that there is a responsibility for the participants in the industry to fund their own industry association, similar to fishermen funding the Fishermens' Union and teachers funding the Teachers' Association and what have you. However, having said that - as you would know, I think, when you were minister - the decision at that time was to contribute funds to the Sealers Association last year, providing they raised funds through pelt levies and identified funding through ACOA or other federal sources matching funding. Neither of those things materialized, so we were the only ones left holding the bag, so to speak. That sort of, I guess, is the context in which the decision was made.

MS JONES: Do you feel that the department has a role at all in dispelling the myth that has been created by animal welfare groups and other lobbyists groups with regard to the sealing industry in Newfoundland and Labrador?

MR. TAYLOR: Yes, I do.

MS JONES: But you do not feel that role is through financial grants to the Sealers Association?

MR. TAYLOR: I do not feel that it is when the industry itself does not see fit to fund an association that is for their benefit. An industry that is worth $40 million, surely God, the industry should be able to find a way to come up with $100,000 to fund an industry association. If that industry association then came to government looking for support for a campaign against the anti-sealing groups then that is a different scenario than looking to us for core funding to support the association.

MS JONES: Okay.

Under that same heading, I noticed a substantial increase in the amounts voted to Transportation and Communications.

MR. TAYLOR: Under what heading?

MS JONES: Processing and Marketing, 2.2.02.

MR. TAYLOR: Again, that is similar to some of the other substantial increases related to the implementation of the Dunne report.

Are you talking about Transportation and Communications, 2.2.02?

MS JONES: Yes.

I thought the Dunne report was back here somewhere.

MR. TAYLOR: No, the Dunne report is scattered all throughout this.

MR. REID: What part of it is -

MS JONES: How come it is all scattered throughout? How come it is not under one particular heading?

MR. TAYLOR: I guess the short answer is because a person who is working in quality assurance, for example, has travel costs that would be billed to the travel and communication subhead. Their salary would be billed to a salary subhead. Their clothing would be billed to some other subhead.

MS JONES: But quality assurance comes under licencing doesn't it, and quality insurance? That would not come under Processing and Marketing. I am looking at Processing and Marketing now.

MR. TAYLOR: Yes, the quality assurance, but there is more to the Dunne report than just the quality assurance piece of course. Maybe the boys can give a more concise answer on what exactly this is related to.

MS JONES: Yes, because every heading of Transportation and Communications has increased. If it is all due to the Dunne report, why isn't it built into one heading? What is the total cost of Transportation and Communications for the Dunne report for next year?

AN HON. MEMBER: (Inaudible).

MS JONES: Yes, that is two headings now to factor in.

MR. TAYLOR: Well, the total is $224,500 for Transportation and Communications.

MR. REID: What is this one here for?

MR. TAYLOR: What is this one for? Processing and Marketing and Transportation (inaudible).

MS JONES: That is for Transportation and Communications?

MR. TAYLOR: Yes, for the whole of the Dunne report.

MS JONES: Yes, and what you guys have done is added so much under each section. Is that what you are telling me?

MR. TAYLOR: Yes.

Go ahead Dave, I am sorry.

MR. LEWIS: I can probably speak to that.

The Dunne report implementation basically falls under three categories within our department. It falls under Licensing and Quality Assurance, that is where the bulk of the money is going to deal with the Quality Inspection Program, and also compliance and enforcement initiatives. It is also under planning services. As mentioned previously, there is consultation requirements in the implementation. There is the operation of the board and there is also a quality working group which will operate. That is showing under Planning.

Under Processing and Marketing, there are requirements in Dunne for increased market intelligence, reporting on where final products go from the Province, particularly in crab products, determination of how much goes to China for picking in the meat and those sorts of initiatives; those fall under Marketing. The department, essentially, has allocated the funds out as it seen best amongst those three divisions.

MS JONES: So the Transportation and Communications cost associated with the Dunne report implementation is $224,500. What is the total cost of implementing the recommendations in the Dunne report?

MR. LEWIS: $1,250,000.

MS JONES: Okay.

MR. TAYLOR: Mr. Chairman, I do not know how much longer we are going to carry on. If we are going on for an extended period of time I would like to take a break for about five or ten minutes. If we are going on for another ten or fifteen minutes then we will go on for another ten or fifteen minutes, but that is up to the committee to determine that I guess.

CHAIR: I am just wondering how many more questions the Opposition may have?

MS JONES: We will try and finish up in the next few minutes but if you want, we do not mind waiting for you to run out and come back.

MR. TAYLOR: I can wait if it is only going to be ten or fifteen minutes. It makes no difference.

MS JONES: You do not have anymore questions, do you?

MR. REID: Yes, I have a couple left.

MS JONES: Well, okay.

Also, under Processing and Marketing, there is a Professional Services increase from what was spent last year, $34,400, to $147,400. Do you want to tell me what the increase is for this year?

MR. TAYLOR: I will turn it over to you Dave. It was Dunne.

MR. LEWIS: One hundred and twenty thousand for Dunne, yes.

Market Intelligence: As I indicated, there are a number of reports that Dunne recommends be implemented, final product marketing information.

MS JONES: Will you guys be actually contracting someone to do the Professional Services?

MR. LEWIS: We have not contracted anybody yet. That is what is envisaged but the final details are still being worked out.

MS JONES: Okay.

MR. REID: I think we can go pretty fast on the licencing there, I would assume, and the quality assurance. Going from $500,000 to $1 million, under 2.2.03, is the increase in Salaries due to the ten inspectors you have hired?

MR. TAYLOR: Yes.

MR. REID: What is that, $50,000 each?

MR. TAYLOR: No.

MR. SAMSON: There is also a new division being created, a division of enforcement and compliance I think it is called. Essentially what we are doing is we are splitting the legal enforcement end of quality assurance off from the policy side of quality assurance. That division will consist of a director and a case management officer. Two or three positions, I think, are billed at this point as auditing positions and they will do a number of functions. They will manage, sort of, the enforcement activities under the Fish Inspection Act, the laying of charges, the management of the case files and stuff. Mr. Reid, you would be familiar with that.

As well, if you read Dunne you would have noted that there is a requirement on a go-forward basis for plants - and it was referenced earlier - for plants to file annual processing plans, and of course if plants are going to have to file plans there are going to have to be reconciliations with actual performance at the end of the year as part of the policy to increase accountability on the part of the processing sector. That is part of the role that those auditors will fulfill. That is the $500,000.

MR. REID: The increase in transportation is for these additional people as well, I guess, the inspectors?

MR. SAMSON: This relates to the travel costs associated with the ten seasonal inspectors and the travel cost associated with the new division.

MR. REID: Professional Services, $133,000 up from $700, a $133,000 increase there: What are you buying out of that?

MR. TAYLOR: Dave, you had better answer that one.

MR. LEWIS: Part of the Dunne Report recommends that there be development of new quality standards. The Marine Institute will be used for a fair amount of that, in developing new standards for the sanitation of the hulls of the vessels and a whole variety of other initiatives that Dunne recommended be done.

MR. TAYLOR: Shrimp quality tests.

MR. LEWIS: Shrimp quality tests. Consultants will be used for part of those.

MR. REID: All I can say is, thank God for Eric Dunne, because without him you would have been wiped out over there, wouldn't you? That is another $1.2 million you would have had stripped out of your budget.

MR. TAYLOR: If it wasn't for Eric Dunne we would not have to be doing this stuff. We are doing what was not done before.

MR. REID: Luckily for Eric Dunne, though, you still have something left of the department. You are at least maintaining your budget this year.

WITNESS: It was a good decision, whoever decided to hire him.

MR. REID: Yes, whoever decided to do that did a good job of it, and compliment him for me the next time you see him.

In aquaculture, there is an increase in Salaries there of $50,000 over last year.

MR. SAMSON: I believe that relates to the provision of the staff person to work with Dr. Daryl Whalen, the veterinarian, the technician, to provide assistance on that side.

MR. REID: And the $70,000 extra for Transportation?

MR. TAYLOR: That is not Dunne.

MR. LEWIS: That item is the increases primarily due to the fish health, travel and communications and investment prospecting. These are items that would have been covered by the CEDA program that just finished in March 2004. Again, like the exercise we just had on the Dunne report, a number of these categories have gone up because it was a cost-shared program for the last two years, but now they are showing as increases in the aquaculture budget here.

MR. REID: On the Purchased Services, $292,000 up from $147,000, what are you purchasing?

MR. LEWIS: Purchased Services covers a couple of the bigger items that we have and they are things like the rental of our offices in Grand Falls, in Corner Brook and in St. Alban's. They are the big ticket items.

MR. REID: Yes, but there is an increase of $100,000 or $150,000.

MR. LEWIS: Again, some of those rentals were covered under the CEDA program before this. The other big one in there is, some of the diagnostic testing that would have been covered under the CEDA program is now in here under Purchased Services which, again, are aquaculture, buying and sampling from some of the labs.

MR. REID: The same with the Grants and Subsidies, increased by $105,000.

I am finished with this section. I am just keeping Loyola straight there that is all.

On the licensing board, you said that you were going to have four or five members on that, was it? These are going to be appointed, I take it, by the minister.

MR. TAYLOR: Appointed by Cabinet.

MR. REID: Yes. I think I read in the Dunne report, or shortly thereafter, you made a comment in a briefing note or something that I saw, that the licensing committee would be asked to make a decision and then refer that decision to you. Then, the ultimate decision would be made by the minister whether to accept or reject the recommendation. Do you think that a board like that should be given the name of an independent licensing board?

MR. TAYLOR: I think it will be just as independent as the Fisheries Resource Conservation Council and I believe they operate with a fair degree of autonomy from the federal minister. They make a recommendation to him and it is up to him to accept or reject it. Sometimes they accept, sometimes they reject it. In the vast majority of cases it is accepted. Seeing as how it is a publicly released recommendation, which is what we envisioned, not a recommendation that would be kept under wraps to the minister and then the minister's decision being the only thing that is public, the minister would, I guess, accept or reject the board's recommendation at his or her peril.

MR. REID: The federal government did not seem to have too much concern about their peril when they rejected the recommendation of the FRCC last year to have a limited fishery in the Gulf -

MR. TAYLOR: Yes, I understand that.

MR. REID: - and a number of other recommendations, since their inception, I think, that whichever minister was here has also played with when it comes to -

MR. TAYLOR: I would suggest that it is less than 5 per cent of the recommendations all the same.

MR. REID: What? That they -

MR. TAYLOR: That were not adhered to by the federal minister over the course of the last ten years.

MR. REID: Is that right?

MR. TAYLOR: I would say less than 5 per cent. While I was on the FRCC, and that was six years, I can only think of, probably, two recommendations that were not accepted.

MR. REID: My colleague here said, the only ones he rejected must have been the ones when she was the minister.

MR. TAYLOR: That was two recommendations, right? That was two recommendations out of probably close to forty-eight fish stocks that the FRCC recommends on. That was two recommendations last year. I do not know how many others were rejected last year, but I am not aware of many off the top of my head. I am not aware of any off the top of my head. That would be 5 per cent, roughly, last year. It just happened to be ours.

MR. REID: These board members, what are you going to pay them? Per diems? Are any of them on salary?

MR. TAYLOR: No, no, there will not be anybody on salary. The per diems, I guess, will be consistent with whatever the government guidelines are as it relates to these types of organizations.

MR. REID: Getting back to George Rose, and cutting - what was it? - $100,000 or $150,000 from the chair?

MR. TAYLOR: Yes.

MR. REID: In the Blue Book again, your election platform, one of the promises says you are going to make a commitment to establish a fisheries science and management institute at Memorial that will provide scientific, technical and economic support for sustainable development of Newfoundland and Labrador marine fisheries and aquaculture. Isn't that something very similar to what the chair was doing?

MR. TAYLOR: No, not in my view. The chair of conservation at MUN is primarily engaged in on-the-water research. That is not how we -

WITNESS: (Inaudible)

MR. TAYLOR: Yes, on ground fish stocks exclusively. Our vision of a fisheries science and management institute would be broader in scope than that and not involved in raw data collection like Dr. Rose is involved with. It would be more along the lines of an institute that would analyze data that is collected by other organizations to provide government with, I guess, the information to deal with the federal government in our various multilateral and bilateral engagements, and also to provide us with management advice for planning exercises for the fishery.

MR. REID: When I was minister I used George for other things than what you said he was there for, infield work basically. I certainly used him for scientific and technical advice and things like that.

You have cut $100,000 or $150,000, is it?

MR. TAYLOR: One hundred thousand.

MR. REID: One hundred thousand from the chair. On the platform, there is no money in the budget this year for this institute at MUN, is there?

MR. TAYLOR: No, there is not. That is because it has not been established yet. Deliberations on that have yet to take place, as to how it will be brought together. As for George Rose, we do and we still will engage him on issues like that. We still are providing $200,000 to it, but whether we funded George Rose at $300,000 or at $200,000 or at $10, his role as the Chair of Conservation at MUN is not consistent with what we envisage as a fisheries science and management institute.

MR. REID: You said that you have not really given it a lot of thought about the establishment of that management institute. There wasn't any deliberations on it yet. I would have thought that there would have been some deliberations on it before you put it in as a commitment in your Blue Book.

MR. TAYLOR: What do you mean, some deliberations on it?

MR. REID: Well, when I asked you how come you do not have it established yet, you said -

MR. TAYLOR: There were deliberations. There were many deliberations on it internally, but as for an engagement with Memorial University as to how we might bring that to fruition since we became government, no there has not been.

MR. REID: I have one final question for you. My colleague from Grand Bank asked me to ask you this. It concerns the plant in her district. Mr. Bungay applied for a licence this year to do a certain product down there. Are you familiar with that one?

MR. TAYLOR: Yes.

MR. REID: What was he looking for and why couldn't he get it?

MR. TAYLOR: He was looking for - he was not applying, I suppose, for a licence, as I recall it. Now, it has been a couple of months since we dealt with it, but he was looking for the reactivation of an inactive non-core, as I recall, processing licence. It was, as I recall, after February 4, where in rolling out the Dunne report we announced that any requests henceforth on reactivation of licences, or transfers of licences or applications for new licences, would be referred to the new licensing board. That was conveyed to Mr. Bungay on a couple of occasions since then.

MR. REID: So, you have not reactivated any inactive licences since you became minister?

MR. TAYLOR: No.

MR. REID: One other - I am sorry. In the Dunne report they talked about eliminating the inactive portion of licences belonging to core plants.

MR. TAYLOR: Species licensing system.

MR. REID: Are you going ahead with that?

MR. TAYLOR: We are.

MR. REID: When is that going to happen?

MR. TAYLOR: It will come into effect in the 2005 season; 2005 calendar year.

MR. REID: Any plant that is core and has only been doing shellfish will have all of these licences eliminated if they never used them?

MR. TAYLOR: Potentially. As we said when we rolled out the Dunne report, we accepted the recommendations in principle but Dunne recommended a strict species by species licensing system. We indicated that we would consult with the industry and whoever wanted to provide input to us over the time between the announcement of the Dunne report and when we finally got around to implementing that aspect of the Dunne report, on how we should do that - should that be strictly on a species by species? The question is: How would we determine whether they were active in a species or not active? Dunne recommended that in order to be considered active you would have to have produced 5 per cent of the rolling five year average in order to be considered active.

MR. REID: Rolling five year average of what though?

MR. TAYLOR: In whatever species. The five year average production by plant. So, if there are twenty plants producing various species and the average - based on five years for those plants - was 2 million pounds, in order to be considered active you would have had to produce 5 per cent of that 2 million. Which is 100,000, is it? That is what he suggested.

Now, we did not say whether we were going to accept that to the letter or not. We want to have a bit of a discussion with the industry and communities on how we should - we want to listen to their input anyway, let's put it that way, on how we should do that. There are those who would suggest that the only way you can determine that a facility is inactive is if it produces zero, but Dunne did not say that.

So, the question is: How do we get around the other thing? Species by species could be somewhat cumbersome and maybe there should be a species grouping. You should group it as groundfish and palagics, shrimp and crab, something like that. Exactly what we will do on that has not been decided yet.

MR. REID: I do not disagree with Dunne on that. I know when I was minister I had problems where individuals wanted to do sea urchins but we could not issue them a licence because there were a number of core plants in a certain area that had sea urchin licences under this but never, ever used them.

MR. TAYLOR: Exactly. That is what drove his recommendation on that. It was that type of a thing, I am not saying it was that specifically.

MR. REID: I think it is going to be pretty difficult though to pull those licences out of the hands of those individuals, especially the larger ones, even though they did not use them. I know of individuals who went out and bought groundfish licences after the moratorium and have not used them since then, but it is going to be difficult to pull them out of their hands.

With reference to that, there is a mussel plant now in operation or about to be in operation in Arnold's Cove. They have not produced mussels before, not that I am aware of. They were just allowed to go in and set up a mussel processing operation in the plant in Arnold's Cove. They never did mussels, so if you had implemented the Dunne report before, obviously that would not have been able to occur. Right?

MR. TAYLOR: Right. The problem is, as you can appreciate, a flick of the switch from one policy to another policy immediately.

MR. REID: I wish you luck with that one, but I think next year this time or the year after, if we are all still around, we will realize that is one Mr. Dunne recommended that you are going to have a lot of difficulty trying to implement.

MR. TAYLOR: But, do you think we should implement it? That is the important question.

MR. REID: Yes, I do.

MR. TAYLOR: Good enough.

MR. REID: Yes, I do. In fact, I have -

MR. TAYLOR: That is all I wanted to hear. We will deal with the difficulties associated with it.

MR. REID: It was mentioned a number of times when I was minister, that these individuals who are out there with a stack of licences simply because they processed a bit of cod back prior to 1992 and never used them since then, should continue to hold on to them and then when someone comes in and wants to do something in a certain species: Oh, the minister is a nutcase because he is issuing another licence.

CHAIR: Okay. I think we asked the minister if he could hold on for fifteen minutes or so, and we have gone beyond that now.

MS JONES: Just a couple of more questions. On the licencing as well, what about licences that are inactive, completely inactive, not just species but whole licences for non-core plants, or whatever the case might be, that have not been used in the last few years? How is the department going to deal with that, or are you going to deal with it?

MR. TAYLOR: They are gone.

MS JONES: They cannot be reactivated, they have been eliminated?

MR. TAYLOR: They are not in existence. I mean, it is only a figment of everybody's imagination that these licences are there, because they have not been paid for and they are not on anybody's books. The cold hard fact of it is that there are no licences associated with these facilities. The whole policy was, two years inactivate the licence is gone. All Dunne recommended, and all that we have said, is, where these licences no longer exist we are going to state that they no longer exist. The fact of the matter is, there is nothing stopping somebody, if they are in a spot, from applying to the licencing board for a new licence. They will not be applying for reactivation of something that existed, as Gerry said, ten years ago. Just because it existed ten years ago, and it has not been there for the last ten years, how -

MS JONES: When we were going through the estimates, you guys outlined a number of new positions that are going to be created in the department as a result of implementing the Dunne Report. Can you tell me how many positions will be lost in the department in other sectors due to layoffs or to attrition this year?

MR. TAYLOR: Layoffs, zero. Attrition, there is nothing that I know of. There are none that we are aware of, lets put it that way. There are no layoffs and, as for attrition, if someone is retiring, not that I am aware of. If they do or if somebody leaves, well I guess we will deal with that accordingly.

MS JONES: Those are all my questions.

The only thing I wanted to say, before I turn it back to Gerry, is to thank you for your time and for the responses that you have given, and to thank your officials for the time that they put in here this evening. I must say, I have had the opportunity to work with almost all of them, except for the Communications Director in back, and you certainly have very capable, very intelligent individuals in your department who understand the industry to the greatest degree. I think that if you take their advice, you should not have any problems.

MR. TAYLOR: You can carry those comments over to the minister too, you know.

MS JONES: We will have to see how the minister performs.

MR. REID: Just in closing, Mr. Chairman, to get back to the figment of imagination that the minister was talking about with reference to inactive licences, I would just like to remind him that a year and a half ago he almost had me convinced to transfer one of those figments of imagination to St. Anthony from- where was it?

MR. TAYLOR: Ramea.

MR. REID: Ramea.

I would like to reiterate the points made by my colleague, the Member for Cartwright-L'Anse au Clair, that you are dealing with a good bunch of individuals in your department. They are very knowledgeable. The unfortunate thing about it is you have the same problem as I had, you are trying to run a billion dollar industry with a $10 million budget. I think it is pathetic. I thought it was pathetic when I was there and I still think that it is pathetic that we all give lip service to the fishery in this Province but we do not put the money where our mouths are.

Thank you.

CHAIR: Before I call for a vote on the subheads, is there anyone else on the Committee who has a question? None.

I will ask the clerk now to call the combined subheads for the Department of Fisheries and Aquaculture.

CLERK: 1.1.01 to 3.1.01 inclusive.

CHAIR: Shall 1.1.01 to 3.1.01 inclusive carry?

SOME HON. MEMBERS: Aye.

CHAIR: Carried.

On motion, subheads 1.1.01 through 3.1.01 carried.

CLERK: Total

CHAIR: Shall the total carry?

SOME HON. MEMBERS: Aye.

CHAIR: Carried.

On motion total subheads carried.

CHAIR: Shall I report heads carried without amendment?

AN HON. MEMBER: Aye.

CHAIR: Carried.

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

CHAIR: That is the Department of Fisheries and Aquaculture, but the other section of the department, Labrador and Aboriginal Affairs, it was my understanding when Mr. Andersen left that this section was also completely covered.

MS JONES: I have asked my questions. I don't have anymore.

CHAIR: So we can vote on this as well now.

CLERK: 1.1.01 to 2.1.03, inclusive.

CHAIR: 1.1.01 to 2.1.03 of the Labrador and Aboriginal Affairs carried?

AN HON. MEMBER: Aye.

CHAIR: Carried.

On motion, subheads 1.1.01 through 2.1.03 carried.

CHAIR: Does the total carry?

AN HON. MEMBER: Aye.

CHAIR: Carried.

On motion total subheads carried.

MR. REID: One final comment there, Mr. Chairman, if you do not mind?

I want to tell this to the new members here. Apparently in the 1980s, under the Peckford regime, on a night like this all the members from the government side did not show up and as a result the Opposition members had the majority in the estimates and they added an amendment to the estimates saying that they would reduce the minister's salary to a dollar and it passed..

CHAIR: I will not entertain that.

I would like to thank the minister and his officials for being here tonight and doing a very fine job, I must say, in answering the questions that were posed to them. I would also like to thank the members of the committee and witnesses, and also the Legislative Assembly staff.

Before we adjourn, I would just like to announce that tomorrow morning we are scheduled to meet again to discuss the estimates for the Department of Innovation, Trade and Rural Renewal. That will be 9 o'clock tomorrow morning here in the Chamber.

Now, I will call for a motion to adjourn.

AN HON. MEMBER: So moved.

CHAIR: Meeting adjourned.

The Committee now stands adjourned.