Pursuant to Standing Order 87, Mr. Edward Byrne, M.H.A. (Kilbride) substitutes for Mr. Rick Woodford, M.H.A. (Humber Valley).

The Committee met at 7:00 p.m. in the Legislative Chamber of the Colonial Building.

MR. CHAIRMAN (PENNEY): It being 7:00 p.m. I will now call the meeting to order.

I would like to welcome everybody here tonight to our fourth meeting of the resource sector of the Budget Estimates Committee meetings. Tonight we will be reviewing the estimates of the Department of Industry, Trade and Technology and I would like to welcome the minister of the department the hon. Chuck Furey. I am the Chair for this evening, my name is Melvin Penney, I am the Member for the District of Lewisporte.

I would like to explain briefly the role of the Chairman of the Committee, basically it is the same as the role of the Speaker of the House of Assembly, to maintain order and decorum, but this is a much more relaxed format. The dress code is considerably relaxed, you need not keep your coats on or ties and of course you can bring coffee to your desk. Members need not be addressed by the district they represent, they can be addressed by name.

I would like to introduce as well the members of our committee; to my right is Ed Byrne, the Member for Kilbride, who will be filling in as Vice-Chairman tonight for Mr. Woodford, the Member for Humber Valley. On my left, Gerald Smith the Member for Port au Port; Oliver Langdon the Member for Fortune - Hermitage; Dr. Bud Hulan the Member for St. George's; on my right, Paul Shelley the Member for Baie Verte - White Bay; Alvin Hewlett the Member for Green Bay and our Clerk for this evening is Elizabeth Murphy. I would also like to recognize two other members from the House of Assembly here tonight and they will be more than welcome to ask any questions they wish when we get to the appropriate times.

Before the minister introduces his officials I would like to ask everybody to cooperate with the Chair and speak directly into the microphones. If any of the minister's officials answer any questions from the Committee they should first introduce themselves because this is all being recorded and transcribed by Hansard. It is important, since you are not elected members that Hansard would already be familiar with, that you introduce yourself each time. I would also like to remind the minister's officials that they are permitted to answer questions only if asked to do so by the minister and even then, they are required to limit their answers to fact and not engage at all in anything pertaining to policy.

Before we go any further, the minutes of the May 31st meeting has been distributed. Could I have a motion please that the minutes be adopted as distributed?

On motion, minutes adopted as circulated.

MR. CHAIRMAN: Mr. Minister, if you would now be so kind as to introduce the members of your committee and then you could continue directly into your opening remarks. We will allow you fifteen uninterrupted minutes for that. If you go over, we will just allow you the leniency and we will give the Vice-Chairman or his designate, equal time to then make his comments to you as well.

Mr. Minister.

MR. FUREY: Thank you, Mr. Chairman, and members. You know that I would not go over my fifteen minutes, not at all like me.

On my far right is Dorothy French, who is the financial person with the Economic Recovery Commission. Dorothy I am sorry I do not have your title. Is there some kind of a nice name?

MS. FRENCH: Director of Administration.

MR. FUREY: Director of Administration, sorry. Cathy Duke is next to Dorothy, she is here appearing with us tonight on behalf of the Recovery Commission too and I think Cathy you are executive director?

MS. DUKE: Yes.

MR. FUREY: Next to Cathy is David Butler who is the financial director of administration for Industry, Trade and Technology: next to me is Peter Kennedy, who is the Deputy Minister; on my far left is Patrick Kennedy, the Vice-President for corporate services of Enterprise Newfoundland and Labrador and next to me on my left is, Jim Janes, who is the President of Enterprise Newfoundland and Labrador.

First of all, Mr. Chairman, may I thank all these officials for coming out tonight; I did not realize so many people were going to come. Normally we just have the deputy and the president and somebody from the Recovery Commission, but I am glad that everybody is here tonight and I thank them for coming.

I suppose if you allow me a few minutes I can break this into four parts. I do not feel that it is necessary to go from a script tonight to describe the role of the department or the ministry. I think, basically, the budget and the estimates have been before the people now for some two or three months, democracy sort of intervened and we had an election; the election basically was on this budget and these estimates and so we present them formally to this committee tonight.

The Strategic Economic Plan, essentially tabled by the government last June, said that we ought to look at some areas and focus on them in terms of economic development. That gave rise to the government considering creating two new departments, the Department of Development, Mr. Chairman, of which I was minister for three years and three months, essentially, it was the collapsing of four-and-a-half ministries under the former government into one ministry. It was most difficult, most cumbersome and it took a great deal of my time and energy to focus on a lot of issues. The strategic plan determined that we ought to break out some of these divisions and create some new departments, and after consulting with the people around the Province they said we ought to create Tourism and Culture so we moved on that rather quickly and the new department, Industry, Trade and Technology, which in its very name tells you the direction and focus of that department.

Some of the things we learned as we studied and prepared to set up this new department was that there are new emerging industries that we really have not taken hold of and one of the things we learned was that, while it is all well and fine to rely on our resource based economy and the traditional industries that have sustained us for 500 years, we have to start looking in new directions toward the new economy, that is not to say we abandon the old, but there has to be a happy balance between the old and the new economy; and the new economy, where industries such as information industries, which accounted for some $15 billion across this country last year and had a growth factor of 8 per cent, when you think about that, what was Newfoundland and Labrador doing to capitalize on that? Not a whole lot.

Environmental industries which is a multi-mega billion dollar industry worldwide, as the world becomes more sensitive to the ecosystem, what were we doing with that? Not a whole lot. Manufacturing, which is an unsung hero in this Province, many people do not realize it but 610 businesses in this Province create products within this Province for the domestic market and for export, you know, what were we doing with that? It had a $700 million value in production last year and accounted startlingly, for 4 per cent; 4 full percentage points of our gross domestic product can be targeted to the manufacturing sector.

What were we doing to that to enhance it to cause it to grow and to put it on a positive path? There was no discipline and focus in these areas, so that gave rise to the new department of Industry, Trade and Technology. There are two divisions in this, two separate assistant deputy ministers, one for Trade and Investment, the other for Industry and Technology. Then there are sectors that we highlight in the department, and I can table these for you later if you would like, but offshore industrial benefits, which essentially allows us to monitor the Hibernia project to ensure that the agreements put in place, the very good agreements put in place by the previous government are adhered to. There is a whole division that monitors these things and in fact, in that little division we have monitored some 102 companies, who all, these Newfoundland companies, gained contracts in excess of $100,000 each in the last two years. That's pretty substantial. We've helped to create joint ventures with local companies which don't have the technological know-how, matching them worldwide, whether it's Europe or in Asia, or in Canada or in the United States or South America. Bringing and bridging the technology back into these companies. So that division is responsible for that.

The industrial technology and information industries. We talked a little bit about that. There are some thirty or forty small information industry companies, mostly located on the Avalon Peninsula, that are doing really fine work, that need some help to grow and need to be nurtured and need to be helped along. The manufacturing industries, I just talked briefly about that. I will get into more debate about that later if you like. The service industries, consulting companies and that kind of thing. Those are four sectors that sit right underneath Industry and Technology.

Over on the other side in Trade and Investment we have a branch that is called business analysis. What that does is look at all of the - in partnership with other departments, particularly Finance - they'll review business plans and loan guarantees and requests through government, through the line departments, wherever it's necessary to pitch in and help there. Mostly on the loan guarantee side. There's marketing and investment, which we see in that division great potential and great opportunities. I will talk a little bit about that later. The other one is strategic procurement, which essentially has taken the great work of the ERC in respect of supplier development and is moving forward to say to Newfoundland companies: what kinds of things are you buying and what can we provide, and how can we be competitive to provide those products?

I'm trying to give you the quick, thumbnail sketch of the department. We can certainly get into the heart of it later if you'd like, but there are some other things I'd like to talk about.

That's essentially the department. Our mandate is outlined very clearly in the action items in the Strategic Economic Plan. The deputy and the senior management of the department have met with each of the divisions, separately and collectively, and in effect have had a number of retreats just to talk about how we can focus laser-like on this department to create economic opportunity.

That's, as I said in the beginning, to try to marry the old economy, which is the resource base that's declining, with the new emerging economy. Not to abandon the old but to, as we find ourselves in difficult times, with the depletion and diminution of the resources, fish and timber. You see what's happening in the paper industry around the world. Recycling has come on. The blue box program. People aren't using as much paper. There's less demand and therefore it's causing a ripple effect back through the economy. Less trees are being cut, less paper is being made, that kind of thing. While we're seeing a reduction in the resources - whether it's fish or paper or minerals - we have to try to accelerate and kick start the engine of the new economy in our own little corner of the world. That's essentially what this department is attempting to do.

Mr. Chairman, if I can just switch gears for a second. There are four parts, as I said, to my opening. The Department of Industry, Trade and Technology. The second part is Enterprise Newfoundland and Labrador. This corporation, as you know, was set up two and a half, three years ago. It's mandate was to seek out new opportunities for small and medium-sized businesses. We can certainly get into the kinds of things that they do over the next couple of hours tonight. It has a capital loan portfolio of $2 million per month which is $24 million per year. It doesn't normally flow, that $24 million, because there's a lag time between actual approval and actual dispersement. I guess it's operating budget is around $13 million. That about right?

AN HON. MEMBER: (Inaudible).

MR. FUREY: Eleven point eight million dollars. Under the umbrella of this particular corporation lie a number of agreements. The Innu agreement of Labrador, the Inuit agreement, the Labrador comprehensive agreement, the world development agreement, the Enterprise-ACOA network agreement, which is the electronic highway agreement we put in place some years ago. Does that about get all the agreements or did I miss one?

AN HON. MEMBER: (Inaudible).

MR. FUREY: Oh, and the NRC, the National Research Council, also sits under there. I guess we have about 175 employees spread across five major regions in the Province with eighteen satellite offices reaching into isolated areas. Its mandate is to deliver the decisions right in the areas rather than here in St. John's. That was one of the great complaints that the former government discovered under the House Royal Commission, that decision making was always in a cocoon here in the capital city so we wanted to break out of that.

We allow loans of up to $100,000 to be approved in the regions and we are just gearing up now to increase that threshold to $150,000. Under the Rural Development Agreement we allow grants up to $2000.00 or $ 3000.00 in the regions so that they do not have to track down paper work and get signatures. If it is good and the region says it is good we will stand by the region. Last year, I guess, we helped 375 companies and there were 3000 new jobs created, and some 5000 protected, maintained or enhanced, for 8000 jobs. It is not just the dollars these people dispense and disburse. Ninety-five per cent of the people at enterprise, 95 per cent of their energy and time is dealing and communicating with companies, and offering them expert advice, whether it is a business analysis, a person, an engineer, all the expertise that come under that umbrella, or our business resources library where we can actually get instant information on contracts and what is happening anywhere on the planet to our people rather quickly. Enterprise is performing, I think, a very valuable service to our people and the reaction we generally get back is very positive.

Moving to the Economic Recovery Commission, they essentially have been given as you know a six to nine year, or ten year, depending upon which document you are reading, mandate to look at the general structure of the economy and be our think tank and policy people, offer up some solutions and some specific programs. In the early going they indeed formed the board of directors of Enterprise Newfoundland, when we set it up, which gave them not only an avenue to think policy through but also a vehicle to find expression for that policy whether it was financial or otherwise.

We are just moving now to put some private sector people, for the first time, on the board of Enterprise Newfoundland. We just appointed three private sector people, a businesswoman from Stephenville, a businessman from Gander and a businessman from St. John's. In concert with that we have taken one of the four commissioners off Enterprise Newfoundland to free up that person to do some more policy work and to move in other directions. We will be doing more of that over the next number of months. We will be taking another commissioner off and putting another private sector person on because we believe that enterprise is up, it is young but it is strong. It is young but it is strong and it can move forward on its own.

The Recovery Commission has done some brilliant work in developing new sectors of what they call opportunities for growth. They have isolated eleven sectors and put forward for public consumption eleven very good studies that show new directions for people who are interested in going in these directions, new pathways to break into business. They have also done some superb work on the craft industry, the five year craft study was produced by the Recovery Commission, and the adventure tourism study was produced by the Recovery Commission. The latest program they brought forward was the Newfoundland and Labrador Conservation Corp for young which I think is absolutely exceptional, so they have done lots of good work. With respect to their budget, initially in 1989 they were given $3 million but they have never, ever seen $3 million. What is the most you have seen Dorothy?

MS. FRENCH: $2.6 million.

MR. FUREY: They have never, ever used what was there initially for them to globally use and I think that augers very well for them because lots of people try to fill up their budget, spend it, and then come back. Every single year, as far as I can tell, you have reduced your budget. Right down to this year it is below $2 million?

MS. FRENCH: This year it is $1.8 million.

MR. FUREY: I think you have to be commended. It is one of those things where people attack blindly without really knowing and flushing out the kind of things that are happening or the kind of things that are being done. I know you are also doing some valuable work on a new income support strategy which we hope to be in a position to talk about publicly in the next number of months.

There is one other area, Mr. Chairman and members, that comes and reports to the Department of Industry, Trade and Technology and those are three Crown corporations. The first of these is Newfoundland Hardwoods which has its head operation out at Clarenville. We have about forty, I think if memory serves me, about forty or fifty employees there. It is one of those Crowns that actually makes money and pays dividends into the government yearly. So we are pretty happy about that but in line with our private sector strategy, we intend, when it is proper and right to divest of that if indeed the marketplace is willing to pay the price.

The other one is the Marystown shipyard. That is quite an enormous Crown corporation which operates out of Marystown. It is also involved in a joint venture arrangement with the Norwegian company, Kvaerner Rosenberg out of Oslo, Norway. That joint venture is a 50/50 operating company which was put in place to operate the magnificent new state of the art facility at Cow Head, five miles north of Marystown. In fact, I was down there last week with the Premier and Mr. Crosbie was supposed to come but the weather was bad, he could not fly and we opened that facility. That facility was purpose built by the people of Canada and the people of Newfoundland, cost-shared, to seek out the mechanical shaft outfitting contract at Bull Arm for the gravity base system. If we are successful in getting this contract it will be worth some $100 or $110 million and could put 400-500 people to work for a good long time down there preparing this work.

We have been successful in winning the barge pontoon contract for $4 million that has put 100 people to work. We have a very good solid bid in on the refurbishing of the fisheries vessel, which if we win it, it could be a $25 million contract. There is also a $2 million training program on the way, 160 people taking advantage of that. So there are good things happening at Marystown. We have a solid base, good infrastructure, a skilled and trained workforce, a fabulous new president, a great joint venture with a Norwegian team and we are positioned well to take advantage of that contract.

The last Crown that reports under my particular department is the Labrador stores which used to be in the line department of the government, the old Department of Development, then we moved it out under Enterprise Newfoundland, the Labrador region and created a subsidiary called Labrador Stores Incorporated. They have an operating budget of roughly $5 million. We did a study some two years ago which was prepared by Deloitte & Touche and they told us that there were a great many efficiencies that could be built into this operation. Governments by their very nature are not good shopkeepers, we were losing a lot of money but I am happy to tell you that we have gone in two years, from over $1 million in operating subsidies to less than $200,000. So we have built in some good efficiencies, we have improved the service and there has been no, that I can see or tell, any diminution of service. There has been no, on the other hand, gouging, unfair pricing or practices in that region. I will be visiting those stores in two weeks time and talking to the public up there as well.

With that, Mr. Chairman, I am sorry if I went on and on but there it is.

MR. CHAIRMAN: Thank you, Mr. Minister. The minister has just used seventeen minutes in his opening remarks. I will now allow the Vice-Chairman equal time, seventeen minutes or if he wishes a designate.

MR. E. BYRNE: Thank you. I would like to thank the minister and welcome everybody this evening. I guess I have some questions in a number of areas. The Strategic Economic Plan, is that directly under your department or is it run strictly out of executive council?

MR. FUREY: The Strategic Economic Plan is budgeted under executive council.

MR. E. BYRNE: All right, fair enough. I just wanted to clear that up.

Some of the environmental industries that you have talked about, could you elaborate on the types of -

MR. FUREY: I am sorry?

MR. E. BYRNE: With respect to the environmental industries that you've spoken about, or identifying new opportunities in the new economy. Could you elaborate in any way or in detail on what some of those industries are that have begun, or have not begun, or that you hope to begin?

MR. FUREY: Yes. The only problem is how much can I talk about, because there are a lot of companies that come to see me, they want to talk (inaudible) -

MR. E. BYRNE: I understand, but are there any examples where your department has initiated or helped initiate?

MR. FUREY: Yes, there are. The three that I can think of are still on the drawing board and there are patents pending and -

MR. E. BYRNE: Oh, fair enough.

MR. FUREY: - there's a lot of confidentiality. But in a general sense I can tell you that one of them deals with major cleanups of oil using new technology called imbiber beads. That's a technology that's a joint venture arrangement between a St. John's company and a mainland firm which we're now currently helping. We had helped them under the ocean industries agreement and we're helping them under the SIID agreement. That's the Strategic Investment and Industrial Development agreement, which is a $45 million agreement.

If the hon. member just thinks in a general sense, when I talk about environmental industries we're talking about industries that are coming to the forefront which recognize that the world is demanding that we clean up the mess of the past.

MR. E. BYRNE: (Inaudible).

MR. FUREY: Right? The environmental legislation that's currently in place in a very strong way protects future development, because the hoops that you go through - they're almost mind-boggling when you think about it. One of the chief complaints I get as the minister of business is: just tell us if we can't do it, stop giving us the runaround. There is a lot of work out there to be done to clean up what's happened in the past. Whether it's pollution of rivers and streams, or whether it's the Long Harbour pollution, whether it's in our forests or whatever.

MR. E. BYRNE: So (inaudible) -

MR. FUREY: The companies that are looking to Newfoundland, and the Newfoundland companies that are here now that are involved in the environmental industries, are looking at our marine environment. They're looking at potential oil spills. They're looking at the bilges that are being flushed along our coast lines. They're looking at the outfall of sewage from municipalities, which really augurs negatively for aquaculture. They're looking at these kinds of areas, many of them, in terms of our marine environment.

It's difficult for me to talk about specific companies, because the ones that are on the tip of my tongue are -

MR. E. BYRNE: I guess the question really was: have there been any companies initiated that your department has helped? Not ones that are still on the drawing board, but any specifically. You've answered the question generally, so....

MR. FUREY: Yes. Hi-Point Peat out of Bishop Falls is a good example of a company that's been helped. There are some other environmental companies. Helitactics, for example, is a remote fire fighting, which of course is to protect the environment. We just helped them with a major grant and they're now pursuing work this summer in Central Newfoundland. It's a St. John's company. There are a number of other companies. I can give you a list.

MR. E. BYRNE: No, that's fine. On another subject -

MR. FUREY: But that's an emerging industry -

MR. E. BYRNE: No question.

MR. FUREY: - that has just immense potential.

MR. E. BYRNE: Are there any federal-provincial agreements looming on that front, are in place or -

MR. FUREY: There's one that we did sign. As I just said, it's called the Strategic Investment and Industrial Development agreement. Which has a whole series of components which allow companies to come in through one or more windows. Whether it's marketing, whether it's hiring expertise, whether it's world travel to trade shows to find joint ventures, whether it's taking new products and building a bridge commercially across into the marketplace. Those kinds of things. It's a substantial agreement, it's $45 million, 70-30 cost-shared.

The ocean industries agreement, which was amended some time ago, is a $14 million agreement which also provides that kind of opportunity for companies to come in and access government funding. We have a small component in our department called the market and product development, the MAPD, where we cost-share 50 per cent of anybody's travel to world shows, environmental shows et cetera. In fact, our department just brought some companies to the Vancouver World Environmental Conference and they made some connections and joint ventures there. I just can't think of the companies offhand. Moya Cahill's company, what's that called? Does anybody remember?

Enterprise also helps small companies and medium-sized companies but they do not get involved in grants; it is straight commercial banking with preferred rates in certain instances.

MR. E. BYRNE: With respect to the Maritime Economic Union Initiative, do you see that potentially hurting the Province here and the workforce? Do you see it as a golden opportunity for the people of the Province and the workforce that is here, could you elaborate some of your thoughts on that?

MR. FUREY: The Maritime Economic Agreement?

MR. E. BYRNE: Yes.

MR. FUREY: I have not heard that one spoken about in a long time.

MR. E. BYRNE: No, but it is something that I think is of importance anyway, and will, as time goes on be of more importance specifically if we do not have the infrastructure or training in the technology available to take advantage of other opportunities; it could be that at this point in our time and history we could be taken advantage of yet again, but it is again, a general question just to get your general comments on it.

MR. FUREY: Yes, and in a general sense, if the trading block forms and if that economic block forms. This is a personal opinion but from everything that I have read and some economists to whom I have spoken - I do not think it will hurt us, I do not think it will hurt us, but that is me; but you know, was it George Bernard Shaw who said you can put economists, line them up head to head until the last one falls down and they still would not reach a conclusion, so who knows?

I can tell you one thing though, that if that trading block happens, it will radically shift our trading patterns back to what they were pre-confederation, we never traded East/West, we always traded North/South. We sent our fish South, we took goods back from the South; when they came North we were a trading nation along the Eastern Seaboard. Confederation in some ways, while it was a blessing perhaps cursed us in other ways, because subsidization allowed Central Canada to dump their products in and displace that which we made and were proud of making. In a general sense I do not see it hurting us, but who knows.

MR. E. BYRNE: I guess a couple of questions with respect to Enterprise Newfoundland and Labrador. With respect to the loan that was given recently to Triton Airlines, could you elaborate on what the decision-making process was on advancing a three-quarter of a million dollar loan to a private company; it is the process in which I am interested and not necessarily - Yes, you should have given it to Triton Airlines or, No, you should not have, it is the process in which I am interested.

MR. FUREY: I would be happy to do that.

This is a young, aggressive company and it is one that I have said publicly deserves high marks for their energy, their efforts, for everything that they tried to do. The process is very simple. They came to me as minister and told me their story. They put a lot of cash, their own personal wealth into kick-starting this. There were a 100 or a 120, depending upon the numbers that you use, Newfoundland and Labrador jobs on the line. It was a wholly owned Newfoundland company, they came to me and said: we are in a crunch and here is why and they told me why, and without getting into the details, their basic problem was one of a technicality.

MOT, the federal Department of Transportation -

MR. E. BYRNE: Yes, I am aware of that.

MR. FUREY: - allowed them to do certain things by way of ministerial exemption. When it got down into the bowels of the bureaucracy with great deference to the bureaucrats, it got triggered by some technicality, they were grounded. That cost them a lot of money. In their initial business plan which appeared to be a sound plan, they had allocated X numbers of millions of dollars for operating capital, smart! That capital was flushed out to pay other airlines for stranded passengers to fulfill their contract, because every time we buy an airline ticket, it is a contract. That sapped their operating capital; they came to me, their problem was two-fold. Number one: we need some help with operating capital in the short term. Number two: we need an answer right away.

The normal process for that kind of a large pool of money and $1 million was the original request; that kind of process takes a while, I mean you just do not give a loan guarantee over night, that is not the way governments in the past or this government operate. In a sense you have to analyze the plan, you have to get into the details of what it is they are asking, it has to cross over three departments, it goes to treasury board and then finally makes its way to Cabinet, then there is approval and then the arrangements have to be put in place and the letter sent out... to long minister, it will take too long. So then as part of the process, I said: well, if we cannot do that I will ask you to go over to Enterprise Newfoundland and Labrador. They have, as you know, authority up to $1 million to approve, beyond $1 million it must go to Cabinet for approval. I think since the life of the corporation, there may have been about four that came to Cabinet, two turned down and two approved, as I recall.

So, they went to Enterprise and the Enterprise team put a team of specialists and financial people right on this problem to deal with it as quickly as they could to help these fellows out of a bind. So, they came up with an offer and the offer was $750,000 with a series of conditions that must be adhered to. The principles accepted our offer - our approval in principle and signed a letter of acceptance, as I recall. Now, they came back and said: there are a couple of these that are tough. You know, you guys are really choking us on this one, can you loosen up some of these terms, or one of the terms?.. as I recall, and we said yes. We softened one of the conditions but you see, we have a delicate balancing act to play too. I mean on the one hand our hearts go out to this Newfoundland company that are creating jobs and I tell you, I am really serious when I say that I am really - when I sat with Mr. Roberts I was most impressed with this fellows energy, his drive, he is almost a neo-nationalist in some ways when I got chatting with him but on the other hand, the other side of the scale is that we have to balance that, that these are taxpayers dollars, they are not mine, they are not his, they are not yours, we all -

MR. E. BYRNE: So, the process then went to you, from there it went to Enterprise Newfoundland. Enterprise Newfoundland then looked at the business plan I suppose -

MR. FUREY: Yes.

MR. E. BYRNE: - and made a decision that there would be a short-term loan of $750,000 -

MR. FUREY: Until November.

MR. E. BYRNE: - provided to Triton Airlines up until November you said?

MR. FUREY: November 30th, that is right and that was satisfactory to the company because essentially it was a bridging arrangement which will allow their planes to get off the ground, put them in a cash-flow position, allow revenues to come back in, those revenues will be diverted to cover that loan and ratified by November 30th. It all made sense but you see the problem was that we - the other half of the balancing act is that we have to protect the taxpayers. Not only have we got to protect the taxpayer but I, as minister, have got to protect myself from you guys who are going to throw the Auditor General's report at me next year as you did this year, for not securing the loan. So, we secured the loan, we secured it in a very reasonable manner, we believed, but as far as I know they have not taken up the offer yet?

AN HON. MEMBER: No, they have not.

MR. FUREY: Have not signed for it. So that is, in a general sweeping sense, how it evolved.

MR. E. BYRNE: Okay. With respect to the Economic Recovery Commission, again a general question, there is not a lot of time to get into details. In terms of actual jobs created you eluded to earlier, how many jobs has the Economic Recovery Commission - is it estimated how many jobs that the Commission has created or is it more a research and policy sort of set up that assists government in evaluating other areas from other departments?

MR. FUREY: Yes, I think you have answered my question for me in the second part of your preamble. Anybody that is going to look at the Economic Recovery Commission and ask you or us to march out with ten or fifteen or eighteen jobs, they are going to be most disappointed. That is not the nature of the Economic Recovery Commission. Its job was to look at the structural - what are the weaknesses in our economy and how can we correct those? You see, I suppose in a sense, we fell down on the job in our communications when we first set up the Recovery Commission because its very title almost misleads - somehow there is going to be an instant economic recovery and therefore everybody will be working, the unemployment rates will drop and prosperity will happen. These are all ideal things that we would strive for but that is not the nature nor the mandate of Economic Recovery. They are there to create a climate and to fix some of the inherent structural weaknesses in our economy. Some of them have to do with the things they are working on now, the income security system, everything that we do in this country and in this Province now, if you look at it and you are honest about it, is a disincentive for people to work. We've got to try to straighten out and level the playing field and pull the disincentives out and create incentives and opportunities for people to go to work.

If the hon. member is asking me to march out the list of jobs there just -

MR. E. BYRNE: No, it wasn't so much a request to march out the list of jobs as it was a - I just tried again to get a general sense of, with you as minister, what is the role the Economic Recovery Commission plays within your department, and for the Province as a whole.

MR. FUREY: It's very much as you said in the last half of your preamble a think-tank policy generator that allows them to say: here are our ideas. By the way, you should do this in forestry. Here's some new and interesting things that you should be doing in the environment side. Here are some things you should track down in terms of business opportunities. It's loosely structured that way so that it's not hemmed in by the traditional bureaucratic rules and not smothered. We intentionally set it up that way.

MR. E. BYRNE: Okay.

MR. CHAIRMAN: As members of our Committee have become aware, and I'll ask the minister to note, the procedure that this Committee has been following is that it will ask the members to not make a ten minute speech in which would be five or six or eight or ten questions, and then ask the minister to answer them all. But to proceed in a manner very similar to what we would use during question period in the House of Assembly. That's to ask a simple question, with a preamble if required, and as the minister answers that one then to ask another. We will limit this time to ten minutes per Committee member, but we will allow it to go back to those Committee members as often as required.

I would ask that as the Committee members are cooperating with the Chair in this regard that the minister would also cooperate with the Committee in keeping his answers as brief as possible.

I now recognize Dr. Hulan.

DR. HULAN: Thank you, Mr. Chairman. Mr. Minister, I might say I think that you have probably one of the most exciting portfolios in this government of ours, and I think you're doing a good job. I have to say that, because I watch it very carefully, being a scientist and a technologist. I know some of the people here, especially from the Economic Recovery Commission. I've dealt with these people a lot in the past and I can take my hat off to that Commission for the job that it's doing.

I think it's fair to say, and others before me have said, that if we are going to come out of the doldrums that we are going through in Newfoundland today, and going to the year 2000, we're going to do so with having a strong base in science and technology. I've included in here science as well as technology. Because it's very difficult to separate the two when it gets down to the nuts and bolts and the practicality.

Having said that, and that's enough of a preamble, what will your department be doing in the future with regard to - are there plans for cross-fertilization of the Department of Industry, Trade and Technology with the Department of Education to take care of what is somewhat of a void today, the science aspect, and marrying it with the technology?

MR. FUREY: Thank you very much for your kind remarks. It's nice to hear somebody say that you're not doing a bad job. I know you to be a sincere fellow so I accept that, and I thank you for your comments about the Economic Recovery Commission.

The short answer to your question is - there are a number of parts actually that I'd like to speak about. The government released about a year and a half ago its new science policy. I think you're aware of that. It's actually a wonderful, very simple document that lays out the objectives of what the Newfoundland and Labrador Science Council, which also reports to this ministry, lays out where the Province should be going in its education system, in its business system, right up through the political system.

Incidentally, we just put a new board in place on the Newfoundland and Labrador Science and Technology Advisory Council, and for the first time in years and years it is top heavy with private sector people, people who operate in the real world. Now that is not to say that it is not good to have people from the academic world or the political world, but we thought we would try this at least once, to put the majority of men and women who sit on that board who are presidents and CEOs of small and medium-sized companies, that operate out there in the real world and sign the front of cheques every week. The President of Matrix Industries, Ultimate East Data Communications, I cannot remember some of the other ones, but these are people who are out there chasing contracts in the real world, exporting to Japan, the South China Sea and these kinds of areas.

The government thought long and hard about what you were saying, creating that synergy between industry and education, removing the barriers, crossing the lines and in fact, a lot of thought went into it through the ERC, Susan Sherk in particular, did a lot of the spade work to create the foundation upon which we built that new human resources agreement, and that human resources agreement is aimed very much at making our schools - Mr. Decker was telling me in the House today, that every single school by late next year would be computerized; there will be a network and electronic highway right around this Province to every school because if we are going to operate the new economy, we must have instant communication, instant transmission, instant reception of information. We cannot operate otherwise. We have done that with the ACOA enterprise, electronic highway through the development associations around the Province. Mr. Crosbie and I signed that agreement a year-and-a-half ago, two years ago. That is up, it is running and it is magnificent. Anybody who looks into it will find it is operating just first class. Richard Fukes is just on a brain storm with the job there with that.

Similarly, we need to tie all of the education system into this new electronic world in which we find ourselves. The $43 million human resources agreement will do just that. Let me, while I am on that subject recommend a book to you. There is a lady who writes for the Globe and Mail, her name is Nuala Beck; she is quite an interesting writer, she just published a book called Shifting Gears. It is called Shifting Gears, The New Economy, it is a short read, about 125 pages, it is easy to read, a brilliant book, and in there she says: If people are to be trained, there are three areas where they ought to be trained otherwise it is just the game of moving rocks, one pile of rocks from here to a pile over there; it is make work, make madness is what it is, but if we are really going to put dollars into training and we are really going to cause them to seek out new opportunity, there are three areas that they must learn, computer literacy, you have to become computer literate.

How many in this room tonight I wonder are computer literate, that is not to say turn the mouse on and punch it and get a few graphs up and a game of golf, I can do that, but how many are computer literate, prepared for the real world out there because that is what is happening. You should see them in Grades V and VI; Gerald you have seen them in your school, it is just amazing to see these little kids go rabid on these machines; they are breaking their minds into the new economy and they do not even realize it.

Secondly, we have to understand and learn how to transmit information and receive it. How many of us around here know how to use a phone modem to get information from Infaglobe, pulling it down off a satellite anywhere around the world; how many can send a fax? I cannot, how many in this room can send a fax? I swore on that fax machine yesterday about 20,000 times but I know how to do it now and the other one is basic use of numbers. I do not know what we are doing wrong, maybe it is because we have sent the calculators too quickly to the classrooms at kindergarten and wherever, but young people are not learning to use basic numbers. Computer literacy, sending and receiving information and working with basic numbers. That's what she says will create the new opportunities.

There's something else we've got to do too. We've got to get out of this mind-set that we send our youngsters to school to get a job. That day is gone, it's over. We see what's happening in Japan, in Germany, and parts of Europe. They're sending them to school to get the tools to create a job. They're sending them into the schools to create a job. Not to make one. Not to get one. Not to depend on somebody else. But to learn independence to go do it yourself.

You'd be interested in this. We're helping companies in the Canadian space industry. Space station Freedom. We met in the Washington Embassy with the Ambassador last year, twenty or thirty of our companies. We managed to hook into some small contracts. The group at the University just did -

AN HON. MEMBER: C-Core.

MR. FUREY: C-Core, yes, just pulled down a $500,000 job. As they start linking and learning and picking up subcontracts we can build on that as well. But you're quite right when you say that there has to be a stripping down of barriers and a razing of walls and starting to find that synergy to work together so that we can all pull this team forward.

DR. HULAN: I was interested in your comment about the 610 companies. You're right. Most Newfoundland people don't know how much is manufactured in this Province. I've been doing some work with that group of people over the last number of years and they just put on a great display here. What they have done is identified something here in the Province and gone with it and developed a great organization and encouraged a lot of manufacturers. I'm just making a comment now, Mr. Chairman. I see the same thing needed in the other great industry that's not even touched in this Province, really, and that is the agri-food industry. Until they do what the manufacturers have done it's always going to be where it is.

Anyhow. You mentioned information industries. What are we going to do, Mr. Minister, about the proliferation of networking around the world? Networking is great, but it's - everybody and everything is networking today. It's almost getting to the point that it's no longer an interesting novelty any longer. There's a lot of networking out there that isn't of any value. How do we sift out the wheat from the chaff as far as networking is concerned?

MR. FUREY: Boy, I tell you, that's almost as easy as winning the lottery, that question. That's a tough one. I don't know what the answer to that is.

AN HON. MEMBER: (Inaudible).

MR. FUREY: Yes, fourteen million to one. That's a tough question, Dr. Hulan. Networking is extremely important.

DR. HULAN: Yes.

MR. FUREY: We tend to - I did, as an Opposition member, tended to slam the government when there were missions moving around the world and stuff. Funny old thing, though, you know, when you get involved in it yourself and you see what's happening, and you start seeing some of the good things that are happening, you start feeling a little bit guilty. Not too guilty. A little bit guilty for some of the things that you said back in your old form.

Let me give you just a small example. When I was in Houston last year I spoke at a press conference about Hibernia. There were some fifty international media there. I was struggling to put the best face on Hibernia that I could. This fellow came up to me after, he was from New Orleans, and he said: I believe what you said, I believe that you're going to find a partner, I believe that Hibernia is going to go ahead, and under difficult circumstances you did well. Then I discovered that this fellow had been talking to one of our companies. It was a diving company.

The company is called Pro Dive. I don't think it's any problem to talk about the company. The president of that company, he's just a little dynamo of energy, this fellow, David Squires. David said: Minister, we're just arranging networking here to pull together a joint venture. This is a year and half ago. Would you on your way back from Texas drop in to New Orleans and meet the president of this company? I'm not a great traveller but he convinced me to do this little leap. It's not far from Houston.

I went in and we spent the day in the boardroom talking to Sub Sea International. It's one of the largest companies in the world dealing with remote underwater equipment. They did their joint venture. I thought to myself: this is great for that company but what's it do for Newfoundland? What I hung my hat on was that the technology that's garnered by this huge company can be bridged in some small way into this little company in St. John's so that it can compete in the domestic market, and its skills and the new technologies, it can be right up to par on everything.

Never in my wildest dreams did I think that this little company using that networking to joint venture with Sub Sea would get a contract. I thought Sub Sea would be in here chasing Hibernia contracts, using our people, transferring technology. Two weeks ago this little company in St. John's landed a $1 million contract through Sub Sea in New Orleans, its joint venture partner, to send twelve Newfoundlanders into the Gulf of Mexico for a year.

I think what you're asking me is: how much networking is a waste of time, and how much (inaudible) -

DR. HULAN: That's right.

MR. FUREY: Lots of is -

DR. HULAN: It's becoming a problem, that's the reason I was raising it.

MR. FUREY: To be honest, lots of it is a waste of time.

DR. HULAN: But some of it is -

MR. FUREY: It's -

DR. HULAN: - (inaudible) fantastic.

MR. FUREY: Yes. It's the golden moment where it just, the magic happens. I've seen it happen quite a bit.

DR. HULAN: One last little question, Mr. Chairman, a very quick one. You mention adventure tourism, of which I'm very in favour of. How much emphasis is being put, right now, and in the immediate future, on four season tourism?

MR. FUREY: I can't speak for the Minister of Tourism, but I can tell you from my knowledge of when I was Minister of Tourism, there is quite a bit of emphasis being put on it. The areas of the Province that I think about - the Strategic Economic Plan isolates the West Coast. Not because the West Coast is any more beautiful than the magnificent -

DR. HULAN: Now watch it there.

MR. FUREY: - Cape St. Mary's bird sanctuary, or any of that, but see we have a head start out there in that we have two UNESCO World Heritage sites at the Tablelands, at Gros Morne National Park, through its geological tectonic plate theory. That in itself has created a World Heritage Site. Then the north, at L'Anse aux Meadows, where the Vikings first landed 1,000 years ago.

There's a new one coming up over at Red Bay. UNESCO, which is, as you know, a part of the United Nations, is just about ready to move very soon on creating a World Heritage Site at the Basque whaling site at Red Bay, which was the first manufacturing plant in North America. Where they rendered the whale blubber into oil. That oil was transported in barrels, manufactured the barrels right there, and exported to light the kerosene lamps of Europe.

Marble Mountain, the winter season; Gros Morne, the spring and summer season, for walking trails and through the Park; L'Anse aux Meadows, Red Bay. It's all interconnected and there's a strategy being put in place now to increase the sports fishing on the Humber River. There's talk of a new golf course, a major golf course complex across the river. Then there's the winter product. There are a number of private operators looking to develop the base of the mountain with major hotels and ski chalets and this kind of thing. In that sense we're moving forward.

That's not to take from the East Coast. I represent the West Coast too, but one of my slices of heaven, I'll tell you, is at Cape St. Mary's bird sanctuary. It's as close to heaven as you can come, I think. But I can't speak for the Minister of Tourism, but personally -

DR. HULAN: No, but you mentioned it in connection with the ERC.

MR. FUREY: They've done some great work on it. Cathy, I don't know if you want to pitch in there and say anything, do you?

MS. DUKE: No, I think that you're (inaudible) -

MR. FUREY: Or have I lied enough?

MS. DUKE: - comments are fair, I think. Certainly (inaudible) a great deal of work went into developing the strategy. There was quite a bit of consultation with industry people during that process, and certainly after the release of the strategies, the implementation was then handed over to the Department of Tourism and Culture.

MR. FUREY: There are some terrific things going on there, you know.

MR. CHAIRMAN: For the benefit of Hansard, that was Cathy Duke -

MS. DUKE: Oh, I'm sorry.

MR. CHAIRMAN: - (inaudible).

MR. FUREY: I was just going to say, there are some really neat things coming out of this ERC work too, you know. I'd never seen it before, but there are two companies operating in my own district right now, sea kayaking and they are just going crazy with it. These guided walks through the park for photo journalism and bird watching, and all that kind of stuff is just going gangbusters. The new discovery centre which Cabinet approved this morning, an $8.3 million geological discovery centre which will be built on the south side of Bonne Bay in the Woody Point area will draw scientists from all over the world to come in and explore and study. These are great jobs that will be happening in that area, so things are looking up in that sector. That is one of the reasons why we pulled that out of development, to let it have its own legs and run as fast as it can on its own. There is another project in Gros Morne and I talked to the proponents this morning, a green wilderness group that are looking to put a first class restaurant and chalet in Gros Morne to cater to the German and European market. The price would be $300 a night, that kind of thing, with spas, saunas, and all that good stuff. It just happens to be in my district. I cannot handle it. It is terrible.

MR. CHAIRMAN: The Chair must make a comment at this stage. The Chair also agrees with one of the comments that was made earlier, that the minister's department is probably one of the most exciting ministries in the entire administration, and I can appreciate the minister's enthusiasm, but I would ask if he would be so kind as to limit his remarks to the answer to the questions that are being asked as opposed to making speeches.

MR. FUREY: Could I just responded to that?

MR. CHAIRMAN: No, Mr. Minister, you cannot.

Mr. Shelley.

MR. SHELLEY: (Inaudible) not being a business person - and now a member being contacted by people about ideas, and these people get these crazy ideas about business and you want to tell them where to go and what to do, but I have a couple of general questions that I am interested in personally and then I have a couple of specific questions so I will try to keep them as brief as I can. First of all, I just wanted to see if you could give me a brief update on the rural development agreement, the federal/provincial one. I am not sure about the funding, how it is going, and basically to know just where it is at right now.

MR. FUREY: Do you want me to deal with that right now?

MR. SHELLEY: Yes, I will just ask that one.

MR. CHAIRMAN: This is the way the Chair would prefer it, that we go back and forth. It is much easier to maintain some kind of control.

MR. FUREY: That is a good question. That agreement, as you know, was signed in the spring of 1989, I think, or the summer of 1989. It is a $30 million agreement, as you know. There are fifty-seven associations and we basically provide administrative funding and then there is the community block fund for drawing on for grants for various projects. The agreement will expire March 1994 and you may well see an amendment brought forward by the government, or will seek an amendment for a one or two year period. The reason why I say that is because if you look at the Strategic Economic Plan it provides for breaking the Province into seventeen zones. Now, what is that going to look like? What will it mean, and how will it fit into the bigger scheme of things? We do not know yet. It is starting to evolve. There have been discussions and consultations, so we may need that little buffer period of a year or two, I would think, three years on the outside, to see how that is going to evolve, because one of the great criticisms I get as minister is that we are over administered. There is too much money going into administration and not enough hitting the heart of the problem, and when you think about it it is not really an unfair criticism.

In my own area of the Province on the Northern Peninsula there are six development associations. They are doing good work but there is also the Womens' Enterprise Bureau, two Enterprise Newfoundland offices, three community futures, two business development centres, two economic development offices, ACOA, you know, after a while you start bumping into these people -

MR. SHELLEY: Complications (inaudible).

MR. FUREY: - too often and you say - pardon?

MR. SHELLEY: Those are the complications I'm talking about.

MR. FUREY: Those are the complications. So when you become over-administered, and when all of your dollars are going into administration, it really gets pretty frustrating for people who are looking for meaningful things.

The reality is, perhaps we should be collapsing all of this into these so-called zones, and giving a one-stop shop for the benefit of the local people. I don't know. It's a bit too early to say that. You also have to recognize that historically the development associations have played quite a significant and good role in our Province. They've just issued, as you know, a twenty-five year catalogue of everything that they've done. You go through it. It's not all graveyards and ice cream projects. There are some fantastic stuff there too.

Woody Point in my own area, I'll give you an example. They built a little fish plant for herring, mackerel and caplin. Underutilized species. They set it up, they sought out an operator, they got one there. The guy's been there for six years now. He's going to buy the plant this year. There are 140 people working there. That was the good efforts of the development association on the south side of Bonne Bay where nothing was cooking. There was nothing happening.

That agreement - this is my own view - it's not government policy, but it would be my intention to try to move forward with Mr. Crosbie to seek an amendment for two years to give us an opportunity to flesh out these economic zones and to have public consultation and to almost take down some of this administrative structure that's there so that it's more flexible.

MR. SHELLEY: That's why I made the comment in the beginning actually about your department. First going through that. I can tell you, locally - I don't know how the other districts feel - but you go in, there's a development association, then there's a community futures, then there's the economic development something else, and you're trying to match them all together. People are confused, is my point. I've talked to people: where should I go this time, who shall I talk to? Then there's ACOA and ENL and the Economic Recovery Commission.

I'd agree with you, that there's got to be some breakdown there so there's a little simpler process for the people who are not used to it. As a matter of fact, I know people who had ideas and started to go through the red tape and said: my God, I've got to get out of here, I just don't know what's happening. They got lost in the shuffle. I'm sure that you've come across that situation.

Like I told you I wanted basically some examples. I picked out a couple here just so I could run them together. In 23.02, I started to look through that and -

MR. CHAIRMAN: What page are you on?

MR. SHELLEY: Page 162. 23.02, Strategic Supplier Development.

MR. CHAIRMAN: That would be 2.3.02.

MR. SHELLEY: Sorry, yes, 2.3.02. Page 162.

MR. CHAIRMAN: That's subhead two decimal three decimal zero two on page 162.

MR. FUREY: Yes, sorry, go ahead.

MR. SHELLEY: Basically I was just trying to understand it, I guess, so I'm just looking for clarification or an explanation. In that particular one, then I'll relate it to your 2.3.01 above, but basically the money allotted there is for salaries. I'm just wondering what those people are doing there?

MR. FUREY: That's a new division, I can tell the hon. member. Strategic Supplier Development, what they do is go out and tell companies - well, let me give you a couple of examples.

They got a bunch of Newfoundland companies to what's called a reverse trade show in Moncton a little while ago. What happened was all these companies set up in Moncton in a stadium. I believe it was at the Moncton - whatever the arena is called. Nova Scotia Power, Abitibi-Price, all of the big hitters in Atlantic Canada. Allowed all these small companies to go in. Instead of the companies going to a trade show to buy something, it was quite the reverse. They went to learn what it was that Abitibi was buying. What it was that Newfoundland Power was buying. What it was that Nova Scotia Power was buying, and hydro, and on and on. Right down to the thumbtacks and the paper clips, to see whether they could get in on some of the bidding and providing some of these.

That's only one little part of it. These fellows in this division also monitor federal contracts. They monitor defence spending. For example, the latest round of spending dollars in the last two years show that there is going to be a substantial amount of money spent in Canada on the maritime coastal vessel program. They have prepared an absolutely superb piece of research with the help of a retired admiral in Ottawa to seek three of these to be stationed here in St. John's. The report and presentation has already gone to the federal ministers seeking that participation here in St. John's and a team from there was very much involved in that. They also help set up the trade shows, the various trade shows, they are involved in the supplier development forums. We just finished one at the Cabot College where small companies in St. John's could go into the Cabot College and say to them: now you spent $20 million last year, how did you spend it? Where did you spend it and how can we get in on it? So, they opened doors that way.

Some of the companies they have helped; the Newfoundland Tea Company, Sunnyland Juice and people like that, getting their products into the local domestic market and getting them known. They have also helped people in other areas, not just in the domestic market. You are familiar with Heritage Woodworks out of Eastport? They just landed a contract to supply products into Japan, right out of Eastport into Japan, into Tokyo. So, they are helping companies find new niches, new markets through these kinds of reverse trade shows, through procurement, through government agencies and large companies that do business in the Province.

MR. SHELLEY: Okay, that is better. That is what it is, the identification part of it basically.

MR. FUREY: Yes, it is hard to know, is it not?

MR. SHELLEY: Yes, it is just from looking at it. Okay, 3.3.01, the Economic Recovery Commission, page 169, just an explanation again about numbers because I am still confused about - in relation to the - I was a little clear when you asked a question on policy and basically the Recovery Commission but then it says two small things in this, just for explanation, Grants and Subsidies, how is it dispensed, to whom and how is it used? What is that for, Grants and Subsidies?

MR. FUREY: Oh yes, what that is, is a block fund which they are given for operating the entire Economic Recovery Commission. So, we have to put it under a subhead, that is right, it is the salaries, it is the employees, it is the contracts. I guess they have about fifteen to twenty people there now? Fifteen full time and five on contracts, something like that?

MS. FRENCH: Yes, that is right.

MR. FUREY: So, that would look after salaries, benefits, travel. But the way it is done through government systems is that it has to come through a line department. So it sits in my department, we grant the money over to them, they tell us how they are spending it, we report back through treasury board -

MR. SHELLEY: Basically, that is administrative costs, right?

MR. FUREY: Absolutely.

MR. SHELLEY: I just want to ask one specific thing, it is only short but I will just bring it up, I thought those were provincial things which I brought up but I have to mention something of my district. You talked about new things, actually I was on the committee as you are probably aware, but for many years I didn't live on the Baie Verte Peninsula and I went back there four years ago. I have always said that when they put the hill in Clarenville, this is my own bias feeling for it and I am sure the members feel differently, but we are in a much better position for a ski jump than Clarenville just simply because of common sense as far as weather and terrain. We have a mountain there, we have weather for it, we have the perfect winter. We have the snow before Corner Brook, it stays longer than - winter is winter there, not fog and rain, it is winter. The snow is on the ground much longer than -

AN HON. MEMBER: (Inaudible).

MR. SHELLEY: Yes, that is what it was but it is winter, it is a real winter. In any event, the truth is, I mean if you look at the climatic maps and everything else, it is a perfect location for a ski hill.

MR. FUREY: And you are not prejudice at all are you?

MR. SHELLEY: No, but it always has been. You know that it is ongoing now that we are trying to get a ski lift off the ground and it is not in any way a competition for Marble Mountain, it was never meant to be. What it is, is basically an introduction to skiing for the people in the area because it is one of the fastest growing winter sports in North America. Anyway how do you see that moving so far?

MR. FUREY: I spoke to the Chamber of Commerce there, I do not know if you know that, three or four months ago -

MR. SHELLEY: I missed it.

MR. FUREY: You missed it?

MR. SHELLEY: I was out of town when you were there but I would have liked to hear what you -

MR. FUREY: Three or four months ago I spoke and afterwards actually I met with the group, the lady who runs the hotel there -

MR. SHELLEY: (Inaudible).

MR. FUREY: Yes and a group. I think I was the minister who gave them some seed money last year -

MR. SHELLEY: Yes you did.

MR. FUREY: - some $5,000.

MR. SHELLEY: Yes, you did.

MR. FUREY: I gave them $5,000 this year too, didn't I?

MR. SHELLEY: Yes, that is right.

MR. FUREY: I have not issued the cheque yet.

MR. SHELLEY: You have not? That is why I brought it up; I am the vice-chairman of the committee by the way.

MR. FUREY: Actually no. I was really impressed. I must say, I was really, really, really impressed with the work they are doing and in fact, is it not a shareholder's arrangement now, where you join up -

MR. SHELLEY: It is a co-operative basically, where the whole peninsula (inaudible).

MR. FUREY: - and you pay so much to get in. I can only tell you that I am very supportive of it; I do not see it as competition for Marble, I see it enhancing Marble. There is no question about that and you are quite right, the climatic conditions are absolutely bang on. I do not know where it is right now but I know that there was an awfully energetic group with whom I met and they were ready to rock and roll on this thing. They were going to approach ACOA and the feasibility study was done -

MR. SHELLEY: It is ongoing now.

MR. FUREY: Yes. Maybe you can tell the group here where we are on that now.

MR. SHELLEY: Well, basically we went through the second phase of the feasibility. The physical structure and the mountain is mapped out for a double chair lift to the top with seven runs coming down and it has all worked out well because now they are even looking at - you saw the scenery. Basically there is a river at the bottom of the hill right into the bay where planes can come in. The other guy went on to say a golf course would look really good at the bottom of the ski belt.

MR. FUREY: Well you tell them that their grant is still there. It was a small grant but it is still there.

MR. SHELLEY: A small grant but it certainly helps in the early stages of this type of thing.

MR. FUREY: You miss my little innuendo there. It was a small grant but it is still there.

MR. SHELLEY: I got it, I got it. Thank you very much.

MR. FUREY: But I tell you, look, take a message back from me that I am very supportive of that and anything we can do, I will be most happy to do it.

MR. SHELLEY: Yes, thank you.

MR. CHAIRMAN: The Chair would like to stick to the acknowledged procedure of the Committee asking the minister questions as opposed to the minister asking questions of the Committee members. The Chair would also like to comment to Mr. Shelly, when you stated that the minister was at a meeting in your district and you did not attend, but you would like to know what he said, you were setting yourself up for about a two-hour answer.

AN HON. MEMBER: That is just want a recap.

MR. CHAIRMAN: Mr. Langdon.

MR. LANGDON: I agree with the minister. I think there is a need to look at the development associations all across the Province. Some of them like Gerald's no doubt have done tremendous work, but when I look at my area, there is a small population of around probably 8,000 to 10,000 and we have three development associations.

I heard the comment the other day where, one of the boys said his main job is to go around the other stores and see what the prices are in relation to what he has in his own. I am sure they probably were not serious when they said that but I think in many of the associations the people who are there, the people who run it probably do not have the expertise that is needed to go out and do the work to attract business and so on. I think a lot of times they compete with councils and they see their jobs as getting ten weeks work for somebody, for a student or projects of this nature. That is not to cast doubt on many of the good things that have been done, but I think it is top-heavy in its administration and I know that in my area as I said, one could take the place of four, so I think that makes a lot of sense and in the long run would pay dividends.

The other point I want to make as far as new industry is concerned, is on the Connaigre Peninsula with the dimensional stone that we have, granite, lots of it. Someone the other day asked how much do we have and one of the proposed developers said that if Christ did not come back for another million years, there would still be lots. So we have no shortage of product to say the least, but one of the things that bothers me about it - and I just want to get your comment afterwards - I think that the stone, from what I understand is going to be taken from its site on the Connaigre Peninsula in large blocks, three feet by three feet or meter by meter whatever, and then it would go back to Buchans where you would have a manufacturing plant or whatever and then they would slab it and put it in its form for market and then probably would have to bring it back either to Botwood or to the South Coast for shipping; that does not make a whole lot of sense to me. On the South Coast, the Minister of Mines and Energy said what we have is better than gold.

Those were his comments to the association there. With the vast amounts of stone, and with the two trade shows that were into Florida about a month ago the Japs were basically saying: where can we send our ships to get it? I really think that within the next few years it is going to be an upcoming industry and it is going to provide hundreds of jobs for the Connaigre Peninsula and probably diversification even from the fishery. From your own department how do you perceive that, from having it done on the South Coast rather than having the rock trucked from the South Coast to Buchans, which is roughly 350 or 400 kilometres, and back to the Coast after it has been processed for shipping again?

MR. FUREY: Mr. Chairman, I am sort of mesmerized as to why people would do that. I do not see the economics because the transportation costs must be just enormous.

AN HON. MEMBER: The manufacturer moved from Springdale to Buchans and that is where the manufacturer of the stone products is located in the Province.

MR. LANGDON: Then they were going to bring it from Lumsden to Buchans, from Deer Lake to Buchans, and from the South Coast to Buchans. To me it is not good economic sense.

MR. FUREY: You are right when you say there is a lot of economic opportunity there. That is why ENL helped to form up the Newfoundland and Labrador Dimensional Stone Association and held those conferences and stuff. I met with some of the Europeans, particularly the Italians, but I have always found that their attitude is - at least it has been my experience, limited as it is, but my experience has been that they want to come in and lease up the mountain and move large chunks of it, and not value-add, just take it in the raw, and I think that is wrong. We had that experience up at Roddickton in the Main Brook area on the Northern Peninsula. There is a beautiful marble find up there, just gorgeous marble, but the proponents just want to come in and slice it up, as you say, and export it. Surely, we must be able to do more with it than that. I hear from the cross fire here that the manufacturer has moved his operations to Buchans.

MR. HEWLETT: Well, the virginite from the Baie Verte Peninsula was running low and the operation that was set up in Springdale producing the finished product moved into Buchans, I think, probably taking advantage of some of the monies that were made available to Buchans with the closedown of the mine and so on.

MR. FUREY: Are the economics there to move large quantities of rock?

MR. HEWLETT: They had a display at the manufacturers show with all kinds of rock from Buchans.

MR. FUREY: I saw that. I cannot answer the question because I just do not know. I know what you are getting at, it is an inherent unfairness to take the resource right out of the area and leave very little in its wake in terms of economic opportunity for people.

MR. LANGDON: As regards adventure tourism you have gone no doubt along the South Coast and it is different than any other part of Newfoundland, the Bay d'Espoir area with the fiords almost like you would find in Norway, and we have the Bay du Nord wilderness area there. In fact I flew over that about a month ago with the Minister of Education when we went to English Harbour and probably saw about 150 to 200 caribou in the Bay d'Espoir area, on the South Coast, up the Grey River, Francois, and so on. In my opinion it has never been promoted the way that it should and I think it has as much potential as anywhere else in the Province. I am amazed that people in a department and people around say, I have never gone to the South Coast, it is the last place we would go to visit. I think it has tremendous potential for tourism and you will probably see a proposal in the near future from a person who wants to take tourists, not to St. Pierre, but to Miquelon because the Connaigre Peninsula is only about twenty-three miles from Miquelon. We will probably get a chance later on to see that it is different from St. Pierre. In Miquelon it is outport life and there are about 500 or 600 people there. I think it has tremendous potential and there is nobody involved in doing that right now. Again, it would generate jobs and it would generate development for that particular area which has been so hard-pressed over the years. I think it would change the face of that part of the South Coast forever.

MR. FUREY: I can only agree with you but I caution you that it cannot happen from the top down.

MR. LANGDON: I know that.

MR. FUREY: It has to happen from the grass roots up. I have had a close up experience with that one, the Viking Trail, which is moving along at a beautiful pace but I tell you, getting people to cooperate and agree in seventy-five communities stretched along 400 kilometres of coastline is a pretty amazing thing to watch, to try to orchestrate. So it has to be nurtured from the grass roots up and once it happens, it is pretty extraordinary.

MR. LANGDON: And this is my point - you have four development associations within that radius and everyone is trying to grab onto it and there is competition among themselves rather than for the area. What is good for Harbour Breton is good for Gaultois or whatever the case may be. So, we are working toward it because I think -

MR. FUREY: There is a parochial view of life -

MR. LANGDON: That is right.

MR. FUREY: But you know in your earlier comment about the three development associations do not - we can sometimes get carried away a little bit and I tend to some times too, our criticisms of these associations, bear in mind that they only get $36,000, that is it.

MR. LANGDON: Oh, yes. It was not a criticism. The (inaudible) Development Association, as you know, got $100,000 from the Department of Industry, Trade and Technology - Development at that time - and they have attracted in a credit union and a craft shop. It is a real credit to the association, things are happening there.

MR. FUREY: When I was Tourism Minister I used to get letters from around the world saying: your people are wonderful, your landscapes and seascapes are gorgeous, your weather, well that is not so great, but we could not buy anything, that was the biggest complaint that I got. We are tired of seeing little lobster pots with `made in Taiwan' on the back of them. You know seriously they were funny but it is not so funny when you think about it. I guess your comment is well taken, I understand what you are saying and I agree there is a magnificent potential down there too but it is not so (inaudible).

MR. LANGDON: We have one more of which Cathy is familiar with and that is a bio-digester so I think there is something to come with that as well later on.

MR. HEWLETT: (Inaudible).

MR. FUREY: You guys have to stop throwing around these fancy words like artificial insemination, cross - fertilization and all of this stuff. I thought we were talking about information technology. Yes, you are right, that was one of the mandates of the old Department of Career Development. They did not quite get it right, so we are going to get it right now.

MR. HEWLETT: (Inaudible) cross-fertilization is not taking place so I will keep working on it.

MR. FUREY: Actually that was a very good department, I should not sound facetious, Career Development did some good work, no question about that.

MR. HEWLETT: One other quick point, you mentioned initially the creation of an image of instant economic recovery, would it not also be a fair comment to make, Mr. Minister, that politically speaking at that particular time, that was probably advantageous to your party?

MR. FUREY: Well, if you want me to get into a dissertation on the political ups and downs of it, I do not think that was really the intent when the Premier announced it, to give us a quick political fix. Certainly people were reaching for some answers, there is no doubt about that. Anybody that tells you that politicians have all the answers or any politicians that tell you that, especially, are not telling you the truth. There are no easy answers. We assembled a magnificent team of men and women who form the Economic Recovery Commission, who, as far as we know, have no particular politics, slant or leanings. They are a group that has performed for all members of the House of Assembly. I get calls back from all members and former members, in all parties, who are very happy with some of the things that the Economic Recovery Commission have done in their particular districts.

I suppose we banter back and forth, whether it's cucumbers or whatever happens to be on the go that particular day, and we get flying in our high rhetoric and beat things around and sometimes beat them to death. I suppose they became an easy target early in the game, politically, and they were not prepared in the initial go-around to go out and bang on the drum and beat their cymbals about the work they were doing, because it was intensive hard studied work that was to prepare plans for certain sectors and get on with it.

They actually moved ahead despite the political commentary from all circles. I can only give them credit. But it was never meant to be set up to be a political easy out for the government It was never set up to be an easy quick fix or band-aid solution. It was set up to look at, as I said earlier, the real structural problems in our economy, and to try to find ways to fire up this economy. It's not going to be an easy task and it has not been an easy task for them. Or for anybody who takes on that burden.

MR. HEWLETT: I think, Mr. Minister, you just described the mandate of the House Royal Commission. If I might use the minister's phrase and focus laser-like on a particular matter, and that's vis-à-vis Triton Airlines. I understand they were into ENL in the order of $750,000. I also understand the dispersement of that money was to be in two segments. One, $350,000 to be dispersed temporarily on the strength of a promissory note and certain guarantees as required, with certain other undertakings to be provided later so as to get the advancement of the remaining $400,000.

The question that I tried to put to the Premier the other day which he really didn't answer, he sidestepped and said my question was tripe -

MR. FUREY: Utter tripe, I thought (inaudible).

MR. HEWLETT: Utter tripe, I do believe, yes. But then again he generally says that of most things that I say.

SOME HON. MEMBERS: (Inaudible)!

MR. HEWLETT: The proponents in this particular case insist to me, by telephone, and I do believe their legal counsel have or are going to insist to Enterprise Newfoundland, that they had met the requirements for the initial dispersement of $350,000, and when they showed up with their requirements they had another requirement relating to liquid assets thrown into their lap, and this is what's caused the system to clog up somewhat and the company to not draw down on the offer of assistance. I'm wondering if you'd make a brief comment on that.

MR. FUREY: Yes. I'll ask Mr. Janes to speak to the actual details, because the president himself was involved. Don't anybody in this room think for a minute that we weren't there to help this company. Don't anybody get their backs up and think that Enterprise wasn't there to help. We were there to help. There were time restrictions put on us. We had to act fast and we had to balance that with protecting the taxpayers dollars. But we wanted to help them. That was the initial go-around.

Let me tell you in this room too. I've taken a lot of phone calls and a lot of heat from the business community because we authorized this. I think it was the right thing to do. I don't think it affected the competitive balance of what's happening out there. I think we have to be earnest and honest enough to say: let's help these people, they're Newfoundlanders, they're trying hard, and they put their own dollars where their mouths were. So in that sense we were quick to react. We put the money on the table but we had to also protect the taxpayer and make sure that the Auditor General wasn't screaming at us.

As to the actual loan, you're quite correct. It was divided out into two sections. The terms and conditions weren't altered. They had to come up with certain things. Let me caution the member on this, Mr. Chairman. I don't think we should be negotiating in public that which ought to be negotiated in private. It's not fair to the company, it's not fair to the taxpayer. But I'll allow the president to say what he can say without negotiating in public. I don't think that's fair or right.

MR. JANES: Jim Janes, Enterprise Corporation. Mr. Hewlett, the information that you've stated is reasonably accurate. Indeed, the Enterprise Corporation made the offer. It has been accepted. There was a need by the company to obtain funds in a very quick manner in order to deal with the accessing of an aircraft to start their business. If one has the opportunity, or the offer is available to them to study, it is very clear that the Enterprise Corporation required certain items of security to complete the transaction. There is never any doubt about that.

In addition, the security to be provided was to be provided in a manner satisfactory to the sole discretion of the Enterprise Corporation, and there is never to be any doubt about that. We have no quarrel whatsoever with the facts that are presented, that there was a two-staged allocation or advancement of these funds. I guess it is fair to say that a company like Triton, which is basically fighting to keep their business going, would perhaps have a very different perception of how this funding might take place, particularly as it is very important to their ongoing start up of the operations of Triton Airlines.

However, we differ with the principals as to their perception, and will maintain that position. It's very clear in the letter of offer as to what the position of ENL is. We stand by that.

MR. HEWLETT: You're saying even though the company per se is indicating that an additional condition was put on the initial dispersement, under your interpretation of the agreement you had the discretion to put such a condition on, assuming that's the case.

MR. JANES: We at the board of Enterprise approved a deal that required certain items of security to be provided. Full covering security, liquid security. It was really no more than an arrangement that would see the principals of Triton use their own security to access funds from the Enterprise Corporation in a manner timely enough to permit that airline to get going. The type of security, the amount of security to be obtained was at the sole discretion of the Enterprise Corporation. There should never be any doubt about that.

MR. HEWLETT: Okay, sir. I thank you for that phrase, "sole discretion." One comment, and maybe a quick reaction from the minister. I had a look at the manufacturers' show that was on the go there on the past weekend. There were a lot of companies there with some very impressive hi-tech gadgetry and so on. I realize the direction that we have to go as a people and I suppose as a world, in order to keep our standard of living alive, and so on and so forth. This question may be too general for you, Mr. Minister. The one impression that I had was that even though there were a great number of companies present, they were not, how shall I say, labour intensive companies, certainly not as yet. Apart from your Newfoundland Margarine companies that have been around for a long, long time.

While it is obviously very much a step in the right direction it does very little to solve a growing unemployment problem in the short to medium term. I guess the Department of Development you had might have had a broader mandate, but does your own Department of Industry, Trade and Technology have a mandate that would have, as part of it, large numbers of jobs - not only a diversification into higher tech and so on and so forth, but a mandate to do something to take care of the literally thousands of people who are now unemployed and thousands more who are going to be landing on your doorstep once this federal fish package runs out?

MR. FUREY: That sure is a general question. It is quite broad stroked, broad brushed. This is the first time in history that a department has ever had an actual division of manufacturing. This is the first time ever, so we really have focused on that sector. We see it as a growth sector.

The companies that are here we are trying to enhance quality so they can export, and we are also trying to displace imports. One of the areas - you noticed Superior Gloves, did you, the other day, from Point Leamington?

MR. HEWLETT: Yes I did.

MR. FUREY: Just terrific products; the quality was superb, and they are selling quite a bit in the local markets but they are also exporting. You turned the corner at the show and you ran into Brookfield Ice Cream. The fellow on the desk there at the show was telling me that they had just received another order for six tractor trailer loads into the Ontario marketplace. Do you know they supply ice cream in the SkyDome - Brookfield Ice Cream? A lot of people do not know that.

MR. HEWLETT: Terra Nova Shoes provide work boots and military boots to a good part of North America.

MR. FUREY: That is right, and they have this really lovely boot called the Wild Sider - probably developed on George Street - that they are marketing in Europe now, and it is just going over gangbusters - manufactured out here in Harbour Grace.

Bell & Howell, the manufacturer, just latched onto a contract to do the woodwork and cabinet making for a hospital in Cape Breton. So it is getting the quality up, getting the name, and not being afraid or ashamed, but daring to go into the other market places and say we are as good or better and we can meet the price and meet the quality.

MR. HEWLETT: One quick follow-up, Mr. Chairman, and I will pass.

I noticed in a display, I think maybe by your department or one of the government's departments, there was a reference, a photograph actually, in a display, Superior Logging, Springdale. That plant seems like a good idea, but it seems to have stalled in infancy. Part of it, in my questioning you in years past, had to do with marketing, but I have also been told informally that one of the problems that company is having is quite literally obtaining wood in terms of birch and aspen, which are not used by our paper companies at all, and I was wondering if you had a comment on that because I find it passing strange with all of these unemployed people on the go that people cannot cut birch and aspen to supply that particular company which I am told could supply markets if it could only get someone to cut birch and aspen.

MR. FUREY: Yes, my mind boggles at that one too. I am with you on that one. Government has helped substantially that company. By the way, their products are absolutely superb.

Correct me if I am wrong. Did they not do the Kilmory - was that Kilmory or was that out of Gander, the same fellow?

MR. HEWLETT: I am not sure.

AN HON. MEMBER: (Inaudible) in Gander.

MR. FUREY: Yes, but they are both equal products are they not?

AN HON. MEMBER: Yes. (Inaudible).

MR. FUREY: They service the domestic marketplace, yes. Boy, I will tell you, both of those companies produce -

MR. HEWLETT: I have seen a bunch of their chalets up in Gros Morne.

MR. FUREY: Oh yes, they are just absolutely superb work, and they could be exporting their products too but I do not know what the answer is on the aspen and birch that is being left there.

MR. HEWLETT: Because the paper companies are not cutting it.

MR. FUREY: I know. They are just -

MR. HEWLETT: It is just standing there in the woods. We have people walking around going on welfare, and somehow we cannot get a supply of birch and aspen. You are almost tempted to take your chain saw and a pickup truck and -

MR. FUREY: Have you talked to the forestry people about that?

MR. HEWLETT: No I have not, I must say.

MR. FUREY: Maybe if you get a chance you can get a letter off to Graham and copy me and we will see what we can do about it.

MR. HEWLETT: Very good. That's it, I pass, Mr. Chairman, thank you.

MR. CHAIRMAN: Before I recognize Mr. Smith, I would like to remind everybody here that at this time of the evening, we would normally take a break for about a ten minute recess. When we are in the House of Assembly, it is convenient so we could go out to the Common Room and get ourselves a coffee or a tea. I notice everybody has been doing that already here tonight, and unless I hear an objection from anybody here, I am going to continue without our recess.

MR. FUREY: I am just going to sneak out to the bathroom but there is quite an artillery here -

AN HON. MEMBER: Mr. Minister, if you want a break there is no problem.

MR. FUREY: I will just be a second.

MR. CHAIRMAN: In that case, we will take a one minute recess.

MR. CHAIRMAN: Order, please!

Our meeting will now resume and the Chair recognizes Mr. Smith.

MR. SMITH: Thank you, Mr. Chairman.

Mr. Minister, I may as well ask one of the first questions tonight to deal directly with the estimates and it will probably be the only one that I will reference. The very first item, page 157, 1.1.01, Minister's Office, under Salaries, a reduction from last year of $189,200 to $173,200, what does that reduction represent?

MR. FUREY: I guess that represents the operating salary and the overtime (inaudible) -

MR. SMITH: But was not this 4.5 announced after this document was printed? This document was before the House -

MR. FUREY: Yes, we cut the overtime, Gerald, that is what that was.

MR. SMITH: So it would not be the 4.5?

MR. FUREY: No, that came after. Sorry.

MR. SMITH: Okay, 2.1.02 -

MR. FUREY: Sorry.

MR. SMITH: - so do you want to add anything further to that?

MR. FUREY: No, no. That is basically it, just removed the overtime but it also reflects the 1 per cent and 3 per cent.

MR. SMITH: Okay, 2.1.02, the Marystown Shipyard Subsidy. I was interested in reading through that because over the years I have followed the Marystown operation with some interest, and I am aware that it has had its problems in the past and I am just wondering right now, or maybe you can just inform this committee as to the present situation of the operation, in terms of the stability of the operation. I understand there have been some developments in recent years that have perhaps put it on a fairly sound footing.

MR. FUREY: Yes. The hon. member knows I guess, that we came very close to selling the Marystown Shipyard a little over a year ago. We had actually structured a very good deal, close to $21 million for the assets of both facilities and bringing in a world renowned company and it would have been their North American headquarters here. We took a portion of the debt and wrote it down, $14.5 million and the other dollars that would have flowed in from the sale would have gone against the debt and we would have written off the balance giving it a zero balance sheet, brand new state of the art assets and a new company in there.

That fell through but we managed to continue and struggle along and basically we had a skeleton crew on for a while. A little over a year ago things started turning a little bit; joint venture arrangements were finally signed off; quite a number of people went to work there on the construction of the Cow Head facility. We managed to bring into place a $2.5 million training program to get people up and running.

We landed a couple of contracts, the latest one is a $4 million barge pontoon contract which is metal fabrication of the underside's of the GBS which are down there. We are going to be bidding on the skirts, I guess, as well. The mechanical shaft outfitting, all of the intricate pipe and metal work that goes in one of the legs. Is it the utility shaft?

MR. KENNEDY: Yes, all four.

MR. FUREY: All four will be bid upon, the bid is in now. We will know the answer to it, the end of this month?

AN HON. MEMBER: Yes.

MR. FUREY: - the end of this month and if we win it, it is $110 million and 500 people working over the next four to five years and very good high paying jobs.

MR. SMITH: So what is the workforce there right now in terms of what it has been traditionally?

MR. FUREY: The workforce fluctuates. It goes anywhere from 400 up to - it had a peak at one point, an artificial peak in my opinion, of 740 but the real core workforce is roughly 450-550. That is the real - it is less than that today the deputy tells me because a number of our people were siphoned away to the St. John's shipyard and other areas but I would still say it is 400 as a core, is it not? Does it even drop below that?

AN HON. MEMBER: (Inaudible).

MR. FUREY: 350, yes. The numbers may have changed but you are quite right, there are a lot of positive developments down there and there are some good things happening. It can also turn that state of the art facility into capturing - you see, everybody when they think about Hibernia, they think $6 billion on getting ready for the production, the development phases, but the production phase over the life of that agreement, royalty arrangement that has been structured, that twenty-five years will flow another $18 - $19 billion servicing Hibernia. Well, I think Marystown is in a key position to service a great deal of that maintenance and looking after that kind of stuff.

MR. SMITH: Thank you, Mr. Minister.

Page 167, 3.2.03, Enterprise Newfoundland and Labrador; certainly Enterprise Newfoundland and Labrador has come in for a good deal of attention in the press and the Opposition members have been known to have taken a few shots at it over the last few months and question the wisdom of the government in establishing Enterprise Newfoundland and Labrador. Just as a point of interest, I am not sure if either you or your officials will have this information ready at hand but I am aware that while ENL is a new entity, there was a fair amount of restructuring done and that a lot of the people within ENL were people that came from other departments in government that - the old Department of Rural Development, a lot of these people are now working, in some aspects within ENL. I am just curious in terms of the creation of ENL, how many of the positions were absolutely new positions that were created as opposed to just a restructuring of various departments and bringing people in from the other departments?

MR. FUREY: Just off the top of my head, Mr. Smith, in the old NLDC I believe there were seventy employees transferred over from the old Department of Development and Tourism. Under the business section and the RAND section there were eighty employees transferred over for 150 and there were thirty-five new positions created for a total of 185.

You are quite right, ENL came in for some criticism. Basically, upon the Auditor General's Report of last year which really looked at its first full year of operation. I think the Auditor General had some legitimate criticisms. These are criticisms that we accept and that we are setting about dealing with. The basic criticism was financial controls. This is being handled now and I can assure you that delinquent accounts and these kinds of things are being dealt with. Where the unfairness came into the criticism was when people misinterpreted the numbers on what the Auditor General had to say about ENL. They did not look behind the numbers to see where the real debt and delinquency was. For example, under the twenty year life of the old NLDC there was an accumulated bad debt of $20 million. Well unfortunately, that scarred ENL because it is the new corporation that had to absorb that. The old Rural Development Authority which had the low interest loans, three points below prime, all of those loans that were given out over the twelve or fourteen year life of that particular system, the $7.5 million was absorbed by ENL. So now you have $27.5 million that came from the old structures into the new structure. The reality was that the allowable doubtful accounts under ENL was less than $2.5 million over the two and a half years of operation.

We weren't doing bad, but if you wanted to you could paint a bad picture of ENL, because you have $20 million, $7.5 million and $2.5 million. Wrap it all together and put it under ENL and it looks bad. But break it our properly and you'll see that it's over quite a period of time and from different structures really.

MR. SMITH: Thank you. 3.3.01, the Economic Recovery Commission. If I might be allowed just a comment here, and certainly I would invite the minister to respond if he's so inclined.

As I'm sure hon. members are aware, my view with regards to the ERC certainly differs from a lot of other people, in the sense that I'm a strong supporter and believer in the ERC and what they've done and what they've accomplished. I really feel that one of the most positive things that the Wells government did was to create the Economic Recovery Commission. I think it's unfortunate that anyone would actually believe that economic recovery was such a simple process that by setting up a commission of four or five individuals that suddenly overnight we were going to see a complete recovery in this Province. I think what it has done, and I think too from my perspective - and if I look at the allocations for the Economic Recovery Commission, to me it's a very modest sum, even out of your budget, I must say - like, we've gone through a number of estimates for other departments, and for your department generally, I mean overall, in terms of what we're talking about here, economic development, it's a fairly modest figure in comparison with what we're spending in areas like education and health.

Not to say that these are not important. But to me - like, the Economic Recovery Commission has been key in a lot of the things that have developed over the last four years. In fact, I would suggest, and I would be interested in hearing your response to it, that indeed the structure and appearance of this new Ministry that you now head up, Industry, Trade and Technology, is in large part a result of the kinds of initiatives that this group have identified and gotten into over the past four years. Because I've seen the kinds of work the commissioners have been doing and the areas that they've gone into, and the kinds of things that they've brought into the Province.

To me just the energy and the blue sky idea, like the idea of having visionaries. I really welcome that. I mean, to me, like in government, as in anything, that it's so simple, if you go through life with the blinders on you and everything is just straight ahead. But you really need to have somewhere visionaries. People who allow their imaginations to run wild and really sit down and think and come up with ideas. At some point in time these have to be transferred to other agencies which then must try to look at the practicality of these things, to pick out what we can action now or what might more be a long-term undertaking.

This to me is something that the Economic Recovery Commission has done and done in an admirable fashion. Indeed, I think the kind of model that we've set up here in Newfoundland, I think that other provinces will look at and will want to draw from in terms of planning for their own economic recovery.

I just wanted to mention that, but I did want to - because as I say, point out - because I know with the new Ministry that's now in place, and I really do feel that in large part it does reflect the kinds of initiatives that have been sparked by the Economic Recovery Commission.

MR. FUREY: I can only second everything that you've said, Mr. Smith. The Economic Recovery Commission is essentially two men and two women and a support team. It's a small group of men and women who, by the way, work very long hours. A lot of people don't realize it. They're back after supper. They're on the road dealing with people in Bay d'Espoir, whether it's a fish farm, or the Northern Peninsula development group about Nortip logging, or in Nain about the Caribou factory. We don't hear about those flights and those hours and that time and that energy away from their families. It's easy to swipe and to take knocks (inaudible).

I can tell you, Dr. House and his team of people are some of the most diligent, hard-working men and women whom you'll find anywhere in this Province. They don't get overtime and they don't get special benefits and they don't get perks. There's no joy in sitting in Air Atlantic on a Sunday night heading for Hopedale or wherever they go. Within the limits of their budget they've performed some magnificent feats.

One of the things that they ought to take credit for - and I suppose, Mr. Smith, one of the areas where they've fallen down, and I keep harping on it with Dr. House. He and I meet every Monday morning. We have an hour together. I keep telling him: get out there and tell your story. It's a good story. Because politicians trying to tell it, we're tainted. Ah, you're just getting on with propaganda, or you're doing this or you're doing that. They're not tainted. They're not politicized, they're not a political animal. They have that independence and arm's length. That's why we give them their budget and we say: run with it. We'll put the whip to them if we think they're doing things wrong, but I tell you, they themselves have to communicate the good things that they're doing.

That's not to say that they're 100 per cent right all the time. I'll tell you something, they were instrumental in helping us to achieve twenty-three federal-provincial agreements that brought $550 million into this Province. Not all of them. Pieces of them. They were instrumental in the Strategic Investment and Industrial Development Agreement that sits in my department, $45 million. They were instrumental in the $43 million Human Resources Agreement. They helped give birth to the first ever Cultural Industries Agreement. Who ever cared about the arts, and painters and crafts people in this Province, before it was given discipline and focus and its own agreement and its own life? No other province in the country has that. We have it. The Economic Recovery Commission helped to give birth to that.

So, you know, there's a lot of things that they've done. The whole innovative work that they did when Richard Fuchs was there - he's now with Enterprise Newfoundland - on the electronic highway, the ACOA-Enterprise network. I spoke in Prince Edward Island at an international rural development conference and I used that as my theme and as my discussion. There were ministers from around the world who had discussion papers. I spoke about just the electronic highway and what we're doing here. It blew people away that we were doing that.

Our geography's immense, our population's small. We've got to connect them somehow,. We've got to bring them into the speed of light somehow. We've got to connect them as everywhere around the world people are doing, connecting their people. The Economic Recovery Commission did it. Not Chuck Furey. Not Premier Wells. Not the government. The Economic Recovery Commission came up with that and gave it life and put it into being.

The eleven sectors that I talked about earlier. Get those background papers, get those studies. They're out there. They're for everybody to have. They did that. We didn't do that. Unfortunately, we're living in a item where perception, as McLuhan would say, is the reality, isn't it? If the perception is that you're not out there every day ringing the bell and beating the drums, well, you know.... What was it Smallwood used to say? If you get up at 6:00 a.m. and everybody knows you're up at 6:00 a.m., you can go to bed for the rest of the day. It's perception. The perception is that - how do you sell policy and think-tank? It's a difficult one to do. That's what they do.

MR. SMITH: Thank you. I'm not finished, Mr. Chairman. Are you going to cut me off or what?

MR. CHAIRMAN: We will get back to you. You have gone well past your time, but I'll get back to you. Mr. Byrne.

MR. FUREY: By leave, Mr. Chairman.

MR. CHAIRMAN: The minister is absolutely correct. It is the minister's fault that Mr. Smith is out of time, but we will get back to you. Mr. Byrne.

SOME HON. MEMBERS: (Inaudible).

MR. E. BYRNE: I think the Member for Baie Verte - White Bay might have been right. I have just one quick question, and it's again dealing with the Economic Recovery Commission. You talked earlier, Mr. Minister, that training and education for the future belongs in three areas: computer literacy, the transferral of information and the receival of information, and the basic use of numbers. I'd make a suggestion that in this Province there are probably four. That before any of those could take place, and before we have an opportunity to take advantage of what these three areas of training and education might do, basic literacy must be a concept that is not only introduced, I think we must get away from the thought and notion that literacy is just a Department of Education point of view.

I'd like to know the Economic Recovery Commission - not in a general sense. Anybody can say that graduation or having a high-school education and moving on to other areas of training and education is a wonderful thing. But does it play really a central role in the development of the information highway that you're talking about. That there is a large number of people out there who are in need of basic educational upgrading, not only in their own personal skills but the workplace is changing drastically every day. The whole notion of workplace literacy is something that we must be concerned about as well.

MR. FUREY: Mr. Chairman, the short answer is that you are absolutely correct. I suppose I was operating from the assumption that that's a given, that literacy -

MR. E. BYRNE: No, no, I was just wondering, does that notion play a part in the Economic Recovery Commission's thought processes?

MR. FUREY: Very much so. It really does. If Cathy wants to speak to it, feel free, Cathy.

MS. DUKE: Yes, sure. If I might. I think that the point that you're bringing up is a very important one. Certainly the work that the Economic Recovery Commission has been doing in the last two or three years has really dealt very much with stimulating and supporting enterprise and economic development, and generating ideas and opportunities for growth and so on.

One of the other things that we like to think that our work focuses on is improving the business climate. One of the important elements of that, as we have identified it, is education and training. Certainly there are a number of aspects of that that we feel are very important. One of the projects I thought I would mention, because I think that the whole area of literacy training and so on comes in there, is I guess an initiative that we've been pursuing for the last year or two. It's called Community Education. I don't know if you're familiar with that concept or that model.

One of the initiatives that we had undertaken at the Commission over the last year or so was the initiation of a pilot project in Port au Port. Within that concept it basically brings all of the partners in a community together, working towards education together. Bringing in existing resources. Certainly under that concept informal methods of education - that's a very important part of that. By bringing existing resources together - whether it's through the Department of Social Services, or the community college, or the K to XII system - certainly dealing with the literacy problem is a key to that, and bringing education to the people and allowing them to take advantage of situations such as they can become available.

Whether it's a situation where single moms are interested in going back to school and upgrading. Then perhaps another program offered through the community college where they would provide training for day care workers would come in, so that the children of the single moms would go to the day care, while the moms go and do their upgrading. So Social Services may then make allowances in its transportation allowances to perhaps bend the rules to allow the moms to have the expenses paid to travel to school. It's a kind of a situation where all agencies come together to work cooperatively. I think in terms of our overall strategy for education and training, illiteracy is a very key part of that.

AN HON. MEMBER: (Inaudible).

MR. E. BYRNE: That's all I have, sir.

AN HON. MEMBER: Was that answer short enough for you?

MR. E. BYRNE: That's fine.

SOME HON. MEMBERS: (Inaudible)!

MS. DUKE: Sorry about that.

MR. E. BYRNE: No, that's fine.

MS. DUKE: I'm taking my leave from the minister.

MR. CHAIRMAN: Dr. Hulan.

DR. HULAN: Thank you, Mr. Chairman. If you'll permit me a couple of short comments, and then I have some questions on the line items here. A couple of them I'm concerned about. You can imagine what areas they're in.

Anyhow, I found it very interesting here this evening, after the years I was away. When I lived in Western Europe I always made a big issue that North America was the best. When I lived in Central Canada, Atlantic Canada was unbelievable. In the United States, Canada was the best, here in Newfoundland tonight, we had the man from Baie Verte - White Bay declare that that was the most beautiful area of the Province, then we had my friend right here, he declared the same thing and we all know that the West Coast is the most beautiful, you know -

MR. CHAIRMAN: The Chairman would like to correct that misconception. It is Central Newfoundland.

DR. HULAN: I thought I would liven it up with a little -

MR. HEWLETT: (Inaudible).

DR. HULAN: The other thing, is before my hon. colleagues pick up on this one, when I look at the salary figures, Mr. Minister, I sometimes think you must have a couple of task force chairpersons working for you in there somewhere, but anyhow, I thought I would slip that one in.

I notice on page 161, 2.2.02 and 2.2.03, the wide variation in the figures; for instance, in 1992-93, the total was, $2,268,000, this year an estimate of $500,000, that is on page 161 under 2.2.02. If I go down below, I see for 2.2.03, again wide variations. I imagine there is an easy, quick explanation.

MR. FUREY: A very simple explanation, do you believe me?

The first one is the wind down of the last part of the flow of money for construction for the Cow Head facility which flowed through that subhead; that is why you saw it high on one end and lower this year because it was just completed. The bottom one, 2.2.03, is the same thing except that deals with the Bull Arm site which is a $300 million site of which the Province put in $95 million but the 100 per cent assets revert to the provincial Crown.

DR. HULAN: Okay, sir.

MR. FUREY: I am going to be out marketing that site next year.

DR. HULAN: Now, on page 164, 3.1.04. With the important role that I feel, and to which you alluded to some degree tonight, sir, that the Newfoundland and Labrador Science and Technology Council is playing, and the role that they must play in the future in this Province with regard to getting into high schools and so on and so forth, I am surprised that there is no increase budgeted at all, in fact, it is a decrease.

MR. FUREY: There was a very small decrease, yes, but one of the things you have to bear in mind is that, as we were going through the budgets, there was a block fund left hanging under the Strategic Economic Plan in the Executive Council that departments could draw upon. This was enough to cover our week-long intensive science and technology week, this year the theme being Communications, to allow for our school program and to keep a skeleton support staff in place for the board, but, I recall making the argument to Treasury Board that we ought to be able to reach into the Strategic Economic Plan pot to draw out twenty, or thirty or fifty or whatever is required to make sure that whatever projects are coming forward, we can certainly help.

DR. HULAN: Well, I will just make a comment on that. As you know I have had some dealings with this and I appreciate what they are trying to do and I can tell you that will be money wisely allocated and spent because they are doing a lot -

MR. FUREY: There were a lot of tough decisions to make in this Budget -

DR. HULAN: Oh, of course, I realize that.

MR. FUREY: - and that was one that had the axe put to it, I can tell you and we managed to return it to the subhead.

DR. HULAN: Okay. Without picking out specific areas, I could name a few, 3.1.05 and so on. I notice that there is a decrease in dollars for research. If there is a case in point, 3.1.06, Long-term Research

MR. FUREY: Can I just explain what the story is on that?

DR. HULAN: Yes.

MR. FUREY: Mr. Hewlett would know this. The offshore development fund is there and it is a large block fund. This is a particular project that flowed for one or two years. The fund, while it has been depleted over the number of years, can still be drawn upon. You may see in my estimates next year Matrix Technologies and two other companies, for specific projects which we drew out of the larger pot and put into that subhead. That is all that is. There is a $300 million offshore development fund for research. A lot of the buildings you saw attached to Memorial, the centrifuge and a number of other matters came out of that fund and are funded directly through this specific subhead rather than the general block. Once the general block is appropriated it has to come under a subhead and show the specifics and that is what that reflects.

DR. HULAN: You touched on the other one I was looking at and that is the reduction for the total C-Core centrifuge facility from almost $50,000 to $222,500. That is on Page 165, 3.l.08.

MR. FUREY: Okay. That is the same thing. As a matter of fact we are opening that this month.

DR. HULAN: I know. I am familiar with it. This is where some of us, depending on from where we come, start becoming paranoid when we see dollars disappearing out of research.

MR. FUREY: I know what you are saying, but it is really reflective of the larger pot wherein there was a $300 million, a 75/25 pot of money under the Offshore Development Fund. Departments could go and draw on that whether it was for the Offshore Technology Training Program or any other various programs, but do not be too spooked by a reduction. It just simply means that that particular project, whether it be bricks and mortar or research, is coming to an end. That is all that means.

DR. HULAN: Thank you, Mr. Chairman.

MR. CHAIRMAN: Mr. Shelley.

MR. SHELLEY: You mentioned a little ago the Japanese and their attitude. The young entrepreneurs in our Province - I am a firm believer in that, if we are going to turn things around which is going to be long-term I agree with that, it is going to have to start with these people and the attitude of the people. The attitudes of the eighteen, nineteen, and up to twenty-five year olds is to go out and create a job. What in your department, I guess, incentives, enticements, encouragements, anything as far as young entrepreneurs programs and training do you expect to come out of your department to go towards young entrepreneurs?

MR. FUREY: In fact enterprise has the Y Enterprise Program that is just aimed at young entrepreneurs and gives them a break on seed capital to start businesses at preferred rates. It is all attitude. As you say it is not necessarily just money that you can toss at things. It is attitude. It is having the drive that these Roberts boys have on Triton and moving that into a niche that you create or that you discover and make a go of it that way. All the tools are there for anybody irrespective of age. Some of the people who come in through our doors are seventy years old looking to start a business. I had a guy in the other day seventy years old who wants to start a business and his idea is fabulous when you come to think about it. It is three jobs and three jobs are better than no jobs.

MR. SHELLEY: Are there any programs within the institutions?

MR. FUREY: ACOA has a series of programs aimed at young people and Enterprise Newfoundland has a series. Patrick how does the Y Enterprise work?

MR. KENNEDY: I am more familiar with the ACOA but I am not so familiar with that.

MR. FUREY: Do you want to take a second just to talk about that?

MR. JANES: We work in co-operation with the Y Enterprise Centre and the chartered banks in and around the St. John's area and help young entrepreneurs within the budget of that Y Centre. We have placed a couple of hundred thousand dollars in capital funds on an annual basis to be available to them. In addition at the Enterprise Corporation we do not discriminate, period. If young people want to start business we encourage them and do what we can to help them.

We have a number of people from the Economic Recovery Commission and Enterprise Newfoundland and Labrador who sit on the Department of Education Enterprise Education Committee, helping to work through part of the curriculum and making available the ACOA enterprise network to help these students, so we are very, very aware of the need to provide assistance, to make programs available, to make funding available, to help young entrepreneurs in the Province, and it is certainly one of the priorities that we have.

MR. FUREY: One other thing I would like to add to that - you touched upon it - attitude. For the longest while the previous government and this government were having the devil's own job trying to get entrepreneurship into the curriculum.

AN HON. MEMBER: That is right.

MR. FUREY: It is in there now, but somehow we have to change the attitude too that making a profit is somehow dirty or wrong.

AN HON. MEMBER: Peter Fenwick said that.

MR. FUREY: Yes, but we know where Peter Fenwick is now, don't we? There is some kind of an attitude that if you go out and use the sweat and equity and energy and human capital to generate x into y, that somehow there is something wrong with that. There is an attitude out there that we have to change too. I taught in the school system and I found it there.

MR. SHELLEY: I did too.

MR. FUREY: I found it there, I tell you, but that is changing. There are new textbooks being produced by Breakwater, our own book companies here. There are new courses being offered. You are seeing entrepreneurs going into the classroom now. It is good stuff that is happening out there now. There is an attitude change happening, but it is going to take awhile yet.

MR. SHELLEY: Thank you. That is it for me.

MR. CHAIRMAN: Mr. Smith.

MR. SMITH: Mr. Minister, where are we in terms of the implementation of the Strategic Economic Plan?

MR. FUREY: You mean my department?

MR. SMITH: Yes.

MR. FUREY: There are thirty-four action items in my own department. We have just laid out a work plan which was just approved by senior management, and without getting into all the details, some of them are completed - a few of them are completed; I should not say very many - some are ongoing and some are long term. We have divided them that way.

Each division has been given their particular action items and they are to report through senior management and myself on a monthly basis on the progress, so it is not something that we decided here are the thirty-four action items and just let them die on the shelf. They must be acted upon. They must be reported through senior management, and I intend to give quarterly reports to Cabinet on what we are doing.

MR. SMITH: So it is being actioned.

MR. FUREY: Very much so. In fact, I could show you the work plan. I brought it with me. It is a terrific work plan which lays out each action item. For example, if I turn to action item 1, support the entrepreneurship by instituting a Province-wide promotional campaign in support of entrepreneurship and developing an enterprise culture, it goes through where we have tagged into the human resources agreement. We are using the private sectors such as Newfoundland Telephone Company. We have a communications plan aimed at whenever I speak or anybody speaks on behalf of that department that touches on that very attitude problem that is out there. It sets dates out, time frames and endings so that we can achieve what we are setting out to do. That is just one. Then it takes all thirty-four -

AN HON. MEMBER: (Inaudible).

MR. FUREY: I would like to be able to give it to my Cabinet colleagues first and then make it public.

MR. CHAIRMAN: Where you were quoting from it, I was just wondering if there was a time that you could tell us that that would be able to be distributed to members of our Committee.

MR. FUREY: What I intended to do was to have a briefing session for my Cabinet colleagues the end of this month. Then I do not mind making the - exactly what we will be doing, where we are heading, and what has been achieved - public. That is no problem.

MR. SMITH: Thank you, Mr. Minister, but there are thirty-four directly into this department but a number of indirect ones come in on this as well.

MR. FUREY: Sure.

MR. SMITH: You referenced in your earlier remarks the conservation corps. I wonder if you could elaborate a little on that.

MR. FUREY: Yes, perhaps Cathy might be better to elaborate on the conservation corps because it really is a creature of the Economic Recovery Commission. For now it is aimed at young people. It has a budget of 350,000 people, and they will set up green teams around the Province, but you might want to just flush it out a bit.

MS. DUKE: Yes, I guess the original recommendation for the establishment of the conservation corps was actually in the Royal Commission Report back in 1986, so it gives you an idea of how long sometimes economic development takes to occur and we have to be patient.

Adele Pointer, commissioner with the RC, has been working on that particular initiative now for the last couple of years but basically in a nut shell, the idea of the program is that it will provide an opportunity for the youth of the Province to become exposed to the whole area of environmental industries, to give them some idea of what the major opportunities are in the industries and what possible career options there may be for them.

The nice thing about this program is that through a work experience on the program, they not only get employment experience which will help them certainly in any future job seeking activities but there is a training program involved with every project that is funded. So, for the first two weeks the students will attend a training program which will introduce them to officials of various levels of government involved in environmental industries, introduce them to the private sector to see what some of the opportunities are and then a second part of the training will be to train them in the specific job that they will undertake during the project.

So for example for this summer, through the assistance that has been provided through the Strategic Economic Plan and through Minister Grimes department, seventy students will be hired and they will be employed on twenty-one projects around the Province. So for every one of those projects the students will attend the initial training session, will be trained in the specific job that they will perform over the summer and then they will have a period of - I am not sure exactly how many weeks each project will be but it will be basically for the summer months in this first instance.

So the overall goal really is to provide an education for youth about environmental industries, looking at conservation, enhancement and that kind of thing. So you really achieve a couple of purposes through the program. It is hoped that eventually the program will run all year long so that students will move in and out of the program over the twelve months.

MR. SMITH: Yes, in its initial phase, for the benefit of my colleague, will this cover - will this be spread right across the entire Province?

MS. DUKE: Yes, actually we do have a list. There are twenty-one projects as I said and there are a number of them in each region of the Province so that there will be a supervisor for each region who will basically monitor and supervise the projects in that particular region and then there will be an over all coordinator for the program. Actually, if you are interested, we certainly can let you know what projects are occurring this summer and where they are. The other nice thing about it, I should add if I can take another moment, is that the projects that the students work on are ones that are received from, either development agencies in communities, development associations, municipalities and so on but they are projects that have some economic benefit or have some environmental benefit so that it is not just a make work project. It is something that when an association submits an application the coordinator of the program will work with the group to ensure that it is a sensible project and that it will have some benefits, whether it is conservation, enhancement or whatever. So, it will benefit the community in which the project takes place. So that is another very important element of the program.

MR. SMITH: Thank you and just one other comment if I may. I cannot resist the opportunity to - we have had a couple of my hon. colleagues this evening make reference to the rural development associations and anybody knowing my background will know that there is no way that I can stand by and have anyone speak, in any sense, that might be construed as being critical or derogatory of development associations - have my feeling that I need to respond, regardless of their political stripe. I indicate and I share my comments in the sense of - that a concern that everyone does appreciate and have a full appreciation for the tremendous contribution that development associations have made to development generally in this Province, not only economic development but social development. Development associations have now been active in this Province for some thirty years. They are spread widely throughout the Island and in Labrador, there are very few areas that are not presently covered. I recognize that with any organization, as a part of maturing and growing, there is a need to change and respond to changing needs. I think we always have to be very careful. Mr. Minister, I do mention it to you as well. Because in terms of your remarks when you were talking about - I know the economic zones that ENL is looking at now, and we're talking about consolidation. We have to be very careful when we're getting into that.

I agree with your remarks in terms of - certainly with regards to the bureaucracies that have been created in certain areas, there appears to be an awful lot of overlapping. I've sat in on presentations down at the advisory council where we've had these maps, where we've had these overlays, and when you start laying them on I mean it gets mind-boggling, because it's just a mass of dots. Some areas seem to be inundated with these different programs that are proposing to offer the same sort of thing.

However, I really feel that development associations in terms of what they do and the areas that they provide for still offer a very valuable service. My concern would be that if we get to the point where we consolidate - because people sometimes think that bigger is always necessarily better. If you broaden the region that you don't destroy the smaller component, just because you take it into a broader region. I think we have to be careful of that, because I think that is a distinct possibility.

I think we have to recognize there are certain development associations out there that probably are having difficulties and maybe aren't making a tremendous contribution. But I would suggest to everyone here this evening that on the whole development associations in this Province, in terms of the level of funding that they receive, which is now thirty-six five, that there's not a better buy that any government anywhere makes for their money than they do with development associations. Because having been involved with development associations for sixteen years, at both the local and provincial level, I'm well aware of the kinds of developments that they've been instrumental in bringing about.

Aside from what they've done in their communities, the other thing we shouldn't lose sight of is that what - they're a grass roots organization. What they've been tremendously successful at - and I'm not sure if you looked at a broader and a wider and a bigger and a larger region if you would get the same sort of involvement. Because what's happening right now with development associations is that you have tremendous involvement right at the very community level. It's difficult to measure the importance of that. Because to me, like in terms of economic development, and you're talking about development associations, the process is just as important as the product. The fact that this provides an opportunity for these people at the community level to get involved.

I guess a real indicator of that in terms of the leadership that it helps to provide and develop and nurture is that two of the members opposite who are not here this evening - to my understanding there may be others - who have just come in as development coordinators, from development associations. The Members for Placentia and St. Mary's - The Capes. Both of these gentlemen prior to their elections were development coordinators for development associations. I think that's significant. There are others, I'm sure, I know there are other members who have come up through - and a lot of the skills and leadership abilities that they've acquired have come about because of their involvement in development associations.

I just wanted that noted, because I think it's important. Because I really do believe in the process, and I really do believe that there's an important role being played by development associations. From my perspective, where I sit right now, I really see a need for that role to continue for some time in the future. Probably a need for more collaboration, but I certainly would not want to see - I guess my final word would be that, I mean, if it's not broken, why fix it.

Thank you, Mr. Chairman.

MR. FUREY: Mr. Chairman, I'll respond to that short question by saying I think everything that you said is right on target. I think the criticism comes when people, as Mr. Shelley said earlier, and you just acknowledged, when you get all these layers of administration and these dollars aren't hitting the heart. I'm just saying: let's lift off the layers and maybe fold up some of the tents, and direct new and enhanced monies to the grass root organizations which were there for thirty years. They were there first. They were doing a pretty good job. They could be helped with some expertise and help and stuff in certain areas. But we are being smothered, Gerald, by all of the layers of bureaucracy and the administrative dollars. Just in my area it is phenomenal to look at.

The Northern Peninsula Development Corporation, the six development associations, these three - they could not get along on the Northern Peninsula with one community futures so they divided it into two, and when those two could not get along they divided it into three. We have three community futures, two business developments - the Northern Peninsula, 22,000 people. It gets absurd. It reaches the point of absurdity where all of these administrative dollars - you have an administrative officer, a secretary, a Xerox machine here, a fax machine there, two across the street. You just smother yourself with all of this expenditure and it is not hitting at the heart, and that is my trouble. I think that was articulated by others as well, but your basic comments are dead on.

MR. CHAIRMAN: Mr. Byrne.

MR. E. BYRNE: I have a question related to the conservation corps. My understanding is that it is a $330,000 project. One hundred and eighty thousand dollars comes from the Department of Employment and Labour Relations and $150,000 from the Economic Recovery Commission, or from the Strategic Economic Plan Fund, I believe it is?

MS. DUKE: Yes, through the Strategic Economic Plan.

MR. E. BYRNE: The Strategic Economic Plan, the money coming from that, is that geared toward the administration of the project?

MS. DUKE: Yes, as I understand it, it is. Because of the nature of the program that is available through employment and labour, that funding is really geared for the salaries of the students and there are certain guidelines to that program where that money was accessed, so the money available through the Strategic Economic Plan -

MR. E. BYRNE: So that money came from the student employment program?

MS. DUKE: It was from employment and labour. I am not sure the name of the program.

MR. E. BYRNE: Yes, the student -

MS. DUKE: I am not sure what the name of the program is, but it is from that department and the administrative funding is being provided through the Strategic Economic Plan.

MR. E. BYRNE: Now that initiative was announced last week, and I applaud the initiative. I think it is a worthwhile venture, there is no question, because it involves more training and education than it does actually employment; however, a question that I do have is that there are twenty-one projects approved. How did the approval process take place? How did projects become identified, because it was not - and I could be wrong - but it did not seem to be open to a lengthy public process and announced. It seemed like the corps was announced and then twenty-one projects were announced along with it, so I would just like for you to explain that to me.

MS. DUKE: Sure, I can explain that. Actually, the work that has been done on the conservation corps has been ongoing for the last year-and-a-half really.

MR. E. BYRNE: Okay.

MS. DUKE: And the Economic Recovery Commission carried the initial costs in terms of the contract person we had working on that particular thing, but in fact there was a public advertisement and announcement of a call for proposals for projects from communities, development associations, economic development groups and so on, as well as -

MR. E. BYRNE: I am sorry. How long ago did this happen?

MS. DUKE: Around a year ago, I guess - a year-and-a-half.

MR. E. BYRNE: Again, I am just looking for information. I am not trying to trip you up or anything like that.

MS. DUKE: No, I realize that. I would say it is probably a year ago. Then what happened is that the person who we had working on it then followed up on every enquiry and accepted proposals and then met with every group and determined to try to prioritize them in terms of what made more sense and what seemed like a good environmental project. So then the contract person worked with each association and helped them develop their proposal further, so the twenty-one that you see are probably twenty-one out of, I do not know, I think there were over a hundred -

MS. FRENCH: Over a hundred.

MS. DUKE: Over a hundred submissions, yes.

MR. E. BYRNE: Thank you very much.

AN HON. MEMBER: (Inaudible).

MS. DUKE: I wonder have they?

MR. FUREY: I do not know where they are either.

The Recovery Commission basically identified them and said these are ones we can go with. This is basically a pilot project and it can be expanded next year and take in federal funds and really give it a good lift.

MR. E. BYRNE: Okay, thank you.

MS. DUKE: You are welcome.

MR. CHAIRMAN: Mr. Hewlett.

MR. HEWLETT: I have just one quick, final question Mr. Chairman. Salary estimates: in the salary estimates book lists permanent employees of the department costing $3.4 million, but in these times of restraint when we hear a lot of cutbacks, layoffs, et cetera, temporary and other employees constitute nearly $400,000 - nearly 11 per cent - of the total budget for permanent employees. I am just wondering why such a relatively large number?

MR. FUREY: Half of that comes under agreements, Mr. Hewlett, comes from the SIID Agreement which is cost-shared and will give us a seventy-cent dollar. The other one is the Ocean Industries Agreement which gives us a seventy-cent dollar as well and those are contractual positions to the federal/provincial agreements, very basically that is what they are.

MR. HEWLETT: Thank you. That is all, Mr. Chairman.

MR. CHAIRMAN: (Inaudible)

DR. HULAN: By the way I should say that I support my friend and colleague Gerald Smith in his comments on the rural development associations, in general, but has there been any change in the philosophy or the mandate of rural development associations that now permits them to establish businesses and compete head on with private enterprise?

MR. FUREY: It was never, never intended that rural development associations, and Gerald you correct me if I am wrong, it was never intended that they go in and displace the private sector. It was quite the opposite. They would go in where the private sector would not dare to go and create, help, nurture and enhance businesses and then back out of it.

Now, some of them get in there and they are running such good operations that you cannot kick them out with a herd of elephants. Right in my own district I know of a couple of opportunities dealing with craft development, where it is so successful - it is really difficult for us because there are now private entrepreneurs that want to take up the challenge and run with it but it is a revenue generator for one association that I am thinking of in particular. It is difficult. I gave you the example of the Woody Point, that is a classical example of how rural development associations ought to work. They put together the various funding sources, built a beautiful little plant, got some marketing money and went out and found a very reputable operator, the Pelley family and it has just been going gangbusters. It only goes for twenty-two weeks of the year but it has been going for twenty-two weeks, six years in a row, ever since they did this. It employs 150 or 160 people, 130 last year but 160 the year before and 150 this year. So, that is a classical example of where rural development stepped in where the private sector would not go.

DR. HULAN: You are preaching to the converted here, Sir -

MR. FUREY: No, but to answer your fundamental question, should they be in competition with the private sector? No, they should not.

DR. HULAN: Okay, I was going to rephrase it a little differently by saying, would it be condoned if a development association came on the scene in some ten/twelve years after an established business is doing very well and start competing with that business to the point of probably knocking that private entrepreneur out of business?

MR. FUREY: I have heard that story before and it distresses me. I think it is horrifying and if you know of an example like that let me know and I will deal with it.

DR. HULAN: Thank you. Now the other thing, can you quickly tell me, I will ask Cathy since she is answering these questions on the corps program -

MR. CHAIRMAN: Would you mind, Dr. Hulan, the question must be addressed to the minister.

DR. HULAN: Okay, sorry. Mr. Minister, I am interested in knowing if it is knowledge now, whether there is in the District of St. George's one of the projects that we are talking of the twenty-one?

MR. FUREY: I will ask Cathy to answer that.

No, she does not have the numbers with her but I will tell you what we will do, the minister is releasing them in the morning?

AN HON. MEMBER: (Inaudible).

MR. FUREY: Yes, he will probably release them in the House in the morning and if not we will certainly make them available to you.

I do not know where the nine projects for St. Barbe are.

DR. HULAN: That is it, Sir. Thank you, Mr. Chairman.

MR. CHAIRMAN: I will now ask the Clerk to call the subheads.

MR. E. BYRNE: Can't we move a motion that we call them inclusive, from 1.1.01 to 3.3.01?

On motion, Department of Industry, Trade and Technology, total heads, carried.

MR. CHAIRMAN: Mr. Minister, if you would like to make a short comment in closing.

MR. FUREY: Short?

MR. CHAIRMAN: The Chair would like to emphasize the word "short."

MR. FUREY: Thank you very much, members of the House of Assembly, and thank you very much, staff of the Economic Recovery Commission, the Department of Industry, Trade and Technology, and Enterprise Newfoundland.

My concluding comment is that we are going to have to work together and lay down our political swords if we're ever going to turn this economy around. We'll take them back up in four years and bash each other over the head and knife each other in the back and rip each other's eyes out, and all the rest of it, and see who wins, and then lay them down again. But I'll tell you something, we have a massive burden ahead of us. We're going to have to pull awfully strongly together, every one of us, to navigate what are going to be some very difficult waters. There are some good signs on the horizon but there are some difficult structural problems, particularly with the fishery, that we're all going to have to circle the wagons on. I think we can pull it out, all of us working together.

Thank you.

MR. CHAIRMAN: The Chair would like to officially thank the minister and his officials for the manner in which they conducted themselves during this meeting tonight. I would also like to thank Mr. Byrne, who acted as the Vice-Chair for this evening's meeting, and the other members of the Committee for their cooperation with the Chair. I'd like to thank Elizabeth Murphy, our Clerk for this evening, and the two gentlemen who represented Hansard here to record and to assist in the transcribing of the comments made tonight.

The next meeting of the Resource Estimates Committee will be Monday, June 7, at the House of Assembly at 7:00 p.m. We will be doing the estimates of the Department of Forestry and Agriculture. Thank you very much and good-night.

The Committee adjourned.