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

MR. CHAIRMAN (Langdon): Order, please!

Before the introduction of the minister and his staff, I would like to have someone move that the Minutes of the May 12th Estimates be adopted.

On motion, minutes adopted as circulated.

AN HON. MEMBER: (Inaudible).

MR. CHAIRMAN: Those were the ones on Forestry.

We would like to welcome the minister and his officials to the Estimates Committee. First of all, I would like to introduce the Members of the House of Assembly here. My name is Oliver Langdon, I am Chair; the Vice-Chair is Rick Woodford, the Member for Humber Valley; Alvin Hewlett, the Member for Green Bay; Neil Windsor, the Member for Mount Pearl; Bob Aylward, the Member for Kilbride; Danny Dumaresque, the Member for Eagle River and Jim Walsh, the Member for Mount Scio - Bell Island. Now, I ask the minister to introduce his officials for us.

MR. FUREY: Thank you, Mr. Chairman. It is nice to be here at the Estimates Committee yet again. On my left is the Deputy Minister of Development, Mr. Clyde Granter; behind me is the Assistant Deputy Minister of Tourism, Mr. Sid Blundon; just at Sid's right is Mr. David Butler, the Director of Financial Administration - that's what it is called, isn't it?

MR. BUTLER: Something like that.

MR. FUREY: Something like that. On my far right is Mr. Sam Kean, who is with the Economic Recovery Commission; and on his left is Patrick Kennedy, who is Vice-President at Enterprise Newfoundland and Labrador and Chief Financial Officer.

We are happy to be here tonight, Mr. Chairman, to answer any questions and we have all night.

MR. CHAIRMAN: Okay, thank you, Mr. Minister.

Before we ask you to lead off with your opening remarks or whatever, just to remind your officials, if and when they do speak to identify themselves for the record. Thank you. Mr. Minister.

MR. FUREY: Mr. Chairman, I don't have any opening remarks; I will just confine it to questions. I had some opening remarks last year and I went on a bit too long, so I decided this year that most people have had an opportunity to look at the Department of Development's budget, it is pretty straightforward stuff, and I am just prepared to answer questions - unless you want me to make a speech, I would be happy to make a speech if you like.

MR. CHAIRMAN: Do you want to lead off, Mr. Hewlett, or whomever? Okay, Mr. Windsor.

MR. WINDSOR: Mr. Chairman, I will just quickly go through a few things I had highlighted here in the Estimates. The first one that jumps at me is under the Minister's Salary - we have to try to get off the Minister's Salary tonight, if we can - Transportation and Communications, $115,000, budgeted $75,000 last year and gone to $90,000 this year. Is the minister trying to catch up to his predecessor?

MR. FUREY: No. I think, Mr. Windsor, it is budgeted $115,000 this year, isn't it?

MR. WINDSOR: $75,000 last year, $115,000 this year.

MR. FUREY: Let me tell you how that occurred. In the 1990 Estimates, if you go back that far, you will see that I had $100,000 budgeted for Transportation and Communications. I actually spent $75,000 in that full year. When I went back for the $100,000 again - I guess I was new on the block - they gave me $75,000. I spent $90,000 which was still $10,000 short of what I had expected to spend. In that intervening time, when Enterprise Newfoundland came on board, there were a lot of demands from that corporation on my time to travel around the Province and to do certain functions particularly as it relates to rural development most especially, and I didn't have a budget at Enterprise and had to draw from the minister's budget here. That is why you see an overrun. But you asked, am I trying to catch up to my predecessors, would you like to hear about them?

MR. WINDSOR: I know well.

MR. FUREY: I just happen to have them here.

MR. R. AYLWARD: We did it sure, we don't need to hear.

MR. FUREY: Okay, but that is how that happened, Mr. Windsor.

MR. WINDSOR: Technology Transfer Opportunities - Offshore Fund, 2.1.04 - $3.3 million for this year. Can you tell us which project that would be?

MR. FUREY: Used as a (inaudible) of the Offshore Fund.

MR. WINDSOR: And is it still going ahead?

MR. FUREY: We are going through a different book from the one you are going through, so forgive us if we are a bit slow.

MR. WINDSOR: I am going through the Budget.

MR. FUREY: Do you mind if the deputy explains? Because it is all the same and I will be repeating what he says.

MR. WINDSOR: No, no.

MR. FUREY: Go ahead.

MR. GRANTER: That relates, Mr. Windsor, to a program funded under the Offshore Development Fund whereby we support Newfoundland companies to acquire training, technology and quality assurance programming and so on, related to offshore activities, primarily.

MR. WINDSOR: Yes, I am aware of that. My question really was, and I'm afraid you didn't catch it, Do we still expect to spend that in view of the present slowdown in Hibernia?

MR. GRANTER: A lot of that is money that was committed in this current year and will be flowed as this year proceeds. We still anticipate spending, this year, as well.

MR. WINDSOR: Of course.

MR. FUREY: And, in fact, if I could just add to that.

MR. WINDSOR: Excuse me a second. Jack, can you get these things turned on? It is not on?

MR. FUREY: Notwithstanding the commitments that were made that are carried over, there are a number of requests under that program that are currently being looked at by government; one of them is a pretty significant training program for Marystown, which was in line with the Kvaerner sale. Now, you know what happened with that, Mr. Windsor, so that is kind of up in the air now and it is a question of whether the government will proceed on its own to send people to Norway to this company for further training. But, yes, portions of that are committed and it will be spent as far as we can tell; I mean, there are enough requests for it, for sure.

MR. WINDSOR: Okay, tying that in with Marystown Shipyard: I see Grants and Subsidies here under Capital, 2.1.06 - $11.243 million for Marystown Shipyard; that is under the Offshore Fund again and I assume that is the completion of Cow Head, this year. Subsequent to that, under Current Account, Subsidy of $1.3 million or $1, 350,000; that is the estimated subsidy this year on the debt, and obviously, Marystown are not going to be able to carry it themselves.

MR: GRANTER: That is interest (inaudible).

MR. FUREY: The interest, yes. It is hard for us to follow because we are going from different books. I am sorry. Yes, that is exactly as you just said, it is the estimates to fund the interest costs relating to the shipyard's year-ending, March 31st, 1993, this fiscal year, and it is also a payout of a portion of the debt in line with the sale. You will recall there was something like $31 million or $32 million on the books. We paid out a portion of that last year, we were getting ready to pay out the balance this year, to pass the company, lock, stock and barrel to Kvaerner with a zero balance sheet, but that debt still sits there, the balance of what we didn't pay in the payout.

MR. WINDSOR: I don't think that would be in here though, would it, it would be under NIDC, I would think, Clyde?

MR. GRANTER: No.

MR. WINDSOR: It is not? It is a special grant?

MR. GRANTER: No. The Marystown debt is held by Marystown, and the $1.350, 000, is the anticipated interest charges for this coming year, but it is essentially a government-guaranteed debt through the Department of Finance.

MR. FUREY: The balance that (inaudible), some $14.5 - $15 million?

MR. GRANTER: Something like that, yes.

MR. WINDSOR: I want to get into the Labrador Stores, an issue that we will be looking at in Public Accounts - that we have looked at and will be looking at again. I just note that there is a cost there of about $5 million to operate those stores. Maybe the minister would like to take this opportunity just to deal with that. We realize they are not commercial stores. Is the government now considering disposing of those stores? If so, does the government anticipate an ongoing subsidy to find someone to own and operate those stores on behalf of government and, are there other ways and means of reducing this cost?

MR. FUREY: That is a very good question, Mr. Windsor. The Labrador stores total budget was down this year, I think, by about $400,000 or $500,000 in savings.

MR. GRANTER: Six hundred thousand.

MR. FUREY: Six hundred thousand. You know that we put together a divestiture team and a study was done, a fairly comprehensive study, that was released to the public of Labrador, particularly, some six or eight months ago. It was done by Deloitte & Touche, and in it they set out certain objectives and possibilities, one of those is the co-operative model, one is to go fully private sector, another is to roll them into a Crown corporation and another is the status quo. I think there are one or two others.

The model that is being looked at is a kind of community-owned co-operative system, whereby the communities would have input and, in order to do that, they have to do considerable travel and consulting with the local groups, with the LIA, for example, the Labrador Inuit Association, with the co-operative movement of Newfoundland to see whether or not that model can fit in Labrador. It is not our intention to abandon the stores and it is certainly not our intention to sell them willy-nilly to the first bidder and hope that everything goes well.

As you know, from being Minister of Development, it is a very unique part of the Province and it is a tough part of the Province to service and very difficult to get foodstuffs into that region, particularly during the winter season, but we have taken the recommendations from this report and implemented the ones that can be implemented immediately, for example, changing the times when fresh fruits, vegetables, milk and those kinds of foodstuffs can be brought into those stores. So we have made considerable strides there but I would think it will be another twelve to fourteen months before we can reach a point where we can say: Okay, this is the best model, this is what our consultations have shown, now, let us incrementally and slowly divest ourselves of the stores.

It is our goal to do that because we think it should be in the private sector in some form or other; governments are not good shopkeepers. You will recall, for example, we cannot even take advantage of good sales and stuff because our hands are tied and we are bound by the Public Tender Act, so by the time we get through the red tape and the paper work it is almost impossible to avail of those kinds of bargains to get them in there. That is just one little problem.

MR. WINDSOR: Well, there are other problems with it, too, and we will get into them, this is not the time, but you mentioned shipping fruits and vegetables in, in winter. You fly those in and you don't have a lot of choice.

MR. FUREY: That's right.

MR. WINDSOR: But we have been looking at some of the invoices and only a portion of what is flown in is fruit and vegetables, and we need to have a look at some of the other things that are being flown in. But that is for another time, I won't pursue it now. The minister might want to have a look at it. Some stuff that is flown from one store to the other, and the accounting of that, is extremely weak from what we have seen so far.

MR. FUREY: It is a very difficult problem and we are doing our darnedest to try to clean it up and to bring some organization to bear on it. We are making some strides slowly but surely.

MR. WINDSOR: You still can't tell us when you show us an invoice for flying in, what was flown in, or that it actually got there. Anyway, as I said, PAC will deal with that.

MR. FUREY: Well, you will see the invoices at your Committee.

MR. WINDSOR: We have them?

MR. FUREY: Yes.

MR. WINDSOR: Thank you.

I wanted to point out here, you are looking at $4.8 million and this is not an industrial development thing, obviously, it is a social thing to keep those stores operating. In the two subheads immediately before that, Business Support and Technology Development Services, these are two programs that the minister has to help business. The total for those is less than a million dollars - the total program for Business Support and Technology Development is less than a million dollars, yet we are putting $5 million into keeping five stores going in Coastal Labrador, just to try to put it in perspective here. That is not to say we could do away with those stores without replacing them with another mechanism, but those two programs are woefully inadequate, as are many programs, unfortunately, in this particular department.

I wanted to ask you about the Newfoundland and Labrador Science Council. Funding has been reduced and I assume the answer you are going to give me is a straightforward budgetary decision.

MR. FUREY: Yes, that is the answer I would give you and it would be dishonest for me to say anything other than that. I mean, we had $300,000 and it was dropped to $250,000, was it?

AN HON. MEMBER: Two hundred and seventy-four thousand dollars.

MR. WINDSOR: Two hundred and forty-three thousand dollars is the present amount from $300,000 - $274,000 actually spent last year. So you lost $25,000, $30,000.

MR. FUREY: Yes, against what they actually spent, that's right. But again, the decision is a tough one, because you have to weigh what the value is. I happen to think it is a very valuable thing. They have done some interesting projects in the schools, particularly, and they are starting to bring a whole new business sense to science and the possibilities in the business world. But then, federally, we see the axe fall on the Science Council of Canada in the last Budget, so we thought we should hang in there for another little while and see what happens.

MR. WINDSOR: Immediately after that we see Instrumar - Research and Development - Offshore Fund, $900,000, $225,000 of which is the net cost to the Province. There is $242,000 for all the Science Council and $225,000 for Instrumar. What would that project be, that special block of funds?

MR. FUREY: I think that is the flow meter, phase two. Did you do phase one when you were there? That is phase two, and it is from the Offshore Development Fund project.

MR. WINDSOR: (Inaudible).

MR. FUREY: This one is cost-shared with the Alberta Research Council. I don't know if you are aware of that.

MR. WINDSOR: I was just again comparing and trying to put in perspective. We're putting $225,000 worth of provincial money into developing a flow meter and $243,000 into all other science research projects.

MR. FUREY: Yes, but in fairness, the Science Council, as you know, is made up of a group of volunteers, too. These people, from various walks of life, give a lot of time, energy and commitment. Teachers, nurses, lawyers, businesspeople - people who are concerned about science and technology, and they are a pretty good group of people. They bring to bear on it a lot of volunteer energy, time and commitment.

Now, in that particular case, where we put that money in for the flow meter, all the people around us and the best advice we can get is that this is a good project and that, if it did take off, it would mean jobs for Newfoundlanders producing this in Newfoundland. That is what they tell me. So we have a decision. We're in there for phase one; should we carry it on? The answer was yes. The Alberta Research Council agreed, the federal government agreed, and the Province - we had to come to the party, too.

MR. WINDSOR: Crown Agencies - Recoveries, $750,000 this year. What are these for?

MR. FUREY: That's the dividend from Newfoundland Hardwoods.

MR. WINDSOR: C-Core Centrifuge Facility.

MR. FUREY: Which, by the way, Mr. Windsor, you would be interested in knowing, we're looking at, as well, in terms of divesting, if at all possible.

MR. WINDSOR: That will be divesting what you have left.

MR. FUREY: Oh, I know.

MR. WINDSOR: Most of that burnt down, unfortunately.

MR. FUREY: That's right. But you know the problem out there, it's not just asphalt, it's the creosote timber side of the operation too, which - the dividends may be higher, is what I'm saying to you, if it were structured in a different way.

MR. WINDSOR: A word of caution to the minister. If you divest yourself of the asphalt, then you'll have private enterprise with a monopoly of asphalt supply in this Province.

MR. FUREY: It is a big question and we're looking at it.

MR. WINDSOR: It may be wise for government to keep it, for that reason.

MR. FUREY: Sure.

MR. WINDSOR: I think that's the more important side. C-Core - Mr. Chairman, I'm sort of monopolizing. I can go on for another while. I'm okay for another few minutes?

MR. CHAIRMAN: Two or three.

MR. WALSH: (Inaudible) once, anyway.

MR. WINDSOR: Thank you. There won't be much left when I'm finished.

MR. WALSH: What I meant was, if not you, it would be one of us, so carry on. I'd like to see the two ministers (inaudible).

MR. WINDSOR: I am a non-member of the Committee, that's been (inaudible).

MR. FUREY: Wait till he hears my questions.

MR. WALSH: What I like is halfway through the night when you guys start praising each other, so I am just going to -

MR. WINDSOR: C-Core Centrifuge Facility. I quite confess that I hadn't heard much about that. Can we, just as a matter of information - it's under the Offshore Fund, $3 million. What exactly is it and what do we propose to accomplish by this?

MR. FUREY: That's a good question. It is for the construction of the $3.5 million building to contain the C-Core Centrifuge Facility. The total project cost is $6.2 million for the building and equipment, to be shared between the Offshore Development Fund and the federal Technology Outreach program. Three million dollars is expected to flow in this year, with the remaining $500,000 in 1993-1994. Now, if you're asking me technically what a centrifuge facility is and how it is going to be wonderful for the Province, I will have to defer to the deputy, to be honest.

AN HON. MEMBER: (Inaudible).

MR. FUREY: Now, you go ahead and tell him all about that.

AN HON. MEMBER: Mr. Greening (inaudible).

SOME HON. MEMBERS: Hear, hear!

MR. GRANTER: I'm not sure that Mr. Greening could answer this one, actually.

A centrifuge, as I understand it, is a piece of equipment that enables engineers and scientists to simulate, in a very short period of time, what various forces and so on can do to structures, and therefore, it is a very useful device in providing a consulting service to the oil industry, to the civil engineering industry and so on. C-core put forward a proposal to the federal government under their technology outreach program and the federal government accepted that proposal, approved it, is providing funding for the equipment, and the Province, through the Offshore Development Fund, is providing the funding for the building.

MR. WINDSOR: I'm not a lot wiser, but it sounds good!

Enterprise Development, Operations - $32 million: I assume the bulk of that flows through Enterprise Newfoundland. Is that where funding is for Enterprise Newfoundland, or part of it? Newfoundland Stock Savings Plan - I see no funding. Obviously, it is a decision of government to eliminate that program, which I think is a mistake. Would the minister like to expand as to why government chose to eliminate the Stock Savings Plan program?

MR. FUREY: I think I gave a pretty good explanation last year. I don't have a similar explanation this year except to say that it was debated. You had to look at all the programs to see what the merits were and that one fell through.

MR. WINDSOR: The big merit of that one was keeping Newfoundland investment in Newfoundland. I think we estimated $400 million a year flowing out of Newfoundland being invested in pension plans, insurance companies, investment companies, and all the rest of it. The opportunity here was to keep some money in Newfoundland to allow Newfoundlanders to invest. I think it is a great mistake, but there it is. I am a little biased, since I introduced the program six or seven years ago.

Economic Recovery Commission: Perhaps you or your vice-president could tell us a little bit about the success of Enterprise Newfoundland? The Economic Recovery Commission ties into it, I suppose. When can we expect this great economic recovery plan that we have heard about for the last three-and-a-half years?

MR. FUREY: Are you talking about the strategic economic plan? I think the Premier announced just recently in Corner Brook that it should be made public in the next month or so. I have seen it myself and I think some of the stuff in there is very impressive. You know that consultations were held with the public to see how they felt about various sectors of the economy, so there is some interesting and innovative stuff. Some stuff is pretty bold, I think. I am not sure it will all work. The whole Economic Recovery Commission, when it was set up, had a mandate for some six to ten years, as I recall. Their budgetary requirement, I think, in the first year, was $3 million and they spent less than $1 million.

MR. KEAN: It was $1.62 million.

MR. FUREY: Yes, and in the second year it was $2.5 and you spent $2.1. Anyway, my point is that each year it has never come up to the full budget. I can tell you that they are just about ready to release what they believe are eleven or twelve very good studies on opportunities for growth, manufacturing, information technologies, environmental technologies - a whole range of them. And these, as I understand it, Sam, set out in study form what you have discovered in our economy are the voids that could be filled and an action plan to go about filling them. Is that correct?

MR. KEAN: Yes, that is correct. Actually, it identifies the strengths and weaknesses associated with the various eleven sector strategies in the hope that we can identify for government some very specific and tangible recommendations to be able to stimulate those particular sectors of the industry.

MR. FUREY: With respect to Enterprise Newfoundland, we are continuing along. They asked for $46 million this year in capital. We have held the line again this year to $24 million. The Budget reflects $14 million but there will be a pre-commitment, once that is used up, of $10 million. I brought along tonight for Mr. Aylward - and Mr. Windsor, you will be interested in this - the 1991 calendar year of all companies that have been helped, how they have been helped, how much they have been helped, and what the consequences of that help have been.

I had quite a debate with people in the corporation on whether it is the right thing to do to release all these 400 companies for the public. I am not so concerned about members of the House of Assembly, but sometimes the media can take a company and really disabuse it of its rightful place by saying x, y and z which may appear to be accurate in perception but, in reality, may have logical and good reasons that a thirty second clip can't quite explore fully. So I have brought along these companies and would be most happy to share them with you tonight.

Mr. Aylward is running away just as I get ready to table them - he had asked me in the House. May I ask the Clerk to bring these across to you, please?

MR. WINDSOR: The other side of that argument, though, is if these companies have been assisted by government, competitors have a right to know.

MR. FUREY: Absolutely, and the reason I am tabling it is because I think we owe it to the people to show it. My concern is not with the politicians, people who regularly engage in granting loans, but in terms of how the media can play that sometimes.

I put an attachment there, Mr. Windsor, for you, because there is a loan there on page one, If you would just look at it for a minute, the second last one, the Economic Recovery Commission. If you look at page one, page two is the mirror of each page. So you will see on page two, the Economic Recovery Commission - $226,612. What that was - during transition, the ERC made certain loans to companies, which I have attached for you on a separate handout. That is just a payback, isn't it, Sam, to ENL?

MR. KEAN: Yes.

MR. FUREY: I put an explanatory note there because I didn't want you to think that Enterprise Newfoundland was loaning money to the Economic Recovery Commission. That was just a transitory thing and it is attached for your review. Alvin, would you like a copy of this?

MR. HEWLETT: (Inaudible).

MR. FUREY: I have one other that I had promised to Mr. Aylward, but I suppose you fellows can have it. Here you go, Elizabeth. Maybe you could give it to them.

That accounts, basically, Mr. Windsor, for the full calendar year of 1991 and it shows you the 400 companies, where they are, which districts they are in, how much money we spent. It doesn't actually give you what it leveraged out from the private banks or ACOA because I didn't feel that we really have a right to say that, you know. All we have a right to say is company X in St. Barbe received a $20,000 loan. It was a term loan and was three points below prime over five years or whatever. But that gives you a full and comprehensive list of one years operations for Enterprise and how it performed.

Just to come back to Enterprise, the only increase in spending that I can see is when we first set up the Eastern office - and we had a temporary vice-president, Gail Percy, who did a magnificent job for us - we didn't really staff up that office properly. So there are four or five new positions which will be advertised publicly, for loans officers and that kind of thing, to help out there. That is the only new expenditure on the operational side. On the capital side it will be $24 million again as we projected last year, and we are holding the line this year although they requested $46 million. Forty-six million, Pat?

MR. KENNEDY: Yes.

MR. FUREY: I can give you the details, Mr. Windsor, if you would like the operational breakdown.

MR. WINDSOR: There is almost too much information there to start to digest right now. We will have a look at those and we will have other opportunities to question the details of some of them.

MR. FUREY: With respect to the Recovery Commission, you raised them, as well. Their budget this year would be $2.2 million. The government's original intention in 1989 was to give them $3 million a year for six to ten years, or something like that. They came in well under in 1989-90, again in 1990-91 well under, 1991-92 I think they were $2.4 million, this year they are $2.2 million.

MR. WINDSOR: (Inaudible) ask you more about that. I just want to move on into tourism. Marketing agreements, $1.5 million this year. This is the result of the new Federal-Provincial Agreement, most of that is federal -

MR. FUREY: Yes. That is the Atlantic Agreement I think you are looking at, $1.5 million?

MR. WINDSOR: That is the new Federal-Provincial Agreement.

MR. FUREY: I see. I am just trying to figure out where you are now, tourism - marketing.

MR. WINDSOR: 3.1.02.

MR. FUREY: Yes, that is the Tourism Agreement, I am sorry, that is the $20 million agreement, Mr. Windsor.

MR. WINDSOR: May we just go back to economic planning, where we have -

MR. FUREY: Go back where?

MR. WINDSOR: Economic Planning Recovery Commission and Enterprise Newfoundland. We have $2.2 million for the Economic Recovery Commission and in Executive Council we have $3.1 million for the Economic Strategic Planning Committee, and on page twenty-four, we have Advisory Council on the Economy, $411,000, so that is $6 million for economic plan. Would you like to tell us what each one is supposed to be?

MR. FUREY: The three systems were very simple. The Economic Planning Group is a group of senior deputy ministers. I think Energy is involved, Forestry, my own department, Dr. House, the Premier's Chief of Staff, there is a number of people involved in that and they had to do considerable research - you are saying the $3 million expenditure this year -

MR. WINDSOR: $3.1 is in the Budget for economic strategic planning.

MR. FUREY: For this year?

MR. WINDSOR: Yes.

MR. FUREY: When the action plan comes out, some of the initiatives are going to have a price tag attached to them. That is exactly what that is for and I cannot get into the detail until the document is released, but, you know, there will be something there perhaps for tourism that requires an expenditure of $100,000 this year; something for forestry that requires an expenditure immediately, but I cannot get into the details because you know, it should be released in the House first and hopefully that will be done shortly.

There used to be, as you know, The Economic Council of Newfoundland and The Economic Advisory Council to the Economic Recovery Commission; we folded those together. Paul Bugden, you will know as a researcher, chopped that down and reduced having two boards, now there is one board led by Harold Lundrigan and they advise the Government generally on the state of the economy and the Economic Recovery Commission on what kinds of directions they should be taking. That is their budget, so the first one was for initiatives coming out of this action plan, the second one is ACE and the Economic Recovery Commission itself of course, it's mandate is to stir up small business and medium sized businesses and to try to induce and attract new investment into the Province. I can give you a breakdown of how their budget looks for this year.

MR. WINDSOR: So the Economic Strategic Planning Committee money is primarily project oriented?

MR. FUREY: Yes, and their work is pretty well finished, I guess. You sit on that Clyde, so it is pretty well finished, the document is now being printed and we hope to table it very soon.

MR. WINDSOR: So the Committee is primarily bureaucrats, then?

MR. FUREY: Yes.

MR. WINDSOR: Mr. Chairman, I am going to pass now, I have monopolized the questioning long enough-

MR. FUREY: Did I answer your questions on the tourism marketing? There were two agreements, Mr. Windsor, one is one we are involved with Atlantic Canada called the Coast of Difference and that is a $10 million agreement over four years, cost-shared, seventy-thirty and our pro rata share then breaks out from the 30 per cent amongst the Atlantic Provinces. In fact we have a bus cruising through the New England States in New York now, Coast of Difference Bus and they are meeting magazine writers and that kind of thing.

MR. WINDSOR: Where did I hear that before?

MR. FUREY: It is called Road Kill 92. Anyway, that is one thing and then the tourism historic resources agreement, money is going to start flowing this year for specified projects like the Bird Sanctuary at Cape St. Mary's, Old St. John's, a whole number of projects; the Boyd's Cove, Beothic Interpretation Centre; nothing for the great district of St. Barbe but money for everywhere else.

MR. WINDSOR: Most of your funding programs now are through Enterprise Newfoundland?

MR. FUREY: Yes, agreements you mean?

MR. WINDSOR: With the exception of the tourism agreement and a couple of technology agreements - you really do not have any program funding.

MR. FUREY: We do. We have the Ocean Industries Agreement, that $12 million, and there is another agreement I should mention to you that is in the works now which we are hoping to have signed within a couple of weeks. It is a major strategic investment agreement for small, medium, and large businesses. That will be funded directly through the Department of Development.

MR. WINDSOR: How does it fit in with Enterprise Newfoundland?

MR. FUREY: Their particular one is the Rural Development Agreement and that flows through Enterprise. The Innu and Innuit Agreements through our vice-president in Labrador. The comprehensive Labrador agreement sits in Labrador and is directly administered and flowed through Goose Bay. The ACOA enterprise network, the electronic highway of patching people in instantly to information, flows through Enterprise Newfoundland. The Strategic Investment Agreement is a fairly significant agreement. I do not want to talk too much about it in fairness to Mr. Crosbie because he ought to have the right to talk about it as well, but it is more global, going into the global marketplace to talk about Newfoundland and get businesses out there beating the drum to come in, and joint ventures and arrangements and that sort of thing. I think there has to be a pool of cash there for that. You mentioned that yourself last year, the fact that that is important. Everybody thinks taking trips is wonderful stuff, I tell you, but I have learned my lesson. It is not as much fun as people think it is.

AN HON. MEMBER: (Inaudible)

MR. FUREY: Exactly.

Anyway that is the Strategic Investment Agreement.

Thank you.

MR. WOODFORD: The minister last year alluded to the Hong Kong office he set up in the business immigration program. He said at that time there were some good prospects for the Province. Has anything come out of these meetings or anything come out of that particular program?

MR. FUREY: We came in under budget actually. We had set aside $450,000. In the first year, I think, we spent just over $100,000 because it was a partial year and last year in the full year I think we came in under $120,000. Was it $120,000 less, David?

MR. BUTLER: Yes.

MR. FUREY: We saved $120,000 because our arrangements at the high commission were forecast too high essentially. This is the second full year. We summoned Mr. Collings back from Hong Kong and asked him to speak to the Board of Trade and the various Chambers of Commerce and Rotary Groups across the Province. He had a successful two week tour and it was an opportunity for an exchange. I think we have had fifty-five business people in through the office from Newfoundland who made advance contacts using the office to open doors to various businesses throughout Hong Kong. It is hard for me to give a list to quantify. We have only been up and running really for a full year, if you do not count the partial year which was just to get established, get secretaries hired, phones in, paper and clips, and get known. This young fellow has done a pretty good job and I give him full marks. At the end of this year, or coming toward the end of this fiscal year, perhaps in January or February of next year, we have to sit down and do an analysis to determine whether it is worth continuing, because as you know in 1997, and preparations are underway now, the whole island of Hong Kong reverts to the communist government of China when the British - Sino Treaty expires in June 1997, but the real action they tell us in terms of the money play is in Taiwan.

There are literally billions of dollars looking for investment in North America. Lots of people have been burned in Taiwan by bad deals in North America. The reputation of our little Province is very good but it is tough. You are in there elbowing with Ontario, the fifty states, and these other large companies that are seeking investment. We intend to send him in there more this coming year because there seems to be a greater pool of capital there looking for places to invest. We have had success with companies going in there and we have also had companies coming this way as a direct result of his representation. In fact I met with a company from China just a couple of weeks ago. Our people in trade and investment are meeting with a group from Korea next week dealing with underutilized species and the production of Surimi. Coming with it are a significant number of jobs, if it can be pulled off, if everything falls in place properly. But it is hard for me to give you a list and say: here is the list of A,B,C,D - I can only tell you that the letters I get from our local companies and the phone calls that I get and the business men with whom I deal, are very thankful that they had this landing point, somebody to meet them, somebody to take them around, somebody to show them who is who, who the government people are, who the business people are, where the investment is and I think that is important in that area, but we will analyze it over the next number of months and see its worth.

MR. WOODFORD: The highway signage problem that we have had over the years, last year we spent a bit of time on that particular program and especially when we were talking about the new signage policy. That was supposed to be instituted last spring and it seems as if it never got off the ground. Is there any truth to that?

MR. FUREY: No. It got off the ground and we laid out the policy fairly clearly and we consulted closely with the industry, particularly Hospitality Newfoundland, but what happened was, like most plans, they sometimes get led astray because certain people in certain sectors get their noses out of joint, that: hey, you did not treat us right or I am not treated fairly or there may be a legitimate case of somebody who just really slips through the cracks, so what we did is, we asked the Member for Mount Scio - Bell Island, a number of officials from Transportation and Municipal Affairs and my own Department, to form themselves into a committee to travel to strategic places in the Province to hear representations by people.

For example, Mr. Woodford, there is a fellow in Corner Brook who has the Lakeland Motel; now when he built that the road went right by his motel. It was not his fault that the road was altered.

MR. WOODFORD: In Pasadena.

MR. FUREY: Yes, Pasadena. It was not his fault that the road was altered some years later, therefore depriving him of the opportunity to advertise, so he had to put a sign out on the main road to tell people where he was. So you know, do you let legitimate cases like that fall through the cracks or do you deal with them?

Now the public hearings were held a number of months ago and I understand they have just completed the report, it is sitting on my ADM's desk, offering options such as Grandfather Clauses and that kind of thing and we hope to revive it over the next number of weeks and make a statement on it.

MR. WOODFORD: Do you foresee that particular program, regardless of what it is, or that particular policy being instituted this summer?

MR. FUREY: It may be difficult. I am not sure. I cannot quite answer that question.

MR. BLUNDON: In terms of whether we are going to institute something, what has happened, government put a moratorium on taking down signs and until such time as a new policy is fully implemented, there is relaxation of the highest order. As I understand it there are about 150 to 200 signs that have gone up illegally since government placed this moratorium and to ensure some consistency on the highways there will have to be a decision made that there will be a number of signs that will have to come down. That will come about as we define what it is that is going to be legally permitted, but at this point in time since last November, nothing has come down.

MR. WOODFORD: So you figure you will have that policy in the summer?

MR. FUREY: No, I am not quite sure that we will have it ready. We will wait until the Fall but I do have the document and the committee's report, it is now being assessed by the department, then it will come to my desk. I will take it to Cabinet, we will make decisions on it, and you know how the bureaucracy works or how Cabinet works from your days in Cabinet.

MR. HEWLETT: You are talking about a billboard jungle for this summer, senseless.

AN HON. MEMBER: (Inaudible).

MR. FUREY: Yes, I mentioned that. It well may be, Mr. Hewlett, a billboard jungle for the summer but the billboard jungle will bloody well come down in the Fall. We set this policy in place as we tried to do and we received certain complaints from only certain sectors. The industry asked us to go out and have hearings to make sure we could try to mitigate those particular circumstances and we did; in fairness, we did. But you just cannot go in with a sledgehammer and hit people over the head, no more than you can have people going around with chain saws cutting signs down all over the place, I mean that is too foolish to talk about.

What we're trying to do is bring a sense of discipline to the industry and to the highways and that kind of thing, and safety is pre-eminent of course in any policy. So we hope to have that before the Cabinet in the next three weeks or so and then make a decision. But I wouldn't see us implementing it this summer. I would see it probably coming this fall. Mr. Walsh sat on the Committee. I don't know if you want him to speak to it at all. He's the guy who got us in trouble in this.

MR. WOODFORD: Yes, well, you'd probably still have trouble if it's brought in the summer, that's for sure. Because the way times are now -

MR. FUREY: I can tell you that it won't be. So not to worry.

MR. WOODFORD: As long as they don't go around with power saws again, like you say, and start chopping $1,700 and $1,800 signs again.

MR. FUREY: We won't, but I mean, you never know what Hogan is going to do.

MR. WOODFORD: No, you didn't, but the Department of Transportation did. To be honest with you, you can come up with all the policies you like. Until we change some of the attitudes of the people in some of those departments, we can bring in all the sign policies we like. There will be active chain saws around the intersections anyway, because they'll find a few to cut down and cause a problem, I can assure you. But at least it's good to know that it's going to be left alone, at least this summer. It's bad enough out there to try to drag people in to buy something, let alone watching all night long seeing whether the Department of Transportation is going to come and cut their signs down.

The Bonne Bay ferry: something dear to the minister's heart. Now to be honest with you I've questioned Enterprise Newfoundland with regards to this. I want to make you aware of that. I have found - as far as I'm concerned - people to be upfront and honest with me on it. The only thing I didn't get, and I heard after the fact, was that the Bonne Bay Development Association has gone through the Rural Development Council.

MR. FUREY: It's in the process now.

MR. WOODFORD: In the process. But whether it's for the funnelling of monies from Enterprise Newfoundland through the Rural Development Council to fund it for the summer or - how is it?

MR. FUREY: Let me just explain. The Bonne Bay ferry you know was taken off by the previous government in I think May of 1985, just after the last election. They took a decision that the $100,000 subsidy per year was no longer justified and I certainly wasn't in a position to quarrel with the previous government on that, because I hadn't seen the books or the numbers, and I still haven't. So the ferry basically was taken off.

We argued at the time that it was a tourism draw to the park. We argued that Parks Canada had a moral responsibility to ensure that in some small measure or some small way they participated in ensuring that a ferry stay there. They have never, ever participated. They've helped in not one single way. A private sector individual from Bonne Bay decided to purchase a boat, and in the dying days of the last government the previous minister, Mr. Doyle, made a commitment that the large boat would have sufficient docking space on either side of the tickle so that the twenty-six passenger boat would be looked after.

We as a new government sent it to Justice for a legal opinion. It was their learned opinion that the government previously bound the new government to building these docks. We spent some $800,000 of capital dollars correcting these docks, measuring them properly, so that they could receive the new ferry without any damage and making it as safe as possible.

The young fellow who bought the boat put some private sector capital in there - I think $60,000 or maybe $70,000 -, had a stab at it, ran into some trouble, borrowed some money from Enterprise Newfoundland. I think he is in there to the tune of $168,000 with accrued interest. ACOA I believe gave him some $50,000 or $60,000. The west coast business centre gave him $40,000. He did, in all fairness to him, run into some problems when he was transporting the vessel from its purchase point in Ontario to Newfoundland. He ran into some troubles and he nearly lost the vessel in a storm. The people who insured it went out of business. So he was stuck with the damages that he had to pay for out of pocket with no opportunity to recoup it from the insurance company that went bankrupt during or just after that storm. So it was a really bad piece of luck for him.

He came down and he made a go of it, using the Enterprise money, the ACOA money, and the various government monies, and the bit of revenue that he could generate from transporting vehicles back and forth from Norris Point and Woody Point. But it just wasn't paying for itself. So he notified me by letter two months or so ago that he just couldn't make a go of it. It was almost impossible for him. Because to service the debt and to try to draw a living from it, the two just didn't match.

I found that pretty distressing but I wrote him back and told him that I admired his guts and his will to try to do this and to make it happen. I told him that the government could in no way involve itself in a subsidy, because to do a subsidy for that pretty little place would mean that we'd have to do it in Mr. Hewlett's district and every other district, and we'd better be prepared to do it for everybody if we're prepared to do it for one. We all have pretty parts of the island that we represent, and some of them have little ferries that run between certain points.

So essentially what happened is the vessel went into receivership because the loan was called by Enterprise Corporation on the west coast. Mr. Tizzard called the loan to protect our position. We're first in line with $168,000 in outstanding debt. So we're first in line. Behind us I think is the West Venture Centre, or West Business Venture Centre. Enterprise doesn't have the capital to run it so it's up on the blocks as we speak for sale. We've restricted the area that it can be sold in because we'd really like to keep it there if there is any hope at all to run this ferry between Norris Point and Woody Point.

Essentially what happened is we've contacted the development association, and they've asked us: do you mind if we put in for a grant under the Rural Development Agreement to see if we can get operation dollars as a development association to run the boat for the next year or two? Perhaps then, at some given point in time, some private sector person can ease their way into it. Perhaps Mr. Lang himself, back into taking over the boat, relieved of that debt. So that's where it stands as we sit tonight.

It's a difficult one, because it's a very lovely tourism attraction, one that I support 100 per cent, one that the government is on record as supporting in terms of tourism. It's not an essential service. We've done so by putting our money where our mouth is to the tune of $1.16 million. But I think there comes a time when you have to wonder whether you should put any more money into something.

MR. WOODFORD: Would that be the figure it would cost for the summer to run that, $100,000, or are they talking about along with the few revenues as well to keep going?

MR. FUREY: That's right. There has to be some upgrading and some minor repairs and that kind of thing. You have to bond it, insure it. It's a very expensive operation.

MR. WOODFORD: They're only going to keep it about two months, is it? Two and a half months?

MR. FUREY: If the development association gets it they'd like to see it go for three months, depending upon capacity. If there are enough tourists - don't forget, 110,000 people went through Gros Morne last year with foreign license plates. That's a lot of bodies. If they can make a go of it, surely it'd be great. That's where it stands, Mr. Woodford, and believe you me, if there is any way of making it work I'd love to make it work. But I can't in good conscience pour 100 per cent provincial dollars into it. We've put a lot of money in there.

MR. WOODFORD: This would be federal-provincial money now if they accessed it.

MR. FUREY: Under the Rural Development, the Community Development fund as you know is a $2 million annual fund. That would cost the Province $30,000 on a $100,000.

MR. WOODFORD: What would be eligible under that Community Development fund?

MR. FUREY: Any development association's project of any kind can apply. For example, we have development associations applying now to build new buildings to house their offices and that kind of thing. We have Credit Unions applying. Co-op movement, the Credit Union, and the rural development movement are the only ones that can apply to that fund. Am I correct on that, Sam?

MR. KEAN: And any other kind of community economic development group which doesn't fit under the auspices of (Inaudible).

MR. FUREY: One of those, yes.

MR. KEAN: But there are a few, there's only a few of them.

MR. FUREY: There are a few that fall between the cracks. But I appreciate you asking that question. It's a question that's near and dear to my heart. But there's just no magic money tree that -

MR. WOODFORD: No, no, I knew the background of it. But the one I didn't know was the actual application - now I was told about it but it was not guaranteed so I was -

MR. FUREY: It was made by the Bonne Bay Development Association.

MR. WOODFORD: Yes through the Rural Development Council and they are waiting now for an answer on that -

MR. FUREY: That is right, and I hope they are successful but I do not know what the answer is. It is a big boat, it is a big vessel to service; it is a small run as you know yourself, it is eight minutes across, and it can handle thirty cars or more. It is a big vessel, you need a lot of revenue to make this one happen.

MR. HEWLETT: Further to that point, having availed of that particular service. I know the gentleman concerned who operated it and having availed of it as a tourist myself, one wonders if not one of the major problems, in light of the numbers of people going through Gros Morne being an international attraction and so on, where does the marketing end of your governmental services come into this? I would think that if people were steered, so to speak, in the direction of such an attraction as they are, for instance the boat tour into Western Brook Pond Gorge, that area; the volume of traffic would increase significantly and I am just wondering where a development of that sort, which as a transportation initiative is not viable, but how would it avail of funding for promotion?

MR. FUREY: The thing was shut down for five years and now you have to try to recover then all that lost time, especially in the local environment, because people just don't go over there locally because they think of it being shut down, and therefore the south end of Bonne Bay is a dead end. Now the locals catch on pretty quick.

The problem is, it would take a lot of money to market the thing properly. He had some very good ideas. It wasn't just going to be a shuttle service. But it was also going to go out to the mouth of Bonne Bay, at the head of Rocky Harbour there, have parties on the boat, and meals and snacks and drinks and that kind of thing. Really, some fabulous ideas to generate revenue. But it requires a considerable amount of revenue because it's such a large boat to make it operate efficiently and profitability. It requires a lot of people of course to work the vessel.

You know, we helped him - he himself is a very aggressive young fellow and a good young fellow. He worked hard putting up signs and getting leaflets out. He got into our travel guide magazine. We helped every way we can. But we can't as a government just exclusively market one property or one person. We have to do it for everybody. I think that if he managed to hang in there and build his market share over four or five years, if he had the revenue to do it, he'd have a very successful operation. I think he would.

MR. HEWLETT: It's a matter of starting on a shoestring and running out of rope.

MR. FUREY: Yes, and the amount of time that he has to operate. That's the problem.

MR. WOODFORD: It's the times, you know, everything's down a bit.

MR. FUREY: That's true.

MR. HEWLETT: Just a technical question, Mr. Chairman. In the salary estimates of the Department under the minister's office there are two - apart from permanent employees - subheads: temporary and other employees, and overtime and other earnings. I'm told from chatting with people who sat on other estimates committees that one of these particular subheads covers the ministerial vehicle allowance. I'm wondering which one, number one; and number two, temporary employees in the minister's office, what sort of category or what sort of activity - is this student employment? Most departments in their ministerial budgets do not have the word "temporary". Overtime, yes. But little or no I think, apart from a couple of other departments, Municipal Affairs I think, and Social Services, have temporary listings in the minister's office.

MR. FUREY: You'll notice too that mine is probably the least expensive of all departments in terms of temporary. That person was brought on I think two years ago to help - this is a huge Department, Mr. Hewlett, and a very difficult one. We get requests from all over the place all the time, and it's just impossible to keep up with them. In fact, if I thought I could get away with it I'd have three or four more temporary people. Because the pressures put on the office are really considerable.

You see, people use us as the court of last appeal on all the Enterprise stuff; whenever they have complaints about the Economic Recovery Commission; whenever they have complaints about me as minister, et cetera. It all comes to us and it comes in a huge flood of mail. They say some good stuff occasionally too. But I'm just talking about in terms of dealing with the complaints.

I think we paid this little girl $21,000 or something, $19,000? She started at $18,000 or $19,000 two years ago. She's at $21,000 now and does a terrific job for us.

MR. HEWLETT: So essentially this is the -

MR. FUREY: I tell you, she was the former secretary to Mr. Barrett's executive assistant.

MR. HEWLETT: Okay. Essentially the temporary angle here covers the salary.

MR. FUREY: Is that right? That was her job, wasn't it? Yes. She was the former secretary to Mr. Barrett when he was the Minister of Development.

MR. HEWLETT: So it covers the salary of an individual, per se.

MR. FUREY: Yes.

MR. HEWLETT: Ah, so the -

MR. FUREY: My vehicle is in Transportation and Communications under my subhead there.

MR. HEWLETT: Transportation and Communications.

MR. FUREY: So you chop $10,000 out of that and you have $105,000 for Transportation and Communications. I think that's where it is. Is that where it is?

MR. HEWLETT: Well, in the salary details book that they list overtime and other earnings. I'm told that's where other ministers list their cars. In which case why twenty, does that include for instance (inaudible).

MR. FUREY: That is right. You see the twenty there, overtime and other earnings?

MR. HEWLETT: Yes.

MR. FUREY: The twenty, ten of that comes right out for the car and then of course- no, it is not ten, is it ten -

AN HON. MEMBER: Eight.

MR. FUREY: - eight, eight comes out. Jeez, I was just wondering if I had been ripped off that time. Eight comes out. $12,000 is there for overtime.

MR. HEWLETT: Very good. Mr. Chairman, my colleague from Labrador was called away to another committee tonight as is often the case and asked me to ask the minister, with regard to the rules of needing a guide and what not, vis à vis 600 metres from a waterway and the distinction between using a guide and/or an outfitting service, which of course would entail much more input into the local economy. I was wondering if you would make a comment on that because he was of the opinion that quite possibly you could see some celebrity or millionaire of some sort, from away, in the hands of a part-time guide, end up drowning, giving the local industry a bad name; there being no liability insurance, etcetera, etcetera, etcetera; whereas -

MR. FUREY: Mr. Hewlett, you know why these rules were changed, don't you?

MR. HEWLETT: No.

MR. FUREY: We were receiving tremendous complaints on the Island portion and on the Labrador portion, from outfitters and from local Newfoundlanders and Labradorians. In the case of Labrador, Americans were coming in and becoming middlemen, taking their own fuel, their own planes, their own camps, their own food, their own liquor, you name it, they were bringing it in, they were simply purchasing licences as they arrived and this was taking tremendous revenues from the outfitters particularly of Labrador -

MR. HEWLETT: Yes, yes -

MR. FUREY: -so we changed that rule. On the Island portion, what we were finding was, quite frankly the Nova Scotians were the biggest offenders. I saw them myself three years ago, in behind Hawke's Bay with canneries, canning trout, they were bringing their own gas, their own tents, they were leaving nothing in the Newfoundland economy, so we decided to put our foot down in Labrador and those middlemen outfitters and we have just about wiped them out, and it has not hurt the business one bit. In fact the government has received commendation from the outfitting industry on that move. And on the Island portion, what we have done is, we have enhanced employment opportunities for people to become guides, that is not to say that I have not gotten some saucy letters from people who are used to coming in here and taking as they see fit. Those days are over. We are policing the rivers, we are trying to add opportunities to the economy and we are enhancing employment by creating jobs for guides.

MR. HEWLETT: I think you took my question from the wrong end round, Mr. Minister, because I was asking on behalf of a colleague and I think his point of view was: are the rules as they are, sufficiently strict insofar as promoting local outfitting companies versus a miner for instance, doing part-time guiding and doing a slip-shod job and so on, so forth, and putting minimal input into the local economy?

MR. FUREY: There is no question that we need to upgrade our guiding skills, if that is what you mean, and we are working on that in the Labrador College now with a new program that has been very successful and there is no question, Mr. Hewlett, we should beef up those skills and professionalize ourselves because it is a very sophisticated audience that we are dealing with, make no bones about it. But I think we are on the right track in both those areas. I am not quite following your question, so I do not mean to sound coy but -

MR. HEWLETT: No, no. Well I am asking someone else's question here so, (inaudible).

MR. FUREY: Did Garfield write that?

MR. HEWLETT: Another question I was asked to ask, with regard to

Labrador West, that is the position of ENL and its support or lack thereof right now for a graphite development in that particular area.

MR. FUREY: The assistant deputy just pointed out too, and I meant to say it when I chatted on the outfitters, in Labrador you can only go there through an outfitter. So I'm sure he knows that. Sorry. Graphite, you were saying?

MR. HEWLETT: Yes. I was asked to ask the status of ENL support for a proposed graphite operation in Labrador West.

MR. FUREY: That's a specific question. I'd have to take it under advisement. I don't have every single project before me, but I can certainly check that out for you, or for him, and report to you through the House. You have before you of course all the companies that are helped in Labrador. They're set out there. What was it called again? I'll just double-check.

MR. HEWLETT: Graphite is the material concerned. I presume it's the development of -

MR. FUREY: Has it been to the board yet?

MR. DUMARESQUE: It has not even been applied for very long. If it has it's certainly been only recently.

MR. FUREY: It hasn't come to the board yet, Mr. Kennedy tells me.

MR. HEWLETT: I see. No, I was asked to ask the status of where this development and/or proposed development stood.

MR. FUREY: Its Labrador West is it, Mr. Hewlett?

MR. HEWLETT: Yes. Graphite mine, I do believe. There is, as I understand it -

MR. FUREY: No, it hasn't come to the board yet.

MR. HEWLETT: Hasn't come to the board yet.

MR. FUREY: Should be there soon I guess, is it? (Inaudible) considering it?

AN HON. MEMBER: (Inaudible).

MR. FUREY: Yes, and I'll report to the House.

MR. HEWLETT: One other question I should ask on behalf of my colleague, a question that's been near and dear to his heart in debate in this Assembly with regard to Labrador West in particular and hydro-electric power, and that's the role of using hydro-electric power as an economic development instrument. I was just wondering if you might want to make a comment on that.

MR. FUREY: Of course a portion of that power would be used, I think, to induce companies to come here and set up, much like Quebec is doing now, although I notice that they're in a bit of trouble on that in some of the states. Because they're saying that it's unfair and an improper trade practise. However, that's their problem. You're asking would some of the power - presumably you're asking from the Lower Churchill be used -

MR. HEWLETT: I believe there is also recall power unused at the moment from the Upper Churchill. Are there any initiatives under way to use that particular power? Because as I understand it, it goes back to Quebec if it's left unused by us.

MR. FUREY: Not at this time, no.

MR. HEWLETT: That's it for right now, Mr. Chairman, thank you.

MR. CHAIRMAN: Mr. Windsor.

MR. WINDSOR: Thank you, Mr. Chairman. I want to go back over this information the minister provided of loans and grants from Enterprise Newfoundland and Labrador. I was always under the impression - and I realize rural development is slightly different, rural development program is slightly different - but every other program we had, funding was never made available to companies that were in competition with others. Such as retail stores or something of that nature. Now as I go through this -

MR. FUREY: We try our best not to do that. There are certain extenuating circumstances of established companies that for one reason or another may require some help and working capital or whatever, yes. But we don't try to establish new companies right across the street from one that's already there and successful.

MR. WINDSOR: In rural areas is that different?

MR. FUREY: No, we try to be consistent. With emphasis on "try".

MR. WINDSOR: As I go down through this list, I'll just read off some. I have to read the names out, unfortunately.

MR. FUREY: Sure, yes, go ahead.

MR. WINDSOR: Beothuk Data Systems, debt retirement and working capital. That's a computer company here in St. John's. That's not rural development either.

MR. FUREY: Yes, that's true. This isn't structured just for rural development.

MR. WINDSOR: The point I was making, I know that in rural development we do take a more lenient view toward that sort of thing. Coleray Maritime established freight forwarding operations.

MR. FUREY: I'm sorry, could you say that again?

MR. WINDSOR: Coleray Maritime Limited in Mount Pearl. It is another trucking company. There are twenty of them in there now. Duckworth Development Group Limited -

MR. FUREY: Coleray Maritime?

MR. WINDSOR: Yes.

MR. FUREY: They had a small enterprise loan of $38,500.

MR. WINDSOR: Yes.

MR. FUREY: Just let me see what it is for, Mr. Windsor. Hang on. To establish a freight forwarding operation. Now I could get you the full reasons for it if you want them.

MR. WINDSOR: Well obviously that is in competition with twenty other freight forwarding operations.

MR. FUREY: I don't have the reasons for each company at hand tonight. I only brought the general approval list.

MR. WINDSOR: I am not here to point fingers at any one of these companies. You may well have good answers and that is why I hesitate to list the names. The Duckworth Development Group, working capital, I mean who are Duckworth Development Group and what are they developing that the province needs to put money into. Maybe it is worthwhile. I don't know.

MR. FUREY: Again I would have to dig out the answers to all of those. In fact there is a document being prepared for me, I think, Patrick, on every company. I am releasing this sort of prematurely because Mr. Aylward asked for it in the House the other day and I didn't want to delay it. They gave it to me this morning and I said I would release it tonight. I don't have the background information, but they are preparing it for me.

MR. WINDSOR: Let me list a few more.

MR. FUREY: Sure, yes.

MR. WINDSOR: (Inaudible) fashions in Whitbourne - expand ladies clothing operation.

MR. FUREY: What is it called?

MR. WINDSOR: (Inaudible) fashions in Whitbourne - expand ladies clothing retail business. Generator exchange, which we are all familiar with - working capital to maintain operation, they have since gone bankrupt. Henry's One Hour Photo - establish a photofinishing operation. I mean this is retail type competition stuff that I didn't think we ever funded. High Tech Builders - expand masonry business, St. John's. Industrial Concepts - conduct marketing study for the provincial Department of Forestry and Agriculture. Kid's Closet Limited, Bay Roberts - established a children's clothing store. Lazy Bank Productions - forming to produce a thirty minute documentary. There may be some cultural or artistic benefit to that one, I don't know. Media Marketing Associates, St. John's - retire bank debt. Is this the kind of thing that we are supposed to be funding? These just leave me cold. Pike's Riverside Garage - to reconstruct premises after a fire.

MR. FUREY: And they may leave you cold, but the reality is that every single small or medium sized business, person or company that wants to come to Enterprise will have a clear and open hearing on any proposal that they wish to bring forward. Mr. Windsor, I should point out a lot of these companies that come to us have already been successful across the street at ACOA and they need extra help or bridge financing or short-term capital.

MR. WINDSOR: Why would we fund a garage to be replaced after a fire?

MR. FUREY: Which one are you looking at?

MR. WINDSOR: Pike's Riverside Garage Limited in St. Catherine's - to reconstruct the premises after a fire.

MR. FUREY: Mr. Windsor, I don't know but I can speculate that it may have been a very successful business. The guy didn't have insurance and wanted to get his business back up and running. I don't know, but I will find out for you.

MR. WINDSOR: (Inaudible) that sounds great, but is that the purpose for these funds? I have always been under the impression that we don't fund a guy to compete with a guy across the street. We don't get into retail operations at all. It is always resource based, crafts, arts, tourism.

MR. FUREY: I understand that. All I am saying to you is that we make every effort not to put money where there is a competing force or where there is no market capacity to expand. Every single business - every single business has an opportunity to approach Enterprise Newfoundland, every single business. It doesn't matter what it is. If it is scuba diving or trying to get to Mars we will look at every single proposal.

MR. WINDSOR: I appreciate your looking at them, but I am amazed at your approving them.

Establishing a chicken and rib franchise in Gander?

MR. FUREY: Yes, but don't be amazed because you don't know the background of these, and I don't have them to respond.

MR. WINDSOR: I know, but I would like to find out.

MR. FUREY: I will certainly do that.

MR. WINDSOR: Quite honestly I am amazed. A chicken and rib franchise in Gander.

MR. FUREY: How many jobs is it creating?

MR. WINDSOR: I don't know, but how many jobs has it eliminated down the street? An equal number?

MR. FUREY: I do not know if that's true.

MR. WINDSOR: That is the whole point of this policy.

MR. WALSH: But is it bridge financing? If you could name one there that I know there is bridge financing between ACOA funding and trying to deal with the banks along the way. There is one you mentioned and it was in my own district, I met the gentleman, he needed bridge financing between -

MR. WINDSOR: It is a conventional loan of $100,000 to establish a chicken and rib company.

MR. FUREY: I do not have the details on that for you.

MR. WINDSOR: I realize that.

MR. FUREY: If you would like to give me a list of those in which you are most interested, I would be most happy to provide them.

MR. WINDSOR: Beauty Salon in St. Catherine's; a retail store in Cavendish and modernize an asphalt plant. Now that one really gets me.

MR. FUREY: Don't look at me stupefied. If you think these are good, you should look through some of your friends at ACOA and see what is being done.

MR. WINDSOR: Oh yes, but that does not make it right.

MR. FUREY: And these may not be alright but I can tell you a lot of what is here is very good.

MR. WINDSOR: How about money to add a lounge to a motel? It says: to increase overall viability. But still, we just funded a lounge.

MR. FUREY: Boy, am I glad I brought this list for you to peruse.

MR. WINDSOR: So am I!

MR. FUREY: You'd have nothing to do.

MR. WINDSOR: I'm coming through them, alright?

AN HON. MEMBER: (Inaudible).

MR. FUREY: Much of it is. I don't have the background documents. I wish I did.

MR. WINDSOR: Cosy Corner Lounge - to retire debt and provide working capital. Adam's Transport, another transport company. Weather Wicker Limited - funding to maintain operations. The Sound - establish an audio and video and related supply store in Lewisporte.

MR. DUMARESQUE: Point of order, Mr. Chairman.

MR. WINDSOR: Hardly an area that you can say: these are services that are not available anywhere else.

MR. DUMARESQUE: Just a point of order, Mr. Chairman. As we're going through these I'm just noticing that obviously the minister has indicated that he has brought the information here, that to the best of his ability is giving you names and numbers and so forth, and he has indicated that he certainly would follow up with descriptions. I'm not sure what the point would be of just going through all of these companies, without the proper assessment, I'm sure that they were all made with quite legitimate background. So I just want to make that known if in fact we're going to keep on going. Because I'm sure the minister can't be expected to detail every proposal and substantiate every proposal.

MR. CHAIRMAN: Your point is well made, Mr. Dumaresque. It has been duly noted by Mr. Windsor that there are many things in there that need to have added explanation. The minister has agreed to provide that to him. All the background information is being provided on every one of the businesses. So therefore in that sense we can probably tidy this up.

MR. FUREY: Mr. Chairman, just if I can add to that. Have you dismissed the point of order?

MR. CHAIRMAN: It's a point of clarification more than anything, I suppose.

MR. FUREY: If I can just add to it. I suppose Enterprise could have done what other operations do. For example, Federal Business Development Bank, they don't make any of this public. ACOA doesn't make any of this public.

AN HON. MEMBER: (Inaudible).

MR. FUREY: No, they don't. They don't give an annual list of every company, how they were helped, the amounts, et cetera.

MR. WINDSOR: They issue a press release of every grant -

MR. FUREY: They issue a press release.

MR. WINDSOR: - giving the details.

MR. FUREY: Wrong. They don't give an annual review as I'm giving you, and spelling it out this way.

MR. WINDSOR: Be that as it may, I thank the minister for giving us the information but that doesn't preclude him from having to answer the questions.

MR. FUREY: No, the hon. Member for Mount Pearl now is not being fair. Because he is being selective, and I'm surprised he's being selective in his choice of language. I committed to any company or any loan that you'd like background information on. I don't have it all here tonight.

MR. WINDSOR: I realize that, I accept that.

MR. FUREY: I'd be glad to give it to you. For example, if you would like to know why we put $200,000 into Sunnyland Juice in Mount Pearl, I'll be glad to tell you.

MR. WINDSOR: No, I can see that, that's a manufacturing operation. That fits in the policy. What I'm trying to get at here is a policy.

MR. FUREY: Right.

MR. WINDSOR: I realize you can't answer questions.

MR. FUREY: If you'd like to know why, in the ten, twelve or fifteen companies listed here from Mount Pearl, why we put over $1 million into those companies, I'd be glad to tell it to you.

MR. WINDSOR: There are some there that I would like to have the answers for.

MR. FUREY: Okay. There are some there you obviously disagree with that we shouldn't have done in Mount Pearl.

MR. WINDSOR: Perhaps so. I don't know. I don't have the information either. Alright?

MR. FUREY: Ah hah. So let me get it for you.

MR. WINDSOR: But I am saying that I looked at these and I have highlighted the ones that would lead me to be concerned. I'm asking the minister, what is the policy? I appreciate that he's agreed that he will give us some detailed information on each one of them.

MR. FUREY: Absolutely.

MR. WINDSOR: Okay?

MR. FUREY: Whichever one you'd like to put down (Inaudible).

MR. WINDSOR: But I want to find the policy here.

MR. DUMARESQUE: The policy is a simple policy.

MR. WINDSOR: Let the minister answer for policy. What is the policy? Are we now providing funding for retail operations, chicken-and-rib operations, video stores, beauty salons? Is that the policy?

MR. FUREY: Mr. Windsor, there was a company in my own little district of St. Barbe, in Rocky Harbour, turned down for crafts. They were turned down rightly because down the street on one end of town there was a craft store; up the street on the other end of town there was a craft store. Both were operating at maybe 40 per cent or 50 per cent capacity and both were put there with private money. So, should I or Enterprise Newfoundland have put money into yet another craft store which would have been under used and would not have sold its goods? Obviously not; each one is taken on its own merit.

Now I wish ACOA would abide by that, and I do not mean to lash out at ACOA but I have seen some really strange things happen over there that really bothered me. It bothers me when somebody in my district put all of his life's family savings into a trailer park and two miles up the road, ACOA gives somebody $250,000 to start a new one -

MR. WINDSOR: I agree.

MR. FUREY: - and he is working - So all I am saying is, we have instructed Enterprise Newfoundland within all of the programs they have, whether it is equity, term loans, interim financing, all of that, to look at it, deal with each one on its own merit, have the board independent of politicians deal with them, and to bear in mind that we are not out there to create jobs only to dismiss jobs further down the street, as you rightly point out and when you look at these cold for the first time tonight, some of them look unusual and they stupefy you. I only ask you to bear in mind that we are not hiding anything, we are being very public with ever dollar that we have spent, we have asked every company to sign a waiver and they all know that they could come under scrutiny, you cannot be any more up front and honest than that, and any background notes or materials you require on any company, we will provide them.

MR. WINDSOR: (Inaudible). They may well be numerous and there are numerous applications that were refused and rightly refused because it is simply going to put somebody else out of business; the point I am simply making is that a large number of these appear to be in the category that they should have been refused and you know, when we get the information we will see whether or not they are. Some of them are established operations that ran into financial problems and if you are providing some interim financing, some bridge financing, doing some re-financing to maintain existing jobs, even though they are in competition with others, and you know, the one I look at is Coleray Maritime, that is not to establish it as to maintain it and that may well be justified; perhaps the board can justify that to us but there are some here, chicken and rib operations, new, in the middle of Gander? If that was on the Coast of Labrador, where there is not a place to eat for 400 miles I could see some justification that you are providing a tourist service and for the travelling public generally, same as a Bed and Breakfast, I do not have a problem with that; I do not have a problem with hotels, I always understood we had problems funding lounges. You know, this one says, a lounge to try to improve the overall viability of a motel, and one can probably see that there is a rationale there, you either give them the funding for the lounge or the whole operation goes; you know the lounge probably should have been built in the first place.

MR. FUREY: Mr. Windsor, I do not mean to sound defensive on the whole thing either and -

MR. WINDSOR: The asphalt plants leave me cold.

MR. FUREY: - but please accept that I do not think these are all perfect, either -

MR. WINDSOR: I am sure they are not.

MR. FUREY: - but I make them public (inaudible).

MR. WINDSOR: To be honest with you, if I had seen three or four like that I might not have even brought it up, but there are so many here that seem to be very obviously questionable that I had to bring it up and I would like to see some of the answers.

MR. FUREY: (Inaudible) and I commit to providing the for you.

MR. WINDSOR: Thank you, Mr. Chairman.

MR. CHAIRMAN: (Inaudible) ten minute break for coffee, then we will come back, that is what normally we have been doing after an hour and a half.

Recess

MR. CHAIRMAN: Order, please!

MR. FUREY: Mr. Chairman, just for the record, Mr. Hewlett was kind enough to give his copy of those companies to the media, so maybe we can organize the clerk to make copies for the House -

MR. CHAIRMAN: It has already been done.

Mr. Windsor has indicated, I believe that he has finished his line of questioning, okay, so we will ask, Mr. Hewlett, if he will -

MR. HEWLETT: Yes. A general line of questioning with regard to the handout that the minister just gave us, Mr. Chairman.

The minister referred to, on a number of occasions such and such a thing was up before the board, what is 'the board'?

MR. FUREY: I am sorry?

MR. HEWLETT: 'The board'?

MR. FUREY: Oh, there are two boards actually. There is a Transaction Board made up of -

AN HON. MEMBER: (Inaudible) three boards.

MR. FUREY: There are three boards; well I will let the Vice-President just explain it to you.

MR. KENNEDY: The board authority for the corporation is broken into three tiers. Any application for funding $100,000 or less, is approved by the authority of the regional vice-president, and there is a regional authorization committee which is an internal committee and the chairperson of that is usually the vice-president and the directors of the regions. They deal with applications of $100,000 or less.

For applications between $100,000 and $500,000, there is a Corporate Transactions Committee in the corporate office of St. John's, and the chairperson of that committee is the President and CEO, Mr. Jim Janes, and then there are the voting members of the board, would be two members from the Economic Recovery Commission and also our Vice-President of Enterprise Services, Mr. Bruce Saunders. Any funding application greater than half a million dollars but less than $1 million, is dealt with by the full board of directors and that consists of the Chairperson, Dr. Doug House and the voting members would be the President and CEO of Enterprise; the four Economic Recovery Commissioners; the Deputy Minister of Development and the Deputy Minister of Finance. That is the board structure.

MR. FUREY: Anything over $1 million goes directly into Cabinet for a full Cabinet review.

MR. HEWLETT: Okay. But I guess it would be fair to say, Mr. Minister, that the people making the decisions at the regional level, at the $100,000 level or the $500,000 level, are... how should I phrase this? People who could be construed to be political appointees of the administration, versus career civil servants. Is that a fair statement?

MR. FUREY: It's a fair statement that it could be perceived that way. But we've taken the position, and we've abided by it, to have hands off. That's not to say that members can't make representations to ministers, or indeed directly to the corporation, as many members have done, including yourself. But no, there seems to be a fair sense of balance there and we've appointed somebody who previous governments have appointed.

For example, the vice-presidents who are in the corporation, Mr. Saunders and Mr. Kennedy, worked for NLDC and the previous government. They have quite a say in operations over there. Mr. Janes is independent of any political affiliation as far as I can tell. He was appointed by way of a public call for résumés and that kind of thing. Dr. House was appointed of course by us. Basically, he wrote the report for the previous government that appointed him. We feel he's done a good job in the past and he's doing a good job now.

If you want to ask me: is there a perception that it could be perceived that way, the answer is yes. But if you look at the break out of all those companies we just talked about there's no one district that seems to be doing better than any other district. There seems to be quite a good cross-section from all districts as I see it.

MR. KENNEDY: Mr. Minister?

MR. FUREY: Yes, please do.

MR. KENNEDY: With respect to the procedures and policies that are followed by the corporation, we've developed internally a fairly detailed procedures manual that is followed. The protocols for how these regional authorization committees must conduct themselves are consistently applied throughout the corporation. As well (Inaudible) corporate transactions committee and in fact the board.

We also have an internal audit function in place. The internal auditor reports directly to the president and it is his job to travel throughout the regions at least twice a year to review the transactional nature of the regions for compliance to our procedures. In addition, we are scrutinized in the same capacity by the Auditor General's department. In fact, the Auditor General is currently in the corporation reviewing the compliance function of our transactional business, independent of our independent auditors.

MR. HEWLETT: One final point, Mr. Chairman. The minister wouldn't have us believe that it's not possible for a minister of X to call the Minister of Development and say: my campaign chairman in the last election has a perfectly legitimate business proposition put before the board in central Newfoundland for $200,000, and I'd appreciate it if it received "scrutiny," and just leave it at that. Surely that is not inconceivable.

MR. FUREY: That's conceivable.

MR. HEWLETT: Thank you, Mr. Chairman.

MR. FUREY: I should, Mr. Chairman, if you don't mind, just take a second. I just got a break out of the way the loans fall out in terms of the various categories, if you wanted to jot them down. Twenty-nine per cent of the loans for that particular year you have in front of you were small enterprise; 47 per cent were conventional loans; 20 per cent were equity; and 4 per cent were venture capital.

The Venture Capital Program is being looked at now and there may be some alterations to it, I should tell you. It is being looked at now; I am not sure that seven years interest freeze may be too generous and the amounts, the levels may be too generous, we may chop them back a bit. It is being looked at now, is it not?

AN HON. MEMBER: Yes.

MR. WOODFORD: Did you say 20 per cent equity and 20 per cent Venture Capital?

MR. FUREY: No. 20 per cent equity, 4 per cent Venture Capital, 47 per cent conventional and 29 per cent small enterprise. Am I getting those figures just about right?

MR. KENNEDY: That is correct, Mr. Minister. Those figures represent the amount of dollars that have been invested in terms of the breakdown by number of applications, the majority of our activity has been in small enterprise loans; 66 per cent of our business is in small enterprise loans.

MR. FUREY: Sorry. That is right, that is the amount of money, the $25 million how it breaks out percentage wise, but if you want the percentage of how they break out in terms of the actual applications, 66 per cent are small enterprise applications; 25 per cent are conventional, 7 per cent are equity, 2 per cent are venture capital.

MR. WOODFORD: I asked the minister, I think it was last year on this one and I just cannot recall the answers, so I will ask it again; with -

MR. FUREY: You hope I will recall them.

MR. WOODFORD: - the interest charged on those loans, they vary from what, a minimum to what maximum?

MR. KENNEDY: The small enterprise loans are charged based upon the bank prime and the corporation using the Royal Bank of Canada bank prime as being its benchmark and we set the rate at prime minus 3 per cent and the current right now is 5 per cent on those loans, reviewed every quarter.

MR. FUREY: That is the old Rural Development loan (inaudible).

MR. KENNEDY: The old Rural Development loans.

MR. WOODFORD: 3 per cent, there would be no prime, yes.

MR. KENNEDY: Yes, and they are fixed for a maximum of five years. The conventional loans are prime, which is currently standing at 8 per cent plus 2 per cent so the rates are at 10 per cent right now for the conventional loans. The equity investments take the form of usually preferred shares in the company and the dividend rate is set at the bank prime plus 2.5 per cent, so it is 10.5 per cent and that is the current rate right now.

MR. WOODFORD: How could there be a small business loan (inaudible) interest pay back of 16.7 per cent?

MR. FUREY: Say that again, sorry?

MR. WOODFORD: There is one here for my district. I have not seen the paper but he has told me and I -

MR. FUREY: Did he borrow when interest rates were high?

MR. WOODFORD: Now, that could be.

MR. KENNEDY: We reviewed the interest rates of the entire portfolio back in January of this year and, a lot of these rates that were extremely high would have perhaps been around when the Development Savings Bond Program was in force, but in any event, we made it a policy at the board that there would be no interest rate greater than 12 per cent based upon the review of the portfolio and the 12 per cent rate was established when the interest rate on the previously funded Development Savings Bond Program investments were set last September and the rate this year was set at - I am quoting from memory, I think it was at 9 per cent, but the 3 per cent spread which is what the board had adopted as its policy under the old bond program, we dropped every loan back to a maximum of 12 per cent, so there should be no loan on our books greater than 12 per cent right now.

MR. WOODFORD: Since January?

MR. KENNEDY: Yes sir, that is correct.

MR. WOODFORD: I will check that one out tomorrow because that was-

MR. KENNEDY: It would be effective January 1st.

MR. FUREY: Yes. In other words those guys with 16.75 would have dropped down, is that correct?

MR. KENNEDY: Yes, sir.

MR. WOODFORD: Why do you use the Royal Bank benchmark, do you just pluck it out of the air or what?

MR. KENNEDY: The Royal Bank is the corporation's conventional banker and we follow the money markets each week, and basically, as the rates change every quarter because of volatility of the rates, we just simply chose the Royal Bank as being the benchmark. The prime rate, as charged by conventional lenders is pretty well uniform across the board in any event, so that is the reason.

MR. WOODFORD: What is your maximum now in the stacking process, is it $60,000, the stacking process with ACOA? You had what is called a stacking process with ACOA up to $60,000 or is that -

MR. FUREY: ACOA has a stacking program, we do not.

MR. KENNEDY: No, there is no stacking program - ACOA has a stacking program, we do not. We will not get involved with, say, an equity loan or an equity investment and then lever that to get conventional dollars beside, for example. We won't do that. We would look at the project as being a strict - one of the instruments, one of the investments that we would use, whether it be a term loan or a venture capital loan or an equity investment. But we -

MR. FUREY: Conversely, ACOA only allows you to stack to a certain limit, from Enterprise or from any other funding agencies that are governmental. But we don't have a stacking limit, as far as I know.

MR. WOODFORD: We don't have but ACOA does. That's why - because some of the applications to Enterprise Newfoundland, you can use the same application with ACOA.

MR. KENNEDY: That's correct.

MR. WOODFORD: That's where I'm getting tangled up, with regards to them stacking.

MR. FUREY: That's why they go to ACOA first and then come to us.

MR. WOODFORD: You'll have that too. Enterprise Newfoundland can sometimes be taken off the hook with regards to loans by going to ACOA first. I'm sure -

MR. FUREY: True, but once they get the ACOA funding - a gentleman in my office today got a really good project under way, $250,000. The way ACOA operates, of course, is you spend first and then they redeem it. You were with me at the meeting, weren't you? You were with me this morning at the meeting. Anyway, go back to sleep.

It was $100,000 bridge financing he needed from Enterprise Newfoundland in order to start getting this thing under way. We are looking at trying to help him out in that regard.

MR. WOODFORD: Would Enterprise Newfoundland be considering more equity financing? Because that seems to be - I know that was one of the recommendations under the report from Employment and Unemployment. More equity.

MR. FUREY: Yes, it's increased, hasn't it, over the years. We're up to, what, $5 million this year of our total outlet?

MR. KENNEDY: The amount of equity investments by the corporation for the current fiscal year is about $5.04 million. You're quite right, sir, in the fact that the corporation is looking at equity as being a desirable way to lever up more conventional money. By going in in an unsecured position it enables the company to approach the conventional lender and get financing that the company wouldn't ordinarily be able to avail of. So the corporation is moving - is looking more and more to the equity as being a desirable investment instrument.

MR. WOODFORD: What would be the percentage - I don't know, maybe it's too early in ENL's mandate to I suppose look at foreclosures. But I'm sure you've had some. What percentage of the total loan base on an annual basis would be foreclosures, and what percentage would be bad loans? Or would it be too early in your mandate to tell that?

MR. KENNEDY: At this point it would be relatively early to be able to predict with any degree of accuracy what those numbers would be. The corporation has been in existence now for fifteen months. The percentage of allowance for doubtful accounts and the amounts to be recommended for write-offs is a document that is currently being prepared for the consideration of the board of directors. The preliminary indication for the activity of Enterprise corporation is that those numbers should be fairly low. But it is going to take a couple of years for some of these particular investment activities to mature to a point where we will be able to get some what we call very accurate figures on those.

MR. WOODFORD: Anybody else have any questions? If not, I could go ahead.

AN HON. MEMBER: Go ahead (Inaudible).

MR. WOODFORD: No? Getting back to the estimates themselves. Page 85, 3.1.03, Promotion Services, 3.1.03.10. Last year there was nothing budgeted and nothing spent, nothing revised. There are $90,000 there this year under Grants and Subsidies. What would that be for?

MR. FUREY: That particular amount is put there for seed capital for the 1997 Cabot Corporation, for the 500th anniversary. We hope to design and have signed in mid- or late-summer a special anniversary agreement which will allow this corporation to proceed to promote Newfoundland in the next five years. Because we see it as a major celebration. We needed to put that seed capital there because it will leverage out some ACOA funding and allow this corporation to get up and running while we're negotiating the final parts of that agreement.

MR. WOODFORD: Where would - or would it come under marketing- for instance, the strawberry festival come under, under value(???) development association? What heading would that be under?

MR. FUREY: Heading?

MR. WOODFORD: Yes.

MR. FUREY: I don't know if it would come under any heading. You mean in terms of grants we give them?

MR. WOODFORD: Yes. Would it be under 3.1.03, would it be under 3.1.02., Marketing?

MR. FUREY: 3.1.02.

MR. WOODFORD: 3.1.02?

MR. FUREY: Yes. Under the tourism agreement there is a component there, Mr. Woodford, called Festivals and Special Events and under there I think we give out up to a maximum of $1,000, is it, Sid?

MR. BLUNDON: (Inaudible).

MR. FUREY: Five hundred dollars for local and regional festivals.

MR. WOODFORD: Personally, I think that is too low you know for - there was some talk last year -

MR. FUREY: There are so many new festivals cropping up, that is the problem and everybody wants a little grant.

AN HON. MEMBER: (Inaudible).

MR. FUREY: Do you want him to speak to that just briefly?

MR. WOODFORD: - yes, because last year we talked about, what was that?

MR. FUREY: It was $30,000 budgeted last year or the previous year and given out in grants of $1,000 or something? The demand is just unbelievable. It is not just festivals, Mr. Woodford, I mean, I have one on my desk for the Craig Miller Avenue Homecoming or whatever it is; everybody and his dog has this homecoming or special event or special party, you know, something exciting is happening in their little corner of the Province and they want some seed capital to get some stamps and mail outs and all kinds of things you know, but let me just ask the assistant deputy to explain the Festivals and Events component of that agreement.

MR. BLUNDON: Basically, there are two phases in that particular program. There is one million dollars under the Federal/Provincial Agreement for festivals and special events. One program includes what we call local and regional festivals and that is basically the $500 grant. There are a number that have considerable potential to become national and international in scope, and under the guidelines, they can come in and access up to $25,000, $30,000, $40,000, $50,000, depending on their particular plans and as part of the application process for the $500, we have also given them a copy of the criteria that details the accessibility to other programs albeit, limited to approximately a quarter million dollars a year in total.

MR. WOODFORD: Why, under 3.1.02 (10), there was nothing budgeted last year, although you revised it to $187,000 and now, up to $300,000, what is -

MR. BLUNDON: What happened last year, as you recall the agreement was only signed I think in May or June, and there were no detailed plans on how that money was going to be spent. As we got throughout the year and items were identified, they did come up with a revised balance of $187,000, now exactly what the details are on $187,000, I have to be honest I really do not know, but we can certainly get it to you. The particular activities covered is to provide grants for projects approved by the managing committee including festivals and events, business service and planning and regional sectorial support, so it is the three components that are included under that grant and subsidies account.

MR. WOODFORD: Based on the information pertaining to festivals, the festivals around the Province, as the minister said, probably only take $25,000 or $30,000 and -

MR. BLUNDON: Well actually, we anticipate we are going to get about seventy-five or eighty particular requests; by the time you take festivals, events, special come home years and what have you, we anticipate that is going to take about $30,000 or $40,000 and I would suggest, because last year was the initial period, of that $187,000 I would suggest that very few dollars of that was actually for festivals and events. Basically we were telling everybody last year that the criteria will not even develop and approve by the management committee, so I have to assume that any monies spent under that particular program would have been for business service and planning and regional sectorial support. Again, that is a revised budget, it may not reflect what was actually spent.

MR. WOODFORD: No, but on the other hand, where I was trying to make a comparison, I mean it is one thing not to have anything budgeted and another thing to spend $190,000, but then again, there are $300,000 budgeted for this year and that is my question. There must be something -

MR. BLUNDON: Well what has happened is that, as the programs evolve and criteria have developed and the information getting out to those who are applicable to the agreement, we anticipate numerous applications and what we are actually seeing in the last four or five months, is that applications are coming in fast and furious and we fully expect the $300,000 to be utilized this year. Again, that particular program is application driven.

MR. WOODFORD: There would have to be a large increase in applications to drive it -

MR. BLUNDON: Again, it may not be just the $500 amount. I know for example the Grenfell celebrations - they came in and they received funding approval for $60,000 as a major celebration. I know we have the one in St. John's that just got recent approval for $25,000. So it all depends on the specific nature of the application. So like I say, $500 is small on a regional basis, with very little information, they're entitled to their $500. For those who want to come in and put together a program for an amount substantially in excess of $500, if they qualify for national and international, in scope - and the strawberry festival is an obvious one that we've talked about for a number of years - I know we have our staff out there now trying to work with those people to see if in fact we can develop an application that will address the national scope of what's already being done.

MR. WOODFORD: Yes. I'm not criticizing the amount as such but I find it hard to I suppose comprehend, when you get one festival come in, say the Grenfell centennial, give them $60,000, and you have a festival down your way, you have them out my way, the strawberry festival, which have been struggling for years, and bringing in lots of dollars. In fact, I guess you probably have the figures on for instance what the strawberry festival brings in during the ten days or two weeks. It's astronomical.

MR. BLUNDON: Very substantial.

MR. WOODFORD: And you just give them $500 -

MR. BLUNDON: But that's because that is all that they have - in fact, I'm not sure what they have actually made application for. But if they want to come in and apply for the $500 grant, they're eligible for it. If they want to come in and apply for the bigger program, and recognize the criteria that have been approved by the management committee, they're also eligible for that as well. So it's all dictated by the applications that are received.

MR. FUREY: Some of those are under special anniversary (Inaudible), Mr. Woodford. The Grenfell one for example is a special year-long celebration anniversary. You have to put fair dollars into that to promote it and enhance it. It's a one-time deal. The strawberry festival is recurring every year. You're right, we should probably put more dollars into it. If I had my druthers we would. We need to professionalize more of these festivals too.

MR. WOODFORD: They've formed a corporation there now so that may -

MR. FUREY: May make a big difference.

MR. WOODFORD: Make a big difference with regards to -

MR. FUREY: Because they'll be able to leverage other monies out, see, from ACOA.

MR. WOODFORD: As far as I'm concerned, on what they have now, the sort of marketing job that they're doing, what would they do for instance if they had $5,000 or $10,000? They are spending their own money now. A thousand dollars probably they would get from the Department of Tourism, or $500, plus $3,000 or $4,000 of their own, what would you do if they had $10,000 or $15,000? They might bring in a lot more. You know, it begs that question.

MR. BLUNDON: Exactly. That's what we're promoting.

MR. WOODFORD: When I look at those figures here, I'm still not satisfied to be honest with you, on that particular answer on that particular Grants and Subsidies. I think there's something not jiving there with regards to the amounts that are given to festivals. In any case, if there's anything new on it you can -

MR. FUREY: Which one?

MR. WOODFORD: On the $300,000 this year for Grants and Subsidies.

MR. FUREY: 3.1.02.10.

MR. WOODFORD: On that 3.1.02.05, same category. Nothing last year, $50,000 revised, and then $600,000 for next year. What would that be, under Professional Services?

MR. FUREY: Where are we again? I'm sorry. Number what?

MR. WOODFORD: 3.1.02.05.

MR. FUREY: Fifty thousand dollars and $600,000 this year?

MR. WOODFORD: Yes.

MR. FUREY: That $600,000 sits there as -

MR. WOODFORD: It's federal.

MR. FUREY: Pardon?

MR. WOODFORD: It's federal, federal dollars.

MR. FUREY: Federal-provincial. We've selected three areas of the Province - I think I'm getting this right - for theme touring routes. Whereby we would have special designed kiosks at the beginning and end of each of these areas and professional sign development and design through them. I think the areas, Mr. Woodford, are: the Viking Trail, would have $200,000 to complement the new chalet expansion at Deer Lake; the other one I think is the Burin Peninsula? Is that right?

AN HON. MEMBER: Yes.

MR. FUREY: Discovery Centre or Discovery Trail?

SOME HON. MEMBERS: (Inaudible).

MR. FUREY: Discovery Trail is Bonavista. Is that one of them? Anyway, there are three areas of the Province. I just forget what the areas are now. But they're $200,000 each, and it's under the historic resources and tourism agreement.

MR. WOODFORD: Okay. 3.2.01 (05), Professional Services. We budgeted $70,000 last year, we spent $30,000 and back to $70,000 again this year. What would be involved in that particular evaluation? 3.2.01 (05), Professional Services under Planning and Evaluation, that is current.

MR. FUREY: Professional Services, you are saying?

MR. WOODFORD: Yes.

MR. FUREY: That is the Comprehensive Labrador Agreement, tourism initiatives that are under way this year as part of that agreement cost-shared 70/30. We can give you a list of them if you want.

MR. WOODFORD: No, but the only thing about that is, there is nothing there under the cost-shared for federal/provincial in that particular heading.

MR. FUREY: Am I in the wrong one, 6.3.2.02?

MR. WOODFORD: No. 3.2.01 (05).

MR. FUREY: Oh, okay. There was $175,000 last year -

AN HON. MEMBER: No, no.

AN HON. MEMBER: $70,000, $30,000 and now again $70,000.

MR. FUREY: What are we looking at here boys, I must have the wrong list.

MR. WOODFORD: The same thing budgeted it's just that we spent $30,000 last year.

MR. FUREY: There are a number of studies around the Province that have not been completed that are going to be completed using that money and that is pretty simple; one of them I think, Mr. Woodford, is the Festival Coast in Bay St. George, that area. There are other areas of the Province which are trying to develop themselves into themed areas that require funding to do proper studies. There are other things carried under there too, exit surveys and studies we do (inaudible) and patterns and stuff.

MR. WOODFORD: Has anybody else any questions?

AN HON. MEMBER: You go ahead.

MR. WOODFORD: Industry Services, under Tourism Development, 3.3.01 (10).

MR. FUREY: 3.3.01 (10)?

MR. WOODFORD: It is pretty well dead on; last year's figure was revised but this year it is up, what would be involved there?

MR. FUREY: This is going to help us to assist in the running of twelve local information chalets. These are small grants we give them to help operate, located at St. George's, Gander, Corner Brook, Marystown, Springdale, Dunville, Grand Falls, St. John's, Labrador West, Goose Bay, Goobies and Hawke's Bay. Basically it is a direct grant to the twelve operating associations. The grants are to be utilized to subsidize the expenditures for seasonal employees, chalet operations and repairs, that is $60,000; funds of $30,000 will be used as the provincial government's contribution to the continued operation of the Signal Hill Tattoo; and the operating subsidy for Marble Mountain is covered under there as well for a total of $225,000. Marble Mountain's operating subsidy has increased this year to $135,000. They have a marketing specialist hired on now, the thing is becoming so big they need an executive director full-time, Kevin St. George just cannot carry it from a volunteer prospective.

MR. WOODFORD: Yes. Right next to that, 3.3.02, Tourism Facilities: would the Deer Lake chalet be included in that?

MR. FUREY: The Northern Peninsula chalet you mean?

MR. WOODFORD: Yes the Northern Peninsula chalet.

MR. FUREY: Yes. To expand the Deer Lake Information Chalet, there is $245,000 that is under way now, as you know we hope to get that open soon and the Argentia Chalet for $535,000, with Argentia being a major gateway.

MR. WOODFORD: Your travel generators for Marble Mountains is budgeted at $3,600,000 and spent $1,600,000, what would be the reason the other monies were not expended?

MR. BLUNDON: Basically, we put the budget together last year. We included $3 million in 1991-92 that was covered under the federal/provincial tourism agreement, and the federal government were responsible for $1.5 million and us $1.5 million. Initially it was thought that we would spend the $3 million and the federal government would reimburse us the $1.5 million. As they got through the process it was determined that they were going to fund it directly themselves, so their $1.5 million they spent themselves and they didn't reimburse us at all. So basically ours is a net amount.

MR. WOODFORD: Then the $750,000 in there for this year under Grants and Subsidies, what would that be for? Just strictly towards the development itself or some programs that have already been announced?

MR. BLUNDON: No, that is still part of the 3,600.000. Last year we only spent $2,850,000 associated with the transmission line removal, and the $750,000 is the carry over to 1992-93.

MR. WOODFORD: Did they call for proposals in the second phase for Marble Mountain? They were supposed to call for proposals.

MR. FUREY: There has been requests. What do we call them: Expressions of interest?

MR. BLUNDON: Expressions of interest, yes.

MR. FUREY: Expressions of interest for the base development.

MR. WOODFORD: Yes, condos and -

MR. FUREY: Yes, there has been a number of possibilities put forward, but we are looking at Housing perhaps doing the infrastructure development at the base first, and those talks are under way with Housing now.

MR. WOODFORD: Yes, they went and looked at it and surveyed -

MR. FUREY: We have had some interesting proposals from people, but when you pare them down I think about three of them are serious, three developers who have serious proposals on the table.

MR. WOODFORD: Do you expect anything to proceed this year because they had to go ahead I think with a new lodge and probably the infrastructure with regards to Newfoundland and Labrador Housing. Do you expect them to proceed this year?

MR. FUREY: Well we are into the talks with Housing now. We hope to have some kind of conclusive thing from them in the next month or so. Until we know what it is they are prepared to do and participate in, and what their numbers look like, it is hard for us to say. But nobody is coming into the base of the mountain for future development until that infrastructure is in place.

MR. WOODFORD: There will be a water system in the whole (inaudible).

MR. FUREY: That is right.

MR. WOODFORD: Is there anybody else with anything?

MR. FUREY: We may proceed this year with a new ski lodge though. I have had discussions with Mr. Crosbie and ACOA and the province may cost-share a new ski lodge between the two lifts. Leave the bar where it is but put a proper ski lodge there.

MR. WOODFORD: I want to touch on the beer dispute and where the minister and the government now stand with regards to the new developments, especially the last couple of weeks.

MR. FUREY: You know our position basically. I don't know if many Newfoundlanders know but we drank twelve million dozen beer here last year. That is a lot of beer. And we are trying our best to comply with the GATT ruling which had four particular offences outlined against Canada. We have basically come forward on three of those.

One of our bones of contention is the point of access problem that the US particularly and mainland Canada want removed. We have consistently said that it is our right and our jurisdiction to regulate how beer is sold and where it is sold. We continue to stand by that. We have made the case to the minister federally. The four hold out provinces were Manitoba, New Brunswick, Nova Scotia and Newfoundland, and I think amongst all of us we represent less than 8 per cent of the market, with Newfoundland maybe being about 2 per cent. We have put it in writing, we have stated it at federal/provincial meetings with the minister, if we keep our head low and comply with three of the four, I think we will be alright.

When I use the word foreign beer it is not foreign from other countries, I am quite concerned about foreign beer that is not produced domestically for our own marketplace. In other words if we stripped down that last requirement, what is to stop the major breweries from just producing en masse in the Ontario marketplace and just trans shipping into this marketplace, cutting their overhead, cutting their costs, displacing the jobs and upping their profits. There is nothing that prevents them from doing that with the exception in my view of that ability to regulate a point of sale, and that is what we intend to hang on to, and we intend to be tough about it - as tough as we can be about it - and I think we will be alright; it is my feeling that we will be alright.

MR. WOODFORD: I commend you for your stand. There is no question of the government's stand on it, because I just wish some other people in your caucus would do the same thing with regard to other commodities, but how safe would your position be, especially with the Province's position on interprovincial trade barriers? There is going to come a time when this is going to have to be addressed.

MR. FUREY: That is right. The position on the interprovincial trade barriers, the Atlantic agreement particularly, also has a clause in there for regional development. For example, if the Lower Churchill were to take off tomorrow we are not going to have the open tendering that is required under these new rules, under a special project. All we are saying is that because we are in a recession, because Newfoundland when we go in we go in deeper than anybody else; we are always the last out; we are always the toughest hit; what is happening in the fishery; what is happening in the paper industry; what is happening in the Hibernia situation; when you put all of those together, we cannot handle too many more body blows. All we are saying to the federal government is: if you have a plan for us for these displaced workers and high-paying workers and the ripple out jobs that go along with it indirectly, if you have a plan for us, we are all ears; but we have not seen a plan (inaudible).

I would love to make room for the U.S., and I would love to make room for the Ontario breweries, but at this critical point in time in our economy we cannot accede to that fourth point of access for anybody in any part of our marketplace, and we have been consistent on that one. It is tough because, as you say, the perception is that it could be contrary to our policy to strip down barriers, and we want to move in that direction; but where we are large consumers of this product, and where we produce it locally, and where labour relations are not bad, and where the jobs are high-paying and we ourselves are the ultimate end user, and where there is no litter stream because it is mostly bottles and returnable bottles, we had to do something to protect it, and we have looked upon that as a special case.

MR. WOODFORD: I notice a bit of a contrast, a contradiction, but I have to go right back to: Why did you change, or why did the government change, or the Department of Finance in consultation with you people, change the trout licence fee for nonresident anglers? What was the real reason for that?

MR. FUREY: Sorry - change what?

MR. WOODFORD: The trout licence fee?

MR. FUREY: Finance you are -

MR. WOODFORD: The Department of Finance, yes.

MR. FUREY: Increase the fee you mean?

MR. WOODFORD: They abolished it.

MR. FUREY: In that series of fees you mean?

MR. WOODFORD: Yes, for nonresident. Last year you touted it here in the same estimates that it was going to do the opposite, make sure that they control them and they have a licence.

MR. FUREY: On the guides and the rules you mean?

MR. WOODFORD: Yes, because for nonresident anglers now -

MR. FUREY: I guess Finance took a whole look right across the whole spectrum of licences, whether it was birth certificates or whatever, and decided to eliminate as many nuisance licences as they could.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: They never consulted your department?

MR. FUREY: You cannot trust that crowd in Finance.

AN HON. MEMBER: (Inaudible).

MR. FUREY: You were the Finance minister.

MR. WINDSOR: I find that incredible. One of the biggest problems we have in Labrador, as the minister knows, is trying to control people flying in from Quebec and fishing in Labrador waters. If there is no licence required you do not even have a right to go ask them now if they have a licence. You have less control now than you had before. I am not worried about the five dollar fee or the twenty-five dollar fee; that is peanuts. Now you have no control over nonresident fishing, and Labrador is where you will have a serious problem, and you already had it. At least you had something you could do about it, even though you did not have any money to enforce it.

AN HON. MEMBER: (Inaudible) control in Labrador.

MR. FUREY: That is one interpretation anyway.

MR. WOODFORD: I just wondered if they did consult with you because I was lead to believe, because of comments on it, that you were not consulted on it.

MR. FUREY: We offered up all kinds of licences, Mr. Woodford. I told them to take every licence and get rid of it, in Tourism and Development. All they asked for us was: Give us your licences; which one are aggravations? Didn't we send over a whole bunch of licences?

It says here, get rid of them all. The tourist establishment licenses - gone.

MR. WOODFORD: Oh yes, I agree with that. But I don't think -

MR. FUREY: You want us to bring that back next year, is what you're saying.

MR. WOODFORD: The non-resident is what I'm talking about, the non-resident. I think they have it increased from 400 metres to 800 metres from the highway. I think so, for a non-resident angler. That's on unscheduled rivers. On a scheduled river it doesn't matter, you still have to have a license.

MR. FUREY: Yes.

MR. WOODFORD: I don't know how the old program worked, but I understand from you people last year that it was working fairly well and it would stop a lot of this, people going in and raping our resources, especially non-resident anglers. Now they don't have to have a license. But anyway, that's about it.

MR. FUREY: I think we were talking in the context of guides and outfitters are what we were saying, and they still require those.

MR. WOODFORD: Yes, they're still required, yes. I have no other questions.

MR. WALSH: Mr. Chairman, if there are no other questions I'll move the estimates for the Department of Development, items 1.1.01 through 3.3.03, inclusive.

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

MR. CHAIRMAN: Before we go I'd like to thank the minister and his officials for coming in and being forthright in the answers that you gave to the questions from the Committee. They were thorough. I also would like to thank the Committee members for their questioning, the way it was done, and the orderly manner and so on. I would also like to thank Elizabeth, the recorder, and the Page for coming along. This now finishes our estimates from the Resource group. So thank you again, Mr. Minister.

The Committee adjourned.