Pursuant to Standing Order 68, Christopher Mitchelmore, MHA for The Straits – White Bay North, substitutes for Lorraine Michael, MHA for Signal Hill – Quidi Vidi.

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

CHAIR (Brazil): I would like to welcome everybody as we review the Estimates for the Department of Innovation, Business and Rural Development.

I would like to first welcome the minister and his staff. I will give the minister an opportunity to say a few words, if you want to do an introduction in a minute, and have his staff introduce themselves.

I do want to reiterate, and I have been saying as we go through: staff, if you are answering a question, please identify yourself. Hansard is doing a recording, and it is harder for them to pick up who spoke.

I would like to start by welcoming the Committee again and ask if they would introduce themselves.

MR. RUSSELL: Keith Russell, MHA for Lake Melville.

MS PERRY: Tracey Perry, MHA, Fortune Bay – Cape La Hune.

MR. CROSS: Eli Cross, MHA, Bonavista North.

MR. BENNETT: Jim Bennett, MHA, St. Barbe.

MR. LONO: Simon Lono, Opposition Office.

MR. MITCHELMORE: Christopher Mitchelmore, MHA, The Straits – White Bay North.

MR. SMITH: Daniel Smith, researcher with the NDP Office.

MR. MURPHY: George Murphy, MHA for St. John's East.

CHAIR: I appreciate that.

We want to start a little bit differently because this department takes in some other entities that are back and forth in the Estimates book. We are requesting that we start with the Rural Secretariat, which is on page 2.11 under Executive Council. There is a section there that the minister is responsible for. We could do that and then move on to the Research and Development Corporation, which is 7.1.01, one small line, and then back to the executive office.

The process, for those who are not aware, what I will do is after the minister gives a quick introduction we will go to the Opposition, and we will go fifteen minute intervals back and forth. If you are close to finishing a section, or there are a couple of last questions, I will give you leave on that. Then I would appreciate the courtesy of going back and forth as you ask questions to the minister.

I do ask, if you are having problems hearing, that you put in your ear sets. That would expedite what we are doing and makes things clear.

Mr. Minister, the floor is yours.

MR. HUTCHINGS: Thank you, Mr. Chair.

Good morning, everybody.

MR. BENNETT: Mr. Chair?

CHAIR: I am sorry?

MR. BENNETT: Mr. Chair, I would like to register an objection to the structure of where we ask questions. In some of these areas I have no interest in asking questions whatsoever, and other areas I do have an interest in asking questions. We may get to the end of the day when I have had to waste too much time on areas that I have no interest and then leave areas that I have an interest.

So, in fairness to people trying to get meaningful information from the minister, I would like to be able to ask questions on the areas that my researchers and I have identified as being important.

CHAIR: Okay, fair enough. Again, you can just say you have no questions on the Rural Secretariat if it is not one of interest and then we can move to the Opposition.

MR. BENNETT: By directing to the page, if I do not have any interest in a particular page, then by the time we have wasted the three hours, we get to the end and then I have an interest in another area, we have used up all the time. We have already learned that government is not about to extend the time when we run out of time, because I learned that in Fisheries.

CHAIR: So noted, but I will start with the section of the Rural Secretariat.

Mr. Minister.

MR. HUTCHINGS: Thank you, Mr. Chair.

Good morning, everybody. I welcome the Committee, the Committee members, and certainly my staff. I have no opening statement. What I will do is, I will go to my left and my staff can introduce themselves. Then I will be happy to get right into questions.

MR. MEADE: Brent Meade, Deputy Minister, Innovation, Business and Rural Development.

MS MALONE: Rita Malone, Assistant Deputy Minister, Regional Economic Development.

MR. AU: Peter Au, Assistant Deputy Minister, IBRD.

MS TRICKETT: Wanda Trickett, Departmental Controller, Executive Council.

MR. JONES: Scott Jones, Departmental Comptroller, IBRD.

MR. GILBERT: Bruce Gilbert, Assistant Deputy Minister, Rural Secretariat.

MR. JANES: Glenn Janes, CEO, Research and Development Corporation.

MS EVANS: Beverley Evans, Chief Financial Officer, Research and Development Corporation.

MS HAYES: Robyn Hayes, Manager of Finance, Budgeting and General Operations for the Executive Council.

MR. BARFOOT: Scott Barfoot, Communications Direct, Innovation, Business and Rural Development.

CHAIR: Thank you, everybody.

Mr. Bennett, you are given the opportunity to have any questions on the Rural Secretariat or, if not, then under Executive Council. You can ask any questions here.

MR. BENNETT: Do you mean do I have any questions on page 2.11?

CHAIR: Exactly, yes.

MR. BENNETT: I have no questions on page 2.11.

CHAIR: Okay, perfect.

MR. BENNETT: I understand this will be done in the House as well.

CHAIR: No.

MR. BENNETT: My understanding is this will be done in the House.

CHAIR: I do not think this will. Once this is passed now, it stays as is under Executive Council.

MR. BENNETT: It will be raised in the House, because government has been shutting –

MR. HUTCHINGS: The Executive Council does most of the House of Assembly under Executive Council.

MR. BENNETT: Under Executive Council.

MR. HUTCHINGS: That is my understanding.

CHAIR: Okay, Mr. Bennett, proceed.

MR. BENNETT: Mr. Chair, you have directed me to ask questions on page 2.11, and I have no questions on page 2.11. Where does that leave me? There are a few numbers and a few lines.

CHAIR: Okay, you can move right into whatever you like.

MR. HUTCHINGS: We are going to stick with the Rural Secretariat first, are we?

CHAIR: Yes, the Rural Secretariat, which is the next section.

MR. HUTCHINGS: Are there any other questions from the Committee on the Rural Secretariat?

CHAIR: I can go to the Third Party.

Mr. Mitchelmore.

MR. MITCHELMORE: I am fairly familiar with the Rural Secretariat and its regional planners, especially in my district and the work that they do and the advice documents.

I have some questions pertaining to the line item 2.6.01.03 under Transportation and Communications. I am just wondering if we could get a list maybe of what the travel breakdowns are, the budgets for each of the planners.

MR. HUTCHINGS: For each council or each planner?

MR. MITCHELMORE: Yes, each council and each planner because some of the districts are quite large.

MR. HUTCHINGS: Yes, sure that is not a problem. We will make note. Yes, we will get that for you.

MR. MITCHELMORE: One of the other concerns I have is when I was in Labrador attending the Combined Councils and there was a presentation by the Rural Secretariat. There were a number of people in the room who had no idea what the Rural Secretariat was and what it did.

I recognize that Labrador is a vast geographical space for one planner. I ask, is there consideration for additional resources for Labrador with the Rural Secretariat? What is being done to further promote what the actual Rural Secretariat does across the Province?

MR. HUTCHINGS: We do not have any immediate plans in terms of expansion. We always listen, Mr. Mitchelmore, to the public in terms of in how we proceed. I have been here now approximately six months but all departments – or all the programs there, we have been doing a review and looking at them. I have, in terms of what we are accomplishing, if there are any shortfalls there and what we may need to do differently.

The Rural Secretariat plays a pivotal role, from a dialogue perspective on the ground with the general public. A number of advice documents obviously come forward. The Secretariat facilitates a number of citizen engagements. We can certainly speak to those if you wish, in terms of some of the very successful ones we have had recently and have continued to have, but in terms of promoting, yes, sure. We continue to promote.

We have some great volunteers, over 100 on the ground from various areas in terms of communities and regions. We value very much their advice. There are other things we can do to advise people of what it is they do and the important role they play in government. We will continue to do that.

MR. MITCHELMORE: Absolutely. I am quite familiar with some of the things, like the regional collaboration and networking project. One of the downfalls of doing that though, is there are limitations with the technologies that are in play, and that is something that will need to be looked at.

I do not really have any further questions on the Rural Secretariat and its role. I am familiar with it and there does not seem to be anything abnormal in the line items.

CHAIR: Thank you, Mr. Mitchelmore.

As we move forward, can I have a motion to adopt 2.6.01 Rural Secretariat?

MS PERRY: So moved.

CHAIR: Motion made by the Member for Fortune Bay – Cape La Hune.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Motion carried.

On motion, subhead 2.6.01 carried.

CHAIR: Okay.

We would like to move into the Research and Development Corporation, which is page 11.16. It is the last page in the department's Estimates of Innovation, Business and Rural Development.

Mr. Bennett, I will go back to you on that one. Do you have any questions here?

Once we complete that, we will go right back to the beginning of the department's estimates under Executive and Support Services.

MR. BENNETT: Mr. Minister, what does the Research and Development Corporation do?

MR. HUTCHINGS: Basically, looking at nationally and internationally, in terms of the importance of research and development, what most countries and regions have done, is they have recognized, obviously, the importance of research and development.

As a government, in 2008, we recognized that. We believed we needed an entity to drive research and development in the Province of Newfoundland and Labrador. We strengthened our focus, quantity and quality and relevance of research and development in Newfoundland and Labrador, and what the importance it is for today and for generations in the future, and overall sustainability. Looking at investing from our non-renewable resources today, that we have sustainability in areas like research and development in the future and what it means for our overall economic development.

So, from that point of view, it is the engine that drives research and development in Newfoundland and Labrador. It collaborates with industry, certainly academia, so we get that focus on research and development which we believe is so important in our Province.

MR. BENNETT: Does it do research and development in oil and gas?

MR. HUTCHINGS: It will partner with the oil and gas industry, yes.

MR. BENNETT: What research, if any, are you aware that is done in researching natural gas?

MR. HUTCHINGS: Particular research that has been approved in the area of natural gas?

MR. BENNETT: Any that has been completed.

MR. HUTCHINGS: That has been completed?

MR. BENNETT: Yes.

MR. HUTCHINGS: I will revert to Glenn.

MR. JANES: We have done a lot of work with the oil and gas industry. We have done over $20 million in over forty projects. Most of them – given that we have slightly more than a two-year operating history – are still in progress. So the majority of our projects are not completed.

In oil and gas, we have worked on things – when it comes to considering things like recovery, we look at recovery of both oil and gas, and we look at issues that would impact both of those in this Province. Namely things like ice infested environments, which would have to be overcome for the existing facilities that we have in place producing oil, but would also be a challenge for gas.

Other technologies that would be important as well would be: How do you put down pipelines to get at those resources? So, we are looking at an issue such as trenching, which is burying pipelines to make them safe in the environment they operate in.

MR. BENNETT: How much research has been done on bringing gas ashore?

MR. JANES: In bringing gas ashore?

MR. BENNETT: Yes. Not oil, just gas.

MR. JANES: We have not done specific projects focused solely on gas. We have looked at recovery of both oil and gas from known reservoirs to make sure that we can get access to it. This is technology driven versus market studies.

MR. BENNETT: You say there has been no research done whatsoever in bringing natural gas ashore?

MR. JANES: No, I did not say that.

MR. BENNETT: Okay.

MR. JANES: I said we are looking at both oil and gas in our environment.

MR. BENNETT: You are saying oil and gas, I am asking about gas. I know the difference between oil and gas.

MR. JANES: Okay. The gas that we have located in this Province is offshore. Many of the same challenges to recover the gas are the same challenges that are there to recover the oil. So, I am trying to identify some of the common themes, or technical challenges that will have to be overcome for both.

With these resources offshore under the ocean, several hundred kilometres offshore, we have to figure out how we access those resources. So namely, how we drill a hole in the ground that hits either oil or gas. Then we have to say how we optimize and get those out of that reservoir, and then how do we overcome the technical challenges to make that happen and also to get it to shore. The issues that we looked at are ones that are future looking. We have supported projects that are future looking for this Province to tackle the issues so that there is further development.

So, the developments that you see in place now, Hibernia and Terra Nova, have done different things to see that you could recover, in the first instance, oil when you have icebergs drifting by or you are in a harsh environment. We are looking at what is required to get some of the other resources out there – that includes gas – back to market, but we are looking at longer-term horizons. You are looking at five to ten-plus years as to what technical challenges need to be overcome to do that.

For instance, we know there is gas off Labrador. It is proven. The challenge there is nobody knows the best way to get that safely from the offshore environment that it is in back to shore to be able to contemplate doing anything with that as an industry; but that day, we are confident, will come. We will have to work on the technological challenges from our perspective to make sure it happens, as others will have to work on the market challenges to see that potential.

MR. BENNETT: How much research has been done to date that is gas specific?

MR. JANES: I would not be able to give you that number off the top of my head. I would venture to say though that a large portion of the $20 million that we have done in projects, all have an aspect of what is the potential for gas. Because the commonality between the two – we are looking, usually, at both simultaneously.

We have also done things that look at non-conventional gas. We have sponsored with C-CORE, that now has a Centre for Artic Resource Development, and a gas hydrates workshop and brought some experts into the Province to do that. That is an unconventional form of gas we are looking at that has future potential, both for Newfoundland and other places.

MR. BENNETT: Do the existing wells have any gas or just oil?

MR. JANES: I hasten to add, I am not an expert in oil and gas. I would not want to purport to be, but my understanding is many oil wells have a mixture of gas as well. Many times it is some of the gas that is used to recover the existing oil that is in the well, but when you get a field it is the preponderance of what you find. Is the majority of what you found in the field oil or is it gas, and which one does it make economic sense to recover and how? In some instances, it is possible to do both.

MR. BENNETT: Do you know how much gas the existing wells have available?

MR. JANES: No, I would not be an appropriate expert to answer that question.

MR. BENNETT: Does anybody know, to your knowledge?

MR. JANES: I would expect that others have estimates or opinions –

OFFICIAL: (Inaudible) Natural Resources from that perspective.

MR. BENNETT: How much research has been done on bringing that gas ashore?

MR. JANES: Could you clarify the question, bringing which gas ashore?

MR. BENNETT: Any gas that is in existing wells.

MR. JANES: Well, all of the technologies we have looked at, by and large, could contemplate: What are the technical challenges that have to be overcome to recover gas that are known?

MR. BENNETT: Has the Research and Development Corporation done any studies specific to bringing gas ashore?

MR. JANES: No, we look at technological challenges. Insofar as we would do studies, they would be technologically oriented as opposed to market oriented. I want to clarify that studies we do, would only be engineering studies or something of that nature which would identify the technological barriers that have be overcome.

When you are looking at broader studies that take a holistic view, that would not be our remit. That is not what we do. We focus specifically on the technological challenges.

MR. BENNETT: The Research and Development Corporation is a separate, stand-alone corporation from government?

MR. HUTCHINGS: Yes, it is.

MR. BENNETT: Who runs the Research and Development Corporation?

MR. HUTCHINGS: The Research and Development Corporation has its own legislation. It is governed by a board of directors. In particular, annually it is audited by the Auditor General. It reports to myself as minister twice a year. That is the basic structure in terms of how it operates and who it reports to.

MR. BENNETT: Who are the directors now?

MR. HUTCHINGS: The board of directors?

MR. BENNETT: Yes.

MR. HUTCHINGS: We can certainly get a list of those and provide that to you.

MR. BENNETT: How are they selected?

MR. HUTCHINGS: They are selected through Cabinet.

MR. BENNETT: Who makes the final approval as to the directors?

MR. HUTCHINGS: It is approved by the Lieutenant-Governor in Council.

MR. BENNETT: How often does the board of directors meet?

MR. HUTCHINGS: How often do they meet?

MR. BENNETT: Yes.

MR. HUTCHINGS: I will revert to you, Glenn.

MR. JANES: The board of directors meet at a minimum on a quarterly basis, and then from there as required.

MR. BENNETT: Does it have a chairman?

MR. JANES: Yes, it does.

MR. BENNETT: Who is the chair?

MR. JANES: Jackie Sheppard.

MR. BENNETT: Who is Jackie Sheppard?

MR. HUTCHINGS: Go ahead, Glenn.

MR. JANES: Jackie Sheppard is a former Newfoundlander. The first female Rhodes Scholar from Newfoundland and Labrador, and until recently, before she retired, was a Senior Executive, Vice-President of Talisman Energy out of Calgary.

MR. BENNETT: Are you aware that she is also a director of Emera?

MR. HUTCHINGS: Yes.

MR. BENNETT: Do you not see any conflict of interest, if the Chair of the Research and Development Corporation is also a director of Emera, when Emera is involved in Muskrat Falls Development, and the Research and Development is doing no research whatsoever on natural gas, which would be in competition to Muskrat Falls?

MR. HUTCHINGS: This is technology driven, and any appetite, I guess, or any applications under the suite of programs under R&D, anybody out there is able to apply for those Research and Development grants and programs that are listed under the Research and Development Corporation.

Are you suggesting that someone has been denied application?

MR. BENNETT: Was Ms Sheppard vetted for conflicts?

MR. HUTCHINGS: I guess all board members are vetted for conflicts originally when they are approved for their appointments.

MR. BENNETT: Was this potential conflict disclosed?

MR. HUTCHINGS: Do you want to speak to that, Glenn?

MR. JANES: Conflict of interest is dealt with on a quarterly basis at every board meeting. We have informed directors who are highly capable and competent in their area, but we recognize to be able to get the people to serve on our board who are informed about the subject matters that we work in, they could potentially be in a conflict. That is brought up at every board meeting.

Decisions that have been made where there is any potential conflicts, they have been excused from any decision-making process. That has been documented and noted.

MR. BENNETT: Are there minutes of board meetings?

MR. JANES: There are.

MR. BENNETT: Are they available?

MR. JANES: They are public and available if requested.

MR. BENNETT: Could you provide me with the minutes of the board for the last two years?

MR. JANES: We can.

MR. BENNETT: I have no more questions on the Research and Development Corporation.

CHAIR: Okay, Mr. Bennett. I appreciate that.

I will go to Mr. Mitchelmore, and then we can come back to you, Mr. Bennett.

Mr. Mitchelmore, on the Research and Development Corporation.

MR. MITCHELMORE: Thank you.

I would just like to note, the Research and Development Corporation produces an annual report which would list the details of salaries, staff and positions. That is made public?

MR. JANES: We produce an annual report that gives a breakdown of our operating expenses, as well as the disbursements we make, the programs we provide and the funding we support. We do not breakdown individual salary line by line because that would identify the particular individual, but we do give information as to what is expended on salaries.

I would also like to add at this point, that for the $19 million approximately that we approve annually for program support, each and every project is announced and released publicly. So, it can be provided to you. Even looking on our Web site, sometimes with a slight lag, all projects are announced and identified, including the amount of money associated with them.

MR. MITCHELMORE: Okay.

I am wondering if I could get a list of under – the only line really is Grants and Subsidies. Can I get a list of all the funds that were dispersed for last year, the $25,220,500?

Also, for the Chair to ask if anything that is provided to Mr. Bennett, like the minutes, if I could also have a copy as well.

CHAIR: Okay, no problem, noted.

MR. MITCHELMORE: I am wondering, the projects that were stated, it said they are technical studies. Are they 100 per cent paid for by the Research and Development Corporation or are they cost-shared?

MR. HUTCHINGS: Glenn?

MR. JANES: Typically we work with partners, and the majority of ours are cost-shared. Over time we have done in the past couple of years a little more than $50 million in commitments, but we have partnered for over $100 million with others. It depends on a project by project basis.

In some cases we are a minority in a small percentage of a larger project, in others taking the lion's share. In other cases we would be the major funder and supporter. It varies on a project by project basis, I guess is my answer. Because of what we want, which is collaboration, co-ordination, and bringing other players to the table, we typically look for their engagement both in terms of their time but also in terms of their money.

MR. MITCHELMORE: Okay.

MR. JANES: Especially when we are working with industry, we expect to see industry come to the table and be able to contribute towards the cost of any project, because we think that they should have sufficient commitment to what is being undertaken as well.

MR. MITCHELMORE: Do you have in-house researchers or are you hiring consultants? What is the process?

MR. JANES: Predominantly for our program side of the business we have account managers who deal with the programs, co-ordinate the activities to put together a project, and then have it taken through an evaluation process. As such, we do not have a staff of research performers. We support and source the other people to do it. That gives us the flexibility to look at and go in different areas.

When we do get in programs that are deeply focused or technically specific – and I will highlight one, geoscience for example, that is a very specific area we are drawing a focus on – we would retain an expert who has that knowledge in geoscience. Typically, we would put them on contract for the period of time that we need to administer and deliver that program.

MR. MITCHELMORE: What percentage of the research is done in Newfoundland and Labrador?

MR. JANES: Minister?

MR. HUTCHINGS: Yes (inaudible).

MR. JANES: I do not have a hard number but it is easy to say that it is well north of 90 per cent. I would hasten to say probably more than 95 per cent.

MR. MITCHELMORE: Okay.

MR. JANES: The vast majority of it is done here. There are instances where there are specialists' expertise, or knowledge, or facilities where it does not warrant replicating simply for the sake of one result or one test, but there is no question that the vast percentage is done within the Province.

MR. MITCHELMORE: Is Memorial University and the College of the North Atlantic a player in this type of research and development that is taking place? Are they a partner, or would they be somebody who has taken on some lead roles in these research cases?

MR. JANES: We certainly partner strongly with Memorial University, and we have a growing and strong relationship with CNA as well, in that we identify some areas where we think the Province can benefit, where the economy is in need of expertise to be developed. Of course, the university plays a role in many of those projects because they have developed the expertise, have the professionals who can be applied, who can work with industry in some instances, but also can work on projects that will develop the next generation of students and talent that we need in particular areas.

MR. MITCHELMORE: Will the breakdown of funds highlight what amounts have gone to the educational entities in the Province?

MR. JANES: Yes.

MR. MITCHELMORE: Okay.

I would just like to ask, is there any percentage of these grants and subsidies that are going to the very rural areas of the Province to do research and development on a technical nature for diversification in sectors where there would be places of under 5,000 people? Have there been any projects undertaken?

MR. HUTCHINGS: Well, just to speak in a general sense, research and development has no boundaries. What we are trying to do here is build that capacity, and that, as I said, knows no boundaries.

Glenn, do you want to speak to a specific area?

MR. JANES: Obviously, we do the work where it makes the best sense to do the work, but we have done projects in rural regions, and certainly done them in communities with less than 5,000 people, which I think was your question. A lot of times it is the problem that needs to be solved in that particular area or region, or it is the best place to do the field study or work. We certainly have done work and projects in the rural regions.

MR. MITCHELMORE: Okay.

I do not think I have any further questions for the Research and Development Corporation.

CHAIR: Okay. Thank you, Mr. Mitchelmore.

Well, if there are no further questions on that, I will ask for a motion to adopt 7.1.01.

The Member for Lake Melville makes the motion.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Motion carried.

On motion, subhead 7.1.01 carried.

CHAIR: We can now move back to section 1.1.01 under Executive and Support Services.

I will go to Mr. Bennett, and we can start from there.

MR. BENNETT: What is the number again?

CHAIR: Section 1.1.01 Minister's Office, Executive and Support Services.

MR. CROSS: Page 11.3.

CHAIR: Yes, 11.3.

MR. BENNETT: Mr. Chair, is it just this page?

CHAIR: No, you can go from there to wherever you want to go. That is the subheading that we start on. You can jump back and forth at your leisure. I do ask if you could stick to it because we want to adopt various headings as part of the process.

You will get an opportunity to speak to that heading, then Mr. Mitchelmore, and then if there are any follow-up questions. If not, then we pass that heading and move on to the next one. You may have no questions on the first three or four headings, and go directly to whichever one you do.

MR. BENNETT: Minister, on page 11.3 there is a line 1.2.01 Executive Support, Professional Services. Last year $41,000 was budgeted and $29,700 was spent. This year there is nothing budgeted.

MR. HUTCHINGS: That was related to consolidation of INTRD and the former Department of Business. There was only one cost required as you move forward, so there was no reason to reinstate it.

MR. BENNETT: On page 11.4 under 1.2.03 Policy and Strategic Planning.

MR. HUTCHINGS: What was that again, Mr. Bennett?

MR. BENNETT: Page 11.4, heading 1.2.03 Policy and Strategic Planning. Last year under line 05 there was $70,800 budgeted for Professional Services and only $5,000 spent, and this year there is $135,000 budgeted. What is that for?

MR. MEADE: This is also a result of the merger and the creation of the new department. The $70,800 that would have been in 2011-2012, would have been actually in the Department of Business's vote. The $135,000 is a forecast adjustment as part of the merger that is now in Policy and Strategic Planning related to professional services for a number of different functions that we would do in the department.

MR. BENNETT: Can I get a list of those professional services last year and this year?

MR. HUTCHINGS: Sure, that is not a problem.

MR. BENNETT: Similarly, on heading 1.2.04 on the next page, also under 05, can I get a list of those also?

MR. HUTCHINGS: Yes.

Mr. Chair, we can provide a list of all professional services if it would –

MR. BENNETT: Okay, that would be ideal.

CHAIR: I assume the request is okay.

MR. BENNETT: Yes.

CHAIR: Note it for both parties.

MR. HUTCHINGS: Sure, yes.

MR. BENNETT: I have no more questions on this section.

CHAIR: Are you finished on that section?

MR. BENNETT: I am finished.

CHAIR: Okay, Mr. Mitchelmore, under Executive and Support Services.

MR. MITCHELMORE: Okay.

Under 1.1.01, the Minister's Office, Salaries had dropped from $580,600 in the budget, and it was revised to $459,900. I am wondering what accounted for this decrease in salary, and if you could explain that?

MR. HUTCHINGS: The $580,000 would reflect INTRD and Business salaries. The 2012-2013 Estimate would be reflective of a consolidation of those two departments. Obviously, you have a reduction in a minister, executive assistant, and those other positions.

MR. MITCHELMORE: Okay. Were there any other positions eliminated?

MR. HUTCHINGS: In the overall consolidation?

MR. MITCHELMORE: Yes.

MR. HUTCHINGS: From a structural point of view, we had one deputy minister position. There were two other positions, I believe, were directors, and they were incorporated into the new department.

MR. MITCHELMORE: Okay.

Transportation and Communications under the same line there, it was $146,000. I guess because of consolidation you are saving $86,800. Is that –

MR. HUTCHINGS: Yes, correct.

MR. MITCHELMORE: Were there some campaigns or advertising that was undertaken for the $146,800 in the budget – with $72,400 spent – that are not going to be taking place right now?

MR. HUTCHINGS: That is under –

MR. MITCHELMORE: Under Transportation and Communications.

MR. HUTCHINGS: – Transportation and Communications?

MR. MITCHELMORE: Yes.

MR. HUTCHINGS: That would be for, overall related to expenditures of the Minister's office through Transportation and Communications. It just was not used, less travel. Travel that was thought would take place did not take place, that type of thing.

MR. MITCHELMORE: Okay.

Going down to General Administration, under 1.2.01 Executive Support, subsection 01 Salaries, we are seeing the same thing. There has been a decline of $300,000-plus from last year's Budget. Several positions seem to may have been lost in the consolidation. Is that correct?

MR. HUTCHINGS: Yes, that is correct. It reflects less executive positions because of the consolidation of the two departments.

MR. MITCHELMORE: Can we have a list of the number of people who are employed under the Executive Support from 2011-2012, and what is the staffing levels this year by position?

MR. HUTCHINGS: In the Executive level?

MR. MITCHELMORE: In the Executive Support and the Minister's Office.

MR. HUTCHINGS: Sure, yes.

MR. MITCHELMORE: We are seeing, as well, that Transportation and Communications has also declined by $32,600. I guess with less staff you are expecting to have less travel.

MR. HUTCHINGS: Yes, exactly.

MR. MITCHELMORE: Are there other initiatives being undertaken to cut down on the travel costs through your department, through the Executive Support branch?

MR. HUTCHINGS: We went through the budget. We went through a zero-based budgeting process for travel and basically rebuilt all of our budgets, recognizing – based on history and where we project we need to go over the next fiscal year and what the requirements may be and rebuilt that budget.

I am personally very cognisant of transportation. We are stewards of the public's money. We review programs and we continue to do that. I have been just here six months, but continue to look at programs and how we meet and what the requirements are for travel. So, yes, we are always very cognisant of transportation costs.

MR. MITCHELMORE: Okay.

The same thing under 1.2.03 Policy and Strategic Planning, Salaries had dropped from what was revised at $833,200 down to $596,500. I am wondering how many less positions are in your department now?

MR. HUTCHINGS: My deputy minister will take that.

MR. MEADE: This is an example of where there would have been some redundancy between the two departments when they would have merged. There was a director's position that would have been redundant. That individual was actually accommodated elsewhere in the system.

There were three other positions; one where the individual moved on. It was a temporary position, so that would no longer be budgeted for. There is a position that was once in Policy and Strategic Planning that is now reflected in the Ocean Technology division, which is later in the Estimates. There was another position that was in Policy and Planning of the Department of Business that is reflected in Administrative Support, in the activity above. That is why you will note the activity above has an increase in salary, because there was a position moved from Policy and Planning into there.

MR. MITCHELMORE: Okay. So there was some shuffling.

MR. MEADE: Yes, there was.

MR. MITCHELMORE: Are there fewer planners under the Policy and Strategic Planning office then there was previously?

MR. MEADE: No. In fact, the net result leads to two positions being added to the overall department, in Policy and Planning.

MR. MITCHELMORE: In the overall department, but under this specific section there would be fewer planners at the Executive Support level?

MR. MEADE: If you look at the former INTRD as the base – because that would have been the larger policy shop – and look at the merger, the net result is that that policy shop or policy division has two additional staff.

MR. MITCHELMORE: Okay, great.

That would be all of my questions for this section up to 1.2.03. Should I go further in the section or do we want to just maybe vote on that?

CHAIR: Well, if you could go up to 1.2.06 under Executive and Support Services to finish that off.

MR. MITCHELMORE: Okay.

Under 1.2.04 Strategic Initiatives, Grants and Subsidies, the budget had $423,000 and there was $300,000 actually spent. Could maybe I get a list of the initiatives?

MR. HUTCHINGS: Yes, we can do that. We can provide you with it.

MR. MITCHELMORE: I am just wondering, the budget has now gone back to $423,000, is what it was last year. Is there something it was expecting to do that did not get done, as to why it is anticipating it is going to spend $423,000?

MR. HUTCHINGS: That was specifically related to the Ireland Business Partnership, and things happening in Ireland. What we anticipated did not reach the level that we thought it would. We are hopeful in this fiscal year. I had a discussion with the Ambassador to Ireland a little while back, things are picking up in Ireland. We do believe the activity will pick up as well as we move forward.

MR. MITCHELMORE: Since the Ireland Business Partnership has been around since 1997, are there plans to do further trade missions in the upcoming year to Ireland?

MR. HUTCHINGS: Yes, there is.

MR. MITCHELMORE: Okay.

Are there any specific projects or a delegation that you are focusing on when you go to Ireland?

MR. HUTCHINGS: Obviously, ocean technology is an important one. There are synergies there. From my colleague, AES in terms of labour supply, I know that is a discussion we are having as well. It is not directly tied – well, it is directly tied to economic development but it would fall under AES. There are some good discussions there. I have had a discussion with an official in Ireland in regard to what the capacity may be there for that. There will be a number of initiatives we will be looking at in the upcoming year.

MR. MITCHELMORE: Okay. I think I am satisfied with the questions under those sections right now.

CHAIR: Okay, Mr. Mitchelmore.

Okay, Mr. Bennett, go ahead.

MR. BENNETT: Minister, I understand you have five assistant deputy ministers, is that correct?

MR. HUTCHINGS: Yes, there are five. There is one vacant at the moment.

MR. BENNETT: Okay. Who are they and what do they do?

MR. HUTCHINGS: Do you want to go through them?

MR MEADE: There are five branches in Innovation, Business and Rural Development. There is a branch of Regional Development. The ADM would be responsible for leading teams and oversees regional offices. We have approximately ninety staff who go throughout Newfoundland and Labrador, five regional offices, nineteen satellite offices. They would be overseeing the delivery of our programs and services and business support throughout Newfoundland and Labrador, as well as the Canada Business – Newfoundland Centre.

We have a branch known as Innovation and Strategic Industries. The ADM would lead that branch in how we look at particular sectors in Newfoundland and Labrador under innovation, things like: ICT, life sciences, aerospace and defence, environmental technologies. Strategic industries would include things like: manufacturing, food and beverage, support agrifoods, et cetera. They would be looking at how we develop sectors, and also as well look at things like supplier developments, supply chain development throughout Newfoundland and Labrador.

We have a branch known as Trade and Investment. The assistant deputy minister would lead that branch in overseeing our trade export activity, but also our investment attraction activities. That would be the main functions that would fall under there.

There is a branch known as Business Analysis. That is essentially our group that does the core financial analysis and support, account management around our major files in conjunction with the Regional Development branch. They would be, as well, supporting the Business Investment Corporation and other agencies and vehicles we have for small and medium enterprise development in Newfoundland and Labrador. As well, it would be responsible for managing some of our Corporate Services functions, such as Information Management.

We also have a branch of Ocean Technology. This is a newly created branch. It was a branch that was part of the platform of the government when they were elected in October. The branch was structured. It would have been spun out of, in some respects, but will certainly be enhanced and strengthened of the Innovation branch.

At one time where Ocean Tech was one of the sectors under Innovation, it now will have its own branch and focus. We see that as being critical, given the strategic importance of the Ocean Tech sector, the competitive advantage we have in that sector. So, the Ocean Tech branch will drive our work in that sector with industry.

MR. BENNETT: Minister, in addition to the Director of Communications, I see five directors. Is that correct that your department has five directors?

MR. HUTCHINGS: The number of directors in the department, is that the question?

MR. BENNETT: Yes.

MR. HUTCHINGS: The question from the hon. member is how many directors are in the department, overall?

MR. BENNETT: Yes.

MR. HUTCHINGS: I believe the number may be somewhere around seventeen or eighteen. I can get that exact listing for you.

MR. BENNETT: Of directors?

MR. HUTCHINGS: Yes.

OFFICIAL: That would be the regional directors.

MR. HUTCHINGS: It would be regional directors, directors in the regions, there would be directors of particular divisions, but we can get a full listing of directors.

MR. BENNETT: I am counting seven managers as well. You have managers as well as directors?

MR. HUTCHINGS: Yes.

MR. BENNETT: How many managers are there?

MR. HUTCHINGS: There are, I believe, between five and seven managers. Again, the hon. member, I would have to go back and get the exact number.

MR. BENNETT: Could you provide that information, please?

MR. HUTCHINGS: Yes.

MR. BENNETT: I have no more questions.

CHAIR: Mr. Bennett, are you good on that section?

MR. BENNETT: Yes.

CHAIR: Okay.

Can I have a motion to adopt headings Executive and Support Services, 1.1.01 to 1.2.06?

MR. CROSS: So moved.

CHAIR: So moved by the Member for Bonavista North.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Opposed?

Motion carried.

On motion, subheads 1.1.01 through 1.2.06 carried.

CHAIR: We can move now into the Trade and Investment section. I am going to go back to Mr. Mitchelmore and we will start in section 2.1.01, or any section in that area you would like to speak to.

MR. MITCHELMORE: Okay.

Under 2.1.01 Trade and Export Development, subsection 01, we see that the revised amount from last year is a bit lower. I am just wondering if there has been a loss of positions.

MR. HUTCHINGS: That is 01 Salaries?

MR. MITCHELMORE: Yes.

MR. HUTCHINGS: No. The revised for 2011-2012 was related to additional work required, positions required for CETA, the Comprehensive Economic and Trade Agreement.

MR. MITCHELMORE: Okay.

Is the work still happening on that agreement, CETA?

MR. HUTCHINGS: Yes, indeed.

MR. MITCHELMORE: Is the focus that your department is taking on CETA around tariff allocation?

MR. HUTCHINGS: There are a number of issues, obviously. There are, I think, twenty-one chapters that have been looked at in the agreement.

As I mentioned in the House of Assembly just awhile back in Questions, tariffs is a significant issue for Newfoundland and Labrador in terms of access to the European market. The opportunities that exist for all of Newfoundland and Labrador business or harvesters are tremendous. So it is certainly a priority for us.

MR. MITCHELMORE: Right now, the current trade agreements with the Department of Fisheries and Aquaculture to sell to Europe for cooked and peeled shrimp and things like that are just being used, sold in boxes, and being packaged as sandwiches as somebody else's product. Is there a push by your department to brand and be able to sell on a free-trade basis versus a resale?

MR. HUTCHINGS: We want free trades. Obviously, it would be our first priority that we could sell into the market as we want to sell into the market, or our producers could.

MR. MITCHELMORE: How active is your department in that, since there have been ten rounds of negotiations on CETA right now? Have you been an active player since the beginning?

MR. HUTCHINGS: We have been an active player. We were observer status up to, I believe, April of last year. Our officials are fully engaged. We have a dedicated staff. They are in constant contact with Canadian lead negotiators. They attend various get-togethers with the Canadian negotiators, as well as their counterparts throughout the country in terms of various areas of interest that are collectively important.

As well, a couple of months ago I met my colleagues from the provinces and territories, and met with Minister Fast to get an update on the lead negotiators in Ottawa on CETA. At that time, I had an opportunity to indicate what the importance was for Newfoundland and Labrador in CETA that would be supported by our Province, as well as update on other trade initiatives for the federal government.

MR. MITCHELMORE: How much funds are allocated for the CETA negotiations in this year's budget and how much was allocated in last year's budget?

MR. HUTCHINGS: Specifically related to CETA?

MR. MITCHELMORE: Yes.

MR. HUTCHINGS: I will leave that to Brent.

MR. MEADE: There is approximately $200,000, $250,000 that is allocated for the support of CETA.

MR. MITCHELMORE: Is it possible to get a summary or some reports on the activities of what has been going on with the CETA negotiations that would not be breaching any type of confidentiality with negotiations?

MR. MEADE: Certainly.

MR. HUTCHINGS: Yes, we can provide that information.

MR. MITCHELMORE: Okay, great.

Under the same section, 2.1.01 Trade and Export Development, the Professional Services. I know we would get a list, but I am wondering: What was not done in the budget? It was estimated that over $200,000 more would be spent in last year's budget.

MR. MEADE: Under Professional Services, a lot of the activity that would come out of that line item in the department is a result of our participation in the International Business Development Agreement in Atlantic Canada. That is why you see revenue at the bottom for federal, because we participate in an International Business Development Agreement with the four Atlantic Provinces and ACOCA.

MR. MITCHELMORE: Okay.

MR. MEADE: What happens is there are certain projects a province takes the lead on through the agreement. That activity varies from year to year; therefore, the number of projects we had taken the lead on last year on behalf of Atlantic Canada will have been less than what we would have had budgeted. That being said, you will see where we did make a small adjustment this year in trying to move to rightsizing that budget as we move forward.

MR. MITCHELMORE: Okay.

ACOCA is promoting an Atlantic Gateway, how active of a role is the Department of IBRD playing in this facilitation of the Atlantic Gateway? What projects or investments are we pursuing to solidify ourselves as a greater player in this process?

MR. MEADE: We have been actively involved in Atlantic Gateway. There are two key components around Atlantic Gateway. There are actual infrastructure projects that have been funded through Atlantic Gateway, projects such as Smart Bay and the St. John's Airport category three system. These are examples of projects that would have been funded through Atlantic Gateway.

The second part of Atlantic Gateway is more of a strategic approach to how we promote Atlantic Canada in the movement of goods and services throughout Atlantic Canada but into other markets. It is a gateway into the North America market but also is a gateway back into the European market or Asian markets in terms of raising awareness and promotion of how we could take the existing infrastructure we have in Atlantic Canada and work together to promote that in an international context for the movement of goods and services and trade.

MR. MITCHELMORE: Is there a push to develop further port facilities based on the Atlantic Gateway?

MR. MEADE: There continues to be a push around how we can support infrastructure, including port development, yes.

MR. MITCHELMORE: Can I get a list of initiatives undertaken through these negotiations of the Atlantic Gateway?

MR. MEADE: Yes, we can provide that.

MR. MITCHELMORE: Okay, great.

Under section 2.1.02 Investment Attraction, I see here that basically from the budget in 2011-2012 to where the salaries are today, they have been cut drastically. Is there an explanation for this from the minister?

MR. HUTCHINGS: That reflects the reorganization of department allocation of salary within the full department.

MR. MITCHELMORE: How many positions were lost there?

MR. HUTCHINGS: There were no positions lost there, but there was reallocation based on the positions.

MR. MITCHELMORE: Okay. There were no positions lost, but the loss of where they were in the budget last year is over $200,000 in the difference.

MR. HUTCHINGS: I should say there was savings in some vacancies and delayed recruitment related to the former Department of Business. That would have reflected some of the decrease as well.

MR. MITCHELMORE: There are still some positions that are not filled?

MR. HUTCHINGS: Are they filled?

MR. MEADE: This is another example of where when we merged the departments it is not as clear as people just moved into one division and we move forward. There were eight positions that were in that $925,000. Four of those positions are now reflected in other areas of the department.

MR. MITCHELMORE: Okay.

MR. MEADE: The $415,000 which is the vote for 2012-2013 is based upon the premise that the Investment Attraction will now have four positions in it. Again, the other four are integrated in other parts of the department: one went to Strategic Industries; one went to Trade; one went to Marketing. Okay, so that is an example of where –

MR. MITCHELMORE: Okay, that is fair, thank you.

Under the Air Access Strategy, the budget this year had allocated additional monies and there were monies last year for it. I am wondering, if possible, I could be provided with an update as to how often this committee is meeting and how they are meeting their initiatives as the initial report had stated and if they are getting any type of performance assessment based on advancing air passenger traffic in the Province.

MR. HUTCHINGS: Yes, we are continuing to pursue it. I think we have had three or four programs that have been identified and funded, in terms of increase in travel obviously driven by some of the economic activity we are having in the Province. The board meets –

OFFICIAL: At least twice a year.

MR. HUTCHINGS: At least twice a year, and gives advice and direction on how we are doing with air access and what more we could be doing in terms of success. We have had some success in terms of additional routes related to that program,

MR. MITCHELMORE: Okay.

For my own personal interest, I am wondering why the St. Anthony Airport was excluded as part of the Air Access Strategy, or were they offered an invitation to be a part of it?

MR. HUTCHINGS: My understanding is the St. Anthony Airport is still under the federal government.

MR. MITCHELMORE: Yes.

MR. HUTCHINGS: We deal with the airport authorities. I believe there are five, and that is who the program was set up to deal with, I guess. Do you want to speak to that, Brent?

MR. MEADE: Essentially, there are two airports in Newfoundland and Labrador that are still owned by Transport Canada: one is Wabush, and the other one is St. Anthony. Therefore, they are still federal entities. As the minister notes, the program was created to support those that had airport authorities running them, where they have been devolved and airport authorities are running the respective airports.

MR. MITCHELMORE: I do not have the report in front of me and I may be corrected, but I have to ask the question: Stephenville Airport – is that still run by an airport authority because it is part there and it had taken private ownership, didn't it?

MR. HUTCHINGS: No.

MR. MITCHELMORE: Okay, thank you for that.

The Province's aerospace and defence industry, there was funds allocated this year, but it was cut basically in half of what last year's amount was budgeted for. I am wondering why the decline in aerospace investment for a growing industry.

MR. HUTCHINGS: When we looked at consolidation of the two departments, I guess it was my mandate to look at current programs and budgets, as you would do. In reflecting on that and looking at prior expenditures in prior years, we recognized that the fund was not being fully accessed, so just to bring expenditures in line with what the traditional expenditures had been in prior years, the budget was adjusted to reflect that. We think that will meet the needs going forward.

MR. MITCHELMORE: Under that section, 10, Grants and Subsidies, is it possible to get a list of where the funds were spent for the $2,776,600?

MR. HUTCHINGS: Sure, yes.

MR. MITCHELMORE: Okay, great.

I have a question around export in New England as well, the investment. Can we get an update of how much was exported to the New England states into that market in 2011? The Web site only reflects up to 2009. I am wondering if that data can be made available to us.

MR. HUTCHINGS: Sure, we can get that for you.

MR. MITCHELMORE: Okay.

I certainly have more questions on this section, but maybe I will pass it over to Mr. Bennett to have an opportunity.

CHAIR: Mr. Mitchelmore, I appreciate that.

Mr. Bennett.

MR. BENNETT: Minister, under Investment Attraction it looks like there are two categories listed and the first one says "Appropriations provide for the promotion of the competitive advantages of the Province in target markets for the purpose of attracting national and foreign investment to match the strengths of key industries of the Provincial economy."

Is that correct?

MR. HUTCHINGS: Yes.

MR. BENNETT: What results did we get last year?

MR. HUTCHINGS: In terms of expenditures?

MR. BENNETT: No, in terms of results. We can see the expenditures from the budget. What did we get for the money?

MR. HUTCHINGS: From foreign investment, we continue to pursue foreign investment in our Province. It is challenging, I will admit that, in terms of attracting large corporations to the region. We continue to pursue it. We feel it is important. We have seen some indications of footprint companies not moving in the bigger context but getting a footprint here based on economic activity and what is happening here in the Province. We still believe it is important.

I will say to you: We are certainly looking at our program to date, what sectors we are identifying, what regions we are pursuing, and if we need to adjust that. We are reviewing the program.

MR. BENNETT: Minister, is there any single, concrete example of anything we deemed under that heading, just the results?

MR. HUTCHINGS: Well, we see the investments we have had in the Province from attraction that we have over the past number of years, those companies. Again, it is an ongoing issue.

We have someone like St. Lawrence Fluorspar. Those mining rights were held by a Canadian company. They partnered with a French company. Through that, the St. Lawrence Fluorspar Mines will reopen. We have invested $17 million. It is a $100 million project. Obviously that is an example of direct foreign investment. We had a resource and an industry that was being sought after. We were able to put that together and make a substantial investment. Certainly on that region of the Burin Peninsula, what that is going to mean is very positive for the future.

Those are the types of things that come along and when they come along we need to be ready to engage and access. I will say to you, even from my short duration of six months, we see some requests, but a lot of times when you do the business analysis and look at due diligence the risk for the Province is quite significant. Oftentimes we refuse it and do not engage.

MR. BENNETT: Minister, you referred to St. Lawrence Fluorspar Mines. I understand the department, or at least the Province, made a $17 million repayable contribution.

Is that correct?

MR. HUTCHINGS: Yes.

MR. BENNETT: What does repayable mean? Is it a loan? What does it mean?

MR. HUTCHINGS: It is a loan based on targets. Do you want to go into more detail? Yes, a loan.

MR. BENNETT: Is there a repayment schedule?

MR. HUTCHINGS: Yes, there is. Peter?

MR. AU: Yes, sir, it is interest attached to the latter $7 million now. We had $10 million. The first $10 million is non-interest bearing. That was a long-standing commitment we made to the company when fluorspar prices were way below what the market price is today. The company came back looking for $17 million because the costs had escalated because of inflation for building the wharf. We have attached interest to the latter $7 million.

MR. BENNETT: Do I understand that there was already $10 million outstanding to this company?

MR. AU: No, it was commitment there to build the wharf up to $10 million.

MR. BENNETT: The $10 million, this will be repaid to the Province?

MR. AU: It will be fully repaid, yes.

MR. BENNETT: When will it be repaid?

MR. AU: It will be repaid starting the second year that the company is in full operation.

MR. BENNETT: Has the company started operations yet?

MR. AU: No sir, they are going to build the wharf and they have to reactivate the mine. The first projected full production of the mine will be in 2014. They will have the first shipment in 2014.

MR. BENNETT: Is this loan secured?

MR. AU: The loan is fully secured by the wharf and also by the buildings that surround it. Also, we have a 50 per cent interest in the partnership of fluorspar with Arkema, their financial partner. That 50 per cent financial interest, based on the company's balance sheet as of this year, is worth $40 million.

MR. BENNETT: Minister, under Investment Attraction the second sentence says "Appropriations also provide for supporting the implementation of the Air Access Strategy and the growth of the Province's Aerospace and Defence industry and Oil and Gas industry by facilitating opportunities to build capacity, enhance competitiveness and expand its export markets."

Can you point us to any tangible results in the last year?

MR. HUTCHINGS: Yes, we can give you a list of aerospace and defence programs that have been approved to date. Do you want to speak to the oil and gas, Brent?

MR. MEADE: We can certainly provide a list of companies that were supported under those funds to the hon. member. I do not know if you would like examples now or we can –

MR. BENNETT: If a list can be provided, I would be happy enough with that, as long as it is relatively soon.

MR. HUTCHINGS: Yes, we can provide the list.

MR. BENNETT: Within a matter of days or so.

Minister, last year under Grants and Subsidies, $10,700,000 was budgeted, but only $2,776,600 was actually used. That is nearly $7 million less than was budgeted. Why is there such a difference between the budgeted and the actual? What happened or did not happen, actually?

MR. HUTCHINGS: Well, again, it gets to the issue of the funds and what was budgeted for and, as I said, some of these were adjusted based on the review we did in terms of what has been historically used in terms of these funds.

We continue to pursue and we have had some success in terms of these programs. Others did not have full uptake. So, in rebalancing our budget we looked at getting rid of some of the dropped balances we had, but we continue to pursue them and certainly see them as important initiatives. Again, as we move forward if there are things we need to do differently – I have been engaged with the business community and certainly various stakeholders to meet the needs that are out there. If we need to redefine the programs, we will certainly do that as well.

MR. BENNETT: Minister, this year's budget is $3 million which is more than a 70 per cent reduction from last year's budget. Does that mean the focus has changed in 2012 than it was in 2011?

MR. HUTCHINGS: Which line is that, Mr. Bennett?

MR. BENNETT: Line 10, Grants and Subsidies. This year the budget is for $3 million.

MR. HUTCHINGS: I do not think the focus has changed. Again, when we looked at our budgets and our history over the past three years in terms of what we had used, we certainly wanted to reflect that in our budget, but the focus has not changed. We believe that will meet the needs based on past performance.

MR. BENNETT: Okay, thank you.

I have no more questions in this section.

CHAIR: Mr. Mitchelmore, I will go back you. You may ask any other questions you may have on that section.

MR. MITCHELMORE: Okay, sure.

Under section 2.1.03, Marketing and Enterprise Outreach, we have seen that Salaries are being increased by over $200,000. That is a big increase from the previous two combined budgets that would have been separate from previous departments. I am wondering what type of specialists or what type of plans the government has, in terms of these positions.

MR. HUTCHINGS: Do you want to speak to that, Brent?

MR. MEADE: In terms of the merger of the two departments, there was only one position that would have come over from the former Department of Business that would have been integrated or assimilated into the Marketing Enterprise Outreach Division, which was a division under the former INTRD. The brand development component of the Department of Business is gone to Executive Council, and their focus would be overall branding of the Province of Newfoundland and Labrador.

What our focus is here is to do two things: to promote the programs and services of the department, to promote Newfoundland and Labrador in our export markets and in our opportunities around foreign and direct investment – so, how do we support our lines of business in the activities they do? The second thing is actually within this division we actually also deliver some programs, most notably the Getting the Message Out program, which is our youth program that goes into schools to try, as part of our objective of building the culture of entrepreneurship, out talking about the good things that are happening in Newfoundland and Labrador, and the opportunities for people to become part of the business community.

MR. MITCHELMORE: Thank you.

MR. MEADE: So that is basically it. The other thing, the reason why the Salaries would have gone up is that it is also part of the reorganization. There were actually a couple of positions that would have been at one time in trade and export that would be moved into this division as we restructure.

MR. MITCHELMORE: I am familiar with the Getting the Message Out program. I have been a former intern, myself, with your department. I am wondering, it seems the focus of that program has also shifted, not only to include entrepreneurship but also to focus on skilled trades, to focus on all of the opportunities that exist within the Province.

MR. MEADE: Yes, you are right.

MR. MITCHELMORE: I am wondering if there are other marketing and enterprise outreach activities that are being undertaken that would fall under this category, because the description is very vague here.

MR. MEADE: You are correct in that, that it is a very vague description, but I guess that is one of the opportunities we have now within the department. We will be embarking on developing a marketing strategy for the department, how we can do more in raising awareness promotion through our lines of business.

We see this division as very much a shared service that supports all of the other lines of business in the department. As well, we are, in fact, continuing to redesign and redefine getting the message out. This year we have actually introduced some new approaches and changes; some of which you have noted.

MR. MITCHELMORE: The Business Retention and Expansion program – would that fall under this entity here, or is this dealt with later in the Estimates?

MR. MEADE: No, Business Retention and Expansion would be reflected from a staffing perspective in a later activity. It is reflected under the Regional Development activity.

MR. MITCHELMORE: I will save my questions for that when I get there.

I would like to ask about the International Trade Assistance Program that is being provided: What is the uptake in that program?

MR. HUTCHINGS: It is very good. It has been significant. We get a lot of uptake from various companies in terms of various markets. It is very positive and there is very good feedback in terms of assisting getting into various markets and making contacts. Overall it has been very good.

MR. MITCHELMORE: Would the department be able to provide a summary of some of these engaged activities, just to highlight a few?

MR. HUTCHINGS: Yes.

MR. MITCHELMORE: I am wondering, as well, with the TradeWaves magazine that is on-line. It is a very good tool that is regularly sent. I am just wondering though: As to being the Department of Innovation, Business and Rural Development what initiatives are being undertaken to ensure that all people have access to TradeWaves? Not everybody has access to electronic media.

MR. HUTCHINGS: We do publications of that and send it out as we can, certainly to our regional offices. Our staff promotes it and puts it out where they can to try to reach as many people as we can with that.

MR. MITCHELMORE: The opportunities in Panama – how is that going? There is a section on the Web site that talks about opportunities in Panama. I am just wondering if the department is making investment or looking at trying to do business in Central America.

MR. MEADE: Panama is an interesting market for us. It is one we have been into now for about three years, and we are actually seeing success with our companies. We are seeing some of our companies that provide ICT support getting activity down there and others that support through ICT or other types of services industries such as the construction industry and whatnot.

Panama's economy is quite strong right now. There is a fair bit of activity. We are seeing some success with our companies down there.

MR. MITCHELMORE: Yes, I would think there would be an excellent opportunity to do prefab homes and things like that, not only in Central and South America, but also in the North as well. I am sure there are some people who are pursuing that.

Back to the line items here, 2.1.03, under the Professional Services: Is there a reason why only $5,000 was spent on Professional Services last year? Obviously there were plans to do a lot more outreach.

MR. HUTCHINGS: In particular that was related to a Web design. That contract was cancelled so that work was not done.

MR. MITCHELMORE: What type of Web design, just a redesign of your own page or for a particular program?

MR. MEADE: No, we were actually looking at a redesign around our ambassador program and things like that. We are actually in the process now of rethinking the best approach for us to target the expatriate market. That is essentially where we are. We were thinking that we would pursue a Web-based approach around that program, but with the merger of the department we are going through a bit of a rethink right now, to be honest, on how we approach that.

MR. MITCHELMORE: The line item in the Estimates is the same as what last year was. Are there still plans to do this Web site, or what initiatives are in the works?

MR. MEADE: Professional services may change from a year-to-year basis of how we utilize that. I would suggest to you that we have moved off the idea of doing something Webbed on the ambassador program. The utilization of professional services in 2012-2013 would be for other things that would support our marketing agenda.

MR. MITCHELMORE: Okay.

You do not have anything right now planned?

MR. MEADE: We do have some ideas of how we would spend that money, yes.

MR. MITCHELMORE: Okay.

Is there anything you can share with us?

MR. MEADE: Again, we are thinking about, as a department, how we can strengthen our support to our lines of business. For example, right now, we are in the middle of doing an ocean tech marketing piece, looking at the competitive advantage of our ocean technology sector in Newfoundland and Labrador, how we best sell that, how we best promote that. That is a piece of work, for example, that we are in the middle of now, trying to do a positioning, trying to evaluate a proposition around it, and how we would then develop a marketing plan or tactical plan of how we can better promote the ocean tech sector. It would be one example of where we are utilizing the funding from this branch.

MR. MITCHELMORE: That is great.

When we define the ocean tech sector you are also including the oil and gas sector in ocean technology, correct?

MR. MEADE: I think that is a fair comment to make. The definition of ocean tech crosses many. It crosses oil and gas. It crosses aerospace and defence. It crosses many other sectors. The ocean tech sector is applying its products and services in many different resource sectors.

MR. MITCHELMORE: Would that include things such as Nalcor with subsea cables, things like that? Would that also be included under ocean technology?

MR. MEADE: I think the ocean technology definition could be as broad to include some of those things, yes.

MR. MITCHELMORE: Okay.

Under 2.1.04, Business Attraction Fund, line 08, Loans, Advances and Investments, it is budgeted $25 million but only $366,800 spent. I would like to be able to get a list of what the money was actually invested in. I am just wondering why so little money has been invested from this fund. Is there a marketing plan to try to utilize and pool attraction for an investment?

MR. HUTCHINGS: Yes, the first part of your question that is what was expended obviously in the last fiscal year. Looking at my role in looking at the budgets from these programs that came over – some of them from the Department of Business – was to right size them looking at what the usage has been over the past couple of years, and we have done that.

In terms of moving forward, we believe there are synergies between the old Department of INTRD and Business in terms of staffing, on the trade side and business attraction when we go into markets and we are focused on where we are going, and attracting business and using the Business Attraction Fund. We are kind of refocusing in terms of what we are doing.

MR. MITCHELMORE: Are you undertaking trade missions for the department to kind of sell this type of Business Attraction Fund?

MR. HUTCHINGS: We do trade missions now and you have hit on what I referred to in terms of synergies that now exist between the consolidations of the two departments. We are in those trade markets. We also have an opportunity to sell and make those aware of our Business Attraction Fund and what opportunities might exist here.

We are also looking at partnering with other groups and agencies that are out there that are in the international market, how we can use their expertise and intelligence to make the world aware of what we have, what the opportunities are in the Province, and how we can seize on those opportunities.

MR. MITCHELMORE: What was the marketing budget for this Business Attraction Fund?

MR. HUTCHINGS: The marketing budget?

MR. MITCHELMORE: For 2011-2012.

MR. MEADE: We would have to go back and see – clearly delineate what it would have been for the Business Attraction Fund. Under the former Department of Business –

MR. MITCHELMORE: Yes.

MR. MEADE: – the brand development division would have been doing two things. They would have been developing a strategy around promoting Newfoundland and Labrador as a Province. They also would have been supporting the lines of business, including the investment attraction team in its efforts. We could try to get that delineated, exactly what would have been spent on that.

MR. MITCHELMORE: I would like to know if there was any print material, or any advertising being done, any foreign advertising being done around these programs that the government has, or if there was no advertising or very little done for such small uptake despite a significant amount of foreign investment taking place in Newfoundland and Labrador. I am wondering if the criteria are too stringent. Has there been an adjustment to any type of criteria under this program?

MR. HUTCHINGS: Not at this time. Again, I revert to prior comments I made; we would certainly like to see more expenditure, but then there is a due diligence component. I could tell you, we get inquires and discussions on various business plans. In some cases, it is not where we want to go as the Province. In terms of the risk, it is just way too high.

Again, I take your point. It is about marketing it and letting people know it exists. When we are in markets anywhere, through the new Department of IBRD, that we market it and we certainly let people know it exists and try to build those partnerships to attract that business.

MR. MITCHELMORE: Thank you for that, Minister.

Just a point of clarification, I guess: Can you differentiate between the Investment Attraction Fund – does that include local businesses that can also avail of it? What is the difference between the Investment Attraction Fund and the Business Attraction Fund? Is there any actual difference?

MR. HUTCHINGS: Do you want to speak to that, Brent?

MR. MEADE: The Business Attraction Fund would be utilized where there is, in the financial structure of the deal, foreign direct investment. There has to be offshore money coming into the Province as part of the deal. It could be into an indigenous company, but there has to be a foreign direct investment component. That is when we would utilize the Business Attraction Fund. That is the only fund that we have in the department that has that requirement. Any other funds in the department are quite open in terms of its utilization for SMEs?

MR. MITCHELMORE: This is where you would be looking at maybe expat, reaching out to them for the Attraction Fund, maybe looking at embassies and their networks that they have. I am just wondering if any of this work has been done previously in the Department of Business and would like to see how it was active and if some proof can be provided to me.

Now with the Business Attraction Fund, is this a joint venture? Can this be joint ventured? Can it be –

MR. HUTCHINGS: Yes.

MR. MITCHELMORE: Do they have to have complete control of the entity or can it be 50-50 with foreign investment?

MR. HUTCHINGS: It could be joint ventures, yes. That would be part of the negotiations in terms of discussions that we would do with the company coming forward.

MR. MITCHELMORE: Can the foreign investment have a minority share and tap into the Business Attraction Fund?

MR. HUTCHINGS: Yes.

MR. MITCHELMORE: They can? What is the minimum amount of foreign investment that is required on a project to tap into this fund?

MR. HUTCHINGS: That would be negotiable I would think. If you want to speak to that –

MS MALONE: Yes, certainly it is negotiable in terms of the overall deal, but there is a requirement that there is significant investment from outside of government in order to pull these deals together.

MR. MITCHELMORE: Okay.

I think I just have one more question on this section, if it fits in the section, and that is about the ExportAdvantage Internship Program. I am wondering if that is still continuing.

MR. MEADE: No, we will not be continuing ExportAdvantage Internship Program this year. We have determined there are others who are in that space. In particular, ACOA has a program. We also have been supporting and contributing to a program through the Newfoundland and Labrador Association of Technical Industries, NATI. They also do it. We felt that, given NATI is having an internship program and that ACOA was also, we were duplicating a service in the marketplace.

MR. MITCHELMORE: ACOA has made significant cutbacks. Is the department going to be filling some of those cuts when it comes to Innovation, Business and Rural Development and what that investment means to Atlantic Canadian provinces?

MR. HUTCHINGS: We have since the Budget been made aware – even prior to the Budget – that the federal government is looking at ACOA and various initiatives they fund in Atlantic Canada. Since the Budget, we are waiting to see what the finale of that will be. There are various programs we have which are partially funded, as you know, by the federal government. We are waiting for final determination on what will mean in terms of the programs we are getting out of. We have some preliminary word on that.

From a provincial perspective, as the Premier has said, we do not have the capacity to backfill all the time when the federal government decides they are getting out of funding various programs. Having said that, from an economic development point of view, overall in our department we are confident we have a suite of programs and we have good capacity on the ground throughout the Province in terms of staff. There may be synergies with other groups that are out there, maybe other federal groups, as we move forward.

With or without the federal government, we are pursuing innovation and business in rural Newfoundland and Labrador and will continue to do that. Any finality in terms of what our response would be to federal cuts will be finalized over the next little while.

MR. MITCHELMORE: How does the Newfoundland and Labrador Immigrant Investor Fund fit into this mapping here of foreign investment? Can you explain that to me, Minister?

MR. HUTCHINGS: The Immigrant Investor Fund – we have an agreement with the federal government in terms of us receiving funds. I think this may be the sixth year. We have holdings now of about $252 million that we can use on various infrastructure projects. That has to be paid back beginning after five years. We have started to pay it back. There is a fee. I think it was originally 7 per cent on the first agreement and 5 per cent now. To date, we have explored some possible usage for that, yet we have not identified an actual project that we would disburse funds from that. I think it is about $256 million that is there in that account right now.

MR. MITCHELMORE: So that is available for investment into any particular –

MR. HUTCHINGS: Infrastructure project, yes. Whatever we deem we could use it for, partner with – recognizing that that money needs to be paid back.

MR. MITCHELMORE: Okay.

You could deal with something like in Winnipeg where they have IRCOM, where they have a housing infrastructure where they have different ethnic groups and cultures living in an apartment building, paying various rents, and really adding to the social fabric of communities. That is something that this fund could actually undertake?

MR. HUTCHINGS: I guess anything, really, that wanted to come forward could be considered under the fund.

MR. MITCHELMORE: It would have to be led by an individual to tap into this fund, or is this something that the Province, your department, grants?

MR. HUTCHINGS: It would be generated by the provincial department, in terms of what project would be pursued.

MR. MITCHELMORE: Okay.

I think that is all the questions that I have right now under this specific section. I do not know if Mr. Bennett has more there?

MR. BENNETT: Mr. Chair, I need to ask for a point of clarification. If I ask questions now for a minute, and then we conclude and we vote, do you go back to Mr. Mitchelmore, or do I continue with the ten minutes?

CHAIR: No, you can continue.

MR. BENNETT: Is it ten minutes and ten minutes?

CHAIR: Yes.

MR. BENNETT: Okay.

Minister, under Business Development – is that the right section?

CHAIR: No. So, you are good under Trade and Investment? I just want to adopt that section and then I will go right to you, Mr. Bennett, under Business Development.

MR. BENNETT: Okay, yes.

CHAIR: Can I have a motion to adopt subsections 2.1.01 to 2.1.04, Trade and Investment?

Moved by the Member for Fortune Bay – Cape La Hune.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Opposed?

AN HON. MEMBER: Nay.

CHAIR: Motion carried.

On motion, subheads 2.1.01 through 2.1.04 carried.

CHAIR: We can now move to Business Development.

Mr. Bennett, the floor is yours.

MR. BENNETT: Under Business Development, Grants and Subsidies, 2011-2012, $1,257,000 was budgeted and $2,230,000 was actually spent or advanced. Minister, can you explain why this section was $1 million over budget last year?

MR. HUTCHINGS: That was related to the funding requirements we have for contact centres. Usually disbursements are at the end of the year related to them reaching certain employment levels. Last year, that particular fiscal year was significant in terms of the call centre and the employment that they had. Therefore, we overshot what we had estimated what that would be. Therefore, to meet their employment levels, the budget increased to pay the wage subsidy to the call centres.

MR. BENNETT: When you say the call centres, what are you referring to? Whose call centres?

MR. HUTCHINGS: We can probably provide you a list in the Province that we have entered into in terms of attraction to the Province. It is a subsidy program over how many years, Peter?

MR. AU: Over five years.

MR. HUTCHINGS: Over five years.

MR. BENNETT: How is the subsidy calculated?

MR. HUTCHINGS: Peter, do you want to go through that?

MR. AU: I am sorry, sir. May I have your question again, please?

MR. BENNETT: Yes, I understand this is a grant or a subsidy for a call centre?

MR. AU: Yes, sir.

MR. BENNETT: How many call centres?

MR. AU: The call centres, we are dwindling down now to only a few for this fiscal year. We have call centres all across the Province. What is remaining now, for this fiscal year, are all in rural areas. They could be in Corner Brook, Marystown, Grand Falls, Gander, or Carbonear. There is one main company, Fusion BPO, that takes up most of the companies now.

MR. BENNETT: Who is the company?

MR. AU: Fusion BPO.

MR. BENNETT: Is that a Newfoundland and Labrador company?

MR. AU: No, that is outside of the Province. Most of the call centres, sir, with the exception of one, Tacamor, is a Newfoundland company, the rest of them are all from outside the Province.

MR. BENNETT: Okay. Are these from outside of Canada?

MR. AU: Some are, yes. Some have a head office outside of Canada; some of them are US.

MR. BENNETT: How many people are employed at the call centres?

MR. AU: Last year, 2011-2012 there were over 1,000. We are projecting it down to about 500 now for this fiscal year. Some of the contracts are expiring because they are five-year contracts.

MR. BENNETT: I am sorry?

MR. AU: They are five-year contracts.

MR. BENNETT: Is it a grant or a subsidy?

MR. AU: They are non-repayable grants and subsidies. They vary from 8 per cent to 12 per cent of payroll. It all depends on where they are located.

MR. BENNETT: How much in payroll?

MR. AU: It is 8 per cent to 12 per cent.

MR. BENNETT: You said it depends on where they are located, so where would 8 per cent apply?

MR. AU: Eight per cent would apply in St. John's and the Avalon area. The 12 per cent would apply in the rural area.

MR. BENNETT: So 12 per cent outside of St. John's?

MR. AU: Outside of St. John's, yes, sir.

MR. BENNETT: In Corner Brook?

MR. AU: In Corner Brook, yes. Some of these are not hard and fast because we set a range of 10 per cent or 12 per cent. It all depends on negotiation. We set a target of employment numbers for them and they have to reach their minimum employment number before the subsidy cuts in.

MR. BENNETT: Are there any other funds provided for call centres other than the wage subsidy?

MR. AU: No, sir.

MR. BENNETT: Do you know how much the employees are paid at the call centre?

MR. AU: The employees are usually paid higher than minimum wage because the jobs are apparently very stressful and the turnover is high. They usually pay around $16.

MR. BENNETT: Do they start at minimum?

MR. AU: They are a little bit higher than minimum because of competition and the labour market right now.

MR. BENNETT: Are there any Newfoundland and Labrador-owned call centres?

MR. AU: There is one in Placentia and one in Carbonear.

MR. BENNETT: How many people do they employ?

MR. AU: There are about fifty in total.

MR. BENNETT: Can I get a list of the companies that have call centres and where they are headquartered?

MR. AU: Yes, sir.

MR. BENNETT: I see this year that it is down to $520,000, which is approximately a quarter of last year's actual. Why is it so low this year?

MR. HUTCHINGS: (Inaudible) as Peter indicated, the contract is five years in terms of what is predicted. Some of those contracts are winding up, so that is predicted on what the wage subsidy would be paid in the next fiscal year.

MR. BENNETT: Of the ones where the contract is winding up, that is the contract for the subsidies, correct?

MR. HUTCHINGS: That is correct, yes.

MR. BENNETT: Are they staying in the Province or are they leaving?

MR. HUTCHINGS: Well, we would hope they would stay in the Province in terms of carrying on the business. It is investment we see as important. We have certainly invested in them and the people of Newfoundland and Labrador have invested in them. We would hope they would stay.

MR. BENNETT: Has any of them that received subsidies closed down and left the Province?

MR. HUTCHINGS: To date, Peter.

MR. AU: Not that we are aware of, but all of them have come back, basically, looking for an extension of the subsidies because the business model of the call centres have changed a lot, sir. The exchange rate of the Canadian-US dollar and also the minimum wage has gone up in the Province and it has squeezed their profit margin down, their bottom line, so that they have come back to the Province looking for an extension of it. We are looking at a program that will continue it.

MR. BENNETT: I see.

MR. HUTCHINGS: We are looking it now in terms of go forward. I mean, there are challenges here with this in terms of depending on the market they are in, the competitive nature of that market and should we support them just in more regional areas where they are required and there is not a high labour demand, as opposed to where we do it. We are going through that process now in terms of how we move forward.

MR. BENNETT: Why is it necessary to provide a subsidy for a call centre to operate here?

MR. HUTCHINGS: Originally, I guess it is business attraction. It is getting those companies to come here to provide employment and to attract industry. That was certainly originally to get them to come here.

MR. BENNETT: Were these existing call centre companies to set up shop here?

MR. HUTCHINGS: They may have had the services elsewhere, so attracting call centres, as you know over the past number of years, has been pretty predominant across the country in terms of getting call centres to come. We were engaged with that as well.

MR. BENNETT: The Newfoundland and Labrador headquarter call centres, did they already have call centres operating, or did they set up new businesses?

MR. HUTCHINGS: I think some are new and some may be an extension of other facilities they had elsewhere, but we can certainly give you at list of that and make you aware.

MR. BENNETT: If a business wanted to set up a call centre here, in addition to the wage subsidy, would the department be in a position to be able to provide any other sort of financial incentives for local businesses?

MR. HUTCHINGS: We would look at the components of what the offer would be and what the deal would be. Any time anybody would come forward with a project in terms of investment in our Province, our department is willing to sit and hear what the proposal would be. At the end of the day, I would not say aye or nay to a what-if question. I would say to somebody: Please come and see us.

MR. BENNETT: At this point, you have no reason to believe that any of the out-of-province owned call centres will close up shop and leave.

MR. HUTCHINGS: This Province?

MR. BENNETT: Yes.

MR. HUTCHINGS: Could you just repeat that, just to make sure I understand?

MR. BENNETT: You have no reason to believe that any of the out-of-province owned – the foreign ones, whether they are Nova Scotia or New York or wherever - that they will close and leave.

MR. HUTCHINGS: I do not know, Mr. Bennett; I cannot confirm that. I mean, that is a business choice they would make in their business model. As Peter has indicated, we are in discussions with them in terms of if contracts expired what role we may play leading forward. We are in that process right now.

MR. BENNETT: If they should decide to leave, would there be any opportunity for locally owned businesses to pick up that business opportunity?

MR. HUTCHINGS: Certainly if a local business came forward with some plan, we would look at that certainly.

MR. BENNETT: Under 3.1.02, Investment Portfolio Management, line 10, Grants and Subsidies, last year $25,000 was budgeted but only $4,000 was used.

MR. HUTCHINGS: That would be related to the interest subsidy payments under the old Fisheries Interest Subsidy Program. Fewer loans were outstanding, so there was lower interest rates as the loans are wrote off, or are taken care of, or taken out of the portfolio.

MR. BENNETT: Do I understand this is actually amounts that were written off?

MR. HUTCHINGS: No, this would be to pay on the interest of the lower interest subsidy payments. There is a formula in terms of when the loan was actually taken, prime – I do know, Peter, if you would like to explain it. Go ahead.

MR AU: Way back, this program was terminated seventeen years ago in 1995. You may recall back in the 1980s when interest rates where in the double digits, some fishers have negotiated into loans where the interest rates were quite high. Government came in with a Fisheries Interest Subsidy Program that would subsidize the high interest rate and the fishers would end up paying the lower of one of two interest rates and the government would pick up the difference. As those loans worked down, they were paid off. Right now we have twenty-four loans left. That is why it was down to $4,000.

MR. BENNETT: If we are down to twenty-four loans and last year was $4,000 why are we budgeting $25,000 this year?

MR. AU: Sir, we kept $25,000 there, the same as last year, because we do not know which way the interest rate would go. There was some indication of inflation or whatever. If interest rates go up, our obligation to cover the difference would go up also.

MR. BENNETT: You guarantee an interest rate maximum that the person holding the loan has – is that correct?

MR. AU: No, we guarantee the fishers would pay the lower of one of two. One is the current prime rate plus 1 per cent, or what the fishers have negotiated. If the current prime rate has gone up the fisher will – let's say the current prime rate is 3 per cent plus 1 is 4 per cent, so the fisher would pay 4 per cent. If he or she has negotiated a loan, which was 10 per cent, we will cover the 6 per cent.

MR. BENNETT: Is this Bank of Canada prime you are referring to?

MR. AU: Bank of Canada prime rate, yes, sir.

MR. BENNETT: Do you agree that there is no forecasting on the interest rates increase this year from the Bank of Canada?

MR. AU: Not with the last couple of Bank of Canada announcements, no.

MR. BENNETT: Wouldn't it make more sense if the amount used last year would be the amount budgeted for this year?

MR. AU: It could be, yes, but like I said, there is a forecast in the US of inflation but it never happened. At some point in time, a couple of years ago, they even talked about deflation. We are at the whim of the market, I guess, when it comes to the interest rate.

MR. BENNETT: The forecast from Mark Carney is well out into 2013 and no increases.

MR. HUTCHINGS: We made a department call on that and we will live with it.

CHAIR: Are you finished on that section?

MR. BENNETT: Actually, the next page under Loans, Advances and Investments, last year the department budgeted $500,000 and used $200,000. This year, it is budgeting $2 million. Can you tell me what is going on here? What does this money do?

MR. HUTCHINGS: This is related to the disbursements related to Fluorspar. Do you want to take him through that?

MR. MEADE: It is quite straightforward. The $200,000 under the revised is what would have been dispersed to Canada Fluorspar's part of the loan deal, the $2 million is what is budgeted in 2012-2013 and the remainder, approximately $15 million – $14.8 million – would be budgeted in 2013-2014.

MR. BENNETT: This is just a matter of when it is drawn down?

MR. MEADE: Yes.

MR. BENNETT: It is part of the $17 million commitment and as it is required, you are satisfied, and then you advance the money.

MR. MEADE: That is exactly right.

MR. BENNETT: Just like an ordinary business, basically.

I have no more questions on this section.

CHAIR: Thank you, Mr. Bennett.

I will go to Mr. Mitchelmore under that section.

MR. MITCHELMORE: I have a question under 3.1.01.03, Transportation and Communications. In 2011-2012 only $22,400 was spent. It seems like there is going to be a significant amount of either travel or increased communications – $40,000.

Is there any type of marketing campaign being put into play? Is it expected there is going to be a significant amount of travel to compensate for this Estimate increase?

MR. HUTCHINGS: The revised budget figure – we just did not reach the anticipated travel and communications we thought. There were whole meetings and other activities going on with the amalgamation of the two departments.

In regard to the Estimate for 2012-2013, it is reflective of continued activity and with the reorganization of the department and additional travel to support our programs.

MR. MITCHELMORE: Under 10, Grants and Subsidies, is it possible to get a list as well on that?

MR. HUTCHINGS: Yes.

MR. MITCHELMORE: I am curious: You have entered into a five-year agreement with some of these call centres and you have given them a wage subsidy each year?

MR. HUTCHINGS: Yes.

MR. MITCHELMORE: You will possibly extend those wage subsidies beyond the five-year period?

MR. HUTCHINGS: We are looking at that now.

MR. MITCHELMORE: Is the wage subsidy the typical 60-40 split that would be offered through Advanced Education and Skills, or does your department have its own fund as to how it administers the business?

MR. HUTCHINGS: No, we would have our own formula in negotiation with the call centre.

MR. MITCHELMORE: Is this just for call centres or can it be applied to other business entities?

MR. HUTCHINGS: I do not think we have used it for other business entities, no. It was an incentive for call centres. Basically, it is part of the whole incentive package and a lot of jurisdictions use it to get them to come to their region.

MR. MITCHELMORE: The call centre, where they are foreign-owned, would they have been able to tap into the Business Attraction Fund that we talked about earlier?

MR. HUTCHINGS: Well, they could have, and I guess you make an important point in terms of, when people look and say you are not doing any foreign investments, in actual fact foreign investment shows up. While it may not come from something like one of the business lines or former business lines, we see business of foreign investment through other lines as identified here.

MR. MITCHELMORE: Is red tape one of the reasons why people are not using the Business Attraction Fund?

MR. HUTCHINGS: Red tape?

MR. MITCHELMORE: Yes. A significant amount of delays and the process, the restrictions of being able to access the fund, because it seems like other funds that your department has are being utilized.

MR. HUTCHINGS: I do not think so, Mr. Mitchelmore. As an overview of integrating the two departments, we are looking at all of that. We want to streamline, consolidate, and make it easy. We want the storefront to look smaller. If we have someone coming forward we will do the stuff behind the scenes, but we just want to engage and bring them in. If they have something to offer we are willing to sit down with them, but I do not know. I do not know if it is red tape but we are looking at all of that.

MR. MITCHELMORE: Can you clarify what the difference is for the Strategic Enterprise Development Fund, that portfolio that is being managed, versus the other type of investment funds that you have? What is the specific differentiation or the benefit of tapping into a Strategic Enterprise Development Fund? From your Web site it seems like almost every category from craft, to agrifoods, to whatever would qualify.

MR. HUTCHINGS: Do you mean 3.1.02 Investment Portfolio Management?

MR. MITCHELMORE: Yes.

MR. HUTCHINGS: My understanding is that is the collections management function that exists in Marystown for all defunct accounts that are managed there.

MR. MITCHELMORE: Okay.

MR. HUTCHINGS: The Enterprise Newfoundland and Labrador fund, I think the old accounts under the old Fisheries Loan Board.

MR. MITCHELMORE: Okay.

MR. HUTCHINGS: That would be the function of 3.1.02, if I am correct, Peter?

MR. AU: That is correct.

MR. HUTCHINGS: Okay.

MR. MITCHELMORE: How many defunct accounts does the department have?

MR. HUTCHINGS: In that Portfolio Management?

MR. MITCHELMORE: Yes.

MR. HUTCHINGS: Peter, would you like to speak to that – about 300?

MR. AU: (Inaudible).

MR. HUTCHINGS: About 300.

MR. MITCHELMORE: How many of those is Fisheries Loan Board or are they all fisheries loans?

MR. HUTCHINGS: No, there would be a disbursement based on – Peter, maybe you could speak to that?

MR. AU: Yes. They are made up of three former organizations: the Fisheries Loan Board, the Farm Credit Corporation, and Enterprise Newfoundland and Labrador.

MR. MITCHELMORE: Okay.

Is it possible to get a list of the 300 defunct companies and the amounts that (inaudible)?

MR. AU: Sure, yes.

They are not defunct as much as – for instance, in the Fisheries Loan Board we gave a loan for a fisher to buy an outboard motor probably thirty years ago. We are still trying to collect some of that. We set a grade on each account, one, two, three, four level and so on. We can certainly give you a list of that, sir.

MR. MITCHELMORE: Okay.

Are there new uptakes under the Fishery Loan Guarantee Program or is that something that is not promoted through your department?

MR. HUTCHINGS: Yes, it is. We have had uptake on that. All I can say about that one is stay tuned. We may have more information on that in the near future.

MR. MITCHELMORE: Okay.

I do not have any other specific questions. I think they will be covered off later in the estimates when we get into the programming piece and the field offices and things like that. I am willing to move forward, Mr. Brazil.

CHAIR: Thank you, Mr. Mitchelmore.

I will ask for a motion – the Member for Lake Melville – to accept headings under Business Development, sections 3.1.01 to 3.1.03

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Motion carried.

On motion, subheads 3.1.01 through 3.1.03 carried.

CHAIR: Mr. Mitchelmore, I am going to stay with you for the next eight or ten minutes.

MR. MITCHELMORE: Okay.

Under 4.1.01, I am curious about the Professional Services as to what was spent last year under the $330,700. Are there some specific initiatives that were undertaken?

MR. HUTCHINGS: That was specific for planning in relation to GBI and RBI, especially RBI in terms of we had a call for proposals last year in preparation for that.

MR. MITCHELMORE: Okay.

Purchased Services were budgeted for almost $6 million and only $1.2 million was spent. What was that spent on?

MR. HUTCHINGS: That is 06 Purchased Services?

MR. MITCHELMORE: Yes.

MR. HUTCHINGS: That was related to the reduction of funding for RBI provided in 2011-2012 and that was returned to base funding. Is that correct?

OFFICIAL: (Inaudible).

MR. HUTCHINGS: Yes.

MR. MITCHELMORE: What do you mean a reduction of funding?

MR. HUTCHINGS: Do you want to take that Brent?

MR. MEADE: What we did here is – the reason there is a disparity in the $5.7 million down to $1.1 million is that when we got into the Rural Broadband Initiative, in order for us to properly enter into the contracts with the Internet service providers we needed to post it under Grants and Subsidies. So there was a movement. That is why you will see Grants and Subsidies have gone up substantially, and you will see that the others would have gone down.

MR. MITCHELMORE: Okay.

The $6.75 million under Grants and Subsidies there is for Rural Broadband Initiative and the Government Broadband Initiative?

MR. MEADE: Exactly.

MR. MITCHELMORE: Okay.

Government had allocated almost $8 million, does that include those two figures totalled together, Purchased Services and Grants and Subsidies, or did all the money that was supposed to be allocated for these two initiatives not get spent?

MR. HUTCHINGS: There is $2 million that would flow into the next fiscal year and that would be included in – actually, $4 million. In number 10 Grants and Subsidies, $5.7 million, there would be $2 million in there that would flow from the commitments made last year with the RBI project, and $2 million that is currently in the budget for this year for possible RBI.

MR. MITCHELMORE: So that is not really new money that was announced in the budget?

MR. HUTCHINGS: There is $4 million in there, $2 million is new; $2 million would be monies that had to flow on this current fiscal year.

MR. MITCHELMORE: Okay.

So, you are stating that $6.75 million was actually spent on Rural Broadband Initiative and Government Broadband Initiative last year.

MR. MEADE: It would also include the spending that would be under our innovation programming which is about $1.75 million or $1.8 million.

MR. MITCHELMORE: Okay.

Can I get a detailed list of these Grants and Subsidies?

MR. MEADE: Yes.

MR. HUTCHINGS: (Inaudible) tech utilization of those programs that were included, as well.

MR. MITCHELMORE: Okay, as well as a detailed list of the Purchased Services.

MR. HUTCHINGS: Okay.

MR. MITCHELMORE: It looks like, in this year's budget, we are seeing quite a decrease in Purchased Services. I guess the planning has been done for the RBI, GBI, and that those guidelines and process does not need to go through that purchasing process again. Is that what is allocating for the difference?

MR. HUTCHINGS: Originally, in last year's budget there was $8 million allocated. That would have been what reflected that, right, the original in 2011-2012 what was in the budget for – then that was reallocated for the last fiscal year into Grants and Subsidies so it could be dispersed out to the successful proponents of the RBI. Then that would be the base budget for Purchased Services for this coming year.

MR. MITCHELMORE: I am interested in the GBI. Do all government offices have access to the Government Broadband Initiative or are there missing links?

MR. HUTCHINGS: No.

MR. MITCHELMORE: They do not all have it. What areas do not have access?

MR. MEADE: If I understand your question, hon. member, I assume you are asking: Do all government offices have access to broadband?

MR. MITCHELMORE: Yes.

MR. MEADE: Throughout Newfoundland and Labrador the answer would be, no.

MR. MITCHELMORE: Right.

MR. MEADE: There is a large majority of them that do have access because they would be located in areas where broadband is readily available; but, for example, Transportation and Works would have depots that would not have access. There would be other examples that we could give.

MR. MITCHELMORE: So, with the money that was spent, what is the coverage of the Government Broadband Initiative – and that is only focusing on broadband. I would like a list of all government offices that have broadband, with the depots, and the ones that do not have access, if that could be made available. As well, are there any schools or municipal government buildings or other entities that are Crown corporations or affiliates of government that do not have access to the Government Broadband Initiative?

MR. MEADE: Yes, we can provide that list. The term we use, hon. members, is government-legislated agencies, so any government-legislated agencies that are out there – you have given a couple of examples of those – we can provide you lists of who has access and who does not right now.

MR. MITCHELMORE: Okay.

MR. MEADE: Everybody does have some form of access, we should be clear – the definition we use under broadband is high-speed Internet access.

MR. MITCHELMORE: Is that the one point five megabit?

MR. MEADE: Yes. So, what we will be able to show you is all areas have some type of access, but it would vary. So, what we can show you is the type of access (inaudible).

MR. MITCHELMORE: So you will break it down by the type of access as to who has cable or DSL speed up to five megabits per second or greater, and those who fall under. Okay, that would be very helpful. Could you do the same for the Rural Broadband Initiative, the communities that actually have access and those who do not, and broken down by the megabits?

MR. HUTCHINGS: Yes, we can get you some information on that.

MR. MITCHELMORE: I certainly would like a detailed listing on that.

The Broadband Initiative is covered under fibre and cellular access as well. Many of the companies I have spoke to are doing fibre as well with their towers and the technology, and they are not linking each other up. Is there any initiative or planning that you are undertaking in the next fiscal year to look at cellular and how that can be bridged?

MR. HUTCHINGS: Yes, we made a commitment last year in our Blue Book – two distinct ones: one related to continuing over the next four years to increase high speed; and the second one was that cellular coverage to look at dealing with the private service providers and see if there is a possibility to engage in a strategy in terms of improving telecommunications, and specifically cellphone coverage.

I have engaged in that and started speaking to service providers here in the Province. The challenge we have, quite clearly, is that we are talking enormous costs. We have various regions of the Province where there is no cellphone infrastructure and tremendous build-out. Various providers I speak to, you are looking at anywhere from half a million dollars to put up a decent tower. Then you have the maintenance of that tower, you have fees associated with it, you have the lifespan of that tower.

There are a number of issues with it, but we are willing to discuss with those service providers what possibilities exist and is there new technology or things we can do differently. From my understanding, I do not know it quite well, where there is fibre optic I think you can do a build back for towers. So it is also important if there is high speed in areas as well from that perspective of building out from it.

We are engaged in that discussion. As well, as a government, it is one budget we have and we try to prioritize to meet the needs in all of the Province, certainly in rural. It is something we are having discussions on. We will continue to pursue it.

MR. MITCHELMORE: Thank you for that, Minister.

Under 4.1.02, Commercialization Initiatives, can you explain why there is nothing in the Estimates for line 06, Purchased Services, as well as 08, Loans, Advances and Investments?

MR. HUTCHINGS: That was a part of streamlining and what we are doing from a departmental point of view in terms of consolidating programs. I talked about being clean and trying to, quite frankly, reduce the number of visible programs, yet amalgamate them where there are synergies. That would be in under the SME Fund, under our business program, Small and Medium-sized Enterprise Fund.

MR. MITCHELMORE: That would have been reallocated under the Small and Medium-sized Enterprise Fund.

MR. HUTCHINGS: Yes, it would be looked after under the SME Fund in the future.

MR. MITCHELMORE: Is that for the Loans, Advances and Investments?

MR. HUTCHINGS: Yes.

MR. MITCHELMORE: That would not include the Purchased Services?

MR. HUTCHINGS: That would have been related strictly to RBI last year, the Purchased Services.

MR. MITCHELMORE: So the $2.4 million would have been for RBI, but it did not get spent on RBI there. Did it get reallocated to the section under Grants and Subsidies?

MR. HUTCHINGS: Yes, correct.

MR. MITCHELMORE: Okay.

Would it also be possible under the RBI to get the details of the contracts that were awarded for the last number of years, highlighting over $27 million invested by government and the community reach and the levered funds? Is it possible to release the contracts?

MR. HUTCHINGS: We would have to look at that. I am not sure whether there are proprietary issues in terms of the contracts that were signed, but we will certainly take a look for you and see what we can do.

MR. MITCHELMORE: If there is any information that can be shared on that, I would certainly like to have a note as to where the communities are being served, what the planning was, and the amount of the contract.

MR. HUTCHINGS: Okay.

MR. MITCHELMORE: I do not need all the specific details if that cannot be provided, but certainly as much as is readily available that would not be proprietary.

MR. HUTCHINGS: Okay.

MR. MITCHELMORE: I just have a couple of more questions under 4.2.01, Salaries. I am wondering if a position is being added, or is that just regular salary increases for the $1,051,000.

MR. HUTCHINGS: I think that is related to one additional position that came over and related to the merger from the Department of Business.

MR. MITCHELMORE: Okay.

Could we get an organizational chart of what the departments looked like previously and what they look like now to show the transition period?

MR. HUTCHINGS: Sure.

MR. MITCHELMORE: I think that would clarify and help me greatly as we move forward.

The only other question I have is under that same section, line 10, Grants and Subsidies. I am wondering what the $112,000 was spent for. It is exactly what was budgeted. I am wondering: What was covered under that?

MR. HUTCHINGS: The Labrador Craft Marketing Agency.

MR. MITCHELMORE: What are they doing?

MR. HUTCHINGS: The overall craft development of the industry, working with those involved in the industry in terms of products, market, and those types of things.

MR. MITCHELMORE: Would this also be eligible to craft co-operatives that wanted to get started and things like that?

MR. HUTCHINGS: Yes.

MR. MITCHELMORE: Is there a section of the Estimates where we talk about co-operatives later on? I do not see it clearly. It probably is listed a little bit later, so I will save my question then.

MR. HUTCHINGS: In Regional Economic Development I guess we could, under that section.

MR. MITCHELMORE: I am fine with the questions here. We can certainly move to Mr. Bennett.

CHAIR: Thank you, Mr. Mitchelmore.

Mr. Bennett.

MR. BENNETT: This is under section 4.

CHAIR: Innovation and Strategic Industries Development.

MR. BENNETT: How many staff work in this particular part of the department?

MR. HUTCHINGS: In Innovation?

MR. BENNETT: Yes.

MR. HUTCHINGS: We would have to get you the exact number and can provide that to you.

MR. BENNETT: Can you provide staffing for the entire department?

MR. HUTCHINGS: By division?

MR. BENNETT: Yes, please.

MR. HUTCHINGS: Sure.

MR. BENNETT: Mr. Chair, I have no further questions on this section.

CHAIR: I am going to ask then if we can adopt sections 4.1.01 to 4.2.01.

MR. CROSS: So moved.

CHAIR: Moved by the Member for Bonavista North.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Opposed?

AN HON. MEMBER: Nay.

CHAIR: Motion carried.

On motion, subheads 4.1.01 through 4.2.01 carried.

CHAIR: Mr. Bennett, you can move right into Regional Development.

MR. BENNETT: Minister, I understand this department has economic development officers?

MR. HUTCHINGS: Yes.

MR. BENNETT: How many are there?

MR. HUTCHINGS: Sixteen.

MR. BENNETT: How many?

MR. HUTCHINGS: Sorry?

MS MALONE: We have about sixty on the frontline, and a total complement of around eighty-two.

MR. BENNETT: Of economic development officers?

MS MALONE: Yes.

MR. BENNETT: Where are they?

MR. HUTCHINGS: There are some here in the department and dispersed around various regions of the Province.

MR. BENNETT: Can I get a list of where they are?

MR. HUTCHINGS: Sure.

MR. BENNETT: Under Grants and Subsidies which is 5.3.01, last year $8,794,000 was budgeted and $10,794,000 was spent. Where did the $2 million go, the difference?

MR. HUTCHINGS: That was for a number of projects that we funded. We can get a list for you of those that exceeded the $8,794,000 that was budgeted.

MR. BENNETT: The additional projects came out to exactly $2 million more?

MR. HUTCHINGS: Yes, it would be over and above. Yes, additional funding for projects. I think one of them was St. Anthony wharf, if I remember correctly, our partnership with ACOA in terms of doing investments in St. Anthony in that good project up there. There are a couple of more, but I can get you the list.

MR. BENNETT: Okay, thank you.

I suppose you would not know which ones were the over budget ones because they all (inaudible) –

MR. HUTCHINGS: Yes, I would not want to say what they were, so I will get you a total list.

MR. BENNETT: Okay.

This year you have budgeted less money, $6,050,000. Why is that?

MR. HUTCHINGS: Brent, do you want to speak to that?

MR. MEADE: This Comprehensive Economic Development activity includes essentially the core program of Regional Sectoral Diversification Fund, RSDF as we refer to, is reflected here. The $6 million would include $4.8 million for RSDF. The remainder of this year has also been allocated for a project that we are doing as part of the Atlantic Gateway with SmartBay.

This number, if you went back to look at previous Estimates, you will see the number is up and down. The reason last year the number would have been higher is because of one-off projects that we would have done that have a finite life. In particular projects like Shorefast, the St. Anthony wharf that the minister has referenced, and others. It would be large projects that would cause the number to move up or down in a given year.

This year, other than SmartBay, we do not have any large one-off projects that we needed to fund.

MR. BENNETT: How long, on average, does it take for a project like this to come to your attention until it is funded?

MR. HUTCHINGS: Can you say it again, please?

MR. BENNETT: How long, on average, does it take for a project like this to come to your attention or application to be made until it is funded? What is the normal time range?

MR. HUTCHINGS: That could vary depending on what additional information is required. Sometimes someone could come forward with an idea and a concept paper. Then you get into the actual application, we do our business analysis and, obviously, financial data is required in terms of the stability of the company, all those types of things, then you get into negotiating.

I do not know, Rita, if you can – the timeline.

MS MALONE: There is quite correct. Larger projects take longer, and usually there are a lot more partnerships involved. In the main, we do keep a very active review on where proposals are with respect to all of our funding. So we do have a fairly nimble turnaround on straightforward funds. If all the information is there, it could be thirty days. Larger files with larger players take longer, but we do try to strive for able turnaround.

MR. BENNETT: Is there any type of applicant that is generally targeted or is it a broad spectrum?

MS MALONE: This is the community-based applicant. In your area, it could be a development association. It could be the Hawke's Bay interpretation centre, or it could be a municipality. So, it is active in community economic development.

MR. BENNETT: So, generally the focus would be for non-profits?

MS MALONE: Yes, very much the community-based organizations.

MR. BENNETT: Okay.

If a non-profit organization like a development association had a business idea that would be to operate something for profit, would that still work under this particular category?

MS MALONE: Oftentimes we look for that spinoff, yes, as being really meritorious. So, if we can build the infrastructure that creates an engaged enterprise, then we can support that.

MR. BENNETT: Okay, thank you.

I have no more questions on this section.

CHAIR: I will go to Mr. Mitchelmore and then I will come back to you for the Regional Development, Mr. Bennett.

Mr. Mitchelmore, under the Regional Development heading there.

MR. MITCHELMORE: Okay.

Section 5.1.01, Regional Economic Development, it talks about support for Regional Economic Development Boards and other community economic development organizations. I am aware that currently the RED Boards are funded 25 per cent by IBRD under performance-based management and the other 75 per cent is funded through ACOA.

Should ACOA make cutbacks? Is the department prepared to make up the shortfalls in this program?

MR. HUTCHINGS: Not at this time. We would not be definitive on that. As I said before, we are waiting for final response from ACOA in terms of what any transition is going to look like from their perspective. Once we have that, we have done some preliminary work, we will articulate then how we move forward from where we are today.

MR. MITCHELMORE: What type of timeline are we looking at for this, Minister?

MR. HUTCHINGS: We expect to hear back from the federal government I would say within the next two weeks, so shortly after that. We want to make sure whatever direction we go in we clearly articulate that and all those communities groups and people on the ground are well aware. We will have a definitive direction on where we will go.

MR. MITCHELMORE: Thank you for that.

Under line 10, under Regional Economic Development, you have a little over $2 million allocated under Grants and Subsidies. Is this allocated for any specific project in last year's budget? What was budgeted and what was revised was spent, and it is the same amount this year. Is it a consistent line item?

MR. HUTCHINGS: I think so, yes. This would include the $1.2 million that is currently there for Regional Economic Development. Our portion is 25 per cent that we now currently pay in co-operative development, community development, youth, entrepreneurship, and some of those programs.

MR. MITCHELMORE: In the same thing there have been significant cuts to co-operatives. Will this change the light of the Department of Innovation, Business and Rural Development from the federal level as to what it goes forward with, with co-operatives?

MR. HUTCHINGS: We will review all of that. There are programs, too, in terms of suggestions, in terms of the percentages paid, and in terms of RSDF. We want to look at the full picture in terms of what the implications are.

MR. MITCHELMORE: The department is willing to be flexible to redirect some funds in its other investment portfolios.

MR. HUTCHINGS: That is fair to say, yes. We will look at where to best redirect those funds and what the best return we can have.

MR. MITCHELMORE: I have a question on the Business Networks Program: Has there been any uptake of new participants in the past year?

MR. MEADE: The Business Networks Program is a very successful program for us. We have had in particular in the last year a number of networks around women-owned businesses that have moved forward. We can certainly provide you again a list of the projects and initiatives that were funded under Business Networks, but that would be one example.

MR. MITCHELMORE: That would be great.

I am familiar; there is a Business Network on the Northern Peninsula as well, that has been maybe one of the early ones to get in there. It can work really well, and I think it is a fabulous program that can work in various industries across the Province.

The Canada-Newfoundland service centres promote a Guest Advisor, Lunch and Learn program, which brings in a number of specialists like lawyers and accountants. It is very good for rural areas that do not have access, many of them, to professional services. My big concern here is that I would like to know what the uptake is.

My other question would be: Is the reason for the uptake not reaching as much as it could be because of lack of broadband access?

MR. HUTCHINGS: I did have a briefing with that group a little while back. My understanding was the uptake was very good. One of the things that did stand out is what you implied. Sessions with various professionals on the ground and outside in rural Newfoundland and Labrador were certainly a big hit and indicated that it needed to continue.

I do not know, Rita, if you have anything else to add to that?

MS MALONE: We certainly want to advance next year more of that Lunch and Learn on the ground outside of the larger centres. We have had very good success and it feeds our other programs as well. People identify other programs. That is the aim, Mr. Mitchelmore, to bring it more on the ground. We can get the expertise on the ground to make it a robust Lunch and Learn.

MR. MITCHELMORE: Great. Thank you, Ms Malone.

The Community Capacity Building program, can that be partnered with some of these Lunch and Learn sessions in an area that is chronically underserviced to help provide transportation costs to get people to an area where there is broadband access?

MS MALONE: Yes, indeed. That is largely what the Community Capacity has been utilized for, to get communities or businesses together. Yes, very much so, and Co-op Development as well. We use that in order to advance co-op networks.

MR. MITCHELMORE: Okay.

There have not been any cutbacks to these two programs you are talking about, Co-op Development or the Community Capacity in the upcoming year?

MS MALONE: No.

MR. MITCHELMORE: The EDGE program – the Economic Diversification and Growth Enterprises program – is a fabulous program. I am just wondering if there has been uptake in rural communities for this.

MR. HUTCHINGS: We have a list of some companies that have applied and who have been accepted over the last fiscal year. We can provide that list to you.

MR. MITCHELMORE: Okay.

MR. HUTCHINGS: Peter, do you want to comment?

MR. AU: The companies which we approve EDGE to are located mainly outside of St. John's. It was not that many because we are still looking at the marketing of it together with the Business Attraction package. The EDGE program mainly is for job creation. We tailored the program such that it benefits higher in the rural area than in the Avalon area.

MR. MITCHELMORE: Would a company like Fluorspar be tapping into the EDGE program? Is that something they are going to avail of?

MR. AU: That is interesting, because back fifteen years ago when Fluorspar approached the government, government gave them EDGE status. Like I said before, because of the depressed world market price for fluorspar they have not been able to develop and activate the mine. Until recently, they found a financial partner.

Because it is located in St. Lawrence, the EDGE contract was only good for fifteen years. In the meantime, they keep coming back to the government looking for extension of that because they hope, eventually, they will reactivate the mine. Right now, we have a hold on mining companies applying for EDGE.

MR. MITCHELMORE: Right. Well, them not getting access to EDGE is going to be a benefit to the Town of St. Lawrence because they would get additional monies in business tax.

MR. AU: Yes.

MR. MITCHELMORE: I want to ask about 5.3.01 under Comprehensive Economic Development. Under section 10 Grants and Subsidies, I would like a list. It was talked about the St. Anthony wharf development. I am familiar with the development and the infrastructure that has taken place. I am wondering if there is going to be future development around cruise ship ports and facilities there in St. Anthony. This is something the government has alluded to in the past.

Is there any progress being made on cruise ship port development in the north?

MR. HUTCHINGS: It is something we would certainly entertain if there is private sector or community groups that want to come forward and engage with us. We also look at it from Arctic opportunities from our ocean tech side as we look at building out in the future in terms of what is happening in the Arctic and what is going to happen in terms of monitoring search and rescue, exploration.

We may need a number of jump-off points, and St. Anthony is certainly one of those areas that we will be looking at. We are starting in the near future to do some work in that area, a consultative process. Through that we hope to build out, and not only in St. Anthony but other ports and opportunities that exist.

MR. MITCHELMORE: Right. Thank you for that.

The Youth Innovation program that was listed on the Web site, is that still in existence?

MR. HUTCHINGS: Yes.

MR. MITCHELMORE: Okay.

What work is being done? What is the budget allocated for this? Are there any projects being undertaken?

MR. HUTCHINGS: Yes, $300,000 for Youth Innovation.

MR. MITCHELMORE: Okay.

MR. HUTCHINGS: Those are the ones in the high school, very successful. I had an opportunity to visit some high schools and see the work that has been done. It is exposure to innovation and technology, it is very successful.

MR. MITCHELMORE: Right. It seemed like it was very flexible. That non-profits, community groups and municipalities could avail of it as long as it had a youth focus. It seems like a very flexible program that a number of youth could avail of, something very positive from the department.

MR. HUTCHINGS: Yes.

MR. MITCHELMORE: I am just wondering if we could we have a list of the initiatives undertaken in the past year?

MR. HUTCHINGS: Sure, yes.

MR. MITCHELMORE: Was all the funds actually spent?

MR. HUTCHINGS: Yes, it was.

MR. MITCHELMORE: Okay.

Do you hold applications or do you always do a new intake?

MR. HUTCHINGS: No. We usually do a new call, but we will look at disbursements. Who got them last time, how we can disperse them out, especially in rural areas.

MR. MITCHELMORE: Okay.

How much funds have been allocated for the Fish Plant Workers Assistance Program that has been administered through your department?

MS MALONE: Right now, it is a couple of hundred thousand.

MR. MITCHELMORE: With all the plants that have been closed, displaced workers, the number who could avail of this program, I am wondering if you are looking at re-evaluating the estimated amount to increase that.

MS MALONE: We have a host of programs, and also other departments have a host of programs in terms of dealing with individual mitigation. This program is very much destined for fish processors and fish workers who can link to new businesses. It is very much employer application driven and we do spend an awful lot of time trying to get that match made. That is not exclusive to what is available to help for individual circumstances.

MR. HUTCHINGS: We have started to engage already in parts of the Northern Peninsula. We even see some opportunities now that exist through that program and we are pursuing those.

MR. MITCHELMORE: There is a suite of programs that your department offers for small and medium business enterprise investment, reaching up to $500,000. I guess sometimes it could extend that and go further, but there are a significant amount of restrictions placed on these loans and narrows the criteria in the field.

Is there anything being looked at, I guess, to be a little bit more inclusive of non-profit groups, social enterprises, to really look at advancing the rural-based economies?

MR. HUTCHINGS: Yes, it is, and I guess the full spectrum of programs and the terms and conditions that exist now – I had an opportunity over the past six months to visit a number of the regional offices and sit with staff and get direct feedback from on the ground and what they are hearing from their clients and issues that we need to consider in terms of moving forward and adjusting our programs.

So yes, your comment is timely. We are actually doing that now and seeing if we can amend our terms and conditions to make them more conducive to our clients.

MR. MITCHELMORE: There are many non-profit enterprises and many that are depending on government funding trickling in here and if they could get the capital and get the investment, they could be self-sufficient and sustainable and they could move forward and create real long-term, viable jobs in the community. That is certainly my belief, and getting access to the capital has been the greatest challenge. One of the biggest problems I see is the liability issue, where they have volunteer board of directors.

Is that something that maybe could be worked upon? If a new program is to be developed by your department or a restructuring, would that be something –

MR. HUTCHINGS: You are talking about a non-profit board –

MR. MITCHELMORE: A non- profit or a social enterprise group, about applying for funding as to –

MR. HUTCHINGS: The liability issue.

MR. MITCHELMORE: – the liability issue.

MR. HUTCHINGS: How do we deal with that, Rita?

MS MALONE: That is a very good point, Mr. Mitchelmore. We have worked in terms of insurance and it is funny you have mentioned co-op because we helped support a co-op network that provides non-profits an opportunity to get better insurance and more robust, including the REDBs as well as other volunteer groups. So you are spot on.

We also have done a fair lot of investment, even to date, under our SME. One that comes to mind in Labrador is Moulder of Dreams, which is a social enterprise. We have helped move them along, working capital wise.

MR. MITCHELMORE: With the Moulder of Dreams, are they operational now? Because they were not operational last year.

MS MALONE: Yes, they are.

MR. MITCHELMORE: They are moving forward now because I believe they are one of the most successful – or they could be; they have the potential for a successful social enterprise. They have a fabulous product and I own quite a number of them.

MS MALONE: Yes, indeed.

MR. MITCHELMORE: It is certainly good initiatives that are coming out of the department; I am glad to see that.

MS MALONE: Thank you.

MR. MITCHELMORE: I have a concern around the youth entrepreneurs and innovators program. There are a number of different components. It is a loan piece of up to $5,000 but there are a number of other things whether it is national or provincial marketing. If somebody has availed of the lending component, are they automatically eligible for the other pieces or do they have to apply specifically for it?

MS MALONE: It is part and parcel. We have thirty-six companies active under the entrepreneurship side, but some of those companies, many of those companies, have availed of other tools within that tool kit.

MR. MITCHELMORE: Okay, great. Fabulous.

I could ask a number of questions on small business development, but I have had the opportunity to work with a number of the staff at IBRD in my previous role. I am fine with the questions right now under the program. I do believe that my questions were answered.

Thank you.

CHAIR: So, you are good, Mr. Mitchelmore?

MR. MITCHELMORE: At this moment, yes.

CHAIR: Mr. Bennett, you are good on that section?

Okay, I would like to have a motion to adopt subheads 5.1.01 to 5.4.01.

MS PERRY: So moved.

CHAIR: Moved by the Member for Fortune Bay – Cape La Hune.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Opposed?

AN HON. MEMBER: Nay.

CHAIR: Motion carried.

On motion, subhead 5.1.01 through 5.4.01 carried.

CHAIR: We will move into our last section, Ocean Technology.

Mr. Bennett, the floor is yours.

MR. BENNETT: Minister, what does ocean technology cover?

MR. HUTCHINGS: Ocean technology covers the various industries we talked about, the oil and gas sector, the fishing industry, technology, and surveillance. We are seeing successful technology companies in the ocean industry, over fifty now, which are involved in those industries I just described.

Some of the technology that has been developed here is being used here and certainly around the world, is certainly a tribute to those companies and a lot of them are young people in terms of the innovation and what is being developed there. The post-secondary institutions certainly need to be acknowledged for their work as well. Our Remote Operating Vehicles, as an example, digital photography on ROVs, some of the things I have seen and some of this technology with our companies has been exported around the world.

Does Rita or anybody want to comment further?

OFFICIAL: No, that is fine.

MR. BENNETT: Your description under 6.1.01 says Ocean Technology Initiatives and it refers to appropriations for industry commercialization initiatives. What specific industry commercialization initiatives can you speak to?

MR. HUTCHINGS: That could be far reaching. We have the Genesis Centre at Memorial which is, I guess, at the very early stages of the business continuum where you talk about ideas, R&D, and getting that first idea or invention to prototype, then taking it from there into commercialization and getting it to market. We would certainly support companies in that way.

Any company out there that is technology wise and the industry is close to going to market, getting that product patents or whatever is required in terms of commercializing and getting it into the market, we would provide assistance along any array of opportunities that would exist.

MR. BENNETT: Is there any product whatsoever that you can refer to that is actually been developed under this program?

MR. HUTCHINGS: Yes, we can certainly give you a list of a number of new technologies and entities. I was in Clarenville a little while back. The name of the company – he is twenty-seven years old; he came up with a new type of camera imagery for underwater exploration. It could be used on oil rigs, ships, you name it. He is getting ready to go to market with it. That was designed here. It was built here. The idea was here. It was patented here. He owns it, and he is twenty-seven years old.

MR. BENNETT: What was the department's input financially into his success?

MR. HUTCHINGS: Well, that was for funding announcement, so I am trying to think –

OFFICIAL: It was $100,000.

MR. HUTCHINGS: I think it was $100,000 we had put in and I think that was for the marketing component now, which would be getting it to market and helping with that.

MR. BENNETT: So you provided him with $100,000 for marketing under this program?

MR. HUTCHINGS: Yes.

MR. BENNETT: What have his sales been to date?

MR. HUTCHINGS: That was two months ago that he was just going to market. I do not know.

MR. BENNETT: Is there anything that you can point to with any tangible results? Any sales that have resulted from any of this initiative?

MR. HUTCHINGS: We have fifty-plus companies now in the ocean tech industry that is exporting all over the world. I can give you the list of companies and you can talk to the people on how successful they have been – no problem there.

MR. BENNETT: Minister, can you or anybody with you point to a single piece of commercialization that has actually been resulted from this program?

MS MALONE: Yes.

MR. BENNETT: What is that?

MS MALONE: I will give you an example of subsea control, building on a similar venture. It is underwater cameras and control software for ROVs, which is being exported out of this Province. It is very, very innovative. Again, there was support there.

There are a number of companies throughout Newfoundland and Labrador that we have supported. A company in Stephenville was supported under a similar program –

MR. BENNETT: I would like to stick with that one that you referred to. What is that company?

MS MALONE: Where is it?

MR. BENNETT: What is it?

MS MALONE: What is it? It is a company that develops a software as well as hardware for ROV applications.

MR. BENNETT: It is a Newfoundland and Labrador company?

MS MALONE: Yes.

MR. BENNETT: It has a production facility?

MS MALONE: Yes.

MR. BENNETT: What has it exported to date?

MR. BENNETT: What has it exported to date?

MS MALONE: I cannot give you the numbers offhand, but I can tell you that it is one example of a company that has a vibrant export market.

MR. BENNETT: Okay.

You do not know if they have actually exported anything?

MS MALONE: Yes. We keep an ongoing review of all of our business investments. It is part of our policy as well as our due diligence and our after care. So, we do have detailed information on each and every one of our business accounts.

MR. BENNETT: Who is this company? Can you tell us who it is?

MR. HUTCHINGS: We can get you a list. We can give a list of companies that have availed of our programs in ocean tech. They are in the market, they are operating. We can give you all of that information.

MR. BENNETT: I would be happy to have a list if we can come back next week and ask you questions on the list, but it defeats the purpose of asking the questions if you are just going to say, we will get you a list and then –

MR. HUTCHINGS: What is it that you want to know? We invest in companies and we support them in the ocean technology, either through the incubation stage, the commercialization stage or into market stage. So, once they are in there, they are a private operating company. We are proud to say we have supported them and they are in the market now doing what they thought they would do.

Does every company that comes to us to avail of a program turn out, at the end of the day, to have success? No, but there are a number that have had success and we would be happy to share it with you.

MR. BENNETT: Right now, today, you cannot name a single company or say what they export and to whom. It stretches credibility. I have only asked for one and the name of the company.

MR. HUTCHINGS: We just gave you one. We just talked about –

MR. MEADE: We can give you many names of companies –

MR. BENNETT: I only asked for one.

MR. MEADE: - but if you expect us in the House today in Estimates to give you the details on the export value of those companies and all of that, with all due respect, I do not think that is a good use of our time or the level of preparation that we would come with.

There are many companies; there are over fifty companies in ocean technology that we are supporting: GRI Simulations, Marport, and Rutter. There are many, many companies, and as the minister has alluded to, it is a cross of business development continuum. With some of these companies, we work on incubation. The company SubC Control is a good example of that. We are at the very front end of the business development continuum.

We have other companies like Marport, very mature companies. Our role is: How can we get them into other markets? We use our lines of business, like trade missions and other support mechanisms for them to expand their markets, but there are many examples.

We can also share with you a profile of the ocean tech industry. There have been two profiles completed. There was one completed approximately four or five years ago and there was one completed last year that will show the export growth of the sector. The growth is pretty well doubled in export value. The number of companies has not changed substantially or the number of employees in a sector has not changed substantially, but what it has clearly shown us is that our companies are exporting more.

MR. BENNETT: I have asked you for an example and you cannot give me an example, and you say you are well-prepared. This just seems like churning a lot of paper at taxpayers' expense. That is my skepticism. I am asking the questions today. You brought a whole battery of people with you and I cannot get a simple answer to a simple question. So you can understand my frustration.

You cannot provide the name of a single company or what they sell?

MR. MEADE: To the hon. member, I just gave you names of companies and what they sell.

MR. BENNETT: So, pick one company, follow the chain and tell me what they sell. They have these fabulous reports of how well they have done. You must know what they are.

MS MALONE: Thank you.

SubC Control, let's talk about that. That is software and hardware with respect to ROVs, underwater technologies. What do they sell? They sell the computer, they also sell the computerized technology and they also sell the hardware. They have sold as far as Aberdeen, Scotland, down into the States. I do not have their contacts in front of me but it is a very good, robust example of going to the continuum from pre-commercialization to commercialization. We keep an active portfolio on all of our files and...

MR. BENNETT: If you just stay with this one company, where is this company headquartered?

MS MALONE: This company is headquartered outside of St. John's, Clarenville.

MR. BENNETT: How long have they been in business?

MS MALONE: Three years.

MR. BENNETT: You have actually seen their sales to date?

MS MALONE: Yes. Mr. Bennett, on our business investment files, whether it is oceans, whether it is business analysis, we keep a robust account management process in place to monitor the outcomes of the company. In particular, a lot of our investments are repayable. So we keep – like a bank – an active update on all of the findings of our business portfolio, including financial statements, change in ownership, management, that type of thing, in the same way as a bank would do so.

MR. BENNETT: How many employees do they have?

MS MALONE: It escapes me at this time.

MR. BENNETT: They are in Clarenville?

MS MALONE: Yes.

MR. BENNETT: They have been in business for three years?

MS MALONE: Yes.

MR. BENNETT: They are exporting to the offshore industry?

MS MALONE: Yes, absolutely. Aberdeen would be certainly one of their success points.

MR. BENNETT: Do you know how much their annual sales are?

MS MALONE: I do not have that offhand. I do have a pretty good memory for numbers but not that good.

MR. BENNETT: You said you maintain financial statements.

MS MALONE: Yes.

MR. BENNETT: I thought that would be a natural.

MS MALONE: Yes.

MR. BENNETT: We are just looking for one of your star companies. Three years seems like a short lifespan so far for such a company. Do you have any other companies that have been around a little longer than that?

MR. MEADE: I have given examples of them, the example of Marport. Marport is a company that is into – but when we come into the detailed questioning of number of sales, employees, I do not have that but there are examples of companies. We can provide you with these profiles. These are readily available. Again, in the profile studies these companies are there.

I do not know Glenn, you deal in the ocean techs base a lot too, if you want to give an example, but there are a number of companies, around fifty of them. Provincial Airlines is an ocean tech company because of its Maritime surveillance role. Because of the role it plays in its Maritime surveillance and the work they have done in the Caribbean and the work they have done in refitting planes for Maritime surveillance and defence surveillance overseas, that is an example of an ocean tech company. There are lots of examples of companies that are in the ocean tech space.

MR. BENNETT: Yes. How many companies do you have that have survived for five years or longer that you support?

MR. MEADE: Companies in the sector you mean?

MR. BENNETT: Companies this department has supported through this program?

MR. MEADE: I would have to look at that.

MR. BENNETT: Are you able to provide that?

MR. HUTCHINGS: Yes.

MR. BENNETT: You would agree that generally a company in the business world is not seen as surviving if it lasts for five years, so you gave me a three year old company. That might cause some concerns, if these are new start-ups that are not making it versus long-standing companies that you have helped over a long period of time.

How long has this program been in place?

MR. HUTCHINGS: A couple of years.

MR. BENNETT: So, you would not have results for longer than that?

MR. MEADE: I think one of the things to remember is that the ocean tech strategy was a focused strategy to accelerate the growth in that particular sector.

Prior to the Oceans of Opportunity strategy being released approximately two years ago, this department would have had a suite of programs that we continue to support all companies in the technology space, including ocean technology companies. Some of the companies we would be referring to have been clients of the department for many years. They would be clients that would be – again, depending on where they are on the business development (inaudible), they will be accessing programs and services of the department at any given point in time for a number of years.

What the Oceans of Opportunity and ocean tech strategy have enabled us to do is to create with industry. It is important for us to note that we have worked very much hand in glove with oceans advance and the industry, and with our academic institutions, a focused strategic effort around how do we now accelerate this sector further? How do we build up our competitive advantages and go further?

Clearly, we are aligned with the RDC. Glenn would speak to ocean technology as being one of the priority research areas of the RDC. We are working with institutions like Marine Institute and Memorial University, where ocean technology has become a priority sector for them in terms of R&D and all their different facilities and approaches they would take. It is about us creating a concerted, focused effort around that.

We have also aligned other levels of government with us on that, including the federal government and the respective departments that were there. It is about all of those things. Included in that would be the support that we would continue to provide companies. There are a number of companies that we can certainly share with you as examples of how we have moved them across business development.

MR. BENNETT: Last year, under Professional Services, you budgeted $1,450,000 but spent only $140,000. What happened?

MR. HUTCHINGS: There was a particular research project in ocean tech relating mapping and systems that was intended to be carried out but it was not carried out.

MR. BENNETT: What became of it?

MR. HUTCHINGS: Brent, do you want to speak to that?

MR. MEADE: Yes.

When we released the strategy, our original vision with industry was that we would work around certain research focused efforts and what we have been working through in the last couple of years is that there are other ways we have been able to approach this. We have been able to approach it through work that we have been doing with RDC, or programs and approaches like SmartBay. The RDC in the Province made an investment in C-CORE's LOOKNorth, for example. We have made a number of investments for Memorial University, the Centre for Applied Ocean Technology, et cetera.

What we have done is this is a case of where we originally intended to take a certain approach in terms of how we were going to simulate some R&D, but we have taken some other approaches. Really, this is an example where early in the strategy –

MR. BENNETT: Could you say what these are, please?

MR. MEADE: Pardon?

MR. BENNETT: It tells me nothing when you say we took certain approach and then another, but if you could please say –

MR. MEADE: We were going to fund projects around ocean observing and we were going to look at how we could use technologies in Newfoundland and Labrador around ocean observing.

MR. BENNETT: What kind of observing?

MR. MEADE: Ocean observing, how you observe the movement on the water, under the water, whatever.

MR. BENNETT: From vessels, from monitors, from aircraft?

MR. MEADE: It could be any number of those things. It could be used in biosecurity; it could be anything. The surveillance and monitoring of the water and the movement that is therein, whether that could be fish, it could be boats, it could be whatever.

MR. BENNETT: What became of it?

MR. MEADE: What became of it is we are continuing to do it through initiatives like SmartBay. We are now working with ACAP on the West Coast to look at initiatives over there in the Humber Basin. There are other ways we have done it.

What this reflects here, to be very clear, was we had packaged a particular set of R&D projects that we were going to do around ocean observing. What happened is the sand shifted on us in consultation with industry about how we wanted to do that. We were accomplishing many of the same goals in other ways. So, to be to the point on it, we have shifted gears on that and as we go forward we will be taking a different approach on how we support ocean observing projects and the R&D within it.

CHAIR: Mr. Bennett, in the expedience of time, I want to go Mr. Mitchelmore, as this is our last heading and we will be concluding at 12:00 p.m.

Mr. Mitchelmore.

MR. MITCHELMORE: Thank you.

I have to say I like the focus on the ocean technology initiatives, and I see that it is a sector that certainly can accelerate growth.

Subhead 6.1.01, we are seeing a significant increase in Salaries of more than $140,000. Are there additional positions being created here? Is that the reallocation of positions?

MR. HUTCHINGS: Go ahead, Brent.

MR. MEADE: What we have done here is we have created a new division focused on ocean tech. What would be restated would be there were three development officers that would have been in other places in the department that are now here. There would have been other resources that would have originally been in Innovation that would be here. This is essentially the building of a new division. What you are seeing in the $259,000 and the $296,000 would have been a comparison to what was originally in Innovation.

MR. MITCHELMORE: Yes, you need that extra emphasis. If you are going to grow the industry to a billion-dollar industry, you are going to need additional staffing resources to get there.

Can I have a list of the $140,000 under Professional Services, if a consultant was hired or what was actually spent there?

MR. HUTCHINGS: Yes.

MR. MITCHELMORE: In terms of Purchased Services there was $100,000 allocated, no money spent, and $50,000 this year. What is that?

MR. HUTCHINGS: Brent, can you speak to that?

MR. MEADE: I think this is just a case of where, in structuring the new division, in putting in the budget for 2011-2012, we extracted what we felt was appropriate to extract from Innovation. To be honest with you, some of the revised numbers here would be actually reflected in Innovation and vice versa. It was not a clean break, if I may suggest to you.

What we have done here, really, in stating 2011-2012 budget, is done the best we could at the time of merging the two departments. As you also understand was around Budget time in terms of preparing for our budgets.

MR. MITCHELMORE: Yes, absolutely.

MR. MEADE: We did the best we could in saying what could we extract out of Innovation that would be applied to Ocean Tech directly, and sometimes that is not black and white. Then the revised would have been posted, but I think most important is what is in 2012-2013. Because the exercise we would have gone through there is: What do we feel this division needs to execute on its work?

MR. MITCHELMORE: Okay.

The Grants and Subsidies section is almost $3.1 million. Can I get a list of what was spent?

MR. MEADE: Yes.

MR. MITCHELMORE: Why the large increase in this year's Estimate? What is being planned for the additional $1.2 million, basically?

MR. MEADE: We are anticipating increased activity. As the strategy continues to roll, we are seeing increased activity.

MR. MITCHELMORE: Are you actively marketing this product?

MR. MEADE: Yes.

MR. MITCHELMORE: How much funds are allocated for marketing or do you have a specific budget?

MR. MEADE: I can get that for you in terms of what our sense is of what we could target for marketing.

MR. MITCHELMORE: Okay.

I will say that since 2006 when I worked with Getting the Message Out program, I remember an ocean technology company such as Genoa Design that has been very successful – Lotek and Rutter. There was Cathexis that was dealing with RFID technology, and there was a company that was dealing with peat to absorb gas there. The Getting the Message Out program is certainly a phenomenal program to learn about many of our industries across Newfoundland and Labrador. All these things were presented across the Province, so I say keep up the good work on that.

What is being done to give us an inventory for geospatial mapping? You are talking about ocean observing, but are you also looking at the coastal bay areas? Are there any pilot projects going on across the Province to map out our land base area?

MS MALONE: That is a good question. You are no doubt familiar with the geospatial unit in Grenfell; it is a partnership with the College of the North Atlantic.

MR. MITCHELMORE: I am not, actually.

MS MALONE: No? You ought to have a tour; it is excellent. They are doing an awful lot of really good work around land and coastal regions around mapping, not only for issues around environment but also resource extraction, as well as utilization of resource and land-based resource as well.

MR. MITCHELMORE: So, will these types of maps made available on-line as a means to promote a region in our area, as they are developed?

MS MALONE: There has been a substantive amount of work done in that regard and in some areas more robust than others, but overall, yes, the vision would be to have a more robust mapping intelligence available. We have done some other new technologies called Lidar, which is using plane-based assessment of land, forestry, rivers, ecosystems as well, and that does emanate out of the college on the West Coast as well as Grenfell.

MR. MITCHELMORE: Okay.

Who is undertaking this research?

MS MALONE: Dr. Wade Bowers is the lead on a lot of that.

MR. MITCHELMORE: Okay.

MS MALONE: Your colleague is nodding there. Brent mentioned earlier the Humber Basin, which is more mapping as well of more ecosystems beyond water.

MR. MITCHELMORE: I am wondering if the ocean technology also fits the fishing sector.

MS MALONE: Yes.

MR. MITCHELMORE: Okay.

If an industry or business is looking into doing something maybe innovative or adapting new technology such as a different type of pot, like a crab pot, or dealing with something like that, that would be something this sector could entail?

MS MALONE: Yes, Fisheries has a $3 million program for innovative and environmental solutions as well for the fishery.

MR. MITCHELMORE: Is that through the Department of Fisheries?

MS MALONE: Yes, the Department of Fisheries.

MR. MITCHELMORE: That is the Fisheries Technology and New Opportunities Program?

MS MALONE: Yes.

MR. MITCHELMORE: They have $3 million in this year's budget?

MS MALONE: Yes.

MR. MITCHELMORE: Because, they have $6.6 million over three years. I am just wondering how it spent.

MS MALONE: This is for vessels. It is also for inshore, innovative approaches, improvements in efficiencies, improvement in reducing diesel and all of that.

MR. MITCHELMORE: I had that opportunity at the Fisheries Estimates and those questions were answered. I am just wondering: In addition to that money, would they be able to look at tapping in, maybe, to some of the Loans, Advances and Investments under Capital through your –

MS MALONE: We actually have a company, Genesis, that is doing some innovation on boats, on resource extraction type craft.

MR. MITCHELMORE: Okay, great.

I have just a couple of other questions about NATI. There was a NATI contract to develop ICT company databases. Is this available? That was budgeted in last year's strategic report.

MR. HUTCHINGS: Yes.

MR. MITCHELMORE: Is NATI putting that on its own Web site? Is it readily available because that would list, I guess, those companies?

MR. HUTCHINGS: I am not sure. We can check them.

MR. MITCHELMORE: Okay, great.

One other thing: I am wondering if there is an update on the green lens and green roadmap projects that were announced.

MR. HUTCHINGS: We just received a report and are looking at it now in terms of how we move forward in terms of our programs and services in the department. We will be working on that as we move forward.

MR. MITCHELMORE: Can I get a copy of the report as well?

MR. HUTCHINGS: Yes, sure.

MR. MITCHELMORE: That would be great.

I guess my concern is if the sector is growing so much and you are anticipating all of this in Grants and Subsidies, why is there no budget for Loans, Advances and Investments under section 6.1.02.08.

MR. HUTCHINGS: That is part of the consolidation and the combining of programs and services. What that would go under now is under the SME Fund.

MR. MITCHELMORE: Okay.

MR. HUTCHINGS: Just to streamline, I guess –

MR. MITCHELMORE: A portion of Grants and Subsidies could be used in partnership with an SME loan to get the –

MR. HUTCHINGS: Exactly.

MR. MITCHELMORE: Okay, I understand.

I do not think I have any further questions on this section. I think that is moving forward in the sector. I guess a lot of the work as well is being done at the Marine Institute. I guess there is additional work, a lot of consulting and maybe companies coming in and using the simulation system.

MR. HUTCHINGS: Yes, you are exactly right. There is amazing technology there and just hats off to Glenn Blackwood and the folks up there and the work they are doing.

MR. MITCHELMORE: Absolutely.

MR. HUTCHINGS: We work closely with them.

MR. MITCHELMORE: Is there any plan of your department to make further investment to further upgrade those systems? I know there has been investment in the past, but eventually the technology is going to become dated and not cutting edge.

MR. HUTCHINGS: We are always working with them and certainly we will entertain – growing the industry is part of the post-secondary side of it too, obviously. The best and brightest, we want them, and the world is recognizing the institute we have there and industry is recognizing it. As we grow, we want that to grow and have the latest technology.

MR. MITCHELMORE: Great, it is nice to see that commitment. I do not have any further questions.

MR. HUTCHINGS: Thank you.

CHAIR: Thank you, Mr. Mitchelmore.

As we are getting close to conclusion, Mr. Bennett, I am going to give you three minutes to ask the last closing couple of questions.

MR. BENNETT: Minister, under 6.1.01,10, Grants and Subsidies, there is $4,275,000 estimated for this year. Is that project specific? Do you know where that is going to go or is it just a general figure?

MR. HUTCHINGS: Some of it may, but overall it would application based as we move forward into the year.

MR. BENNETT: When you say application based, I understand that to mean if somebody applies and you approve it, then it falls under that part of the budget.

MR. HUTCHINGS: Could you rephrase the question?

MR. BENNETT: I keep hearing the response that something is application based and I think you probably have to have an application for everything. Wouldn't they all be application based? So does this mean that someone applies and they get the money from this, you do not really know what this is for?

MR. MEADE: No, there are particular programs and a particular focus within the ocean tech strategy that we are trying to get out with this Grants and Subsidies. For example, we have the OceanTech Intelligence program, where we would be largely working with our industry associations, our academic institutions, and our research facilities of how we build capacity in the sector around that.

So the intelligence program is one of the components. We have been funding out of that examples of where we have been supporting the Marine Institute and the Holyrood marine bays, the Ocean Engineering Research Centre and NATI would have been supported through that. We will share last year's approvals which will give you a sense of the type things we are funding under Grants and Subsidies here.

MR. BENNETT: So, you will supply last year's $3,068,000?

MR. MEADE: Right.

MR. BENNETT: How did you come up on $4,275,000 for this year?

MR. HUTCHINGS: The $4.275 million?

MR. BENNETT: Yes.

MR. HUTCHINGS: Just anticipation of increased activity now that we have the department built and shortly, I believe, we will have a new ADM, so we will be stepping up. We believe there is increased activity based on what we have seen to date and we believe the budget reflects that.

MR. BENNETT: Last year you were almost $500,000 under budget.

MR. HUTCHINGS: Pardon me?

MR. BENNETT: Last year you ended up nearly $500,000 under budget.

MR. HUTCHINGS: Yes.

MR. BENNETT: So, this year you are budgeting another $500,000 more than last year even though you did not spend last year's budget last year.

MR. HUTCHINGS: Yes. Again, as I have said, we have gone through transition. We are pretty confident that we have this ocean sector up and defined now. As we move forward and what we are hearing from industry and stakeholders out there, we believe there is an appetite, too, and we will have more applications for this fiscal year and we want to be able to meet that need if we are growing the industry.

MR. BENNETT: So, last year even though you did not spend the budget that you had, this year you want more than you asked for last year. That is what I am getting at.

MR. HUTCHINGS: Based on our intelligence and what we believe, yes, we are saying that.

MR. BENNETT: What do you base that on?

MR. HUTCHINGS: The overall budget is lower, I do believe.

MR. BENNETT: I am sorry?

MR. HUTCHINGS: The overall budget is lower, I do believe. I think it was $5.4 million and now it is down a little less than $5.1 million.

MR. BENNETT: Okay.

In the category below, Loans, Advances and Investments, last year you budgeted $1 million and used $721,000. What was that all about?

MR. MEADE: (Inaudible).

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

MR. MEADE: What was under Loans, Advances and Investments, the $721,000, would have been loans and investments that we would have made in a number of ocean tech companies.

MR. BENNETT: Can you provide a list of who got the $721,000?

MR. MEADE: Yes, we can.

MR. BENNETT: Why it is zero this year?

MR. MEADE: As the minister earlier noted, what we have done for the Loans, Advances and Investments activity and for the one that was earlier under commercialization under Innovation, both of those programs have been streamlined under our SME Fund. So the SME Fund, of which we have a balance of about $15 million, we can accommodate our client needs through that program.

As we built the new department, we went through a process of discussing: How could we begin to create a more streamlined, flexible, nimble toolkit of programs? When we looked this year at the issue of how we provide loans or equity to companies, we determined that the SME Fund can meet a number of multiple needs in the sector.

MR. BENNETT: Have you increased the staffing component for this part of the department year over year from last year?

MR. MEADE: Pardon? What was the question again?

MR. BENNETT: Have you increased the staffing component year over year from last year?

MR. MEADE: No. The overall staff complement of the department has not changed. As I noted in a response to earlier questions, some individuals have moved around in the department to be placed in different divisions.

MR. BENNETT: I mean this part of the department?

MR. MEADE: This part of the department would now – as a focused effort, yes – have more staff resources than earlier.

MR. BENNETT: And a smaller budget?

MR. MEADE: Smaller by $300,000, yes.

MR. BENNETT: Last year's budget was $6.4 million, this year it is $5.1 million.

MR. MEADE: Yes, but that includes the $1 million for the Commercialization which we can accommodate through the SME Fund. I would suggest to you, that is not a black and white comparison. The $1 million that is no longer there under Commercialization, under Loans, Advances and Investments can be accommodated within the SME Fund.

MR. BENNETT: How many people work in the department overall now, this year?

MR. MEADE: Two-hundred-and-nineteen is our present staff complement.

MR. BENNETT: How many vacancies are there?

MR. MEADE: I do not know the exact number right now of how many vacancies there would be.

MR. BENNETT: So, 219, is that positions that include vacant positions?

MR. MEADE: No. If you were to go to the Public Service Secretariat or the Human Resource Secretariat now and ask, how many positions are on the books because of the merger of Business and INTRD and what would be sitting there? The number would be around 270, but we have determined that a number of those positions would no longer be needed. In fact, a number of departments on the organizational structure, there would be positions that have been long-time vacant.

We are going through the process now, as all departments will be in the coming months, of cleaning up our organizational structure around removal of long-time vacant positions. The more important number is what is active in our payroll, and it would be around 219 right now.

MR. BENNETT: Does that mean there are a certain number of vacant positions slated to be done away with?

MR. MEADE: I would suggest to you they would be long-time vacant positions. That because of the lifecycle of the department and the changes of it, that would be positions that we would determine are no longer needed, yes. There would be nobody in those positions. They would just be on the books.

CHAIR: Mr. Bennett, I am going to give you one more minute and then I am going to call for conclusion and adjournment.

MR. BENNETT: Okay.

Can you provide the list of all of the staffing for the two departments last year and the merged one this year?

MR. MEADE: Yes, we have already committed to providing that to you.

MR. BENNETT: How many positions were what you call long-standing vacant? How many positions will be done away with, and how many of the ones that say vacant you are actually trying to fill?

If a person looks at what you say is vacant and now we find out today that some of these were long-standing vacant, then maybe they should have just been taken off the books. If it looks like there was a job description and nobody there for how long, then how is a person able to get a sense of who is doing what?

MR. MEADE: We can give you the list of positions that are in our salary plan. We will give you the list of positions that are funded in the department, that are active positions in the department. We can also, within that list, give you the list of those that are vacant on a temporary basis because recruitment is underway or it is our intent to fill it. We can give you that list.

MS MALONE: We have already committed to giving the pre-org charts, as well as the post-org chart. So that would give you a complete picture of the department's human resource complement.

CHAIR: Mr. Bennett, on that note, I am going to ask that we conclude discussion.

I am going to ask for a motion to adopt section 6.1.01 to 6.1.02.

MS PERRY: So moved.

CHAIR: Motion made by the Member for Fortune Bay – Cape La Hune.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Motion carried.

On motion, subheads 6.1.01 through 6.1.02 carried.

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

On motion, Estimates of the Rural Development Secretariat and the Estimates of the Department of Innovation, Business and Rural Development carried without amendment.

CHAIR: Also, a bit of housekeeping. I need a motion to adopt the minutes of the Resource Committee of May 14, Department of Natural Resources.

Can I have a mover?

MR. CROSS: So moved.

CHAIR: So moved by the Member for Bonavista North.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Minutes carried.

On motion, minutes adopted as circulated.

CHAIR: I want to thank the minister and his staff for some very open and healthy discussion. I want to thank the Committee and thank the Clerk's desk.

Can I have a motion to adjourn?

MR. RUSSELL: So moved.

CHAIR: So moved by the Member for Lake Melville.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Committee adjourned.

Thank you.

On motion, the Committee adjourned.