The Committee met at 6:00 p.m. in the House of Assembly.

CHAIR (Verge): Okay, ladies and gentlemen, I think we are all ready to begin. I want to welcome you all here this evening. We are going to hear the Estimates of the Department of Fisheries and Aquaculture.

Before we start, I have circulated two sets of minutes; one was for the Department of Natural Resources. I am looking for a mover and a seconder. I checked with the Clerk. Do we actually vote on the adoption of the minutes, Clerk?

Do we have a mover and a seconder for the minutes that were circulated for the meeting of the Department of Natural Resources?

Moved by Mr. Brazil, seconded by Ms Michael.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Contra-minded?

Carried.

On motion, minutes adopted as circulated.

CHAIR: The second set of minutes is for the Department of Tourism, Culture and Recreation.

Moved by Mr. Davis and seconded by Mr. Baker.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Contra-minded?

Carried.

On motion, minutes adopted as circulated.

CHAIR: We are going to start the proceedings by asking the members of the Committee here to introduce themselves. I will start on my right. Also, any officials who are here with the Opposition, you can also state your name for the record. After we have done that, then I will ask the Clerk to call the first subhead and pass it over to the minister to begin and to introduce his officials.

We will start over here to my right.

MR. POLLARD: Kevin Pollard, Baie Verte-Springdale.

CHAIR: You might note, Kevin is sitting in as a guest tonight.

MR. BAKER: Jim Baker, Labrador West.

MR. DAVIS: Paul Davis, the District of Topsail.

MR. HUNTER: Ray Hunter, Grand Falls-Windsor-Green Bay South District.

MR. BRAZIL: David Brazil, Conception Bay East & Bell Island.

MR. DEAN: Marshall Dean, The Straits & White Bay North.

MS PLOUGHMAN: Kim Ploughman.

MS MICHAEL: Lorraine Michael, Signal Hill-Quidi Vidi.

MR. MORGAN: Ivan Morgan, Researcher, NDP caucus.

CHAIR: Ms Ploughman, are you with the Liberal or -

MS PLOUGHMAN: The Opposition Office, as a researcher.

CHAIR: I will ask the Clerk now if she will call the first subhead.

CLERK (Ms Murphy): 1.1.01.

CHAIR: Shall 1.1.01 carry?

I will pass it over to the minister. I will ask the minister if he could introduce his officials and to also remind people, when you are speaking, to watch for the little red light on your mike there and when you speak if you could say your name, any of the minister's officials. It is for the purpose of Hansard. It is all being recorded and we want to know who to attribute the comments to.

Minister Jackman.

MR. JACKMAN: Clyde Jackman, Minister of Fisheries and Aquaculture, and my district is Burin-Placentia West. (Inaudible) staff here, I am going to let them introduce themselves.

Mr. Lewis will announce his division within the department.

MR. LEWIS: Dave Lewis, ADM for Policy and Planning Branch.

MR. ROBINSON: Shawn Robinson, ADM, Fisheries.

MR. WARREN: Good evening. Mike Warren, Executive Director of Marketing and Development.

MR. TOBIN Andrew Tobin, Executive Assistant to the Minister.

MS OATES: Lori Lee Oates, Director of Communications.

MR. JACKMAN: My deputy minister is on a flight, actually, right now. He is on his way here, but we will go through our Estimates here and we will look forward to your questions and whatnot. Staff are more than able to answer any questions that you have and (inaudible).

Do you want me to start with some introductory remarks or are you…

CHAIR: You have up to fifteen minutes, Minister, to start and go ahead. Would you prefer that questions be directed toward you and if you need to enlist some assistance you would -

MR. JACKMAN: Yes.

CHAIR: Okay.

MR. JACKMAN: I suppose I could start off by saying as much as some people say that the job you have is a strange one and would not wish it on anybody else, I have to tell you quite honestly and quite sincerely, this is a department that I really enjoy being in. Challenges, there is no doubt about it, absolutely. I do not think there is ever a day that you can expect the same type of an issue is going to raise its head.

There is nobody in our department, nor do I as minister, underestimate the importance of this industry to the people of the Province and to rural Newfoundland and Labrador. I live in it. I would not say it to the media or anything, like this might be now, but a couple of Saturdays ago I took the day and went crab fishing with a crowd down my way, and I have done that for a number of years. It just gives you the perspective from where these people come from on a regular basis.

There are challenges that come with the fishery; there is no doubt about it. I do not know if anybody opposite listened to the broadcast just a short while ago, but they are talking now that in PEI they were hoping to get $3.50 a pound for lobster, but by the end of the week they are saying it could very well be $3.25. We are embroiled in a debate here. In the lobster, in particular, it relates to outside buying. Somehow or another it is an issue that we are going to have to deal with, and a large contingent, a party that has to be engaged in this is the union. It is an annual occurrence.

I made a comment earlier in the week, I did not say it in the context that it was reported in and (inaudible) season, but it just seems like every spring there are issues that arise in the fishery. There never seems to be a smooth opening of the season. This year, to everybody's thoughts, crab prices were good. Shrimp prices were as good as they have been seen for years, and they have even gone higher. Everyone thought: Boy, this is going to be a half decent smooth season. Little did we know, lobsters were on the way. Hopefully, we will find a resolution to that.

The budget, the money that has been invested in it still speaks to that. The Department of Fisheries and Aquaculture, the budget has increased five-fold. Our combined budget is greater than the other three Atlantic Provinces put together. No one underestimates the value of - we expected this year, this would go over the $1 billion mark. This is certainly positive.

The sealing initiative is an ongoing one. This past year I had the opportunity to partake in a Canadian delegation. We went into the European Union and made some representation there. We have also done work in China, and the markets that are becoming available in Russia. If we can avail of those opportunities, then that industry will be, hopefully, strengthened and will continue well into the future.

The initiatives we have gone into, the Centre for Fisheries Ecosystems Research. Everyone, I hope, would have heard by now about our investment of $14 million into that. We put $3.3 million into that this year with the arrival of the Celtic Explorer and other initiatives. We continue with our fisheries technology program.

The fishery is indeed changing. Technology is becoming more and more a part of it, not only from the processing side but from the harvesting side as well. This program that we put $2 million into each year for the past three years, the response from industry has been tremendous to the point that we did a survey, and I believe it was nearing 90 per cent satisfaction with the program. They were hoping we would continue it, and, in fact, we have. In those types of programs you have harvesters who are purchasing new boats; looking at design structures so that they become more fuel efficient, see how they can harvest their catch more efficiently, and for processors it means a way to see how they can operate more on a cost-recovery basis. Those are the types of things we are entering into in that program.

There are talks that are ongoing now with trade, and issues around trade tariffs. We have now entered as part of the Canadian delegation. We do not ever prejudge stuff but the representation we are making, we are certainly hoping that the tariffs would be lifted on seafood. Right now, we have no tariffs on seafood going into the European market unprocessed, but anything that goes into the European market that is processed they pay tariffs on different species, up to as high as 20 per cent. If we can get those things removed it would be a huge boost to the prices, I would expect, that the harvesters would get, and processors would get as well.

I mentioned sealing; we have increased the budget for sealing with an additional $100,000. The animal rights groups continuously come here and are on top of that issue, but we have made some additional efforts beyond working with the Canadian union. I do not know if people are aware of it or not but our government last year committed to sponsoring a group, it is called the CIC. Basically, in English terms, it is a group that looks at sustainable hunting and harvesting. We are the first jurisdiction in North America to join that group. They are very influential people in Europe, and we are continuing to work with that group and work with other groups that are on the ground in Europe. I truly do believe, as much as you want to counter the animal rights groups, each time you do it you give them ammunition to come with even more. Maybe the way we need to take a look at some of those things is that we tackle and get involved with the groups on the ground who have an interest in hunting, but equally as important, they have an interest in sustainable hunting and humane hunting. So, we will work on that.

Again, this year we have allocated a total of $3.1 million toward the workforce adjustment program. Now, as much as we would like to see that we would never have to use those things, we readily recognize it is an issue that faces us on an annual basis. It seems now coming more and more. We have had several plants that have required of that this past year. In the past years we have invested those funds into facilities such as the one in Gaultois, another one in Trouty, and there is one more, I cannot remember –

OFFICIAL: Englee.

MR. JACKMAN: Englee is another one. As much as we would hope that we would not have to use this, it is a factor. We are facing some other plants in the Province that indeed may require these amounts of monies for this coming year.

I am going to make a few comments on the aquaculture. The focus sometimes gets caught up in the wild fishery so much that the aquaculture oftentimes gets – not overlooked, certainly, but to see the impact that it is having on the Province I do not think we recognize it at some point. Right now, we have 700 people directly employed in the aquaculture industry. We have three large companies operating down in the Coast of Bays region. We have Cooke, we have Northern Harvest through Ingalls, and we have Gray Aquaculture who is down there. There are approximately 1,000-plus people who are directly or indirectly employed.

A comment that has really stuck with me is, I was down there at one point and somebody asked me: Where would these 1,000 to 1,500 people be if the aquaculture industry had not come in down there? We are expecting to see even more increases. The numbers have basically tripled in production over the past seven, eight, nine years and we expect that trend to continue. Shawn Robinson has just moved in as the new ADM in the department, but his career has basically been in the aquaculture industry down on the Coast of Bays and he can certainly speak firsthand to a lot that has happened down there.

We are looking forward to the opening of the aquaculture health development centre this spring. That is an $8.8 million state-of-the-art facility that will put us on the leading edge of the aquaculture industry; that likewise, is bringing a number of people in. An interesting visit down there last year pointed to something we are not seeing a lot of in some other divisions of departments, look at the age of the people who are involved down there. They are young people. They are young veterinarians, people who are new into this industry and it is truly good to see them. I am not saying the old fogies are not as dedicated anymore, but it is good to see some younger people coming into a new and evolving industry and these are the people who are going to take us there well into the future.

The other side of the aquaculture is the mussel growing sector. We have been working with that sector. There has been a report that has been completed and some suggestions coming out of how we can move that industry forward. As such, we will continue to look forward to them.

With that, Mr. Chair, I think I have said enough. I am certain there are questions that will be asked of some of these issues and we are opening to move to the Estimates section.

CHAIR: Mr. Dean, would you like some questions of the minister?

MR. DEAN: Thank you, Mr. Chair.

I thank the minister for his opening comments.

I want to say we are excited, obviously, that aquaculture is doing well. It is probably the bright spot in the fishing industry overall, but we are also very concerned about some of the larger issues that are out there today in terms of the MOU, in terms of rationalization and restructuring. The very current issues are obviously the lobster issue, which you referred to in your opening remarks, and the protests that have taken place and more protests that will take place.

The cap on the shrimp and the sealing industry; I just heard on the broadcast, as I already knew but I am sure you are aware, that the season is kind of extended indefinitely at this point in time, and I think the numbers are less than 40,000 of the 400,000 quota being taken this year. I think that really is just a reflection of how people have just lost interest in the industry because of all of the challenges that are in there. I am not suggesting, by any means, that they are a result of your leadership but certainly a responsibility of your department and a great challenge. I would certainly hope we can see some good things out of there for my district, in particular, and others along the Northeast Coast and so on. The fishing industry has been a great part of the spring economy. A very few short years ago, I saw in St. Anthony where we were getting $80 to $100 a pelt and that was putting $7,000, $8,000 or $10,000 in people's pockets per year and this year it is not there, so there are a lot of things that is happening for sure.

Anyway, there are a lot of things that are important to the fishing industry and I have a lot of questions and so on to put forward tonight for dialogue and information back and forth. Probably we can just start by looking at some of the numbers in the Estimates binder, just to get us going. We can start with the Minister's Office. I just ask for an explanation on one or two items. We are looking at line item 1.1.01.01. Basically, we are just asking the variance in the budget revised versus the budget 2010-2011.

MR. JACKMAN: Yes.

MR. DEAN: We see that nearly $100,000 - $87,000 or so, I guess, is the right number, or $97,000 - would not have been used, so can you give us an explanation because basically the budget going forward is the same number so obviously something did not happen this year that you anticipated.

MR. JACKMAN: There has been a position budgeted for: Parliamentary Secretary to the Minister of Fisheries, and it has not been filled. It has been asked for again this year, but that is the simple fact of it.

MR. DEAN: Is it a recruitment thing?

MR. JACKMAN: We have parliamentary secretaries that are in other departments but we have just opted, at this particular point, we have foregone putting anybody in the position of parliamentary secretary to the minister.

MR. DEAN: Okay.

In line item 1.2.01 Executive Support, again looking at Salaries, you are a couple of hundred thousand dollars below your budget for this year and boosting it just slightly in 2011-2012.

MR. JACKMAN: Yes. We would have kept that money but we hired Shawn Robinson. So, that is the simple fact of it there.

MR. DEAN: All right.

Under General Administration, line item 1.2.02, Administrative Support, can you give us a breakdown of item 05 Professional Services? There was nothing budgeted last year and you do not carry one going forward, but there was $370,000 spent this past year.

MR. JACKMAN: Do you want to speak to that?

MR. LEWIS: The funds in that account were originally budgeted in Property, Furnishings and Equipment account, but during the year they are moved around as expenditures occur on the principal projects that funded under that program. This is a capital program so it is a series of construction projects, mostly related to the support of the aquaculture industry on the South Coast. Specifically, the funds that were in that account last year included funding for the St. Alban's laboratory facility, equipment for the St. Alban's lab, the construction of wharves on the South Coast to enhance bio security, so there were four wharves to be constructed down there. The department also assumed ownership of two wharves that had belonged to the federal government on a cost recovered basis. The federal government provided the funding for the work that had to be done on those two wharves. The department assumed ownership of those as well and will be undertaking work on them in the coming year.

MR. DEAN: In that whole piece, because basically there are three line items there that do not match up at all with the budgeted figures and the revised figures and the budget going forward, so if they all relate to each other, is that the case? Because in Purchased Services you made purchases of $12 million with no budget and then with Property, Furnishings and Equipment you had a budget of $16 million and only spent $500,000, so is that all related to what you just said?

MR. JACKMAN: Yes. If we itemize it for you, for example in column two there, the total amount being voted on was, say, $13,669,000. If I list them off for you: the St. Alban's building was $7.157 million; the lab equipment was $265,000; the wharves that we invested in were $5.982 million and the South Coast wharves; the ones that the ADM mentioned was $265,000. So, if you tally those up, that gives you that amount of $13,669,100.

MR. DEAN: Okay.

When you say you purchased wharves from the federal government, did I understand you correctly?

MR. JACKMAN: What happened is that there is a plant that is being used in St. Alban's that was on a federal wharf. What the federal government has done is that they have divested of it and we negotiated an amount of money that we would take it over, but to have the repair work and what-not done, this is the amount of money we asked for to get it turned over to us, and they agreed. So, it is money in to general revenue, and it is out into making that wharf workable.

MR. DEAN: Okay. So it is a wash, basically.

MR. JACKMAN: A loss?

MR. DEAN: No, a wash.

MR. JACKMAN: Yes.

MR. DEAN: Okay.

In 1.3.01 Planning and Administration, again, line item 01 Salaries –

MR. JACKMAN: Yes.

MR. DEAN: If you could just speak to that discrepancy a little, I guess.

MR. JACKMAN: Yes, these were temporary positions: information management and trade policy. They were paid for out of savings. There is a review undergoing, an organizational review ongoing there. So, basically we took these people into a temporary position and we found it in savings. Like I said, it is work around trade policy issues.

MR. DEAN: Okay.

Line 10 I am interested in. Tell us a little more about the Grants and Subsidies that would come out of there. We had budgeted $46,000, did not really spend any – well, $1,000.

MR. LEWIS: In the budget last year we had $46,000 in Grants and Subsidies, $45,000 of that was for trade policy. We also had some funding allocated in Professional Services for trade policy. The intention, at the time of the budget, was that we would be retaining a consultant and also providing some grants to pursue trade policy initiatives; but, during the year, a decision was made to instead hire a position within the department. As the minister mentioned previously, there was a higher expenditure on salaries, and that was we retained a trade economist in the department rather than retaining a consultant.

MR. DEAN: So when you say trade policy, you are talking about hiring a consultant, which you did not do and you hired an employee instead. Is that correct?

MR. LEWIS: Yes.

MR. DEAN: Okay.

Just a general question - and I have made this comment in the House - for me, when I look at the Budget and the priorities of the government, I really feel there is a weakness in terms of the commitment to the fisheries, generally speaking. I think a lot of people were surprised, especially those attached to the industry obviously, over the financial commitment by the government in this year's Budget. There were good things there for aquaculture and fisheries research, I acknowledge that, these are good items.

When it comes to dealing with some of the other issues in terms of really rebuilding our fishery and making sure we have a sustainable fishery going forward, the vital industry, the lifeblood of our rural communities there is no money there. We have $150,000 to do some demolition work which – if you are going to do the Englee project for example, it probably will not even cover that one. I would like to know just where government's position is with that and why we are not seeing more from that end of it.

MR. JACKMAN: Yes. I am going to break up the response in two parts. I think in reaction to the MOU, people were expecting some things to be announced in the Budget. Now, I can tell you there are some things that we are working our way through. There are things in the MOU that I think warrant further work, and what the end result will be I cannot say at this point - but that warrant further discussion, one being marketing. I was over gallivanting around in Europe, wining and dining, I saw the news release.

MR. DEAN: Did you take any lobster with you?

MR. JACKMAN: No, but when you go to one of these shows you soon recognize how important it is that we do the marketing piece, there is no doubt about it. Sometimes we think in the Province that we are such large players, but once you go to one of these shows you see that you are just a player in this thing and therefore marketing has to be key. As a department, we are doing some work on that and we will see how we are going to roll it out.

Another one that has certainly been asked for is around the loan guarantees that people are looking for. Now, I cannot say we are going to do them but there things that we as a department are working our way through at this particular point. Inventory financing is something that was thrown at us I suppose last year in the crab issue and we did not have the time to work through. Since then, we have had time to work our way through that. These are some initiatives that I think we very well might be able to move on for a coming season. There is much work to be done, and if we move down that road then I expect the money will be there to support those types of initiatives.

Now, back to the Budget; like I said in my introduction, this is a changing industry. If you look to some of the younger people who are coming into it, they come at it with a different perspective. They are coming at it with a determination I think and vigour. I have spoken to a number of them who almost say to me at some points, and I think they are saying to government in general, get out of my way and let me get on with the business that I am involved in. These will be the people who will determine the future of the fishery. Our supports to the changing fishery of today are things such as the FTNOP. This is a Fisheries Technologies and New Opportunities Program whereby harvesters and processers can avail of monies to make their operations more financially viable, to invest in equipment that might make their harvesting more profitable and a better return on it. If we look at our investment in CFER, the Centre for Fisheries Ecosystem Research, we said that the federal government, we think, are shirking on their responsibility around research, so we have stepped up to attempt to fill that void.

It would be interesting some time, and I asked the staff to do it a little while ago, pull up the number of dollars that we have put into cod research, that we have committed to George Rose and his work through the Marine Institute to see where we can do further work into cod. Because there is one thing my deputy keeps saying, and I do no think there could be anything further from the truth, there are two things that are important in this industry, and that is resource and markets. Now, if we do not have resource and we do not have markets we will not have people in our rural communities and nobody will be in this industry, and as such, we do our research piece and that is ongoing. Recognizing also, in this Budget there are workforce adjustment funds that are being put into it. We have put additional monies into the sealing initiative. We have doubled that as a matter of fact, $100,000 is what we had into it. We put $200,000 into it this year.

Those are the issues, and I think the larger one in getting on with what we have to do with the wild fishery, we make these investments to continue the research, to invest in technology and whatnot. We have made efforts before and hopefully, if we come forward with things around marketing and inventory financing, if we can get that worked through the industry will be supportive of us moving those things in and will fall in line with us. There is one thing for certain - and I take all politics out of this altogether - there is no way in the world that a government on its own can settle the ills of this industry.

The union and the business part of it, the processing sector has to be engaged with us. That means they are going to have to be willing to accept some changes as well. Like I said, if I were an independent observer, I truly do agree with that. I have said in this House year after year after year, there has been report upon report and report commissioned, and we still end up at the end of the day going back to more reports. This is where we have to move.

I do not know if that is the answer to your question or not.

MR. DEAN: The point that I want to make and what bothers me, or us in Opposition, you have mentioned two or three things in the MOU, and we will have lots to discuss on the MOU, and I will let Lorraine speak after I speak here and you can respond, whatever. We are talking about loan guarantees, which we see as something that is requested, that is a good thing. There has always been a Loan Guarantee Program. It worked for a lot of years, the fishery loan board, whether it worked right or wrong or what worked and what did not and so on. I am not one to say go back, that failed so we can never do it again; something worked.

The loan guarantees, the marketing piece, the inventory financing, you are saying we are going to have to wait another year for that, basically, if we are going to put it there. I think it is so urgent that it should have been there this year, I guess is the point I am making when I look at the fisheries budget. If we know the harvesters are out there and if we know they are undercapitalized, or if we know that in order for them to get money to work with that they actually are over ‘buddying' with a processor who basically controls their operation if you will, there is only one way for them to be free. I think that is something that probably could be done with – I think we have enough knowledge about that. We do not need any more reports, I agree.

MR. JACKMAN: No, but there is a complicating issue in that. The Fisheries Loan Board as it exists right now, if an individual harvester wants to go in and borrow money for a boat or if he is in debt to a processor, they can now avail of our loan program and get that.

The other point was licences; you could not borrow to purchase a licence because the federal government regulation would not allow you. There was a court ruling. There was a court ruling that was changed, and we lobbied the federal government to change that. So, now, the federal government says we can use licences as collateral. They could not be used as collateral before. That issue has only been resolved in the last few months. So, now, if there were a new loan program, it can encompass licences, boats, and I suppose anything that a harvester wanted to come into. The default rate on the loan program is extremely low, about 1.1 per cent. We would not have any reason to suspect that a revised program would be any different. It is one that we are taking a look at. All the workings would have to be done prior to the start of another season. If we can get to that point, that can be worked out.

CHAIR: Mr. Dean, we will go to another member of the Committee now for some questions?

MS MICHAEL: Thank you.

I would just like to pursue a couple of those points that you have been speaking about with Marshall, Minister, especially around the research. I know that the Province is committed and you are making an effort, as a province we are making an effort, but it seems to me that if we are really going to be serious about the wild fish and especially about the cod, the federal government has got to be on board and we have to research in a really big way.

MR. JACKMAN: Yes.

MS MICHAEL: So, I am just wondering, what kind of discussions are you trying to have, what hope do you have that we can get through to Ottawa? Because the cutbacks they have made in research, we know, is not acceptable. I do not think it is acceptable. I do not think you do either, that we just take for granted that there is not going to be a cod fishery any more. I just can not believe that, that just is not acceptable to me. It does not make any sense. So, I am just wondering where are things in your efforts with the federal government around this? I am presuming there are efforts going on.

MR. JACKMAN: Well, our department works pretty closely and jointly with DFO and, as such, views and opinions are put forward and where to focus the research efforts. We hear the public debate around what has happened to the fishery. Gus Etchegary is one that we hear from quite often -

MS MICHAEL: I am sure you do.

MR. JACKMAN: and the public airwaves, we hear from quite often. In terms of intense lobby from me, as a minister, personally, to be quite honest with you, we go and we discuss it with them, but to orchestrate a concerted effort, I have not done myself at this particular point. I will tell you one thing: I wish that we could get to a point. The interest of not only cod - one of the amazing things that George Rose discovered at this particular research piece is in one area off of Labrador the temperature from what it traditionally was has risen a number of degrees. We do not know what in the devil that does to fish and the migration of fish, so there are many, many complicating factors.

Where I would like to see this going, and I go back to the MOU again because I wrote both parties and asked them: What are some of the things that we could do as part of the MOU to move the agenda forward? One has to be: How do we get to the federal government? I really would like, at one point, if we could all go to Ottawa - and I am talking about industry - take the politics away from it and have harvesters, union, processors going to Ottawa as a unified voice. I am afraid sometimes that whether it be research or anything else, Ottawa dismisses us. We have an issue; we decide we are going to take it to Ottawa, and what happens? Within a matter of two or three months we end up fighting amongst ourselves down here. I contend that Ottawa sits back and says: Just leave them alone. It will not take too long, they will disagree, and they will fight amongst themselves. We never get that co-ordinated effort.

I think sciences have to be one because as I said before if we do not have the resource, we do not have anything. I do not know what is going to happen to the day of cod because some of the research is showing that the cod stocks are not coming back to what they were. I know everyone has highlighted the larger Celtic Explorer but we have another vessel that the department owns, it is a catamaran that we use for mid-research and we have a smaller one, a thirty-foot one that we use for inshore research. We are attempting to do ours and I hope to see at some point where we can have that co-ordinated effort, but we still have to keep pressuring Ottawa to come on side.

MS MICHAEL: It is absolutely essential. You may want to do the industry plus all three parties go to Ottawa together, because even to show that politically we are united I think would be extremely important as well.

MR. JACKMAN: Yes.

MS MICHAEL: I do not think this is something that we are divided on; I think we all know what has to happen. While I support aquaculture, aquaculture cannot replace what we have had in this Province. I am realistic enough to know that we cannot have every rural community that had fishery with the same employment and all that, I am not naive. I still believe we can have a wild fishery. Now with the climate change, who knows what is going to happen, we might have grouper in our waters before we are finished. Nevertheless, we just cannot sit back; we have to be proactive.

MR. JACKMAN: I agree with you. There is going to be a wild fishery in this Province, I am convinced of it. There may not be as many people at it and there unlikely will be as many plants as we have now, but I contend that there will be a wild fishery. Despite what some people might think otherwise, I think the people who are involved in it are going to be doing a well-to-do living out of it, I truly do.

MS MICHAEL: We have to do that.

MR. JACKMAN: Yes.

MS MICHAEL: Coming back to the marketing issue. I was really glad to hear you say what you said about marketing. As you know, I have stood in the House of Assembly and I have asked you about the marketing issue, you can tell your colleagues who had fun today with me when I was on my feet. I absolutely do agree with you, and it was one of the recommendations of the MOU that you have spoken positively to. You sort of talked very casually about it. Could you give us just a little bit more detail? You sort of said you are working on it and you are going to be rolling out something. Can you give some more detail?

MR. JACKMAN: I suppose I have been criticized that I condemned the report outright. Maybe in hindsight there are things in it that merit more discussion. We are in the process now of developing that and bringing it to Cabinet for consideration.

MS MICHAEL: Okay, that is good to know. I know if you are bringing something to Cabinet that means at the moment there is no talking about it, so we look forward to see what you come up with.

I will come back to the budget lines and just ask some questions there; it is not as exciting as having this discussion. I will not repeat anything that Marshall asked about. Section 1.4.01 - just some small things, not a lot - under 05 Professional Services, obviously you had something unexpected this year that would not be usual because you spent $138,000.

MR. JACKMAN: That was money to Tom Cliff, the Chair of the MOU.

MS MICHAEL: Oh, right.

MR. JACKMAN: Then there were some consulting services that we provided to the MOU process and they were involved in that.

MS MICHAEL: Great, thank you.

Under Grants and Subsidies, number one, what is it that gets funded under that? Number two, the budget has come down appreciably, why would that be?

MR. JACKMAN: Item one is workforce adjustment; that was $750,000. There is $250,000 that went to the Safety Council. There were some new initiatives under the Centre for Fisheries Ecosystems Research, and other initiatives like that, which totalled $500,000.

MS MICHAEL: Right.

MR. JACKMAN: It went down because we had budgeted $750,000 for the workforce adjustment and, in fact, there was only $570,000 used.

MS MICHAEL: Okay.

MR. JACKMAN: The Safety Council took $250,000.

MS MICHAEL: Obviously, you are expecting the figure for this year is more realistic, in terms of all of those items, especially the workforce adjustment?

MR. JACKMAN: Yes.

MS MICHAEL: Okay, great.

Thank you.

MR. JACKMAN: The Safety Council this year will be $125,000.

MS MICHAEL: Okay, great.

Under 2.1.01 Administration and Support Services, again subhead 06, you have a much larger figure. I think it is an increase of $170,900 under Purchased Services over last year. What are you expecting this year?

MR. JACKMAN: One of them is the one that Mr. Dean mentioned. There is $150,000 in that for facility demolition. We have some structures in the Province that are liabilities. Now, as much as this may not please people, this amount, last year there were none. So, this year we put an additional $150,000 into it.

MS MICHAEL: What gets covered in that? I think Englee has been mentioned –

MR. JACKMAN: What we will be doing there is – we have a list of the facilities that are in this. What will happen is we will consult with people in the field –

MS MICHAEL: Right.

MR. JACKMAN: – and then we will determine from there which ones they want to rank as their priorities.

MS MICHAEL: Right.

You mean your staff in the field, obviously?

MR. JACKMAN: Yes.

MS MICHAEL: Right.

MR. WARREN: What we have done is we have had our regional people look at facilities around the Province to see what ones are in very poor condition, they are unsafe. Some of them are very bad. There has been no more fishing activity. We think that is important for safety, that we remove some of them. We work with the communities; we work with the fishing - interest in the area to talk about, to remove them when absolutely necessary. There is a lot of consultation goes on. We are looking at a number of facilities. We will have the list finalized over the next, probably month or so.

MS MICHAEL: Okay, thank you.

In subhead 10, what is it that gets covered under that Grants and Subsidies line?

MR. JACKMAN: Subhead 10, those are the special assistance grants. They are basically about $3,000 each.

MS MICHAEL: Right, yes.

2.2.01. Seafood Marketing and Support Services, subhead 05, a slight over expenditure there, about $56,000.

MR. JACKMAN: Yes. We had a marketing official, we brought in his services for the MOU, and we also provided $139,000 for market intelligence around the collective bargaining.

MS MICHAEL: Okay. Thank you.

Subhead 06 Purchased Services, I think you probably maintained the same amount there and just did not spend as much this year as usual.

MR. JACKMAN: That is right, yes.

MS MICHAEL: Okay.

Subhead 10, Grants and Subsidies are going up to $700,000 this year.

MR. JACKMAN: Yes, those are allowances for some of the new initiatives that we have in place. These are some of the expenses associated around trade show initiatives. We have a number of them that we get into. There is the Chinese seafood show; we are getting into now eco-certification, these types of things. We fund the Lobster Council of Canada. More and more we are getting into things around the lobster council, as an example, traceability projects where someone who buys a lobster in, I do not know Florida, can have a tag so they can be traced back to the individual who caught it. Those are the types of initiatives that we are getting in there. It is marketing initiatives that are more important on the global context than some of these types of new initiatives.

MS MICHAEL: Right. You may not want to comment on this, but may we hope that after whatever you are bringing to Cabinet, that next year the money here might be much higher for the seafood market.

MR. JACKMAN: Yes, I am certainly hoping so. If it does not work this time this could be the third strike because we have offered the industry the FPI thing, the marketing piece there. We offered them for the Seafood Marketing Council the year before last.

MS MICHAEL: Right.

MR. JACKMAN: If we come forward with this one, this will be the third time. Hopefully, we will be able to get it to move this time, but we certainly cannot move that without the industry though.

MS MICHAEL: Well, with the MOU though, with the fact that it has been dealt with positively in the MOU, let's hope that will make it happen.

MR. JACKMAN: I hope so, yes.

MS MICHAEL: Okay, Mr. Chair, I will pass back to another member.

CHAIR: Okay.

Mr. Dean.

MR. DEAN: I want to go back to the MOU again for a few minutes. Before we do, I just want to pick up on some of the conversation that you are having. I guess to make the point again of the disappointment that I see in what we are calling the wild fishery development, if you will, minister. Again, you go back to 2.2.01 and you have $2 million that is being voted for, Seafood Marketing and Support Services. I would assume a part of that is being shared across both the aquaculture and the wild fishery, right?

MR. JACKMAN: Definitely. I would contend that it probably goes more to efforts toward the wild fishery. In Brussels, where I was this past week, there were seven groups there, one of them was aquaculture. The rest of them are in the wild fishery. I am also convinced that if we can get the industry to work with us on this and it proves worthwhile, it would be a good argument for continued or increased funding in years after that.

MR. DEAN: I think it should be increased, personally, and not –

MR. JACKMAN: Well, we have to get them working on the piece we gave them in the beginning first. We offered them twice.

MR. DEAN: Yes. Market money is something that probably does not come back real quick, not necessarily, but $2 million to me to develop and market the fish industry of Newfoundland and Labrador is not a lot of money.

MR. JACKMAN: No. Let's say if we were to get this through the MOU, and just say there were $7 million or $8 million, I contend that is a half decent start. The offers we have made have not been reciprocated by the industry, and we have to get them to come in with us on this.

MR. DEAN: Why is that? What is their comeback?

MR. JACKMAN: Well, the processors in this particular case here made it contingent on the rationalizing of plants in the MOU. They said: We will take part in it if you allow us to do what we want with the plants. We have to be able to work around issues of that nature, I would hope. So, we will have to see where it goes. Like I said, we have offered them twice before, and I am hoping against hope that we will have them and if we can work our way through this and provide it, that they will be more accepting of it this round.

MR. DEAN: The other observation I make; we look at 2.2.04. Fisheries Innovation and Development, the total voted there, we are looking at $4.4 million. We are actually coming down from what our budget was last year. We are still over some on what we are revised number was, $3.8 million, and we are going back to $4.4 million, but the amount that we budgeted last year is more than what we are budgeting this year for Fisheries Innovation and Development. Then, if we flip the page and we look at the aquaculture piece of it, and we see that in 3.1.02 our total investment in aquaculture is $11.6 million.

MR. JACKMAN: Yes.

MR. DEAN: So, again, my sense is that aquaculture has become the great priority. I concur with what our Member for Signal Hill-Quidi Vidi just said a minute ago: You are not making Newfoundland and Labrador survive from a fishing industry perspective on aquaculture.

MR. JACKMAN: No.

MR. DEAN: Obviously, you look at your map where aquaculture is, it is in a couple of bays in Newfoundland. It is the right environment. It is probably the right place. I do not think you could do it up around St. Anthony, for example. Certainly a lot more challenges and so on. So, the focus is there, and that is a good thing, that we are trying to develop a new type of fishery. My concern is that in developing that new type of fishery, we have lost our focus on what had sustained us for centuries.

MR. JACKMAN: I certainly have not lost the focus on it, and our government has not -

MR. DEAN: Put your money where your mouth is, so to speak; the money is not there, kind of thing, right?

MR. JACKMAN: Yes, but if you are looking at fisheries development in 2.2.04 that you mentioned, look at the last line. The last line, our Estimates next year, is $11.497 million.

MR. DEAN: Yes. The point I want to make, and I do not think we need to debate that point all evening.

MR. JACKMAN: No, because you and I could debate this for a while.

MR. DEAN: We can, but the point I want to make is when you take your billion dollar industry, you take the amount that aquaculture brings in, you take the 1,000 people who are either employed directly or indirectly, and you compare it to what is in the wild fishing industry and the investment that is out there and the infrastructure that is there, whether it is on the processing side or the harvesting side and so on, these numbers do not compare.

MR. JACKMAN: Well, the numbers that are involved in the fishery, but if you look at what I said in the introduction, if we are looking at aquaculture let's say tripling within the next six, seven, eight years, we will see where that can take us.

MR. DEAN: Yes.

MR. JACKMAN: If we look at where the wild industry is going, and as I said before I think there are going to be fewer people into it but those people who remain in it will do quite well in this industry. I am baffled sometimes about the wild fishery. We have so many bloody complications in it, but getting to a point whereby we find the way forward is where it is.

We have this dichotomy I think now where you are being asked on the one hand to open outside buying for lobster. Now, I admit that the amount of processing that is in that is not as huge as it is in other industries, but you have probably been lobbied yourself. I do not know if Ms Michael has or not because I do not see many crab boats down in her district.

MS MICHAEL: There are a few boats in my district.

MR. JACKMAN: We have been lobbied over and over for outside buying as it relates to crab. If you are going to open it up for one, will you not open it up for the other one? That is one of the questions I am putting to the union. You are representing plant workers. You are representing harvesters. So, help us to have a decision around that.

That is all I am asking and I think if we can start to deal with those types of issues, then we remove that barrier of protest and we can get on with the business that we need to do. I am convinced of it. There will be no government that will not invest further if you can see the path forward. Right now we do not have that path forward, and dealing with the issues like outside buying are one of the things that we somehow or another have to deal with and bring a solution to it.

MR. DEAN: What is our role, though, in creating that path forward, I wonder, as the government? Are we going to get leadership or are we going to let the two parties that are the other pieces of this, are we going to let them give the lead? I am not convinced that we should not be at the forefront here.

MR. JACKMAN: Well, you write them and you ask them to come back to you with suggestions as to how you can move forward. We will see where they are ready to move with that. You put the offers out to them but if they do not reciprocate, I do not know what you can do. I cannot go down and yank Derek Butler and Earle McCurdy and say: Go on, boys, I have to try to get somebody else to deal with. So, working our way through all of those types of things, we definitely cannot do it alone.

MR. DEAN: All right, let us talk about the MOU. We are talking about the MOU, generally speaking, but I think that you have acknowledged that perhaps you threw your arms in the air too quick with it.

MR. JACKMAN: Now, do not go saying that in the House tomorrow.

MR. DEAN: No, I will not - Monday. I will give you a couple of days to get ready for it, okay?

[Laughter]

MR. DEAN: No, listen, I think the greatest sign of a man or woman is when they can acknowledge they might have done something wrong. I believe that you caught everyone off guard when you did that, obviously. After twenty-odd months of waiting for a report to come down which was presented as being kind of the way forward and the document, whatever, the process that was going to give us the answers, there is no one in this Province who is following that process who did not get caught off guard the morning that you said: Look, hand's off, I am not taking this to Cabinet, I am not doing anything with it, it is an ask, it is too much money, we are not going to do it kind of thing.

MR. JACKMAN: Maybe it is a little jolt that people need sometimes to get on with the business that needs to be done.

MR. DEAN: Yes. Most of what I would say here I have already put forward in the House probably in some manner or another. Again, I bring it back to the fact that one of the weaknesses of the MOU is not that the FFAW has not brought their recommendations forward to you, nor is it the ASP has brought theirs forward to you, but the government has not said what they want. It is not there. It was a three-party process. This is where I will beg to differ with you. There is where, to me, you as minister and this government can give leadership and say: What is it we want of this industry? Because business is business and when you ask business what they want, they will tell you what they want. What they want to do is make more profits, they want to be more efficient, and obviously they want to have a better return. That is exactly what they said.

MR. JACKMAN: In this industry, in this process that started because of a few months delay – I think it was a three-month delay in the shrimp fishery if I am not mistaken.

MR. DEAN: Yes.

MR. JACKMAN: On a Friday evening when it was decided on moving forward with this MOU, the directive was, and the parties were clear on it, we will come back to you with recommendations around rationalizing and restructuring the fishery. So, what they came back with and when we have an independent chair who does the analysis of it and in that report there are things that says if you do nothing this and this and this will happen, then how can you accept it?

I am not going to be the politics and I will not throw it at you about the numbers that are up on The Straits. Just from where I sit, to give the processors an $80 million loan to rationalize 30 per cent of the plants over three years and then we have to soak up the $80 million interest over the next twenty-seven years is a far cry from anything I would have thought that they would have come back with as to how we can move ahead with a restructuring of the processing sector.

MR. DEAN: Okay. That is their take. That is their ask - is the buzzword that is being used. What is it that we are willing to do as a government, though? What is it that you are willing to say: Okay, if – and I agree that going that far is too far, but what we are not hearing is, where is far enough?

MR. JACKMAN: Where we have looked is we have gone back and said to them: Is there a possibility whereby the season can be extended? So rather than people being stuck to a ten to fourteen-week work process, are there ways that seasons can be extended? Are there ways that we can alternate season openings?

Landing ports: We all hear from processors who say one of the big expenses that they incur is that there is something like 400 or 500 landing ports around the Province. Are there things that we can do to lessen those numbers? Are there policy changes that can be made at the federal level? For example, there is a policy now that you are not allowed to combine any more than two licences. Now, industry, I think, has buried their heads in the sand on that because people have gone out and found ways around it. They are putting it in somebody else's name, or they are taking it to a lawyer and having crew members sign a document. So, those are the types of things that we have asked, are they willing to take a look at, and the response to this point has not been favourable, I have to tell you. So, as far as I am concerned, that is leadership. We are asking the industry: Can you consider these types of things?

I was interested, in Brussels, where one of the people on the ground came up to me and said: Is there any way we can look at a three-year pilot in establishing prices? We have seen the patterns over the past number of years, is there any way we can look at a three-year pilot? Fishermen will tell you, even though they are getting $2.75 or $2.50 or whatever, they would prefer to see a price that is, say, at $1.80 and it be level, so then they can make good business decisions. So, these are the types of things that was brought to me as a suggestion. I do not know if it will ever work, but at least it was something that we might be able to sit down and discuss further.

All I have heard is here is what we have proposed, give me the money, let it happen. Basically, that has been around rationalization of the harvesting sector and an $80 million ask plus an $80 million interest to let us take out 30 per cent over three years and then walk away with no guarantees that then the capacity is reduced or where is it going, is it going to go into somebody's pocket and they walk away and the next thing you see is the production capacity back in another facility. So, I did not see it as a well wrote-out plan, I have to honest.

MR. DEAN: No, and again I have to go back because I think it is just so important that if I were either the FFAW today or I were the ASP and you have rewritten me following the process after eighty meetings where I would assume there were officials from your department in each one of those meetings or most of them at least, and I would assume that you are getting some advice as to where it is going, you are being kept abreast of what is taking place and after that process is finished, for you to say this is no good, then I have to say back to you: Tell me what is good, give me some idea. Let me know where it is you want me to go, either from the union side or from the ASP side, so that I can come down the same road, so to speak, and we can meet somewhere because I do not know where you are going. I do not know where you want me to go -

MR. JACKMAN: I just outlined to you five or six of the things that we put in a letter to both parties.

MR. DEAN: Yes.

MR. JACKMAN: Do I go and browbeat them into coming forward with those things? I would not hope that they would be offended by my response. I have seen disputes in this Province that are much more irate than that and parties have gotten back to the table and sat down and talked again. We have to get beyond this crisis that you enter into a crisis here in April or May then it goes away and then next year you are back into it again.

We have put out there things that we have asked them to consider, and I would hope that we can get them to move forward on it. Right at this particular point, everybody is caught up in the happenings of the fishery right now and that the fishery gets underway, you have a smooth year and you make it the best that you can. I would hope that as the fishery now settles and people make their catches, we will hear from both parties in a favourable way.

MR. DEAN: You have gotten no response from them at this point, right?

MR. JACKMAN: I have, but it is not a detailed response and it is going to require further discussions with them. I am more than open, I am certainly not adverse to sitting down and talking about how we can move forward, I can tell you that.

CHAIR: At this time, I would look for some direction from the other Committee members. Ms Michael, did you have some further questions, or did you want to allow Mr. Dean some extra time to finish up this train of thought?

MS MICHAEL: Let him finish up his train of thought, yes.

MR. DEAN: Thank you.

CHAIR: Okay.

MR. DEAN: I do not see government, personally, as being an observer to this process or a commentator. I think that again it comes back to, it has to lead the charge if it wants change. It has to put the change out there what we are looking for kind of thing, not in vague terms but in some specific terms that people can understand.

MR. JACKMAN: Just think about this now. I have asked them to consider: Are there ways that we can extend the season? Are there policy changes that we can look at in Ottawa under federal government jurisdiction that can make a difference? Landing ports have long been an issue with processors and the pick up costs which impact and, in effect, give a lower price to those who are harvesting. Those are just three examples that I have asked them to look at. How more specific can I be than that?

MR. DEAN: No, I think on those items that is very specific. That is what I am saying. I think if that had been there through the process, and I do not know if it was or not, but it does not show in the MOU document.

MR. JACKMAN: I will tell you privately, when I attempted to make some comments one day, about the process. It was hinted to me, very clearly, if you are going to interfere in this process, then you are politically interfering with it. The point to me was very clear to stay clear of it and let the process work itself through.

MR. DEAN: Okay. The other comment -

MR. JACKMAN: When we get the right time and place, I will tell you what the comment was.

MR. DEAN: Okay.

MS MICHAEL: This is going in Hansard.

MR. JACKMAN: Pardon?

MS MICHAEL: It will not be private once it is in Hansard.

MR. JACKMAN: No, no, but it is not going to be in here. It is not going to be here. I will call you too.

MR. DEAN: Okay.

The other criticism that I have made and will make again is regarding public consultation. This government has probably been as keen as any government when it comes to consulting the public on different issues, whether it has been a whole bunch of things. Budget consultations, even though some of them are done after the Budgets are written up and the documents ready, nevertheless you consult.

This was a behind-closed-doors process. Again, I think that is one of the things that probably brought us down the road we went. If we did not get the public's input into it and if we are going to reform our fishery, then goodness gracious we need to understand the impact that it has on the public, not only on the harvesters and on the associations but we have to understand what the impact is there. Assuming that the MOU process is not dead and assuming that it is going to move us forward in some shape or another, will there be public consultations?

MR. JACKMAN: Look, I think first and foremost we have to work out the issue as to industry and government and how we are going to move ahead with some of the issues that I outlined to you, and there are others in the letter. If there are going to be changes made in this industry, the impact that it is going to have on the communities - the communities definitely have to be involved. Let us not think too far out in the past. The Fishing Industry Renewal Strategy was supposed to be where it all was going to happen and change.

There were forty consultations held as a part of that renewal strategy and out of it came some suggestions as to where we need to go with the fishery. We need to make sure that it is going to be viable for rural Newfoundland and Labrador, that the people operating within it will make a good living, those types of statements, which everybody wants. Again, you consult and you consult, but I will agree with you on the point. If we can get the industry to move on some of the issues, the impacts they are going to have on the communities, there is no doubt about it, there will have to be discussions and consultations with those communities. We will not have to go out there because if communities are impacted by it, we will hear from them.

MR. DEAN: Okay.

One last question is the letter you wrote on February 25 or whenever to the federal minister, have you gotten a response? I should say, you sent a copy of the MOU and a cover letter, whatever, asking for –

MR. JACKMAN: Her input into the MOU?

MR. DEAN: Yes.

MR. JACKMAN: Just that she received the letter and nothing back in terms of anything that she would do. I am still at the point, get us together and let's go forward to Ottawa unified so that the federal government, or anyone else up there can ignore us then because we know the strength of the union, we know the strength that the processors can have. If we can get that collapsed together, and I do not know if it will ever be possible, but if we can get to that point where we go forward looking for those changes then the federal government will not have any choice but to pay attention to the group who is coming.

MR. DEAN: Will you take an all party committee with you?

MR. JACKMAN: That is too early for me to decide. I cannot comment right now.

MR. DEAN: There have been changes in Ottawa, as you know.

MR. JACKMAN: Yes, I know.

MR. DEAN: Okay.

Thank you.

CHAIR: Ms Michael.

MS MICHAEL: Thank you very much.

I was quiet during all of that but I would have been echoing a lot of what Marshall said, so we will not go over all of it again.

It would be very interesting to go to Ottawa. I would find it very interesting right now because of the Official Opposition.

MR. JACKMAN: I am looking forward to Mr. Cleary and his moves on the fishery that he talked about before he went there.

MS MICHAEL: Right, we will see what happens.

MR. JACKMAN: Yes.

MS MICHAEL: We will come back to the budget, then, 2.2.02 Licensing and Quality Assurance.

MR. JACKMAN: Yes.

MS MICHAEL: The big things, I think subhead 05. Professional Services. Again, even though my researcher has that in there, I realize that is one of those things you keep. It is a standard line and sometimes you use all of it and sometimes not.

MR. JACKMAN: Yes, and some of it has to do with the Licensing Board. There was less Licensing Board activity this year.

MS MICHAEL: Right, okay. That would certainly explain that.

The other one is Purchased Services, not a lot of activity there. What normally would be under that?

MR. JACKMAN: That would be activities involved in the same type of thing, around the Licensing Board.

MS MICHAEL: Around the licensing, right. Okay.

2.2.03. Compliance and Enforcement; actually, there is really nothing there majorly significant. Probably the only one that would require an explanation would be subhead 06 Purchased Services.

MR. JACKMAN: Yes. That is a positive one, really. It is under our inspection officers and whatnot. We have them engaged now in a training program through CNA and the Marine Institute. There are eighteen modules that they take part in. Each module is around ten days. It is similar to the training that is offered to conservation officers. It is making our inspection officers and enforcement officers more professional, and it is a positive thing.

MS MICHAEL: Oh, that is great. Which campuses is that happening on?

MR. JACKMAN: Stephenville.

MS MICHAEL: Stephenville, okay. That is good news actually.

Could we come back up to 2.2.02 for a minute and if you could explain the provincial revenue line, subhead 02.

MR. JACKMAN: As part of getting the shrimp season open at that particular time when the MOU came into place, we agreed to reduce the licensing fees.

MS MICHAEL: Oh, right, I remember.

MR. JACKMAN: Yes, that used to be $1.7 million. It was down to permanent price processing. In our Estimates, the revenue that is going to be coming in now is just $300,000. It is reduced by $1.4 million.

MS MICHAEL: Okay. So you are going to leave it there?

MR. JACKMAN: Yes, a $1.4 million reduction.

MS MICHAEL: Right. Yes, I remember when that happened. That is good.

Okay, thank you.

2.2.04. Fisheries Innovation and Development; the big one there I think is 01. Salaries. You must be having new people come on board.

MR. JACKMAN: Yes. There was some work around a sealing communication specialist that we had there. Also - I have to get you to explain this one - the move from one division to another.

MR. LEWIS: Yes, included in the salary estimates for 2011-2012 is funding for a seal communication specialist. The minister previously referenced, there is an additional $100,000 in the department this year to deal with the sealing industry.

MS MICHAEL: Right.

MR. LEWIS: There are some salary dollars there for a communication specialist. In addition, they are not new positions but they were previously funded elsewhere in another heading, which has now been moved over into fisheries development. Included in there is a co-ordinator for the fishing industry renewal activities, as well as a marketing specialist and a development officer. The development officer in the previous years showed up in this account but the co-ordinator and the marketing specialist were shown elsewhere. Most of their activities related to fisheries development, so the salary dollars have been relocated. They are not different persons, just funding is showing in a different place.

MS MICHAEL: Okay.

Since we are mentioning the sealing industry, I do not guess there is a final report yet on the status of this year but is it as bad as indications are that I have been hearing?

MR. JACKMAN: As Marshall mentioned, there were years when it was up to $100 a pelt. This year, I believe it is around what, between $17 and $20.

MS MICHAEL: Really?

MR. JACKMAN: Yes. So, people are not going to go at that if the dollar is not there but I think it is, as he also alluded to, at the start of the fishing season it meant $7,000 to $8,000 in some individuals' pockets, not just a boat. The historic attachment of it to the Province, plus supporting the industry, I think this is why we have to continue efforts to keep marketing. Plus, do not forget, as much as people will promote, we have over nine, and estimates could be as many as 11 million seals off our shore now. You mentioned the cod; they do not just swim around, they have to eat.

MS MICHAEL: Well, exactly.

MR. JACKMAN: That certainly has to have an impact on cod stocks.

MS MICHAEL: Yes.

I am totally supporting what the government is doing with regard to the sealing industry. I think we have to maintain that industry and I know there are a lot of difficulties. We have the climate change as well, which is problematic. It causes problems.

MR. JACKMAN: Yes.

Mike, do you want to speak on that?

MR. WARREN: Just to make a quick point, you mentioned how bad the sealing harvest is for this year. I have numbers updated, as of Sunday past it is 37,600 Harp seals harvested. That is only 9 per cent of the quota indication.

MS MICHAEL: Right. That is a real serious indication.

MR. JACKMAN: Terrible.

MS MICHAEL: Let's hope this year is an anomaly.

MR. JACKMAN: Yes.

MS MICHAEL: I think everything else there is pretty straightforward in that section. Oh no, I knew there was one other. Under 06. Purchased Services, there was quite a budget line last year, $473,600, but only $65,000 was spent.

MR. JACKMAN: Which section are you in?

MS MICHAEL: I am still in 2.2.04, Fisheries Innovation and Development, subhead 06 Purchased Services.

MR. JACKMAN: Okay, yes.

MS MICHAEL: The budget last year, under Purchased Services, was $473,600, only spent $65,000, and this year it is a little bit more than half of what had been budgeted last year. So, what is happening there? What was the Purchased Services expected initially?

MR. JACKMAN: One is for the new initiatives. One is around additional sealing funding. We are looking at a $65,000 salary position there, and other related services: $10,000 with Purchased Services and Professional Services. So, there is $100,000 that is accounted for there.

MS MICHAEL: Okay, so most of it is around the sealing?

MR. JACKMAN: Yes.

MS MICHAEL: Thank you.

Before going into aquaculture, do you have anything around either one of those, Marshall? I am quite happy to have it go back to him if he wants to deal with those two things before we go into aquaculture.

CHAIR: If it is okay with Mr. Dean - and I do not think you have any more line items, do you, Mr. Dean?

MR. DEAN: No, not really.

CHAIR: You could finish up the line items, maybe, and then if you have some –

MR. DEAN: There might be a question or something, but not really, no, I am not really into the line items there.

CHAIR: Is okay with you?

MS MICHAEL: It is fine with me, yes.

CHAIR: Right.

MS MICHAEL: I do have a couple of other line items. Under 3.1.01, Aquaculture Development and Management, 05 Professional Services, quite a bit of money in there this year; what is that about?

MR. JACKMAN: That is money that we have budgeted in our budget this year. One is $100,000 for a cleanup. This industry is evolving but people have been engaged in it for a while, so there are some sites, gear, and whatnot that have been left around. So, we have put $100,000 into cleaning up that. There is a bay management initiative that we are putting some $200,000 into. That is to do work on environmental issues, to do some inquiries – I think you mentioned to me this morning - around tidal action. If you want to speak a little bit more to it, Shawn?

MR. ROBINSON: As the minister says, the bulk of that money is earmarked for the bay management. The aquaculture industry and the salmon industry, in particular on the South Coast, has been developing quite nicely over the last four or five years. We are rapidly getting to a point where now we have to start managing the production areas as discrete production areas. To be able to do that, we need to be gather quite a bit of information about salinity, temperature, current movement, tidal fluctuations, and that gives us the ability to know how that body of water performs and how it moves. Once we have a good understanding of that, then we can decide where the best place is to put production areas to make sure that our fish health performance remains at the highest level.

MS MICHAEL: Right.

Minister, when you were mentioning the cleanup, there must be regulations with regard to the leaving of gear. The industry must take the major responsibility, does it, I would hope?

MR. JACKMAN: If you think back to when this industry started - and Shawn probably can speak more to this - many of the things, I suppose, were quite different from what they are now; therefore gear would have been left in it. Even though my area is not an aquaculture area, I know in a couple of places where someone was growing mussels, there was rope still strewn along the bottom. I am thinking that is the types of things that we are looking at getting back to, things that probably have not been tackled before and could be as much as twenty-five years old.

MS MICHAEL: Okay.

You would hope that kind of thing is now being taken care of and not happening.

MR. JACKMAN: Now, yes, definitely.

MS MICHAEL: Thank you.

Under Grants and Subsidies, last year the budget was $2,080,000, you only spent a small amount of that and now this year it is $1,580,000. What is under that line?

MR. JACKMAN: The regular development is $330,000, but there has been an interest expressed for development of a meal plant. While the companies have not moved on that, it was held there in case the initiative would go forward. It has not at this particular point. If a new processing facility were to be built in Harbour Breton, for example, this might be where this money would be invested. We cannot invest in new structures, but this would be something, say, more technological. So, it is something that we can support and that is where we have that money put towards. It would be really handling the offal, I suppose, from the plants and making it useful.

MS MICHAEL: Okay. So, that is Grants and Subsidies, straightforward, no strings attached?

MR. JACKMAN: Yes.

MS MICHAEL: When you come down to the Capital, here you have Loans, Advances and Investments. Can we have a breakdown of who is getting these loans and advances and investments?

MR. JACKMAN: Yes. Are you up to speak to this? Yes, I will get Shawn to speak to that; he is more into the details of this one.

MS MICHAEL: Okay.

MR. JACKMAN: I can tell you where it is going, but he will speak more specifically about it.

MR. ROBINSON: This item is the capital equity investment program. The purpose of the program is to enable government to invest directly with companies and take an equity position in those companies as a mechanism of stimulating investment and getting them to invest in the Province. The money, government's investment goes in and it is repayable by the companies over a set period of time, usually seven years or less.

This particular amount of money, $8 million, for this year is for Northern Harvest, which is a company from New Brunswick that started in the Province a couple of years ago and has been expanding quite rapidly. They will be getting $5.5 million. Usually these investments can be scheduled over a period of years, so the portion for this year is $5.5 million and there is a remaining $2.5 million that is not committed from that program at this point.

There are two particular projects that we are still working on with industry that we expect will take up that $2.5 million. One is to move the technology forward in net washing, which is becoming a bigger and bigger piece of our business, having to wash all those nets that the fish are grown in. We want to be able to move that onto land and again improve our biosecurity and reduce our environmental footprint. The other $1 million is targeted to the mussel sector with the expectation that we will be able to – hoping that we will see a large investment by a mussel company in that industry.

MR. JACKMAN: These are true equity shares as well, right? (Inaudible).

MR. ROBINSON: Yes.

MS MICHAEL: With the equity shares when they return the money - because you are saying that over a period of time the money all comes back - does the Province's then equity connection end?

MR. JACKMAN: Yes, I would assume.

MS MICHAEL: I would think, right? Yes, so it is only while they have the money and they have not paid it back that the equity share is operative?

MR. JACKMAN: Yes.

MS MICHAEL: Okay, all right. That is fine.

That is all my questions.

CHAIR: Are there any other members of the Committee who have any questions?

We will go to Mr. Dean then.

MR. DEAN: Thank you, Mr. Chair.

Let's talk about the Northern shrimp quota cuts for a few minutes, Minister, please. Again, it is not a new issue in terms of us discussing it a little briefly across the House and so on. Yesterday you said that you can anticipate 10 per cent to 15 per cent. Can you elaborate more on that?

MR. JACKMAN: Our staff has been working with DFO and have been attending meetings. Now, it may not, but this is what we are anticipating that it is going to be a 10 per cent to 15 per cent reduction.

MR. DEAN: That will be in 4R or 3L or 3K?

OFFICIAL: Area 6.

MR. JACKMAN: Yes, it is Area 6.

MR. DEAN: Area 6?

MR. JACKMAN: Yes.

MR. DEAN: Okay. So, there will not be a 40 per cent, there will not be a 30 per cent, you feel fairly certain of that?

MR. JACKMAN: That is what the indications are. I may be on public record of saying - I said it here in the House yesterday, but I do believe that I said it previously as well on the airwaves that this is what we are anticipating. It is unfortunate how it all unfolded, but as I have also said in some of the answers to your questions for the past three years, it was not uncommon that this was the type of thing that was done to get the fishery started, and the final allocation came down later. Of course, elections do strange things to people.

MR. DEAN: Tying that into last year's cut, how many plants do you see being in jeopardy this year because of that, or do you see any?

MR. JACKMAN: Well, right now, production is underway. With the way the price is if quotas are caught based on the price, we would hope that all plants will do quite well this year.

MR. DEAN: Okay.

I guess the other piece that ties into the Northern shrimp is the situation we have on the Northern Peninsula. I believe they are going out again on Thursday; they have another planned demonstration. I understand you not wanting to go into the midst of it, stand by the side of the road with a bunch and confront a group of protestors; but, having said that, they are there because of frustration, for the whole part, they are concerned about their livelihoods and so on. Are you willing to discuss reinstating the cap? Where is that issue? I mean it was taken off when it kind of was not even necessary, would be my understanding. There was plenty of shrimp, did not need to worry about the cap, just let it flow. It is a different day now, right?

MR. JACKMAN: If we are going to start down the road of talking – I will backtrack. The movement of product across the Province goes everywhere. It is a strange situation that you will have a product there that could be produced here but, still, processers will choose to ship it this far to have it done. The adjacency thing and having it there, it is something that we were told to stay quite clear of a number of years ago. You were not around then, but I can still well remember, it was called RMS.

MR. DEAN: Yes.

MR. JACKMAN: Now, it did not get resolved to the satisfaction of some of the people in your particular area but, again, it is what fell out at the end of that long and hard debate, I can tell you that. Now, whether we will get back there, I do not know if we ever will. I cannot give you a commitment to say that it will or that it will not. I will tell you that I cannot be held ransom by someone, but I have said to them if they want to finish their protest, and we will certainly, and I will personally, sit down and discuss it with them and see if we can find a way forward.

MR. DEAN: In some sense, I guess, really, they have ended their protest. They protested last week and they have not protested since and they are waiting to meet with you, right? Because there is not a satisfactory response or no response, they are going to go back our again tomorrow to make their voice louder.

MR. JACKMAN: Yes.

MR. DEAN: We have people on the sides of the highways, not on the roads coming out of the fish plant or whatever the case is. I know you do not want people out on the road protesting, I am sure, anymore than I do; I am quite certain of that.

MR. JACKMAN: No.

MR. DEAN: Having said that, we have them out there.

MR. JACKMAN: Yes.

MR. DEAN: I think if you do not express a willingness to come and meet, then the thing will continue.

I drive the Northern Peninsula as much as you drive the Burin Peninsula kind of thing, which is a lot I am sure. I see empty fish trucks going up, but I never see full ones going up.

MR. JACKMAN: Yes.

MR. DEAN: With the exception of OCI taking some products to Port Saunders at times, all the ones going up the Peninsula are empty, the ones coming down are full, and there are several million pounds of product coming off that Peninsula every year. The options are limited. If The Straits part of our Province, take it from Cook's Harbour right down to Rocky Harbour, that part of our Province, if we do not have an established fishery, if we do not protect their right, so to speak, their tradition, what has been their livelihood for generations, if they do not hang onto that, there are no other options.

If I was sitting where you are today or if you were sitting where I am, it would make no difference. What do I do? When I look at my district and I look at from Eddies Cove to Anchor Point, what do I do if we do not have a sustainable fishery? Do not ask me. I have no idea to be honest. I am not sure if there is anything else we can do. There are other options in other parts of the Province and so on, but I just do not see other options there. It is plain and simple.

That is what you are hearing. You may be hearing it in a frustrated way. It is out of concern. People are saying listen - one comment there is that it will be war. We do not want war, but the people just want to be able to make sure they have their livelihood for this year. The only way they can have that is if they are assured, as cuts continue to take place in the shrimp industry in particular, that there is some mechanism in place which was the mechanism that was in place when shrimp quotas were lower. If they do not have that protection now, they are not going to survive.

MR. JACKMAN: Again, I will not go back to the days when plants were issued licences and that kind of stuff. If the resource continues to decline, let's say the four plants that are in that particular area, we are going to have to start asking ourselves: Are we going to continue to fight for four plants that are trying to eke out a living for a number of people – and year by year you are never certain if that is going to happen – or do we ensure there are two or three processing facilities that are going to be strong based on the product they are receiving?

The adjacency one and the product there is a long way from being resolved into this season. I do not know where it will take. I have committed that I will meet with individuals and maybe I will be in touch with them tomorrow.

MR. DEAN: Okay.

The other piece of the shrimp business is the industrial piece.

MR. JACKMAN: Yes.

MR. DEAN: We know that a lot of industrial shrimp is leaving the Province. It is all about economics and that, supposedly. Is there an exemption by the government to companies that land here and export their product?

MR. JACKMAN: That is the shrimp that gets sent out to Norway and – where is it?

OFFICIAL: Denmark.

MR. JACKMAN: To where?

OFFICIAL: Denmark.

MR. JACKMAN: - Denmark for further processing. Are you asking: Should we do more of the processing of it here?

MR. DEAN: Well, I am asking: Is there a way for us to do that here? In light of the cuts in shrimp quotas, is there a way that we can process more of that industrial shrimp in our Province?

MR. JACKMAN: I do not know. I will let Dave explain.

MR. LEWIS: There are a couple of issues around the industrial shrimp. One is that vessels, if they land in Newfoundland, you could have some control over what happens to the shrimp, but they cannot be forced to land in Newfoundland. Some of those factory freezer trawlers land in Nova Scotia now.

MR. DEAN: I understand that.

MR. LEWIS: One expectation would be that cold storage facilities in Bay Roberts, Harbour Grace, Argentia, and St. Anthony could be impacted if the requirement was that if it was landed in the Province, it would have be processed here.

The big issue, really, relates to the tariffs in the EU. We are hopeful that this Comprehensive Economic and Trade Agreement that is being negotiated now with the EU will deal with some of those tariff issues. With the removal of tariffs, it would be certainly a lot more attractive than it currently is for that product to be processed in Canada. We are closest to the northern areas where those shrimp are harvested, so it would be beneficial for us. That is, sort of, the main factors that influence that at the moment.

MR. DEAN: Okay. So, that tariff is a part of the discussions that are ongoing?

MR. LEWIS: Yes, shrimp tariffs are one of the major points of discussion. The other thing is some of that industrial shrimp is currently processed in the Province. St. Anthony does some from time to time.

MR. DEAN: Yes, I realize that.

MR. LEWIS: OCI does some as well from time to time.

MR. DEAN: Yes, I guess that is the point I am getting to: It is good at times, and, other times, it does not seem to be any good. If there is something there, they can process it. Some other plants, I understand, cannot process it, probably do not have the equipment, may not be interested in it or whatever the case is.

MR. JACKMAN: We go back to the budget, the fisheries technology program, if there are areas that are interested in exploring technology around that kind of thing that is what that program is for. I do not know if that is a way to help us out or not, but it certainly can be explored.

MR. DEAN: Okay.

The turbot fishery: I have a couple of questions on that. It is only a short one in Newfoundland, the fixed turbot gear; it is only four, five, six, seven days, or whatever the case is.

MR. JACKMAN: Yes.

MR. DEAN: It is the inequity in the Gulf turbot quota that keeps coming back to me again in terms of Quebec has 81 per cent, 82 per cent of the quota, our fisherpeople have 18 per cent. What are we doing to try to change that, if anything?

MR. JACKMAN: Well, I have to tell you I was not very much aware of this issue until I came into this portfolio. I made some trips up around the Northern Peninsula and, like you say, it is a short season. The unfortunate thing it seems to be that the rationale for Quebec versus ours is based on historic shares. Attempting to get Ottawa to change those types of issues are sometimes rather difficult to tackle.

MR. DEAN: I think that is another case in point where - and I know we have tried over the years probably at different times to force Ottawa - at some point or other, we really have to try to be more forceful, come back to the all-party committee and the processors and the harvesters and the mothers and fathers. I do not know but Ottawa does control quotas and there is not a lot.

MR. JACKMAN: Yes, definitely.

MR. DEAN: I understand that. At the same time, they are controlling the livelihood and well-being of our people. I guess that is where the challenge from government comes to. Like I said, when I talk about the turbot fishery, three or four days - and some of those are travelling. Some of those live in St. Lunaire, for example –

MR. JACKMAN: Yes.

MR. DEAN: - and probably travel their fishing enterprise down to Rocky Harbour somewhere. You are down there for two days and all of a sudden the instruction comes out from DFO: Get your nets out of the water, get it out. They are concerned about violation charges and all of those kinds of things.

MR. JACKMAN: I wonder sometimes about the safety issue as well because when it opens they are forced to go.

MR. DEAN: Oh, definitely, the load and go kind of thing.

MR. JACKMAN: Yes.

MR. DEAN: We know where that leads to: overturned vessels and so on and deaths on the water.

MR. JACKMAN: Yes.

MR. DEAN: It is just another issue that, again, is not earth shattering, it does not seem to be, but it is an important piece. When you get into that thirty-five foot boat, your little bit of turbot and your little of sealing and the other things gives a person a good year's salary.

Last year, there was an exemption by a company in Woody Point - I think it was - to export what was considered to be unprocessed, inferior gill netted turbot to be shipped out. Is that going to happen again this year, or is that exemption still in place?

MR. JACKMAN: We have not received any request yet.

MR. DEAN: Okay.

Are there any findings from that in terms of what happened last year? Was it successful?

MR. JACKMAN: We do not remember; I will have to check, actually, and get back to you on it.

MR. DEAN: Okay.

MR. JACKMAN: So, it was from where? Woody Point?

MR. DEAN: Yes. Is that 3 Ts?

OFFICIAL: Yes, 3 T's.

MR. JACKMAN: 3 T's; that is Todd Young.

MR. DEAN: Yes. 3 T's requires lots of exemptions and other things.

They own a fish plant in Sandy Cove, too; I am sure you are aware of that. They have the licence and so on. They have not operated for a couple of years. The CFIA turned it down for some reason or other - interesting.

MR. JACKMAN: Yes.

MR. DEAN: Keep the politics out of the fishery, how can you? Come on, my God.

[Laughter]

MR. DEAN: Another exemption is the OCI one last year for yellowtail flounder. How did that work out? It was under 450 grams, is that what it was?

MR. JACKMAN: Well, they have asked for a further exemption. They have not been granted it yet because we are looking at a financial review of their situation as to how do it impact their bottom line. So, that is under way, and we will make a decision further to that.

MR. DEAN: There is the rumour out there that they were exporting larger than the 450 gram as well.

MR. JACKMAN: Well, when I met with the group in Marystown we committed to doing some inspections. So, we did do two inspections. It seems to go both ways because all fish, apparently, do not grow to be exactly that same size. So, they may be a bit wider, just like people, I suppose. We found that there was a variance on both ends, but we had no indication that they were shipping out huge amounts beyond the exemption.

MR. DEAN: Okay.

Lorraine was talking about the seal industry for a moment. I have just one or two things on the sealing industry and that is the cull of grey seals. What can you tell us about that?

MR. JACKMAN: You are talking about the cull –

MR. DEAN: For the Gulf region.

MR. JACKMAN: - in the Gulf?

MR. DEAN: Yes.

MR. JACKMAN: Well, I suppose, if you are looking and planning strategically, it is not something that the animal rights' groups are going to support. We contend that the best way forward is as much full utilization of the animal as we can have. So, we do not support that type of effort.

MR. DEAN: Okay.

MR. JACKMAN: I do not know how in the devil you go out and cull about 7 million seals. It is amazing the numbers that this has reached. They are saying 9 million but, possibly, it could be 11 million.

MR. DEAN: I guess at some point, though, it has to be one thing or the other. If we do not have a hunt, there has to be a cull or we have no fishery, right?

MR. JACKMAN: Well, we will get you on Ellen DeGeneres, is it, and debate that one.

MR. DEAN: Sure. Of course not, we will go together.

[Laughter]

MR. DEAN: The export to China of seal products: How optimistic are you about that? How is it moving?

MR. JACKMAN: I am very optimistic about that. It seems that the Chinese are not only interested in the pelt but intestines and everything else for medicinal purposes and whatnot. I think the very important thing is that some people kind of felt that you can take this now and all of a sudden you are going to dump this meat into China and there are going to be sales for it. The Chinese are very particular about the products that they receive, even to one point where they wanted to import I believe, Mike, with the claw still attached to the animal. If there is one message that we heard in China, I heard it from the ambassador to China from Canada: You have to do this right. You get one chance at getting at this market. If you do not make a good first impression –

MR. DEAN: You are done.

MR. JACKMAN: - then you are done. We are working our way through that with veterinarians and the whole gamut so that we do things right.

MR. DEAN: Okay.

I have a few more issues, not a big lot, so we should be out of here a little bit earlier than anticipated there. The Standing Fish Price Setting Panel –

MR. JACKMAN: Yes.

MR. DEAN: - we have heard criticisms, calls for the dismantlement and so on. You made some changes last year. We have this situation now here with the lobster buyers, for example, the association SPNL did not appear, did not make their presentation to the panel. Yet it is a bargaining act, it is the law of our land so to speak, isn't it?

MR. JACKMAN: Yes, it is.

MR. DEAN: The no-show, how do you see that? Where do you sit with that?

MR. JACKMAN: The panel is established and both sides have the option to present their case. If they do not present their case, the panel will rule on the information that is presented. It is to their disadvantage if they do not show. This year SPNL met with the FFAW in Corner Brook, they discussed, and we would certainly like to see a price negotiated as opposed to going to the panel. The panel was established as the last-ditch effort.

MR. DEAN: Yes.

MR. JACKMAN: We were very pleased this year that shrimp was negotiated outside of the panel, or was it crab that was negotiated outside of the panel? Shrimp was, and crab was negotiated through the panel and you had good resolution this year. It is just kind of surprising that SPNL took this route. I wonder sometimes if they did not do it just to make a point around the panel.

MR. DEAN: I am sure we all wonder the same thing.

MR. JACKMAN: They have contended and the processing sector, in general, has contended that they do not agree with a three-member panel. They agree with one individual: final offer selection. We certainly have no intentions of dismantling the panel.

MR. DEAN: How about changes in membership? Are you considering changing some of the individuals on the panel?

MR. JACKMAN: I do believe that the members on the panel, their time is up. I am not certain; there might be one whose term is not up. Of course if your term is up, it is always up for consideration, but we have not decided on anything at this particular point.

MR. DEAN: Okay.

Can you give you a breakdown of the annual cost of that panel? Is that here somewhere? You do not need to do it now. It is probably something you can –

MR. JACKMAN: Yes, we can provide it to you, definitely.

MR. DEAN: Okay, thanks.

OFFICIAL: (Inaudible).

MR. JACKMAN: Yes, that is an important point. It does not come from our budget. That is the Labour Relations Agency. I do not know if they have done their Estimates yet or not.

MR. DEAN: Okay.

OFFICIAL: (Inaudible).

MR. JACKMAN: That is through HRLE.

MR. LEWIS: The only requirement for our department in relation to the panel is the provision of market intelligence. Last year, I believe the minister already mentioned, in our marketing budget we expended $139,000 for marketing consulting reports on shrimp in Europe and crab in the US and so on. That information was provided to the parties involved in collective bargaining and to the panel, but the actual operation of the panel, the cost of the panel and so on, are all voted in the Labour Relations Agency which is a part of HRLE.

MR. DEAN: Okay.

The lobster rationalization program that FFAW put forward - I know that, again, we have discussed it a little bit in the House in terms of questions and answers - what is it that the department is doing with that? I mean the FFAW has kind of had their piece, the feds have their money in or their commitment there, are we going to move that forward? Where is the timelines and when we can we expect a decision?

MR. JACKMAN: I think now, with the landscape that has changed federally, we will just have to see who the minister is in there and what they come forward with. The FFAW, to the best of my knowledge, has not received in writing officially that the federal government are going to support this; it has been a verbal commitment. You would want something in writing that they are going there. As I said in the House yesterday, we are seriously looking at it if they come forward with the program.

MR. DEAN: Okay.

Do we need to wait for the feds or we put ours there anyway first? I realize they have to be there, but do we want them there first?

MR. JACKMAN: Well, they have worked their way through this with the feds now, and I can tell you it is just a matter of waiting for the response from the feds on it.

OFFICIAL: It is a federal program.

MR. JACKMAN: Yes, it is a federal program. Because this was the lobster initiative that was mentioned by Minister Shea, so it is a federal initiative and we have been asked to partner with it. Once they look to it, like I said, we are looking seriously at it.

MR. DEAN: Okay.

One of the big issues that we have along the Northeast Coast and some of the other parts of The Straits there I guess, the Gulf region, is the difference in the price of fuel. I know it has been one of the big obstacles of the St. Anthony cold storage, for example, trying to attract business there. It has been a number of years trying to do that and, really, cannot because there is like fourteen cents or something on a litre of fuel difference, buying on the Avalon and buying on the Northern Peninsula. Marine fuel is not a regulated fuel like the other ones have been and so on. It is preventing the larger vessels from coming into that area. Has that concern been brought to your department? Have you had any discussions with anyone? Do you see anything that can be done?

Is Wally here? No, Wally is not here. In St. Barbe there is a 12 million litre farm, I think, for example. When a tanker comes in there, I do not know what it brings in. Perhaps it is even more than twelve; it might even be twenty, I am not sure. Yet to come and take fuel out of that farm compared to taking it out of a farm on the Avalon or down around Central, you are talking twelve to fourteen cents difference on a litre of fuel. A factory freezer, for example, coming into St. Anthony and offloading compared to offloading in Harbour Grace or Bay Roberts will pay $20,000 to $25,000 more to refuel. So, they do not come in, obviously. That is one piece of it. The other piece is, the same sixty-five footers that are fishing shrimp on the Northeast Coast and are fishing shrimp in another area there, there is a discrepancy of up to fourteen cents a litre on fuel.

MR. JACKMAN: I was not aware of that issue. It may have been mentioned to me in the periphery or some of the discussions or whatnot, but I am not aware that there have been any proposals submitted to government. You are kind of heading towards a subsidy or something of that nature.

MR. DEAN: Yes. I guess my question is: Is anything being done to the matter of regulating marine fuel? Is there something that there has been a proposal on or something that has been studied so that marine fuel users in the Province are all paying the same price with a small difference from region to region, which we experience in other fuels, home heating, gasoline and so on? Like I said, it is a major discrepancy for people who leave ports in the same industry and are paying upwards of fourteen cents difference on a litre of fuel.

MR. JACKMAN: Like I said, I am not aware of it. I will follow up on it, though.

MR. DEAN: Okay, I appreciate that.

Licence buyback and early retirement, Minister, that is a piece of the MOU as well, I think. We really did not discuss it as such, but it will be vital to our industry going down the right path. Obviously, there are a lot of people there right now who probably would leave that industry and leave it gracefully if they were offered an early retirement package, a licence buyout, whatever the case might be. When can we anticipate seeing a package, an initiative on that?

MR. JACKMAN: Right now if I were to say, based on the numbers that came out of the MOU, the buyout of licences - if I were to look at my particular area, as licences are being put up for sale, they are being bought. The report clearly showed that the rationalizing of that sector is occurring without government involvement into it. So, at this point, I do not see us going down that road.

MR. DEAN: Okay. There is another piece to that, though, in 4R for example, the shrimp fishermen.

MR. JACKMAN: Okay.

MR. DEAN: I know several who have bought licences and have paid upwards probably of a quarter of a million dollars or so for them, only to now be at about the same quota as they were when they bought the licence a few years ago. I think people are probably becoming more hesitant now to buy licences because they have no idea where the quota is going to go.

MR. JACKMAN: Yes.

MR. DEAN: Like I said, I know two or three fishermen - and these people for the most part only have shrimp licences, they do not have crab – they probably had 300,000 pounds, or whatever the number was, and they went and they bought another enterprise or bought the licence for another 300,000 pounds and now they are back down to 300,000 again. They have the debt held over their head because they borrowed, obviously, to buy that licence. I do not think it is working that well. It was intended to be well but they are in financial trouble now, some of these people. I guess the other side of it is the early retirement piece, in terms of plant workers and so on. Are we willing to look at any retirement, not only for plant workers but for crew members?

MR. JACKMAN: To look at retirements for plant workers or for –

MR. DEAN: Or for both.

MR. JACKMAN: - both. The programs that we are into, I know some people will talk about the CEPs and this kind of thing, so I do not know if it something that we can explore a bit further. If you walk into any of the plants that are around now, you look at the age of the people who are in there and you can see where they are. If I look at the plant in Marystown right now, I believe the average age is something like fifty-eight, and many of them are women.

I do not know where we will end up with that. Clearly, the direction that the processing sector is going in is heading us in a road whereby there is going to have to be something that is going to have to assist to get these people through a transition period while they exit the industry. I am certainly not one in favour of these roadside, in the snow, cutting alders. I certainly hope that we can find something better than that.

MR. DEAN: When do we find it? The previous minister basically two years ago now alluded to the fact that it is probably something government would do. It has not happened. It is not being discussed - it does not seem to be - in any real positive sense. I use Englee sometimes in some of my debate on the fishery because I see it as being an example of the worst thing that could possibly happen. It will happen again. It is very unfortunate.

When I campaigned in the by-election in October 2009, I saw displaced plant workers. I saw sixty-year-old, sixty-two-year-old, and sixty-three-year-old women in doing a carpenter course with a square in front of them and this kind of thing. They were degraded. If that was a profession they chose, that is a different thing; but, at sixty-two-years old or sixty-three-years-old saying: The only thing I can offer you is putting some bucks into a workplace adjustment program, we are going to retrain you now, and we are going to make a carpenter out of you. They had no desire to be there because they knew it was not going to take them anywhere.

Now I come ahead two years later, now that the workplace adjustment program is gone and the monies have been spent. No one got anywhere out of it, only from the unemployment line to a CEP program to eventually welfare. It is a sad reality that without an early retirement program, that is where other people in our Province are going to go, whether it is going to be in Port Union, whether it is going to be over in Jackson's Arm, or whether it is going to be up in Black Duck Cove next year, or whatever the case is. If we do not put a program in place, if government does not come with something, put a budget there, and say, listen, we are willing to do this program even if we got to do it on our own, if there is no federal involvement or whatever the case may be, we need to take some of these people out of the industry, MOU completed or no MOU completed.

There is a reality in there in front of us. Either that, or we have to bump our CEP budget up from $4 million to $25 million, one or the other, and allow them to do beautification projects around their towns for the next four, five, or eight years they need to get through. Put them to work in July instead of November is the only thing.

MR. JACKMAN: I think that is something we certainly need to explore. It is an option. We still have the stand that if we can get the federal government to be involved, we would do it on a cost-shared basis there. As you talked to before about going to Ottawa with stuff, maybe that is something if we could get all parties to come together on, this is certainly probably – not probably, it is one of the most important issues we need to deal with. The workforce, especially in terms of our plants is bothersome. It bothers me.

I met with some people out in Minister Johnson's district last year. I made it a point not to involve union brass in it and not to take any department officials. No disrespect for either side, but I wanted to hear from people one-on-one

One of the stories that stuck with me was from a lady out in Minister Johnson's district, who said: If you really want to know what is happening in the plants and to us, look in our lunch cans for the numbers of Tylenol and Atasol they have to carry with them to get them through a shift. It is not acceptable, and it is going to require all parties to come together. This is one of the issues we should be able to find some path forward with.

MR. DEAN: I would jump on the plane with you readily to go to Ottawa, and I am sure Ms Michael would as well, if that were something we thought would be effective. Again, political parties aside and all that kind of thing, it is a major issue –

MR. JACKMAN: Sure it is.

MR. DEAN: – and my district is affected by it probably more so than any other district in the Province. That does not matter, it is still in other districts as well, more in some than others, but we have a lot of people out there in that age category, they are very frustrated, they are lost, they have no future, very demoralized. Government has to step up to the plate here and do something, no question at all. If the federal government does not come, there was a statement that the government will look at doing something alone. I think it is time for that to materialize, to be honest.

We could stay here forever, but we will not do that. I would say –

CHAIR: Well, Mr. Dean, let's have a look and see if somebody else has some more questions for – maybe we could come back to you then.

MR. DEAN: Okay.

CHAIR: Do you have any more questions, Ms Michael?

MS MICHAEL: No. I will just say one thing, it was something I did forget to bring up, and it was the whole issue of, especially the plant workers and the early retirement. I really do back everything, and I hear you agreeing with what Marshall is saying and I am there as well. We have to do something.

When I campaigned during the by-election in The Straits & White Bay North my eyes were certainly opened. I had no idea the depth of the issue for the people in the Straits area in particular. I think it really has become an extremely forgotten part of the Province. I really think people do not even know that there are people who live there. It really struck me when I did that campaign. As Leader of a party, I know I do not have a rural district, but that is not the point. These are people of our Province.

I, too, saw those women who were being trained at sixty-two and sixty-three in carpentry, but the worst part - and you have mentioned it already, Minister, and I am glad you did - is seeing women in their sixties, in October, in snow cutting alders by the side of the road, and not even a place to take care of their personal needs, from 7:00 in the morning until it got dark at night. We have to stop that in this Province. We cannot have that going on. I do want to say that I really feel it very, very strongly.

CHAIR: Mr. Dean.

MR. DEAN: The plant in New Ferolle, I know the committee there have wanted to meet with you for some time I think to discuss that issue there. The owner's comments a couple of weeks ago on the Fisheries Broadcast, as you are aware, I do not think it really jelled the relationship between the community and him as someone who is interested in doing business there. A year has come and gone, and now we are into another year. Are you willing to meet with that committee, first of all?

MR. JACKMAN: One of the individuals, who were in here as part of a delegation just over a week-and-a-half ago, was from New Ferolle. If there is either community in this Province, and I can show you the briefing note on the history of where it has gone from New Ferolle, every effort has been made to see if we can get that plant up and operational. Because like I said the other day, if we were going to follow the letter of the law there would not even be consideration because they were not operating by March 31. We are giving them that extended period to see.

We have been following up with Mr. Mullowney, and maybe it is his comments that have created the situation now whereby if he goes into operation there he might not get workers. Every indication we have is that he is going to do some processing there this year. He has moved in some equipment. He had it fabricated out in St. Mary's. He shipped it up there, and that is where it is right now.

MR. DEAN: I think he made the same commitment last year though and I do not think it happened.

MR. JACKMAN: No, but last year -

MR. DEAN: My understanding of the plant is that it is pretty much bare.

MR. JACKMAN: Last year I went up there when it was in operation and there were certain things around it, that when I came back I said this is not acceptable and he was pushed on certain things. Our checking of it said that he met some of these things. Now if it is pretty well empty, I have not heard that at this point.

MR. DEAN: That is pretty much what we are hearing, is that the place was stripped, what equipment was there was taken. It is a shell of a building as far as I understand. The only one, to be honest, who has shown any interest in doing anything, really has been this guy Andy Schnare.

MR. JACKMAN: Andy Schnare.

MR. DEAN: Mullowney just has not been around. The deal is for $1, it is yours, go work it, here is the agreement, here is your time frame; the guy has not honoured any of it. I do not see where he deserves to own it. The people are willing to take it and try to do something with it. I am not an advocate for Andy Schnare, by any means, but I will tell you that he is a bright spot on the Northern Peninsula when it comes to doing multi-species and pelagics and so on. His place in Main Brook, he has done quite well with it, he has invested in it.

While everyone else is trying to pull everything out, he is one person who has been there putting in. He has expressed the same interest in New Ferolle. Greg has not and his only comment in recent months has been one that has been totally demoralizing to everyone involved. If that is his mindset, I think he has a different interest than going up on the Northern Peninsula and investing tens of thousands or hundreds of thousands of dollars to get that plant up and running. That is not processing fish there next week with the condition it is in right now.

MR. JACKMAN: I will commit that first thing in the morning I will check into it and see what is happening in New Ferolle in terms of Greg Mullowney's operation.

MR. DEAN: Okay.

MR. JACKMAN: I do not know where we will go from there, but I certainly will commit to that.

MR. DEAN: All I am saying is he has had it long enough now and if there is no commitment – to me, commitment is time frame, a short one first of all, equipment, investment and whatever moving forward. If that kind of commitment is not there, I do not see why we owe him anything. I certainly would encourage you to look in another direction with it because it is important to the people there. It is the only multi-species plant on the Northern Peninsula with the exception of Main Brook, isn't it?

OFFICIAL: Rocky Harbour.

MR. DEAN: Well okay, Rocky Harbour. That is the bottom part of the Northern Peninsula, yes. No disrespect, but there is nothing else up there for all of the communities. There are fishermen there who are licensed to buy, they have cod fish they cannot sell, they have herring they cannot sell, and so many species they cannot do anything with because there is not a buyer. You have this large plant sitting down there, for a buck it was given to him, and he has not honoured one thing.

MR. JACKMAN: I will follow up in the morning and just see where he is with things.

MR. DEAN: Okay, all right.

I would not dare want to leave and miss anything, but there was something else I wanted to ask you about. That was the special grant, the $3,000 grant, is that through fisheries?

MR. JACKMAN: Yes.

MR. DEAN: Where is that in your documents?

MR. JACKMAN: It is the one that Lorraine mentioned.

MR. DEAN: Yes, I thought she did and I –

CHAIR: It is in 2.1.01.10 I do believe, Minister.

MR. DEAN: The $300,000, is that the one?

MR. JACKMAN: Yes, on page 131 of the Estimates, 2.1.01.

MR. DEAN: Okay. Is that the only thing that is in that?

MR. JACKMAN: Yes.

MR. DEAN: Okay.

So, it equates to under grants or do you double them up or -

MR. JACKMAN: No, some will come in for $3,000. It could be a $4,000 thing, but it is not $10,000 and $12,000 grants. It is more minimal amounts of money of $3,000.

MR. DEAN: Okay.

Thank you, Mr. Chair.

CHAIR: I will ask the Clerk if she could call the subhead, please.

CLERK: 1.1.01 to 5.1.01 inclusive.

CHAIR: Shall 1.1.01 to 5.1.01 carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Contra-minded?

Carried.

On motion, subheads 1.1.01 through 5.1.01 carried.

CLERK: The total.

CHAIR: Shall the total carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Contra-minded?

Carried.

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

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

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Contra-minded?

Carried.

On motion, Estimates of the Department of Fisheries and Aquaculture carried without amendment.

CHAIR: I would like to thank the members of the Committee for their participation tonight. I thank the minister and his officials for a very engaging discussion.

I would like to remind the members of the Resource Committee that we will be meeting on Monday, May 16, at 9:00 a.m. to review the Estimates for the Department of Environment and Conservation.

With that, I would entertain a motion to adjourn.

MR. DAVIS: So moved, Mr. Chair.

CHAIR: Mr. Davis, a motion to adjourn; seconded by Ms Michael.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

Thank you very much, ladies and gentlemen.

On motion, the Committee adjourned.