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

CHAIR (Skinner): Order, please!

Good morning, everybody. I call the meeting to order.

First of all, I would like to ask the MHAs to introduce themselves. We will start with Anna.

MS THISTLE: Anna Thistle, MHA for Grand Falls-Buchans.

MR. ORAM: Paul Oram, MHA for Terra Nova.

MS E. MARSHALL: Beth Marshall, MHA for Topsail.

MR. LANGDON: Oliver Langdon, MHA for Fortune Bay-Cape la Hune.

MR. FORSEY: Clayton Forsey, MHA for Exploits.

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

CHAIR: Now, if I could ask the minister to introduce himself and his staff, please?

MR. SULLIVAN: Loyola Sullivan, Minister.

With the Public Service Commission being on first, I will just introduce two members here. Ed Walsh is the Chair of the Public Service Commission, and Keith Barry is Vice-Chair of the Public Service Commission.

CHAIR: Thank you.

First, before we start, if we could adopt the Minutes from the April 4 meeting.

MR. ORAM: So moved.

MR. ANDERSEN: Seconded.

CHAIR: So moved by Paul Oram, and seconded by Wally Andersen.

On motion, minutes adopted as circulated.

CLERK: The Head of Expenditure of the Public Service Commission, 1.1.01.

CHAIR: Minister Sullivan, if you would like to start.

MR. SULLIVAN: Thank you, Mr. Chair.

What we will do, I am not going to have any preamble on this, we will just move into it immediately. If there are any questions you wish to direct here, I will attempt to answer them, or the two gentlemen with me will certainly assist in that process.

CHAIR: Very good. Thank you.

Are there any questions?

MS THISTLE: Thank you.

I would like to start off by saying congratulations to Ed Walsh on his - I guess it is not so new, now, but it is the first time we have been face to face since you have been in this position, and Keith Barry, congratulations.

The Public Service Commission, there is not a great deal of it there between the headings, but it was interesting how you got your salaries to balance right out. From what you budgeted, it came right in on the mark, right to the dollar. That was amazing, creative, or whatever.

There is one line there, Ed, 1.1.01.03. Transportation and Communications, you budgeted for $104,000 and you spent $65,000. What happened there? Was there anything that did not take place?

MR. SULLIVAN: Transportation and Communications you are referring to?

MS THISTLE: Yes.

MR. WALSH: The allocation for Transportation and Communications would have been affected in some measure by the absence of a Chair for a considerable period of time over the previous year. The anticipation, however -

CHAIR: Excuse me for one second. If you could identify yourself before you speak, then it keeps it -

MR. WALSH: I am Ed Walsh, Chair of the Public Service Commission.

Ms Thistle, in response to your question, I will say that for a considerable period of time in that preceding year there was an absence of a Chair of the Public Service Commission, and that would have had a considerable amount of effect on the amount of travel that would have been done within the Commission. This year, however, with the anticipation of a full Commission - and that is exactly the status we find ourselves in right now - we anticipate that the full expenditure should be required.

MS THISTLE: Well, the only -

MR. SULLIVAN: Excuse me, Mr. Chair, if I could just add further, there were less out-of-province registrations this past year. That can go up from year to year - it can vary - and there was less required because there was less out-of -province this past year, too. So, that would have a tendency to bring it down, too.

MS THISTLE: The only other deviation that I can see there, really, was Allowances and Assistance. Would that have been for the same reasons?

MR. WALSH: I am sorry, could you repeat the question?

MS THISTLE: That would have been under the heading 1.1.01.09., Allowances and Assistance. You budgeted for $20,000 but none of it was used. Would that have been because you did not have a Chair in place all year? Is it the same reason?

MR. WALSH: Yes, ma'am, that is exactly the same reason.

MS THISTLE: Okay.

Last year when we had the Estimates, Sheila Devine was in your job and I asked her at the time, I was very concerned about the Graduate Student Employment Program, and the funding that had dried up, or government decided to go with a different policy. Last year, you talked about having a different program, an interim or - I cannot remember the name of the program that you were going to introduce last year. Has that been done for attracting new, young career civil servants?

MR. WALSH: Yes, ma'am, that is correct. The anticipation is that we - rather than do a program of general recruitments just to identify individuals who might have long-term potentials, we wanted to make sure that, in addition to those long-term potentials, we wanted to ensure that we were attracting and recruiting individuals who had the essential skill sets that the Public Service may require. For example, if we anticipated that we would have trouble recruiting for engineers into the future then we would want to focus our attention not just on individuals who have appropriate skill sets but engineers who have those.

MS THISTLE: So, what you are saying is that the idea of introducing young graduates to the Public Service and then moving them from one department to the other to give them exposure and experience, you are not going in that direction? You are looking for where there is a lack of a certain skill set in a department and you are recruiting those? Is that what you are saying?

MR. WALSH: Actually, it is probably a combination of the two statements: That we be interested in identifying individuals who have the kind of academic preparation that we are looking for, but part of the overall development of that individual to ensure that they have the skills that are going to be necessary to enable them to develop into executive employees within the Public Service, we would still facilitate by horizontal training, by job rotation, and by doing the kind of developmental rotations that we would have been doing in the past with the grad recruit program.

MS THISTLE: Do you have a certain amount of funding directed for that sole purpose of attracting new graduates for the public service?

MR. WALSH: Yes, ma'am, that is correct.

MS THISTLE: Would you give me that funding amount, please?

MR. WALSH: Previously, it has always been $900,000. That same amount of money has been allocated this year, except that - and we believe appropriately - money has been allocated to the Public Service Secretariat as part of their organizational development initiative and funding, but that money is still being earmarked for that purpose.

MS THISTLE: How many graduates did you hire last year under that heading?

MR. WALSH: In the past year?

MS THISTLE: Yes.

MR. WALSH: In the past year we would have identified them as interns because the graduate recruit program, as we identified in the past, does not exist any longer. What we have been doing is a combination of things. We have identifying in-house employees who have the skill sets that the organization may require, and using that money as part of their development. So in addition to the grad recruit program that we have had in the past, last year we would have identified one intern. The other monies would have been spent on the development of existing employees.

MS THISTLE: Okay. So what you are telling me, you have one new intern that you have identified as a new entrant to the civil service and you are looking within to groom other people for careers in the public service. Is that what you are saying?

MR. WALSH: Yes, ma'am, that is correct.

MS THISTLE: Although, most of the people who are inside now are not young people. I thought there was an indication by this government that they would be looking to look at succession for the public service and they were going to look at hiring young people out of university; the best and the brightest. You are looking now more within than outside, or doing a direct recruitment through our university. Is that what you are saying?

MR. WALSH: No, ma'am, that is not actually correct. Our intention is to ensure that when we are going to use that kind of funding to identify and attract individuals to come into the public service that they have the kind of academic preparation - whether they be engineers, they be accountants, whatever the organizational needs might be, that we would try and identify and recruit individuals with that core academic preparation. Then we would use that funding as part of the development exercise to ensure that they get the appropriate skill development - the leadership, the managerial skills - so that they can turn around and satisfy our future requirements.

One of the things about the transitional change is that it is necessary to do the consultation with the departments and to ensure that those organizations identify what their skills would be as part of their own succession planning, succession management activities. That is the link, again, between where the Public Service Secretariat representing the employer versus the Public Service Commission, in its arm's length, independent role, that would take responsibility for the selection of those individuals. We need to ensure that those decisions, in terms of what kinds of skills we would require and the kind of backgrounds we would be looking for, would be done in consultation between the Public Service Secretariat and the various departments that are doing the hiring.

MR. SULLIVAN: Mr. Chair, just to add to that, if I could.

What we looked at this year is trying to expand and grow the human resource elements, succession planning and training. There is significant extra money in the Estimates under the Public Service Secretariat at 3.1.06, Human Resource and Policy Capacity Development. They will be discussed here in the Legislature under Executive Council.

We are looking at enhancing the succession planning, developing the skills, the training, to ensure that people are able to do the jobs and they have the right tools to do that. There is a whole umbrella in human resource development we are looking at across the public service that will be delivered through the Public Service Secretariat. That is an initiative. Also, the umbrella of the $900,000 is transferred into the Budget. It is under Executive Council for the whole development aspect in government. We are looking at that on a very broad basis to have a better educated, more informed public service, one that is able to - I guess, creating tomorrow's public service under that theme. It is one that significant resource investments have been made this year to be able to accomplish that.

MS THISTLE: I guess, in conclusion on that particular subject, I would assume from your response that this program does not exist in its form that it was in the beginning, where there were at least 500 applications every year from young people. I would also assume that young people now, today, are not singled out and encouraged as having a career in the Government of Newfoundland and Labrador because it seems like everybody has the same opportunity, whether they be young or already into a career with our public service. I do not think there is that much emphasis on singling out young people from what you are telling me. Is my assumption correct in that matter?

MR. WALSH: Just to modify. We will be using the recruitment arm, that is the internship program, to be looking for individuals who will often be going to school at our expense.

Environmental health inspectors, for example, there are difficulties identifying individuals with those qualifications for all of the locations and all of the opportunities that might be available within the Province. What we would use is that money to go and identify individuals who, potentially, would be going to Ryerson or other technological institutions where that training might be available to satisfy immediate short-term and long-term requirements of the organization. Individuals will be recruited for the those, and those applications will contribute to those numbers that you refer.

MS THISTLE: I would like to move on to another topic now, Mr. Walsh.

Last year, your own public service annual report indicated that 400 managers were enrolled in an Employee Assistance Program because of stress levels with the changeover in job losses and so on. How many managers do you have now enrolled in that program?

MR. WALSH: The allocation of numbers of individuals, managers who would be taking advantage of the service, can often be very difficult to assess. There are two factors at play. One is that the managers, who have staff who are working for them directly, who are in receipt of employee assistance, would also be receiving some supports from our program, from the Employee Assistance Program. So, what individuals there would be, I will see if my data can provide that. I do not have that number available to me right now. However, I will get that for you and I will respond through the minister.

MS THISTLE: Yes. Is your annual report ready at this point?

MR. WALSH: The annual report for the preceding year is close to ready. There are a couple of issues, however, as it relates to our annual report and the new legislation on transparency and accountability.

MR. SULLIVAN: If I could just add, Mr. Chair.

Overall, to looking at, I guess, stress and with reference to your question of the public service. What we have looked at there, we have programs to enable our managers - a very good program. In fact, we just met with - the first-ever meeting of ministers responsible for human resources in Atlantic Canada was held this year, and I am going to be hosting one in the future.

We had people from other Public Service Commissions who have come down to our Province and have complimented us on how far we are advanced in dealing with training for our people. In fact, they wanted to come down. I am going to host a conference of ministers on that, that we have tremendous programs under our learning and development areas there to enhance, make managers better qualified, be aware of all aspects that are expected of good managers. I think a lot of these things will go a long ways to relieving stress. People going into situations without the proper training programs and the proper development, I think it is unfair.

We have to have good programs, we have to have good training, and we have to be able to have managers who then have those opportunities to advance their development and learning so they can better perform their jobs. I think that goes a long way to having someone in the position who would reduce stress and assist in that.

We have an excellent program there. Mr. Walsh, too, will be participating in that, as Chair of the Public Service Commission, and working hand in hand in that aspect. A tremendous amount of work has been done in that initiative, and we have been able to resource it in this year's Budget to be able to ensure that every since person has to be trained to a specific level. We have added within each department to allow training for people within every single department of government to be channelled out, to be able to ensure that you have that training level that is needed to be an effective manager. I think that would go a long way in reducing the number of people who have to participate in programs because they feel overwhelmed, in some cases, by the magnitude and probably the lack of opportunities to develop those skills and techniques that they need to do the job.

MS THISTLE: Mr. Walsh, I would like to ask you about our Public Service. This year, and last year, there was an unusual increase in severance pay allotted in our Budget. Normal is about $7 million a year, but last year it was $17 million and this year we are forecasted for $13 million. Can you tell me how many civil servants lost their jobs last year?

MR. WALSH: Lost their positions?

MS THISTLE: Yes, how many jobs were lost?

MR. WALSH: I do not have that number available to me immediately. I can probably obtain it for you, if you wish. I would suggest to you, however, that the other factor that would contribute in some measure to the amount of severance would be normal attrition that occurs given the nature of our aging population.

MR. SULLIVAN: I can comment, Mr. Chair.

In this year's Budget we are projecting for those costs about $10 million, last year $10 million, the year before $14 million. We are below the level of a few years ago in the number projected to deal with any severance of other costs.

There are almost 200 more people working in the Public Service now than this time last year. This Budget allows for another 212 employees to be hired in the direct Public Service, not counting those who would be hired in health boards and elsewhere within education boards around the Province as a result of new programs that we have offered in numerous areas in health care.

I would estimate - I am just taking a shot at it - the health corporations, the Regional Integrated Health Authorities, those would be the ones that would have to put numbers to these: How many you need to run the dialysis, how many you need to run these programs and areas, but I would say there would be as many again in health, education and other services outside direct government departments, so we have identified an extra 212. That would put us up about 400 in two years in the number of people employed, so there has been a significant number, and the number of our redundancy amount has gone down over two years by $4 million.

Normally, with a workforce up in the tens of thousands of dollars, there is tremendous turnover. If you took the core Public Service - 6,000 people - divided that by somebody who works thirty years, that is 200 people who would leave in any given year. If you look at the costs associated with that, depending on their years of service - they are required and obligated to pay based on their years of service - if it was twenty years, 40 per cent would be allocated toward severance. In any year, there are several hundred people who leave the Public Service, in any given year, in addition to people who might get attrition through other than retirement means also. That is significant. There is nothing abnormal. There is $4 million less than there was two years ago allocated for this budget item in this year's Budget.

It is not a part of the Public Service Commission Estimates, of course, because they are not responsible for that. It is a part in the area that I am responsible for, but it would not be under this direct subhead there, under the Estimates under Public Service Commission.

MS THISTLE: No, I understand it is not under the Estimates of the Public Service Commission, but the Public Service Commission would have a handle on the numbers of people employed by the Government of Newfoundland and Labrador. They would also be part of the actual exit of people from the Public Service and they would have those numbers, I would expect.

MR. SULLIVAN: Yes, there were around 5,800-and-some people employed as of the last payroll, about 5,600, going upward to 5,700 about a year ago. For every payroll period that varies, depending on the season. The seasonal nature of employment, depending on more temporaries during certain seasons of the year than others, the number goes up and down, but the ballpark is around 5,800 people employed in the core Public Service, not counting regional integrated health authority boards and other agencies out there that would be directly on our payroll on a bi-weekly basis.

MS THISTLE: Mr. Walsh, I would like to ask you about a job that had a lot of controversy around it before Christmas, and that was Communications Director in the Department of Justice occupied by Mr. Billy Hickey. He was appointed on a temporary nature without any competition. Has that job been since advertised, and was there any competition for it?

MR. WALSH: Recently, the Public Service Commission ran a competition for - which is perhaps the third or fourth time we have done this now for the last number of years - a renewal of our eligibility list for Directors of Communications positions. There were a number of candidates, applicants, whose names were brought forward, who applied for that. Individuals were rated, evaluated, by the Public Service Commission, and, from that recommendation, a number of individuals were appointed.

Can I just take a moment?

MS THISTLE: Certainly.

MR. WALSH: I apologize. I am concerned about confidentiality of the specific named individual. What I can say is that, as a result of that competition, Mr. Hickey was successful and, as a result of his success in the competition, was eventually appointed on a permanent basis to the Public Service. That was done and orchestrated through and by the Public Service Commission.

MS THISTLE: So, there was a competition within or outside?

MR. WALSH: It was a public competition.

MS THISTLE: It was actually advertised within the Public Service?

MR. WALSH: Yes, that is correct.

MS THISTLE: A competition took place?

MR. WALSH: Yes, that is correct.

MS THISTLE: Can you give me that date?

MR. WALSH: I cannot give you the date off the top of my head, but what I can say is that it was done early in this new year.

MS THISTLE: Early in the new year?

MR. WALSH: I can check the date for you and confirm that, if you would like.

MS THISTLE: Okay, I would appreciate that.

I guess there is probably one final question for me to the Public Service. I want to know: Has government deviated from their policy on double-dipping? I know there was a policy while we were the Administration, particularly with teachers, that if teachers of a certain speciality were difficult to find, lots of times retired service teachers came out of their retirement and were rehired.

I am just wondering, it seems that we are having MHAs now into executive positions within government. Can you tell me if their working pension would be suspended while they are in an executive position within government?

MR. WALSH: I am sorry, Ms Thistle, that would be issues that are outside of the jurisdiction of the Public Service Commission. I would not be able to make comment.

MS THISTLE: You are not aware of those? In other words, you have -

MR. WALSH: As a citizen, I am aware of what has been happening, but I will say that executive appointments are done outside the scope of the Public Service Commission and pension eligibility is a matter for the pension people.

MS THISTLE: Would Mr. Sullivan be prepared to answer that?

MR. SULLIVAN: Yes.

I am not sure what you are talking about, but I will indicate that anybody who takes up a position here in government and who, I think you said, was an MHA, getting an MHA's pension -

MS THISTLE: Correct.

MR. SULLIVAN: - when they are re-employed here with government they would have to forego their pension and just take their salary, unless anybody came in under a contract basis. People may do contract work for a government and there may be situations where pensions would not be affected, but if you are going to take a position in government, the normal course would be that you would forego your pension then. While you are an employee, you could pick up benefits while you are here and then when you retire or leave, your pension would kick in again. I guess, reset at the level of - if you have earned any credits toward that when you are here - some may and some may not, depending on the position you hold, but under a contract you would not gain any benefits of that nature.

So, in answer to your question, a person who takes up employment, yes, would forego their pension and receive their income, unless there is a special circumstance that I am not aware of.

MS THISTLE: Can you tell me if the three individuals here are on a contract basis or are they permanent employees of government, that would be Chuck Furey, Len Simms and Glenn Tobin?

MR. SULLIVAN: Chuck Furey - you are talking about the Chief Electoral Officer?

MS THISTLE: Yes.

MR. SULLIVAN: That reports to the House of Assembly. As a government, we are hands-off on the House of Assembly. The House of Assembly has autonomy over its decisions. That would be a matter, I would assume, that would be dealt by the House of Assembly through the Internal Economy Commission. I happen to sit on that, by the way, but that is an issue an employee of the House of Assembly - which is removed from our operation of government.

MS THISTLE: Do you know if it is a contract position?

MR. SULLIVAN: With Glenn Tobin - I am not aware of Glenn Tobin being employed by government. If he is, it is new to me.

MS THISTLE: Isn't he with the liquor commission?

MR. SULLIVAN: No, he is not employed. He just sits as chair of the board, the same as the chair of a hospital board or any other board. I think the per diems for meetings are about one-hundred-and-something dollars. They meet about ten or twelve times a year. I think that would be the normal course, the same as in the past. I think the previous Chair was Jamie Smith, who sat as chair of the board. He is not an employee. He sits on a board, the same as if someone sits on a housing board, or on a health board, or any other board due to appointment. That is a Cabinet committee appointment - the committee on routine matters and appointments.

MS THISTLE: How about Mr. Len Simms?

MR. SULLIVAN: From my understanding, Len Simms is the CEO of the Newfoundland and Labrador Housing Corporation. If he is employed there, I would assume that he has taken up a position there and I would assume he is not getting any benefits as a result of that. I would not be aware if he is. I would assume he is getting a salary.

MS THISTLE: Is it a contract position?

MR. SULLIVAN: If he is under contract, I am unaware if he is. I would not know that. I am assuming he is employed as the CEO and it is a salary position. If it is, it is unaware to me. That reports to the Department of Human Resources, Labour and Employment. That might be an issue you may want to deal with in Estimates, but to my knowledge, that is not the case.

Mr. Simms is an employee. At this point in time I do not think Mr. Furey is an employee. I am not sure if he is - I am not aware if he has. Mr. Tobin is not an employee. He sits on a board as anybody else who is appointed to sit on a board and there are hundreds, probably thousands of them around the Province who sit on it. If the board meets once a month or twice a year, they get a per diem when they meet.

MS THISTLE: Since you are on the IEC Committee, are you aware if Mr. Furey's position will be a permanent one or is it a contract position?

MR. SULLIVAN: I am not aware of that. I haven't had discussions on that and I am not going to speak for the IEC. As a member of the IEC, I haven't had any discussions in IEC on that at all. I would assume the House would have to ratify the decision. It is my understanding it would come to the Legislature here, I think in that case, any Officers of the House.

MS THISTLE: Thank you, Mr. Walsh. If you would undertake to get me that information which was missing from this morning, I would appreciate it.

MR. WALSH: (Inaudible).

MS THISTLE: Thank you very much.

I do not know if there are any other questions.

CHAIR (Young): Do we have any other questions for the Public -

Mr. Langdon.

MR. LANGDON: They are general questions, probably. They might have the answers or not. You can probably get them for me, and you probably already have the figures right there.

On the pension plan, I know the dollars that were put into the Teachers' Pension Plan have been set on a sound footing. How much money is the Public Sector Pension Plan underfunded by and the MHA's pension plan?

MR. SULLIVAN: Mr. Chair, I will certainly answer that, but that sum would be under Consolidated Fund Services and it is going to be debated in the Legislature.

MR. LANGDON: In the House? Okay.

MR. SULLIVAN: But if you want me to answer it now, I can do it, or at another time when these Estimates come up.

MR. LANGDON: Okay. Well, it is up to yourself. I mean, the thing about it, I would like to have the answer just for me and you can repeat it again.

MR. SULLIVAN: Yes, because it is not a part of the Public Service Estimates and I can tell you personally, or I can tell you in the House, under - when Consolidated Fund Services (inaudible) here.

MR. LANGDON: We will wait until we get to the House.

MR. SULLIVAN: Yes, they are done in the Legislature here and it is open during a regular sitting of the Legislature.

MR. LANGDON: No problem. I will keep my questions until then.

MR. SULLIVAN: Okay.

CHAIR: Very good, thank you.

Are there any other questions for the Public Service Commission? Could we clue up with the Public Service Commission?

You say you have questions for the Public Service Commission?

AN HON. MEMBER: (Inaudible).

CHAIR: Okay. If we want to, minister, we can - so do we adopt -

CLERK: Just put the head, 1.1.01. Just put that to the Committee, shall the head pass.

CHAIR: Shall head 1.1.01 carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

On motion, subhead 1.1.01 carried.

CLERK: And the total, $2,015,700.

CHAIR: Shall the total carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Carried.

On motion, Department of the Public Service Commission, total heads, carried.

CHAIR: Now we can continue on to the Department of Finance, minister, if you would wish.

MR. SULLIVAN: Okay. I thank Mr. Walsh and Mr. Barry for your time.

CHAIR: Minister, if you would like to have a few remarks, up to fifteen minutes, you are quite welcome, sir.

MR. SULLIVAN: Sure. I am not going to take up time. I am sure that will only take time out of questions.

I will introduce my officials here. To my left, Terry Paddon, who is the Deputy Minister of Finance and Secretary to the Treasury Board. We have to our far left, Deborah Pennell, who is Director of Communications with the Department of Finance and Public Service Secretariat. We have the ADM of Taxation and Fiscal Policy, Robert Constantine, and we have Donna Brewer, who is the ADM of Financial Planning & Benefits Administration.

CHAIR: Thank you.

If you would like to continue with a preamble -

MR. SULLIVAN: I am not going to have a preamble. I will just throw it open and try to expedite the process here. I do not need to take up time on a preamble, unless anybody would like to hear from me for ten or fifteen minutes?

CHAIR: I think that is fine.

MS THISTLE: We sat through the Budget, that will do.

Excuse me, Mr. Chair. I would like to turn it over to my colleague from Torngat Mountains, who wants to start off with some questions.

CHAIR: Thank you.

Mr. Andersen?

MR. ANDERSEN: Minister, I guess the first question I would ask of you - rather than to the Minister of Health because you are the Minister of Finance - is that there are a lot of patients who come out from Labrador, and just recently a gentleman came out - he was diagnosed where he has to have dialysis. They came out hoping to be here for just a week or so to do some tests. They were told by doctors that they have to be around until late June or early July before he is ready to go back to Goose Bay to go on home-care dialysis. They told me, except for a small portion of the airfare, that there is nothing in place by government that they can avail of any help to offset some of the costs while they are out here.

Would your government look at bringing in something in the very near future to help patients of this nature and similar instances, that people incur when people come in here and have to stay for a long time where the services are not provided in their place of residence?

MR. SULLIVAN: Mr. Chair, I certainly appreciate the question - understanding, it is something I will take back. I cannot speak for the Minister of Health and Community Services. They would be areas budgeting for - costs related to health matters are under the Minister of Health and Community Services. I will take note of your question, but it is not one that I want to speak on because it is not an area I am responsible for. I do not want to speak on behalf of the Minister of Health and Community Services. I am sure you are aware with the program we do have, that is there, while it has certain limitations. Of course, we expanded it last year to include anybody within Labrador to move into services there. We put significant dollars in the program last year, but I understand your question is beyond that. I understand it is a broader issue that would deal with - and I will not answer that because it is not my responsibility, but there are significant requests coming from isolated parts of our Province, too.

The Member for Fortune Bay-Cape la Hune, for example, has people living in very isolated areas who may have to come in for service. They apply it universally, regardless of where you come from to get services, because it takes awhile to get from, I would think, from Ramea or Grey River or any of these areas, too.

So, there are bigger issues there. I will take note of that, but I think it should be directed to the Minister of Health and Community Services.

MR. ANDERSEN: Thank you.

Minister, the reason I directed that question this morning is because normally the first thing that any minister will say: Well, we will have to see the Minister of Finance, if there are funds available - and I know that you are projecting a good surplus.

MR. SULLIVAN: With that, I would say there are programs established within the department. They get their specific budgets at Budget time. They have a budget based for this fiscal year and within that budget and that program they will have to follow those expenditures. If you are going to introduce a new program and new expenditures, that would be developed within the Department of Health and Community Services. If it is a new expenditure, it would have to be advanced - come to Treasury Board, which seven ministers sit on and look at that. If it is going to be an expenditure over and above what is required, obviously, there would have to be a Special Warrant or Supplementary Supply Bill in the process. That is an area that should be channelled into the Department of Health and Community Services. If they want to give it future consideration there is a program to advance there. We would look at any program as it comes forward, but that is something that has to be originated through Health and Community Services.

MR. ANDERSEN: Okay.

Minister, my second question is the rebate for home heating fuel and the high cost, again, in certain parts of Labrador where it is way more expensive than anywhere else. I guess the long winter months that these people face, they chose to live there because it is their chosen place and it is a way of life for them. Yet, when rebates usually come out, it is one rebate that is basically for all people.

What I am asking is: Would the Minister of Finance consider those who live in isolated communities and pay far more for home heating fuel, would you look at enhancing the rebate for those people?

MR. SULLIVAN: Overall, this would be under Consolidated Fund Services, too, but seeing it is under Finance I will comment on that, even though it is not directly a part of these estimates.

We looked at all areas of the Province and looked at how we can best meet the needs for home heating. Of course, as you are aware, we upped it to $400 from the $100 that it used to be. We also expanded the amount up to anybody making $30,000. We added $8.9 million cost to a program to alleviate that burden. We do know there are numerous situations in the Province. It is hard to look at every community in isolation. For example, we have increased it for social assistance and other people, too. We have doubled it.

There are certain areas now that will get close to 100 per cent covered in certain areas in Labrador, in certain aspects, because of initiatives we took - almost 100 per cent of their cost. The intent of the program is to rebate and to alleviate the increased costs due to rising costs of home heating fuel. One of the aspects we looked at, certainly Labrador - normally, most people with home heating in Labrador, the price that you pay in the fall of the year - and I looked at it historically - was even throughout the winter. When we set a price - while it is higher, it usually has not fluctuated during the winter because when it is shipped you end up generally paying the same price. That is what historically has happened.

In other parts of the Province the price can vary from week to week or month to month and there are costs. We looked at the total part of the program and tried to bring in something that was going to be encompassing, that was going to be significant for low income people. We have looked at that. Whether you can tailor a program to hit each isolated community, that is something I cannot say without looking at all the data and looking at all the details of that. That is something that - it would go into as difficult. You cannot have a program for every separate community that varies - based on all variations. You would never be able to manage a program. It would be an administrative nightmare, but we have taken significant steps to refund a significant amount and the amount of people benefitted by it would be up to 25,000 people.

So, we have gone significant lengths with this program now. What will happen in the future, I cannot say. That is one that will be looked at in due course. Come next fall, we will look at all aspects of the program again if the need is there. I will be in the Cabinet and will propose then, based on the circumstances that exist in all parts of the Province and based on the price of fuel and so on, and make a recommendation to Cabinet for discussion. That will happen. Now, I am certainly not going to say no. We are going to look at all aspects, and if there are anomalies out there, we are certainly prepared to look at them. Obviously, the program as it is running now has criteria. It is established now and that is the program that would be in place for this year. As for next year, who knows? There could be variations to that program next year that might deal with your concerns, and maybe it will not, but I think representation should be made over the course of the next several months - if there are specific issues that should come to our attention, so we can see if there are anomalies out there.

MR. ANDERSEN: I did ask this question of you last year, I think during Question Period or in the Estimates. It was not a question of community by community, but rather regions. I think that if you took Coastal Labrador, even though the price per litre for home heating fuel is set once the navigation season ends, I am sure that it would not be very difficult to find out and to find proof that even though the prices are frozen, that the amount of home heating fuel it takes to heat a home on the North Coast of Labrador is far greater than anywhere else. I think it is the same as the question I asked last year. A lot of these people are probably the lowest income earners in the Province. Again, I would ask you and your government, if there is anything you could do to reconsider?

The next question would be - I am not sure if it is appropriate to ask you, but under the Liquor Corporation, all the revenues that come in. Minister, there seems to be a lot of problems that the Aboriginal communities face with regard to alcohol, and it is certainly ongoing. I know they have a new government, which will have to deal with some of the problems themselves, but as much as we have heard people talk about the VLTs and funds for them: Would this government or would the Minister of Finance, if the request was made from the Nunatsiavut Government, if there are ways that funds could be made to bring in additional programs into some of these communities?

For example, people go to a detox centre, which is good, only to go back into certain areas of this Province where there are no services whatsoever, and only to, after a period of time, go back and face the problems they faced before. Would this government consider adding some additional programs to rural communities across this Province?

MR. SULLIVAN: Once again, the program deliveries in these areas is Health and Community Services. We have been very sensitive and we have put significant funding in to deal with some of the concerns and problems with Aboriginal people, generally. I am sure with the Nunatsiavut government, the new government there, I am sure they will be receptive to dealing with any particular issues there. The department has certainly scaled up resources significantly within Labrador and that specific area. As to where they are going to deliver these programs, it is Health and Community Services.

We have been receptive. We have significantly increased funding in those areas and if there is a need for other funding, it should be directed to the department to bring back to the table on specific areas that we can move forward. We are certainly receptive to dealing with any particular social issues out there that may be unique to any population. We have been receptive to that and we have worked co-operatively to enhance funding in those areas. I am sure the department will be receptive to hearing those specific concerns or any requests, and I am sure they will give it the appropriate consideration.

MR. ANDERSEN: Okay. One last question, minister. Again, the reason why I raise it is that you are forecasting a surplus, and that is the long-term health care centre for the Upper Lake Melville area. It will be regional to service all of Labrador. Minister, there are people who, through no fault of their own, have to leave Coastal Labrador and many times there is not a bed available in Labrador. They come out to the Island portion of this Province for long-term health care. These people leave - some of them, they never get a chance to see their grandchildren or their children. The only time that these people see them is when they return in a casket. A prime example is this weekend. There was one of our seniors who was out here for fourteen years receiving long-term health care. She has passed away and now she will return again for burial.

Minister, there is such a need for such an important facility. I think the cost has been identified in your government, which is a good move. Certainly, with such a facility that is needed so urgently and with the surplus that you have already announced, would your government look at speeding up the procedure? Instead of calling tenders for this facility in 2007-2008 to begin construction, would you consider doing this almost immediately? Again, as I said, you have outlined a surplus. The need is there. Would your government consider calling tenders and getting the work done immediately?

MR. SULLIVAN: We are interested in expediting and moving as quickly as possible. We cannot call a tender without a design, without a plan. Design engineering takes a period of several months, and the tender preparation, that cannot happen without that being done. So, we are interested. When we announce projects, we are interested in moving it along quickly. We are eager to see it done. I think it is a $17.5 million commitment there and we are eager to see it moving and getting it as quickly as possible. It was announced just recently and it is going to take a period of several months to get the engineering design, the plans, go to public tender to allow for submissions to come in and tender selection. That cannot happen in a matter of just a couple of months. It is a fairly large project, significant project, and we are going to move as quickly as we can on that project. There will be no delays, from our point of view, on that issue. As soon as that gets moving there, it will follow the process when that is ready and tendered and the awarding of it and the construction. We hope it will expedite it. What funds are needed from a cash flow basis to move it next year and get as much as we can done in each year, that is the intention of our government.

MR. ANDERSEN: Again, because I do believe in your Budget and the Speech from the Throne, where you said that you have allotted money for the design work, but I do believe it says it will start in 2008-2009 and, certainly, that is a long wait. The only thing I would say is that I hope that it can be speeded up as much as possible.

MR. SULLIVAN: I am not sure it said 2008-2009. My understanding was design work will get done this year and we will see the construction next year. That is my understanding. I cannot see why it would take two years to get the design work done. I am not aware of that. If there is an issue there, I do not know if my officials - I cannot see two years time. I would assume - maybe Donna can give you some specifics.

MS BREWER: It is our understanding that construction would be over a two-year period. Even once construction is done, there is a period of, probably, upwards of six months of commissioning that needs to be done. So, I think they were looking at a 2008-2009 completion.

MR. SULLIVAN: Yes, I think the member is looking at the completion date of 2008-2009 rather than the commencement of the construction date. Because if we do design engineering this year, in a two-year construction period, I think that is when it is completed. I think that is what you might be reading, when it is ready to be occupied. But, as Ms Brewer indicated, it would not all get done in one year. That is a significant expenditure. It is a major project and it is unlikely to complete a $17.5 million project, I believe, within one year. It would be very difficult. So, by the 2008-2009 fiscal year, at the end of that, it should be ready to be commissioned.

MR. ANDERSEN: Okay. Maybe I am wrong, I will double check, but some people said it seemed to be a long time. I know that you plan to build a new hospital in Labrador West with the start date, I think it was in 2007-2008. When it referred to the long-term health care for the Lake Melville area, I am quite sure that it said construction would begin in 2008 or 2009. Again, our concern is that it be put there as soon as possible.

MR. SULLIVAN: Yes, and it is our intention to move it as quickly as possible. We do not plan on making announcements and going into design and waiting a year to start construction. When the preparation of plans are ready and done, the documents are prepared and go to tender, that is a process. You have to get people to submit bids, to look at it and do their costing and get back, that takes a period of several weeks and then awarding the tender and get moving on these things. Our intention is to move expeditiously with that, and it is not our intent to have any delays.

MR. ANDERSEN: Okay. The last question, minister, is - in the summer of 2003 the previous Administration had allotted $2.4 million for an auditorium in the Upper Lake Melville area. I know you allotted $1.9 million, and during the Budget Speech you said that the total cost would be $4.4 million, that you were hoping for the feds to come up with the rest. Can you just give me an update as to - have you heard back from the federal government as to how much money they are willing to bring to the table?

MR. SULLIVAN: This is a file that is being handled by another department and being funded through another department. We did commit - I will speak for my department there, then my ADM might want to comment on the specific breakdown.

At this point in time we have committed $1.9 million. Depending on the type of structure they build and what the overall cost will be, the federal government had committed to giving us a contribution, back to the former government. I think our discussions with the current minister -Mr. Oda, I believe, has committed a certain amount of money, too. They were looking at some of those other joint-shared federal programs to be able to do that. I think there was some funding - and I will have one of my officials comment - between MRIF or one of the other programs, a possibility. It has not been determined exactly, at this point in time, to my knowledge, what the flow of the other monies are specifically going to be, other than that we have committed in this Budget $1.9 million.

OFFICIAL: (Inaudible).

MR. SULLIVAN: The official has nothing to add beyond that. That is an ongoing piece in dealing with that. The minister responsible is dealing with the federal government. I think there is some commitment there but I do not want to speak on their commitment, on what specifically it is, because I am sure the appropriate minister would be the one to respond to that.

MR. ANDERSEN: Thank you, minister.

CHAIR (SKINNER): Ms Thistle.

MS THISTLE: Thank you, Mr. Chairman.

Before I get into questions, I would like to ask you about some of the line items, minister. We will start off with Executive Support, 1.2.01., which would be Salaries. I notice that you budgeted for $1,029,000 and $780,000 was actually used. Were there any layoffs in this sector?

MR. SULLIVAN: In 1.2.01?

MS THISTLE: Yes.

MR. SULLIVAN: That was because of vacant positions within that area. If you look at next year, the number is back up again in 2006-2007. We abolished one assistant deputy minister position. Since last year we went through a restructuring, of course, with the Public Service Secretariat. It took on a different structure. We moved the budget division into Finance and the insurance division into Finance, and the remaining areas left in the public service that deal with more human resource and employee issues - like collective bargaining, organizational management, learning and development is there, classifications and pay. Those areas are under the public service.

So, in the process we eliminated one ADM position. Also, about $30,900 is added for an increase of 3 per cent in Salaries. Still, it is going to be down, as you can see, from $1,029,000 down to $980,000. Even though it has gone up with the salary increase of 3 per cent, there is one ADM position less. That would account for the difference.

MS THISTLE: Minister, I guess what you are saying is there are some vacant positions that were not filled, even though you forecasted that they might have been filled.

Employee Benefits; even though you did not use all your budget for this, employee benefits went up by $6,300. Was that a payout of any sort for anyone leaving the service?

MR. SULLIVAN: No, conference and membership fees were higher. One of the particular areas here, our Province participated in the Canadian Council of Comptroller Generals and that was a cost of $5,000. So, that was an extraordinary cost that year. There was a $5,000 cost for that. That is strictly dealing with membership and conference fees, and that was an unusual. We have gone back, as you can see, and budgeted for $1,000 - back to a more historic level.

MS THISTLE: Administrative Support, 1.2.02.06. Purchased Services went up significantly, $15,000. Can you tell me what was purchased over and above what you forecasted?

MR. SULLIVAN: Okay. Professional Services, one of the bigger costs there was the cost of printing. The Economy cost $9,200 to get printed.

For Equipment, photocopier rentals were greater than the previous year. Normally, this area has been generally underfunded. Usually, you have to try to make up the slack elsewhere. So, maybe we should have proposed more than $35,900 this year. It has been historically underfunded, but one of the big costs was $9,200 with the printing of the Economy.

MS THISTLE: But the Economy booklet gets printed every year.

MR. SULLIVAN: Yes, but this was a bigger cost than normal in the printing of the Economy.

MS THISTLE: Was it a tendered cost expenditure?

MR. SULLIVAN: I would have to ask an official if that went to an outside source.

MR. PADDON: It (inaudible) to an outside source. I do not believe it was tendered but there would have been a number of quotes received for the printing of it.

MS THISTLE: Don't you go to tender with everything over $5,000?

MR. PADDON: I would have to check. I am not quite sure if it was tendered or not.

MS THISTLE: Would you check on that?

MR. SULLIVAN: No, I do not think it is over $5,000. I think that is up to $10,000 now. If you go out to tender and wait to be printing something out to tender, you will be waiting probably for several weeks or months to get something printed. You can go out and get quotes, and pick the better of the quotes and do it. That number - it used to be, several years ago, $5,000 - is up now to at least $10,000, to my knowledge; at least $10,000. I am not sure if it is higher, but it is certainly $10,000.

MS THISTLE: Okay. Mr. Paddon could probably find out who actually printed the Economy book and what proposals went out, requests for proposals you received (inaudible).

MR. SULLIVAN: Equipment and photocopy rental was higher, also.

MS THISTLE: Under the same heading, .07, what was the increase in Property, Furnishings and Equipment?

MR. SULLIVAN: There was worn furnishings and new furnishing equipment, as a result of ergonomic assessments, that had to be provided. We have gone back to the historic level now. That was one time, extraordinary costs there.

MS THISTLE: You are talking about chairs for secretarial use?

MR. SULLIVAN: As to what the specific details of each one was, I would not be able to tell you that, but, yes, that could very well be included with ergonomic assessments. It probably was chairs to a certain extent. The minute details of that, I would not be able to have the details of any specific invoices subtotalling that. That would be generally what they are for, yes.

MR. PADDON: It would be a combination of - chairs would be a big thing. Plus, desks set up just the way, I guess, the desks relate in relation to the work habits of people who are using them. It is a combination of, I think, desks and chairs.

MS THISTLE: Are you satisfied now that within government, throughout most departments, government is following the requirements for ergonomic, proper seating and so on throughout government or is this an ongoing thing that will take years to complete?

MR. PADDON: Well, I would not be able to comment on throughout government. I mean, this specifically relates to the Department of Finance. If a particular employee feels that they want to have an ergonomic assessment done because they have some specific issues in the workplace, we would allow them to have that assessment done and then whatever the results of that would be, we would see if we could accommodate the particular concerns within the workplace.

MR. SULLIVAN: Yes, and it is my understanding that - I don't think any department, and I cannot speak for all departments, but as the minister responsible for public service and the employees, I do not think any department would unduly refuse to provide something that is needed for someone to be able to participate and minimize any risk for somebody working in the workplace. In our department, if the opportunity arises and the need is there, they are done individually by departments to deal with that. So that would certainly be encouraged in government. I would not be aware of any instances where it was not. If not, I probably would have heard about it.

MS THISTLE: Minister, under General Government expenses, 1.3.01., Salaries. What happened there? You forecasted for $1.2 million, but you have no salary line in the revised section.

MR. SULLIVAN: Normally, that is an amount put in dealing with salaries. There could be a negotiation of contracts out there outstanding.

Just to put it into perspective, I will just go back. In. 2001, for example, it was $40 million. In 2002 it was $83 million. In 2003 it was $46.25 million. Usually, if you are in discussions and in negotiations, you may have a certain amount there in lieu of getting a settlement during a year that you might need funds for that. That has been as high as - probably when you were President of Treasury Board - $82 million; $83 million one year. So, that just shows where most of our contracts are under agreement now and settled. I think it is something like twenty-nine out of thirty-three, overall. So the risk side on that issue, we pretty well can factor that into our line items - one in each department under salaries - as opposed to speculating that a contract might be settled during the year.

MS THISTLE: Of the outstanding or remaining ones, the four you have, who are they, Mr. Minister?

MR. SULLIVAN: Pardon?

MS THISTLE: What are the other four contracts that are outstanding?

MR. SULLIVAN: The ones that are outstanding right now? We have correctional officers, we have the RNCA, we have nurses, and we have one group (inaudible) forty people with CUPE. The Association of Allied Health Professionals have reached a tentative and they are out to their membership now, so I would not be able to say that is under, but there was a tentative there. So, they were the four that would still be negotiating out of the thirty-three contracts.

MS THISTLE: Under Pensions Administration, you didn't use all that budget for salaries. Were there any jobs not filled, or were there any people who exited that department that you were not expecting when you forecasted a $1.6 million budget?

MR. SULLIVAN: Yes, it was down to $1.565 million on Salaries. That was because there were a number of vacant positions during 2005-2006. That is why it is lower than was projected. It is lowered by $40,000 partially because there were vacancies occurred during part of that year. Of course, this year you can see it increased up there from the budget last year. The increase is $48,200. That is 3 per cent of $1,605,700 there. That allows for the increase in Salaries.

MS THISTLE: I wonder also, under Debt Management, I notice there was no money budgeted last year for Professional Services but you spent $17,500 under line 05. What was that cost? What did that involve?

MR. SULLIVAN: We spent $17,500. We had specialized debt servicing consultations occur and we had round-table discussions with numerous groups. The cost of that was $17,500. We looked at areas to deal with $2 billion, and getting expert advice to indicate what advice we might get, obviously, which obviously corroborated our opinions anyway, but it was necessary to have extensive consultations on it and look overall at our debt servicing situation.

MS THISTLE: Minister, those consultations you had, were they with local professionals or were they out-of-Province consultations?

MR. SULLIVAN: A combination.

MS THISTLE: A combination?

MR. SULLIVAN: Yes, we touched all spectrums. We touched people from the accounting end to the people from the fiscal agent end to banking institutions, accounting firms, you name it, academics. We touched the whole spectrum of people in a round-table discussion we had. I guess there probably wasn't an entity out there untouched in having representation.

MS THISTLE: So, in essence, the $2 billion, $1.9 million is going to the Teachers' Pension, is it?

MR. SULLIVAN: Well, $1.953 is going into the Teachers' Pension Fund out of our cash on hand. If you call it out of the $2 billion, that could be debatable because we have already factored $541 million of that into the budget last year and the budget this year. Last year, we factored in $322.3 million into the 2005-2006 fiscal year and we have $219 million into this fiscal year. We have $541 million that has been used and flows in the budget as used. Announcements you see on health care, roads, education, and all of these, we have already built that in. That leaves $1.45 billion. That is what is left out of the $2 billion, so when we have a cash flow basis and we have money there, what it comes from, if you wanted to say we will put the rest of that into the Teachers' Pension Fund but we used cash on hand and took a portion of that, it is all money that is into our fiscal framework. That is like saying we used our income tax to pave roads and do this and that. You can tie it into what you want you. We did put $1.953 billion into the Teachers' Pension Fund out of our cash surplus on hand.

MS THISTLE: Minister, the $2 billion that was transferred to you by the federal government, how much interest did you earn on that $2 billion, and at what per cent, while you were waiting to make a decision on dispersing that $2 billion?

MR. SULLIVAN: Initially we got about 2.4-some per cent interest at the beginning, and at the end we got up over 3, probably 3.3 or 3.5, in that range, until it was utilized. Overall, if you look at $2 billion over a six-month period at an average of 3 per cent it would be 60. I think it was slightly under at the beginning. The number that sticks in my mind is about $48 million or $49 million in interest, if you have to be specific. I think that is pretty well it.

OFFICIAL: Forty-two.

MR. SULLIVAN: My ADM tells me it was $42 million up to the time. We are still carrying some of the investment, which means we are probably still accumulating some, but $42 would be what got attributed to the fiscal year there, about $40-some million.

MS THISTLE: Okay.

You are also indicating you are going to need $50,000 for the same type of professional services for the upcoming year. Now that you have the greatest portion of your money spent, how do you anticipate you will need $50,000 to look after consultations?

MR. SULLIVAN: We are going to look at a review of the organizational structure of the debt management branch overall. We are going to look at that, and look at a debt management plan strategy. We are going to have a look at that whole aspect, structure, in the next while. We figure there could be professional service required in doing that.

MS THISTLE: Under Financial Planning and Benefits Administration, Budgeting and Insurance, 2.1.03.04. Supplies, what did you purchase that would have driven up an extra $10,000 there for Supplies under that heading?

MR. SULLIVAN: First of all, I will say that area has been historically underfunded, but this year there were significant requirements for colour toner cartridges, paper, different meetings, and general miscellaneous expenses. It was traditionally higher. It has been underfunded generally in the past, and usually what happens at the end of the year is that you are finding money in some other areas to fund that. Maybe it probably should have been increased to more traditionally reflect it, but when you find savings in other areas there probably wasn't a need to increase it beyond what we budgeted last year, but that was extra cost. A big cost of that, I understand, was with toner and cartridges and colour printing and things of that nature.

MS THISTLE: Minister, under Financial Assistance, 2.1.04., Grants and Subsidies, what is going on there, that there is so much variance?

MR. SULLIVAN: A variance from next year as opposed to last year?

MS THISTLE: Well, even from last year what was forecast to what it actually was, a difference of just over $500,000.

MR. SULLIVAN: We put a fund of financial assistance available to be able to assist and promote business opportunities. Traditionally, historically, money has been in that fund for the Pippy Park Commission. We have reduced that down to $350,000 in that. Also, for last year, to give you an example, with the Arnold's Cove fish plant - there was concern - we did an arrangement on preferred shares, arrangements to own, basically, the quotas. That was $3.5 million; $1.75 million was in the fiscal year 2004-2005, and in the fiscal year 2005-2006 there was $1.75 million spent, so that $3,088,000 that you see there, there was $1.75 million of that from the Arnold's Cove plant, there was $350,000 that was Pippy Park Commission, and on Marble Mountain we added money for snow-making equipment and guns so it could get open earlier and hopefully catch the Christmas season. As it happened there, when that started, to get it ready, there was some pipe broken and there had to be other costs incurred, so we also incurred, in addition to the $568,000 for snow-making equipment, there was another $420,000 cost incurred there with that, so all that adds up to $3,088,000.

This year we decided that we want to have an opportunity, if there are some good business initiatives that come by and there is a program in INTRD that might not fit that and it is a good venture, there are companies that come in and want to invest significant amounts of their own money, to have some flexibility to be able to not turn down a good economic opportunity for our Province, so that is why it is up to $7.1 million this year. We are going to look at opportunities. There have not been any identified; spending for that has not occurred. We have not identified that. That is there in case something arises during the year and we need to deal with a good venture. The only other way to get money for it would have to be through a special warrant or go to the Legislature. We did not want to be in a position where we would want to do a special warrant on something like that, and maybe the Legislature would not be sitting, so we wanted to have the funding there to be able to deal with opportunities that arise of a business nature.

MS THISTLE: It is interesting, isn't it? A great turnaround, because now we are putting extra money aside just in case we get an opportunity.

MR. SULLIVAN: We did it last year. We put money aside last year also.

MS THISTLE: I mean, you are pretty well doubling your -

MR. SULLIVAN: We are, and we will hopefully double business and opportunities. We are open to increasing business in our Province. We are not going to shut a door on that. If $10 million or $15 million is going to get us opportunities and people are going to pony up tens of millions of dollars of their own money, we are prepared to come to the table with good business ventures where we have done the proper analysis and we think it will survive and is going to employ people in our Province. We are going to keep the door open.

MS THISTLE: Well, if you look at your $76.5 million surplus you left on the table and the extra money in anticipation of something that might turn up next year, you had certainly more than the $76 million surplus.

I want to move on to 2.1.05., Special Assistance. I know that the fuel oil tank replacement program - is this the year that it finishes?

MR. SULLIVAN: March 31, 2007.

MS THISTLE: In 2007.

What is it with the extra money? Is this a push to advise people to get this done ahead of time? Because you have $2 million put aside for it.

MR. SULLIVAN: That is correct. The take-up on the program has not been highly significant in each year. There are an estimated $20,000 potential homes out there, and only a smaller percentage of that had been done over the past four years of the program - it is a five-year program initiated by the former government - so we want to do two things. Number one, we want to allocate more money in this Budget, because we figure most people are not going to necessarily do the changes until they need to get them done. Why pay the money three years early if you do not think there is anything wrong with your tank? Secondly, we did talk with environment and conservation about a program to notify people in advance, to let them know that the deadline is coming, and do some more publication on it. That would be done through their department. This money is strictly allowed for the rebate of up to 50 per cent for people who submit their bill, to a maximum of $300, so that is extra money, yes, to get a push on. Hopefully, some people might have done it and might have tanks that are already meeting the standard - we would not know about these - but, with tanks being inspected, some may be inspected and they are up to standard, some may not. If they want to do the repairs to get them up there based on this program we are prepared to budget an extra $2 million. We figure the uptake on this program should be more significant in this last year of the program than it has been in the previous four.

MS THISTLE: Minister, under Tax Policy, 2.2.01., Purchased Services, what plan did you have in mind last year when you forecasted $1.6 million in that area and roughly $500,000 was spent? What was it you were thinking about when you forecasted three times that amount?

MR. SULLIVAN: Under Purchased Services?

MS THISTLE: Yes.

MR. SULLIVAN: Basically, that was relating to the tax on income implementation. There was a cost in there. We were not required to pay for it at one time. When you tax on net income there are certain costs associated with that, I guess, that would be paid to the federal government for initiating that program into their program on taxes. That was $1,054,300. That was associated with our tax credits, and it wasn't required to be paid in that fiscal year at all. It was not required. We anticipated -

MS THISTLE: Or not this year, either, coming up?

MR. SULLIVAN: No.

Any time we do it, if we want to do any rebate on a program on things in change structure, they have to change their programming and there is a fee associated with that.

MS THISTLE: That is right.

MR. SULLIVAN: Normally, we do it to get changes. There is a cost associated with that, that they bill back to the provinces. We anticipated the cost on this would be over $1 million and we did not have to pay it.

MR. PADDON: The federal government basically forgave the implementation costs, so we will not have to pay those at all, but we thought we were going to have to pay them during the year.

MS THISTLE: How about this upcoming year now, $554,000, Purchased Services? Can you give me just an outline of what this will be spent on?

MR. SULLIVAN: On the $554,000?

MS THISTLE: Yes.

MR. SULLIVAN: Basically, photocopier charges, printing costs, professional training, there is a whole breakdown on the previous one. If you want the specific ones, I can give you each one. Under benefits, there are senior benefits of $150,000; Set-Off Program $50,000; there are credits under film tax credit, R&D, venture capital, student tax credit, equity tax, R&D, political contribution credit. When you look at all of these things on your income tax, every time we do something on our income tax there are associated costs in doing these.

There is a tax on income, ongoing costs. There is a $225,000 ongoing cost on tax on income there, or an ongoing cost of $225,000. We did not have to pay for the implementation or the setting up cost of over $1 million, but all of these costs there would show what happened, would add up to the $550,000 there.

If you want each specific one in amounts, I can give them to you.

MS THISTLE: No, that is fine.

Also, continued on Taxation and Fiscal Policy, 2.2..02. under Salaries, you budgeted last year for $300,000 and used $232,000. Was that more vacant positions not filled? What happened in that regard?

MR. SULLIVAN: An unfilled ambulance position, and there was no requirement for temporary assistance. That is why that was down. It is up next year because there is a 3 per cent salary increase and there is funding for a senior economist.

MS THISTLE: One new position?

MR. SULLIVAN: A senior economist position, yes.

MS THISTLE: Continuing on with Taxation and Fiscal Policy, Tax Administration, 2.2.04., you did not budget anything for new furnishings or equipment but you spent $23,000. What did you spend it on?

MR. SULLIVAN: Okay. That is 2.2.04.07.?

MS THISTLE: Subhead 2.2.04.07., yes.

MR. SULLIVAN: We had to purchase the IT hardware for the home heating fuel rebate program that was announced last year. We had to purchase the hardware for that, to be able to administer that program.

If you remember, we changed from an income of $22,397, I think, and we put it up to $30,000 with a phase-out under the program. There was cost involved with that, so that is basically cost associated in being able to have access to those levels to be able to know what to be able to refund to people.

MS THISTLE: I am surprised. You would almost think, with the huge increase that is going into the Information Officer's budget, you would almost think that would be absorbed into that area rather than be a straight finance charge.

MR. SULLIVAN: Our home heating fuel rebate program was utilized as, really, a reduction in revenue basis. That is where it got reflected. We do have a page in the Budget that shows all of those related costs. As the AG has raised in the past, we have all of these programs. We are reducing our taxes and we are not saying why we are reducing them, so we have listed all of these separately now, a page to show each one of these.

That was a direct cost in administering that specific program within the department. That was a direct departmental cost.

MS THISTLE: Under Economic and Statistics Branch, 2.3.01., Transportation and Communications, you budgeted $102,000, you used $46,000, which is a good thing. What happened there?

MR. SULLIVAN: I will just mention overall in this project. I probably should have a general statement to explain this particular area. Under our economic policy and statistics it is one that is driven primarily by outside revenue. Just look at 2.3.01 and look at the general heading. Just look at the expenditure there, the subtotal, this year $2.7 million. We get revenue of $1.4 million, so the cost is $1.3 million. In other words, over 50 per cent of those programs, staff and everything is based on outside revenue. Look at the previous year, you can see $2 million. We got over $1 million and back the previous year. That has been historically because we take on a significant amount of projects.

For example, we take on some that are 100 per cent recoverable, like the census project. It shows a cost there of two-hundred-and-forty-seven-point-six, 100 per cent recoverable; production accounts market based measures, $89,000; labour market development agreements. We have a national crime prevention strategy; numerous projects, surveys, forecasts. This division does work for the university in Atlantic Canada, the whole group nationally. We get fully funded. In other words, we get over half recoverable. We are probably getting half of our employees in that branch paid by work they are doing for outside sources and employing.

To get to your question, this is prevalent in all of these areas. There was less travel and telecommunications costs for special projects because the special projects were less than anticipated last year. That is why you would see the change. Next year the projects could be up. We might have another $200,000, but we will get $200,000 revenue to offset some of these special projects. There are a whole array of these that are funded overall.

I will just give you an example. The 100 per cent recoverable ones, there is about $1.397 million. The census project was $286,100, 100 per cent recoverable. Production accounts market based measures, $124,700, 100 per cent recoverable. Labour market development agreements, $335,000. We got 100 per cent revenues back. National crime prevention strategy, $142,000. Other miscellaneous projects, forecasts and contracts for $510,000, 100 per cent recoverable. So $1,397,800, we directly offset the labour, the work and the costs of operating these that we have done here.

We have a division there that has done tremendous work in community accounts and numerous other areas. We are fairly, highly acclaimed right across the country. In fact, I think we won a Canadian award with the United Nations for the world. I am not sure, the result has not been determined yet. It is now to the United Nations for a world award, based on the type of work that is being done here. It is very proficient and highly acclaimed, and there is a tremendous amount of travel that goes out of this Province. I sign off a lot of those travel vouchers with statements 100 per cent recoverable. We are doing tremendous work being paid by other people. We have an expertise level that people are looking to us for. If you visit the Web site on that, I think you will find out a little taste of what the division has to offer.

MS THISTLE: Indeed, Mr. Minister, I agree that those stats are vital. We have always looked at those as you have professional people doing an excellent job that we can rely on the results.

I want to talk about the Office of the Comptroller General, 2.4.01. You are looking at a huge increase in that salary budget for this upcoming year, almost a $700,000 increase. You budgeted last year for $2.3 million and you used almost that. Now, you are looking at $2.9 million. Although I know there is a salary increase, are you doing any new hirings in that department?

MR. SULLIVAN: Yes, we are doing - basically, that area has sixty-one permanent positions, temporary assistants, and there is an allowance of $480,000, a one-time allowance this year to implement the corporate service financial plan. We are trying to put all the financial resources of government coming under the Comptroller General's office. That is a one-time -

MS THISTLE: What amount did you say?

MR. SULLIVAN: Corporate -

MS THISTLE: Did you list -

MR. SULLIVAN: $480,000 would be to implement the corporate services plan. Also, there are going to be additional positions too - I think two extra positions, three - in that which would be on a permanent basis. That is what would drive it up. If you take the $480,000 and you take these other positions, that is what would bring it up to twenty-nine-five-four. Plus, the salary increases for those areas with the 3 per cent comes up to $69,300. That would be the new structure from last year's budget.

MS THISTLE: Minister, you overspent on Purchased Services last year. You budgeted for $225,000 and it came to $279,000. What accounts for that?

MR. SULLIVAN: The banking fees were greater than anticipated. Of course, fees for services were higher. We had to invest $2 billion there. We wanted to get the best return we could in the short term on that. So we did seek advice on how to maximize our return.

MS THISTLE: But didn't you already - that was what we just looked at over those consultations that you had.

MR. SULLIVAN: No, that was looking at the overall things and what to do with it. This was for our shorter-term investments in these.

MS THISTLE: Yes, but it would not cost $54,000 to get that advice.

MR. SULLIVAN: Well, advice is not cheap.

MS THISTLE: I knew you were going to say that.

MR. SULLIVAN: Good advice is -

MS THISTLE: More expensive.

MR. SULLIVAN: - not as cheap.

MS THISTLE: Yes. Talk is cheap until you have to pay a lawyer, right?

MR. SULLIVAN: If you invest into a plan you pay a fee. If we go to the market with an issue we pay a fee.

I guess that would be a fee for a percent of the total amount of money we invested?

OFFICIAL: (Inaudible).

MR. SULLIVAN: Yes, every time you invest there is a fee associated with that. If we have more to invest, the fees are higher. One way to get that down is if we don't have any money to invest and then the fees will be lower.

MS THISTLE: Well, it looks like you are taking care of that.

MR. SULLIVAN: We would like to have fees higher. We would like to have more money to invest.

MS THISTLE: I know you did quite a manoeuvering act to get your surplus down under $100,000. So I am sure that next year you will not be having anything there to invest.

MR. SULLIVAN: We hope we do.

MS THISTLE: Well, I am sure you will find a pocket to deposit it in.

MR. SULLIVAN: Well, if we pay $250 million a year for forty-eight years, we will eliminate our debt. If we had a surplus of $250 million a year for the next forty-eight years we would have no debt. So that gives an indication of the huge problem. We are twice as in debt as the next most indebted Province, and we think we have struck it rich. We are still broke to the tune of $12 billion. That shows the magnitude of our problem. We added $76.5 million. If you had three to four times that every year for forty-eight years, then we would be able to say we are debt free.

MS THISTLE: Well, Mr. Minister, most people can buy their groceries but they cannot pay off their mortgage.

Anyway, look at 07, Property, Furnishings and Equipment. What did you buy for $32,000 that was not budgeted?

MR. SULLIVAN: We had to replace four copiers, $19,200. There was some other out-of-date equipment for $12,800, for a total of $32,000 that they added up to.

MS THISTLE: It appears that most of the overruns has been on toner and cartridges and photocopiers. I would like to know who your supplier is? He had a good year.

MR. SULLIVAN: Maybe there is a lot of equipment that did not get replaced for some time that was long overdue.

MS THISTLE: Who knows?

Anyway, I would like to ask you a couple of questions. Would you give me an update, please, on school tax? This time last year there was about $40 million outstanding -

MR. SULLIVAN: Yes.

MS THISTLE: - and you had six tax collectors hired. Would you give me an update on what has transpired since then?

MR. SULLIVAN: Yes, I mentioned it was $40.9 million outstanding. We are now down to about $29.9 million. It has been reduced over $11 million. This year we have collected, in cash, $4.8 million in 2005-2006. We also gave relief, or written off another $6.2 million. Overall, we had 28,000 accounts outstanding. We now have 19,866 outstanding, of which some of these - there are probably payments arranged that will reduce that number. So, we have taken it down by 8,212. We brought closure to 8,212 accounts out of 28,078 accounts. We have still, on the books, $29.9 million out of $40.9 million, and we had significant progress made this year on that.

MS THISTLE: Minister, there was a great deal of hardship, I know, since income tax rebates have been issued. I have had at least half a dozen from my own district call me. They wondered if that was the end of the line, because they did not get their rebate they thought they were getting. Is that the end of the line with regards to an appeal through your department for monies that is being taken from their income tax rebate?

MR. SULLIVAN: Do you mean for tax outstanding?

MS THISTLE: Yes. Is there any other avenue where those individuals can go, now that their rebate has been taken by the federal government and transferred to you?

MR. SULLIVAN: You mean avenues -

MS THISTLE: That they can go to get their money back.

MR. SULLIVAN: To get their money back?

MS THISTLE: Yes. They owe a tax bill; you have notified the federal government. Their income tax return has been stopped, and they are not going to get the rebate they thought they were going to get.

MR. SULLIVAN: I guess overall there is always - if people feel they are unjustifiably treated, there is always an avenue through the courts to be able to pursue a case. Anybody who owed taxes to government, first of all, there was a program always in place for anybody with hardships, had low income and could not be able to meet payments. You could get written off. That program has not changed. That is still there under a low income. That is there.

We decided, regardless of your income, last year, we introduced a program last spring that it does not matter what your income is. It could be $200,000 a year. We announced a six-month program to be able to - an amnesty, for anybody who wanted to settle it, to go back and just take their principal and just three years interest.

This has been going on for thirteen years. Prior to coming into office there was probably a person dedicated to collecting this, and you might get a bill every so many years. We said this is lingering too long; it is far too long. It is time to put the resources to it and get it done. We went through and hired individuals, dedicated students to it. I think there were six positions filled, and some students, probably a dozen or more working in this area - my ADM will confirm the numbers - at least a dozen dedicated to it. We went at the files. Let's clear out those who are people of low income, they are seniors, contact them and we will clear them off. Let's get them written off, get them out of the system if they do not have the ability to pay. Let's clear them from the books and let's go after people who have the ability to pay.

We did that from day one, but last year we decided let's try to bring it to a closure quicker. Let's get an amnesty. Let's say if you owed $100 in taxes back in 1991, for $152 you could clear that off the books. It did not matter what your income was. That would be about 52 per cent of your principal. If you owed $400, obviously 52 per cent of that would be a little over $200, or $208, so you could clear that off, for that extra amount. We offered that right up to December. We even let it go until the end of January for anybody who wanted to take that initiative. In the meantime, in order to access under the Set-Off Program with federal taxes, we forwarded social insurance numbers because some people had not been able to be tracked, they might have been living in other parts of the country for the last number of years. That would be picked up in their income tax system. If they are out of the country, obviously, I guess they would not be picked up. We went through under a Set-Off but when they got their notice they were given - and my officials could give the specifics if we need to elaborate further - each of these persons were told that they could be deducted on their taxes at a period of a number of weeks and to contact the department to work out an arrangement, that it did not come out of their taxes. If they wanted to come in and work out an arrangement, they did not have to pay it all in the one lump sum. They could say, look, within my means we could pay it over this period of time. They had an opportunity to respond to that when they were tracked down, I guess, through their social insurance number and through the CRA. They had an opportunity to (inaudible).

Those who did it, we settled a fair number of accounts on that basis. Some probably did not contact us until well after the deadline, until they got it taken out, and wanted to come back now and say that I lost it through my taxes. Anybody who responded, if the CRA found them, my understanding was that the CRA would notify them to contact our provincial department. That is my understanding. Bob, if you wanted to give more specifics on that.

MR. CONSTANTINE: What happened essentially was, when we implemented the Interest Relief Program back in July, I guess, of last year, we put a stop on the Refund Set-Off Program. People were notified that the program was in place and they should settle up prior to the end of December. We identified another bunch of people in, I guess, October or November, matched them up with social insurance numbers so that we could go to the federal government with those, and they probably got three or four months notice. So, there was plenty of opportunity for people to contact our department and to make arrangements to settle their debt prior to having their income tax refund set off. If they did not make contact, then their account was intercepted.

MS THISTLE: Minister, are you going to continue to keep those tax collectors employed this year and pursue the tax collection like you have over the past two years?

MR. SULLIVAN: Well, we are going to continue to - you know accounts. We dealt with, I guess, we dropped accounts from $28,000 down to under $19,000-something, so our intention is to continue and try and eliminate these accounts, write off ones that people do not have the ability to pay, and if people have an ability to pay and they are living within or outside the Province and there is an ability to pay, I think it is fair that we should pursue taxes that are owed the government.

We did give an opportunity for everybody to get off fairly cheap on this program there. There were monies owning to government in taxes. Whether you owed in income tax or whether you owed in any taxes it is legitimate, but there is a program available, and always was, for low-income people to be able to deal with it. If they go into a financial hardship they are assessed, they are done, and officials will handle it. My instructions that I gave to people were to apply equitably what they are doing on these, and apply them fairly. I wanted everybody treated the same under this program there, and there has been a significant amount. Just to give an indication, there was far more written off than we took in, which means the program is working for the benefit of low-income people.

MS THISTLE: I think what happened in a great number of cases, people got the letter and they said, well, I don't owe that; I am going to throw it in the garbage.

At any point, did government send a registered letter to those people who owed school taxes so it would impress on the individuals how important it was?

MR. SULLIVAN: I would assume everybody, I guess, who probably filed taxes in Canada, who owed money, when it was forwarded on, would have gotten something from CRA indicating that it was outstanding. It was incumbent on them, too - I think the letter probably indicated to contact your local Department of Finance, in contact with them, to deal with it. That was the gist of it, so when they got that from the CRA they were asked to contact our department. If they contacted our department, a lot of things got resolved. If they did not contact the department and ignored the letter, their most recent addresses are there through the income tax system. The only anomaly that might occur is if someone changed their address, I guess, in the interim and did not get something there; but, yes, it is the intention of the department to follow up, and individuals are being contacted. They will continue to be contacted, and if we forward under a Set-Off, if it happens in the future under a Set-Off, they will also get word from CRA again, and if they contact us we can try to work out an appropriate arrangement, what is fair and reasonable, in line with how they treat everybody in the system. If they do not contact us, how can we work out any arrangement or assess it? Anybody who has been contacted, I think they have been treated in a reasonable manner, and everybody has been treated appropriately based on their ability.

MS THISTLE: I will stop now and turn it over to my colleague who wants to ask a few questions as well, and I will come back again.

CHAIR: Mr. Langdon, if I could, before you start, I just wanted to ask: Did we want to take a five-minute break, if anyone had to -

MR. LANGDON: Anna, how much longer are you going to...?

MS THISTLE: (Inaudible) much longer.

CHAIR: You won't be much longer?

MR. LANGDON: I only have a question or two on the school taxes, so I will just follow through on that.

CHAIR: All right, carry on.

MR. LANGDON: When I was talking to my assistant last week, he was dealing with one of the people in the department and I think that the lady made contact with one of the six collectors within the department and she was told, as far as my understanding is concerned - I think that is where sometimes, regardless of how good the system is, you will always have exceptions. This lady was told that she would be able to get her interest written off, providing she paid 100 per cent of her principle up front. She said: It would be difficult for us to do that now, but could I make arrangements to give you, say half of it now and the other half in two postdated cheques, or whatever the case might be? The person said: No, it is either 100 per cent up front for the principle or you pay the interest.

These are examples that, I think, does cause - and I agree with you in many instances. There are people who had the letters come and they just threw it in the wastepaper basket. Anybody who is billed, they have to pay their taxes, but there are people out there - not a lot, but there is a certain percentage of people who are in smaller communities, for all intents and purposes, not casting aspersions or anything, a lot of them are illiterate and they find themselves in a situation like this here.

We have dealt with other situations where the person has said this has happened and when we have contacted the department they have had a history this long where they have been dealing with people like that. Here is a situation that I think there could have been a little bit of flexibility provided. I do not know the name, I do not know the person, but in conversation with the young fellow who works for me, that is what he was told last week, and I thought that was a little harsh. I do not know all the details of it.

MR. SULLIVAN: All I will say is that I do not get personally involved in any. Anyone who has contacted me, and several members on both sides of the House have passed them on to me. I follow up and I pass it on to an official. I say: I would like it dealt with in a equitable manner, how you treat everybody. Nobody gets treated any better, in my mind. I do not ask for special status for anybody. I ask that they be treated fairly, how you would deal with it. Whether it is a constituent of mine or otherwise, I do not personally get involved. I would not know those types of details because it is an issue that I leave to officials to apply the same standards that they are applying. For that question, I am not sure -

MR. LANGDON: I am not asking for a special status. All I am saying to you is there are times when your policy has to be flexible enough to allow these things to happen. That is all I am saying. We can stay here until the cows come home, that is not going to change my mind. You cannot have a system that is so ironclad that there cannot be exceptions made under dire circumstances. That is what I am saying to you.

MR. SULLIVAN: Yes, and there are payment schedules worked out with people now.

MR. LANGDON: Well, she could not work hers out.

MR. SULLIVAN: No, there are certain people getting payment schedules. What the individual instance is or what their income level is probably could vary. If someone has $25,000 or $30,000 of income and is looking at working something out, and somebody has $100,000 of income, whether there are differences, I would not know the details on that or the period of time which you would be expected to repay. It might depend on the amount of money you owe and based on your income, those type of things. There has to be some variability. If your income is twice as high as another person, maybe you might be expected to make a bigger payment over a period of time. I would not know the details, but I will certainly take it under advisement and just follow up.

If there are individuals who want to settle and you thought that something was probably a little harsh, I invite you to forward it on and I will have my officials look at that particular thing to see whether something might be applied, because different people deal with different instances. We have so many files each. Every individual - we would hope to follow the same standards. There might be areas for flexibility there that might vary somewhat. I am not sure, but if you forward it on I will follow up and see if things were done in-line with the way it should happen. I will certainly do that.

MR. LANGDON: I have to tell you, again - because I do not deal with it personally, any more than you do, but the people who do contact the department find that there are different people, personalities, who deal with these files that - I am not saying flexible, because you have rules to follow, but they are certainly more cordial and compassionate to the people who have to deal with that.

MR. PADDON: If I could just make one comment. Generally, we do try to be somewhat flexible in terms of how we administer the program. We understand that there are different circumstances. The tax has been on the go for quite some time. So there are a wide variety of situations that have occurred. Without knowing the details of the particular circumstance, it is difficult to talk about it specifically. But, generally speaking, I would think that if somebody qualified for interest relief, generally under our programs or our policies, that whether they pay the debt off in one lump sum or they pay it off over two or three months, they should still qualify for the interest relief.

MR. LANGDON: That was my point. The lady was told, point blank, that she did not qualify unless 100 per cent of the principal was paid up front.

MR. PADDON: Yes. So if you wanted to follow up with me and my staff, that will not be a problem.

MR. LANGDON: I will ask them to follow that up, even with (inaudible) or whoever.

That's it.

MS THISTLE: I just have a couple of more questions - the rest I will have an opportunity in the House of Assembly - on Executive Council matters.

One was your statistical branch is getting all kinds of accolades, which they deserve, for being accurate and so on. I wonder, have you, the minister, ever done any kind of analysis on job ratio with regards to the money that is put into INTRD with regard to the results that come out? Has your branch, under the branch of statistics, ever taken on to do an analysis to see if we are getting good value for the money that is put into that development fund?

MR. SULLIVAN: Okay. You mean into INTRD?

MS THISTLE: Yes.

MR. SULLIVAN: I think that should be appropriately asked to INTRD. That would be a follow-up on investments with companies, how they are doing, if they increased their employment or contributed to the economy. An analysis, a post follow-up on these. Well, we have only been in just two-and-a-half years, so any funding we would have funded in the last year or so, it probably would be a little early to see the fruits of those labours over such a short period as opposed to follow-up on any previous ones that might have been ongoing. I cannot tell you exactly where they are on that. I think INTRD - and I will refer to my deputy in a second, if he is aware of what has happened within government previously, but I do know some of these funds that we are funding - let's look at the SME fund. There was only about $2 million in that before we came in. We funded it $10 million last year, $8 million this year. The intention was to be six, four and two and build up a fund probably of $30 million revolving fund. We put $5 million into a new regional sector diversification fund and other business development funds in the department. These are ones that have just started in the past two years and ones that are probably difficult to gauge in a short period of time.

Traditionally, any government money into projects, where they are overall and that, I will defer that in case my deputy has a comment. I will say that when you fund initiatives, you do not always see a result in the first year or two. You have to look at the sequence. There has to be a little bit of history to measure and to be able to record what has happened. In any type of fund we put money into, it is always difficult to pick winners. If you only take the sure bets, you are probably never going to get that company which is trying to get moving to get kick started to fly there. In success sometimes there are failures, but hopefully we will have more winners than we have failures in that process.

Terry, with reference to any past post-analysis of money - it is an area we are very concerned about and we have had some general discussions, but we have not had enough history on initiatives that we have had.

MR. PADDON: It is not the role of the economic statistics branch to do specific follow up or evaluation of programs in other departments. They look at the macro-economic impacts of some of the initiatives but they would not be directed specifically at the micro side of things on, say, INTRD or some other departments.

Any evaluation of specific programs, I guess, presumably would be done within the specific departments or there would be a specific request through our department to follow up or do some evaluation, but there has been nothing specific to your specific question.

MR. SULLIVAN: I would like to just make one final statement.

When it comes around the Budget table and there is a request coming from departments on funding for various initiatives, we have indicated - and I can tell you the Premier also is strong on this issue - that we want to see a return in investment. We are very cognizant that, if we are putting money in, we want to see a return. We want to be able to justify an expenditure and we want to be able to see a result. We want our money to be directed to get a result to help grow the economy, to get it more diversified and get a result. We will be looking, and we have requested and we have told departments this year, we want to be able to see results. We want to know how that money is being spent, and they are going to have to come back and report back, if that is effectively being utilized. They are things that we are very much concerned with. Otherwise, to put money out and not follow where it is going and not see the results you are getting may be money that is not well spent. We are going to be monitoring that and they are going to have to justify their programs when they come to the Budget table in the future too.

MS THISTLE: I think that is very important, for you to take on that outlook in the future, because right now, with industry, trade and rural development, there are as many funds as hurricanes that happened in the U.S. last year. There are that many funds and committees, but I really do not see any results in rural Newfoundland and Labrador. There has been millions of dollars put there to prop up the economy but we do not see the results, the general public do not, and I think it would be worthwhile for this government to do an analysis, whether it comes out of the Department of Finance or whether it comes out of the very Department of Innovation, Trade and Rural Development, because right now it is getting to the point where there are so many funds but we do not see the results. That would be an observation from myself, as the critic, and people who are out there in the field.

One final question for this session. Prime Minster Harper is coming to town on Wednesday and he has been big on reducing the GST by 1 per cent. Do you, as the minister, know when this might happen and what impact will it have on revenue here in our Province?

MR. SULLIVAN: I cannot speak for the Prime Minister, what his agenda is on that issue - that is one for him to answer - but it will have no impact on our revenue here. We will still get our proportion. They will reduce their 7 per cent down to 6 per cent and we will our 8 per cent. So, we will get eight fourteens as opposed to eight fifteens. We will get the same amount of revenue, so there is no impact on our revenues.

MS THISTLE: There is no impact, but -

MR. SULLIVAN: It is not an ad valorem. The tax is basically - so will get the same amount.

MS THISTLE: I am just thinking, do you share the same beliefs that it will, you know, stem more retail sales and, as a result of that, we will do better in the end?

MR. SULLIVAN: Yes.

Normally when you have lower taxes you probably have more money in the consumer pocket and more consumer spending. So, if you spend it on goods and services out there that are taxable goods, we will get an 8 per cent. It might have an impact on a larger volume of sales, assuming that extra per cent goes back into the economy. I understand it is in the billions across the country. It has been down in the millions in our Province, and a per cent of the millions then would be probably - who knows? - tens of thousands. It could be hundreds of thousands, depending on the impact it has, but we do not know when it is going to be implemented and when it is going to take effect. We could not budget for any changes, but they would be very minimal. We would have to project what impact 1 per cent would have out of 15 per cent on consumer spending. Very minimal, but we will still get our rates. We are not anticipating any impacts of changes on that, certainly, in this year's Budget. If we do see that sales are gone up as a result of lower taxation and so on, we will get data from our Economics and Statistics Division and we will make those projections into any particular model that we would have on taxation and what would equate into any types of income, whether personal income tax, sales tax, revenue, or whatever the case may be; but, no, there has been no amount factored in because of that. Number one, we do not know when it is occurring. Secondly, our percent is not audited, so it is our percent that gets us the revenues of 8 per cent.

MS THISTLE: Well, Mr. Minister, I guess you will be able to use that as one more item this time next year in trying to hopefully hide that surplus.

Anyway, I want to say thank you to you and your staff. There are other questions but I will have an opportunity under Executive Council to ask those.

Thank you very much, and I will now pass it over to any other questions from my colleagues.

CHAIR: Any other questions from members of the Committee?

We will call the heads now, Elizabeth.

CLERK: Subheads 1.1.01. to 2.4.01. inclusive.

CHAIR: Shall 1.1.01. to 2.4.01. carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Contrary, ‘nay'.

Carried.

On motion, subheads 1.1.01. through 2.4.01. carried.

CLERK: Total.

CHAIR: Shall the total carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Contrary, ‘nay'.

Carried.

On motion, Department of Finance, total heads, carried.

CHAIR: That is it.

Thank you very much.

A motion to adjourn, please?

MR. ANDERSEN: So moved.

CHAIR: So moved by Mr. Andersen, seconded by Ms Marshall.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Contrary, ‘nay'.

Carried.

On motion, the Committee adjourned.