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

CHAIR (Mr. Canning): Order, please!

Good evening ladies and gentlemen and thank you for coming here tonight. This is the resource committee meeting on Fisheries and Aquaculture with the Hon. Minister, Mr. John Efford.

Before we get into that, there is some housekeeping business that we have to take care of. I would like to have a motion to accept the minutes of the previous two committee meetings on May 27, Forest Resources and Agrifoods; and May 28, the Department of Development and Rural Renewal. If I could have a motion to accept these minutes.

On motion, minutes adopted as circulated.

CHAIR: Good evening, Minister. Before we get along with business, perhaps you want to take some time to introduce your delegation.

MR. EFFORD: Thank you, Mr. Chairman.

To my far left is Mr. Gar Mouland, Director of Administration for the Department of Fisheries and Aquaculture; to my immediate left is my Deputy Minister, Mr. Leslie Dean; to my right is my Assistant Deputy Minister, Reg Kingsley; and Josephine Cheeseman is Director of Public Relations for the Department of Fisheries and Aquaculture.

CHAIR: Perhaps we might introduce the committee starting with Paul Shelley.

MR. SHELLEY: Paul Shelley, Baie Verte.

MR. FITZGERALD: Roger Fitzgerald, Bonavista South.

MR. OSBORNE: Tom Osborne, St. John's South.

CHAIR: Perry Canning, Labrador West.

MR. MERCER: Bob Mercer, Humber East.

MS THISTLE: Anna Thistle, Grand Falls - Buchans.

MR. WOODFORD: Rick Woodford, Humber Valley.

CHAIR: So, Minister, what we have decided is that you will open with a fifteen minute statement and then Mr. Shelley has fifteen minutes to respond. I would ask your bureaucrats to identify themselves each time they speak into the mike, for Hansard purposes. So good evening and welcome to the committee.

MR. EFFORD: Thank you, Mr. Chairman.

I will begin by saying it is a pleasure for myself, as Minister of Fisheries and Aquaculture, and my staff to have the opportunity to present to the committee the Budget Estimates of the Department of Fisheries and Aquaculture for the year 1996-1997.

We are dealing today with the first budget of an entirely new department that has been formed under the new government of Premier Brian Tobin and ministers; a department focused exclusively on the fishing and aquaculture industry and charged with the delivery of the programs and services to those industries.

I am not going to read the text that I have in front of me. I am just going to highlight a number of the things that we are doing.

As you know, the Department of Fisheries and Aquaculture has the responsibility for promoting ongoing developments in harvesting, processing and marketing sectors of the fishing industry and for articulating policies relative to the management of the fishery resource. Comprehensive programs relative to technical innovations, resource development, aquaculture development, productivity, quality enhancement and infrastructure support are designed to maximize the economic benefit which can be generated by the fisheries and aquaculture sectors.

Gross expenditures in 1996/1997 are projected to be $12.9 million. We will spend approximately $11.5 million on the current account and approximately $1.4 million on capital accounts. We anticipate revenues of $2.4 million, most of which are federal revenues associated with the aquaculture component of the Canada-Newfoundland Agreement on Economic Development.

The fisheries industry is undergoing a major transition. There is no doubt about it that the fishery of the future is going to be somewhat different from the fishery of the past, from a harvesting point of view, from an industry point of view, processing, from a management point of view and from an overall perspective of all of the industry people involved, from harvesting right down until the fisheries species or product gets to the consumer table. We have to put a totally new emphasis on the fishery of the future. We all have accepted the fact that the damage done to the resource of the past must never be repeated in the future.

We have to look at other species of fish which are undergoing experimental fisheries right now within the department, which I will get to in a few minutes, but we also have to keep in mind that if we are going to move forward to creating a sustainable industry, sustainable to the communities and to the regions across this Province, we must first begin with the thinking of our people; and I emphasize that because we have to change our attitudes.

Everybody involved in the industry, from the time that fish comes out of the water, regardless of the species, whether it is shell fish, ground fish or other species of fish in the water, we have to look at that species as it comes out of the water, in whatever mode it is caught, and look at it as it is our livelihood.

We must do whatever we can to enhance, number one, preservation and conservation measures. We must make sure that it is handled with the utmost quality in mind from the time it comes out of the water, as I say, until it goes to the consumer's plate; a quality and a standard of handling fish that is unequal in the world, until it reaches the consumer's table. Why must we do that? We must do it because we have never done it in the past to that standard. We have never taken the interest - and I mean all people involved in the industry. Nobody can escape from that responsibility.

We have to carve out a market. We have to earn the respect and the credibility within the market-place that we are going to be looked to as a pristine, clean environment with a fish handling process that the people in the world will demand. It is a very, very highly competitive industry today. Aquaculture is very competitive all over the world. In downtown New York, downtown Mississippi, and many other countries in the world aquaculture is growing on a daily basis, fish farming, harvesting and processing of all species of fish. So the market is demanding a high quality product and we are saying to our people here in this Province: We must create a fishery in the future that is going to be in line with the market demands.

We also have to get away from what we did in the past. Unfortunately what we are doing today is placing too much emphasis on any one species, any one resource. We did it with groundfish and we know what has happened to the groundfish. I thought that most of us had learned a lesson from that and I thought that we would never repeat that again in the future. One of the concerns that I have today is that we are doing a similar thing to the crab industry. We are harvesting crab, expanding licences and we are putting too much emphasis and too much dependency on one resource. We should be focusing - the attention of our people involved in the industry is to realize there is more fish in the ocean than just cod, two or three of the groundfish species or a shell fish such as crab. We have to educate and promote our industry in the area where people will come to accept and expand and take advantage of all the other species in the ocean, that all of the harvesting and processing must be multi-species if we are going to provide long term employment in harvesting and processing in the future. We cannot depend on one resource. No one resource can sustain, be it financially, nor can the resource sustain conservation measures if we don't focus on other species.

What I am saying to the people of this Province is, yes, there is a fishery in the future. Yes, we can carve out an industry that will sustain communities and regions; probably not as many as in the past, not as many numbers, not as much processing, but nevertheless we can get a good industry developed in this Province which will give long-term employment, long-season employment, if not a full year at least a majority of the weeks involved in that year, if we focus on other species.

The provincial Department of Fisheries and Aquaculture is placing a lot of emphasis on under-utilized species. It is amazing to me how many people walk up to me and say: Why would you want to be Minister of Fisheries today when there is no fish. Well I can tell you, there is a lot of fish in the ocean that we have not yet began to take out. There is a lot that has already been taken out over the last few years in a very commercial way, and it is growing if we allow further work to be done to the resource so that we can get - the market demand it there, I guess, is what I am saying, and the need to harvest and to need to process. It is just getting our fishermen, our people, involved in the industry, more in line and more in tune, more understanding, and more educated about the advantages of doing this and exactly what is out there.

In 1995, for example, fish harvesters landed approximately 133,000 tons of fish, on par with activity in 1994, but considerably less than the activity prior to the groundfish moratorium when landings were in the order of 550,000 tons. In 1995 landings were worth approximately $340 million at dock side, representing an all time high. We know that was mainly because of the shell fish and the price that the shell fish was taking in on the market. There were approximately 10,000 people engaged in some level of fish harvesting and 8,000 in the processing sector. On average 3,900 individuals were employed monthly in the fish processing in 1995.

Now we know, Mr. Chairman, that is not good enough. We know that we have got - and this is the reason why we are placing emphasis on other species such as deep-sea scallop, offshore clams, sea urchins, skate and many other species. We just recently announced two new fisheries here in this Province, atlantic king crab and a shrimp pot fishery. We know how much shrimp is in the bays and the waters around the Province. All we have to do is see the way it is being fished by other companies. We know it is a proven technology in the State of Maine and it is a proven fishery now underway in Nova Scotia.

We have some experimental (inaudible) out there, not enough to satisfy us in the department, but we will be working on getting more of those in the water over the next while, not only on the king crab but also on the shrimp. We believe that this is going to be a major commercial fishery for the inshore fishermen in the future. It is the type of fishery that begins in September and pretty well ends in March or April in Nova Scotia. It seems to be more prevalent and easier to catch in the winter months which would be great, because then you have the other species coming on, such as different species of crab and scallops in the spring of the year, and then you have the caplin in the summer, and when the groundfish comes back. So, that is the way we are trying to develop the fishery of the future, to keep in line with that type of thinking, and wherever we can develop on the utilized species, to be in line with the multi-species operation.

So that is the kind of process and thinking that we are going with within the department, and we have enough information now to know that there are a lot of species out there that can be harvested commercially. It is amazing, when you get into the type of things that we are talking about, but the fact is that there is untold wealth in marine life. It is just unimaginable and you have to take one step at a time to understand and develop it in a manner in which it can be valuable.

The landed value of some of these species that I mentioned has gone from $4.5 million in 1990 to approximately $25 million in 1995 and still we have not touched the tip of the iceberg.

The other thing, as I mentioned earlier in my remarks, is Aquaculture. We know how much opportunity there is now in aquaculture around the world. We know how much development has taken place over the last number of years. We have now signed a $20 million agreement with Ottawa that will be jointly delivered by the Province and by the federal system in developing research and developing aquaculture. We have many proven species now: We have Bay d'Espoir going; we have the scallop industry going; we have the scallop spat going up in Belleoram; and we have the ocean science research centre making major gains in the development of halibut, yellowtail flounder and many other species.

So we have, number one, the opportunity of the research centres here in Newfoundland that we can further expand on. We have private industry willing to develop and to invest in aquaculture. So a partnership between federal-provincial, private industry and our technology and our research centres, is going to make aquaculture a major industry in the future. Most of us know about the Bay d'Espoir success and that is only in the early stages yet, but is on the threshold of major things to happen in the future. It is there because private industry is willing to take the chance and be a part of the development. It can't work unless it is a partnership, a total partnership right down the line.

I guess what we are saying is that the aquaculture development is now on the threshold of major things happening within the Province. Because we have an opportunity now to have the $20 million from the economic development agreement, it will give us a great leap ahead towards major research and scientific opportunities that we otherwise would not have had. When we talk about that publicly and talk about it to private industry, they are excited about it because that is where we are lacking. If you were to go out and talk to somebody in the private industry today: Where would you rather see the money go? Would you rather see it come out in the form of business assistance or business subsidies or would you rather see it go with the research and development? Most of them will say research and development is where we want it to go because that is where we are most lacking.

The other thing that I am excited about - and I guess if there has been any one individual in the Province since 1985, since I have been in politics, who has spoken very heavily on this, it is me, and I am not the only one but I know what I have said myself - is the sealing industry. We all know how the Province was devastated by the closure of the sealing industry. We all know of the impact that the seals have on commercial species of fish. I used the example many, many times that, if there are five million seals in the ocean - we know that, even the scientists today are admitting that after much argument and discussion back and forth - but if they only ate one pound of fish a day, that is five million pounds a day. You multiply that times 365 days a year and you are talking in excess of 2.4 billion pounds of cod fish a year; if they only ate one pound and we know what an average seal consumes, a ton of fish a year, whether it is caplin, herring, mackerel, shrimp or whatever. They are all very highly commercially valued. It is estimated by the scientific community that seals eat, on an average, 640,000 tons of caplin a year. We are allowed to harvest less than 45,000 tons. The last two years we didn't do any. This year we have 40,000 tons, including the males and females, to harvest. So you can see the devastation of the sealing industry.

Nevertheless, we have made major gains this years with persistence from the provincial fisheries, the federal fisheries, and especially private industry. As most members around are aware of, Mark Small and his group, the Sealers Association, have done a lot of work, the public relations factor and being persistent in fighting the animal rights groups. This year we had a harvest of approximately 250,000 seals; very successful. All of the seal, the animal, was utilized to its totality. There was nothing discarded. That is a big advantage now because that is what the world is demanding. The markets out there are saying to us: We want more. We are saying to the federal government: Whatever the markets demand, within reason, we should harvest.

At one point in time this year they said they were going to cut and close down the sealing industry, and we made representation to the federal minister. They reopened it and it is successful now that the 250,000 seals are harvested. From the industry people whom I've been talking to, they could have taken more. But we are in agreement with the decision by the federal government this year. Let's not jump too far into it, let's talk about it next year, let's overcome some of the difficulties that we had this year and look at what the market will allow next year.

We are now working, we have already had some meetings, and the Sealers Association had a conference in Gander a couple of weeks ago. In fact, I talked to Mr. Small as early as 5:00 p.m. - 5:15 p.m. He was in Gander on more meetings. We talked about some of the things that he wants us to do as a government, in working with the federal government, to overcome some of the difficulties.

Nevertheless, there were 250,000 seals harvested, valued at approximately $15 million. So that is 250,000 seals, and that is only the beginning, because things that aren't being done here in the Province with the seal product can be further done here. Further processing, a tannery, and other things can happen once we get into the processing, get the numbers up where we want them. The department's 1996-1997 budget provided a $400,000 subsidy for the industry support initiative for the sealing industry.

The aquaculture industry also holds considerable opportunity for employment and investment in mussels, scallops, as I said, salmon, steelhead trout - I'm not going to repeat all that over again. The fact is that there is about a $5 million export value this year, and that can grow in the future. I guess we have to use our imagination in doing research and looking at all the things like that. That is going to grow by millions and millions over the years.

The final thing I will just comment briefly on, before I conclude, is the fact that one of the things I have been asked by the press on numerous occasions is: When are you going to make an announcement on the closure of fish plants? Very clearly, I am not going to make an announcement on the closure of fish plants. I don't think any government or any process has a right to walk into any business and say: You must close your doors. My answer to the news media and to anybody who has asked me that question, is: We are going to do whatever we can to get fish plants opened, as much as we possibly can, in the communities around the Province, where there can be a multi-species plant operating.

We will put a process in place over the next few months that will hopefully help some fish plants, either to come together as a partnership or as a business development within their own (inaudible). After we get the harvesting adjustment board report that was headed up by Mr. Cashin - that was initially started up by the federal system, but then under the direction of Premier Wells they met with Premier Tobin, who was then Minister of Fisheries and Oceans, and they said they would include into that harvesting adjustment board the processing sector. They have done quite a bit of research and quite a bit of consultation with it. They have given me a report, that we are satisfied now there are a number of options there that they could go out and further consult with the industry and then the general public. Hopefully, over the next few weeks or months, come back and give their final report to government, that a process will be put in place that will allow the industry to take care, I guess, of itself and allow the numbers to come together and buy-outs or whatever to take place. I will guarantee and commit it to this calendar year, but I would like to see it happen sooner than that.

Mr. Chairman, what we are saying is there are major things happening in preparing for the fishery of the future. I have a sincere commitment, as Minister of Fisheries and Aquaculture with my staff, who I have every confidence have that same interest at heart, that we can see a major industry developing in the future; much unlike the fishery of the past but, nevertheless, a major industry in the fishery of the future that is going to be sustainable to the communities that depend upon it and that will be to the advantage of life in rural Newfoundland. I must say, when I talk to people in different communities, they are very frustrated and lost. Confidence, self-esteem and everything else is lacking. We have to do everything we can as a community and a province, working together in partnership, to rebuild confidence in the communities, and to try to give Newfoundlanders the right and the opportunity that they deserve to have some pride back in their lives, and work at what they know best.

Thank you, Mr. Chairman.

CHAIR: Thank you, Minister.

I really appreciate your comments. You are very sincere in your words, and with a high degree of enthusiasm as always.

As a matter of procedure, I will ask the Clerk of the House to call the first heading.

CLERK: Subhead 1.1.01.

CHAIR: Mr. Shelley.

MR. SHELLEY: Thank you very much.

I want to say this, first of all, that I want to congratulate the minister for finally getting into the portfolio that I think he always wanted, and where he always wanted to be. I will say that for the record because I believe that. As a matter of fact, I believe also that a lot of people in the Province believe that he is in the portfolio where he always was meant to be. We are not in the House of Assembly, we are in a different forum here now, and I will say a few other things before I get into some specifics on numbers.

I also want to say, too, that I agree with quite a few things you said in your opening remarks. One of the things - and I said it today earlier when I talked to the Minister of Development and Rural Renewal, so I am just repeating it again. I'm all for the Voisey's Bays and the Hibernias of Newfoundland and so on. I still believe they will be there, and I've heard it before about Hibernia and Voisey's and how they are going to solve our problems and so on. Yes, they will help. I believe that sincerely; Voisey's Bay will help. How long it will take and what we will get is still to be answered in our history books yet. I still believe that the fishery is the backbone that brought us to this Province, and I still believe that that is the only thing that is going to save rural Newfoundland. I really believe that.

Those communities, the Fleur de Lys and Coachman's Coves and so on of the world, are not going to sprout up and become vibrant again just because Voisey's Bay comes on stream. They are still going to be there with what made them come there in the first place, which is the fishery. I think the only way for us to move is to first of all learn from our mistakes. Every government and every party has had their hand in that, what happened to the fishery in this Province, provincially and especially federally. Especially federally: I will say that. We all know that from management plans and so on.

I believe now that we have to turn the corner on it. That is why I agree with the approach that your department and you, as minister, say you would take, the utilization of the different species that we haven't really gone after, and not depending upon one as we did with the cod; not one so much, but cod more than anything else. I believe the right approach is to take a look at the new developing research in the fisheries which we haven't because we have been so, I guess, caught up in our greed. Everything was so plentiful, and John Cabot passing a basket over the side, there was lots of fish, so don't worry about anything else until it is gone. That has been the philosophy in this Province for a long time with the fishery, I think, and I think that was our problem, greed, and not even caring enough to research and develop other possible fisheries so they could, I suppose, support the cod fishery. That was our problem throughout our long history, I guess.

I agree that we have to move towards multi-species, and do more research. I'm glad to hear that also, that we are going to spend more money on research and development of things so we can sustain it. The key to it all is going to be how we set up the management and how we fish in the future. There is no doubt about that, everybody has to accept that. You, as the minister now, in this department, have, I think, probably the toughest task of all departments in government, but I also think that you have the best potential for bringing back this Province, to start on the right foot this time. Because we collapsed, that is the one luxury you do have, that we can start fresh. We can look at the mistakes. Everybody has accepted it. Let's start on the right track, when you talk about multiple species and so on.

I was just going to ask a couple of general questions, then I will ask some more specifics. First of all, I just heard your remarks on the Fisheries Broadcast. I just caught the tail end of it. If you said it publicly, I just thought we would get more on it and get you to make some comments on it, about the cartel and crab fishery. I've heard this story in and out of buildings for a long time, and I just got the last part of what you said on the Fisheries Broadcast today. Would you like to make a comment on that, first of all, to get started?

MR. EFFORD: Mr. Chairman, I was interviewed yesterday afternoon by Katherine King of the Fisheries Broadcast, and it was about what most people perceive to be a cartel. I'm going to speak from my personal belief as an individual and also as a minister, and I'm not going to separate them both. I have total confidence that my statements were totally accurate, that there is a cartel. What I believe is happening in the industry is that a group of processors have gotten together and they have put an agreement in place which is totally monopolizing the industry, are putting a system in place that is not allowing people to move within the industry in a free enterprise and on a free and competitive basis. That they have said to them - I know fishermen, I will tell you about my most recent one. It was a widow from my own community. Her husband dropped dead suddenly a year and a half or two years ago. Her two sons are operating the boat, two young men are taking a fifty-five foot long-liner and going out on the Grand Banks and harvesting crab. She went to a fish plant and asked: Would you buy my crab this year? They said: No, you have to go back to the people you sold it to last year. That tells me there is a cartel out there.

I'm going to do everything in my power, as minister of this department, at whatever cost, to break that cartel. I don't like it. I think it is legally wrong, and I'm seeking advice from Justice about it. I think it is morally wrong. The only thing I can compare it with is going back before Confederation when I was a young fellow in Port de Grave, and my father, and all the fishermen in Port de Grave, went to the merchant the beginning of the year and got his supplies to go fishing. When he straightened up, as we used to call it in those times, in the fall of the year, we never got enough money expect a barrel of flour, a barrel of apples and a barrel of whatever for the winter months, and that was it. That was total anarchy and a monopoly by the merchants of that day, and there was a lack of, I guess, education and everything on the part of the fishermen and people at that time in the system.

We must never allow that kind of system to take place again, and I believe that is what is happening out there today. I made that statement publicly on television today and I suspect there are two or three of the major players in the industry now probably getting a hit man out there. But I don't give a damn.

MR. SHELLEY: I had to ask you that, first of all, because I just got the tail end of it. I can tell you this, that my definition of a cartel, if that is really happening in this Province - you have more resources than I have, but I have heard similar stories. It is hearsay, I guess, from what I can gather, from talking to the right people though, probably. If that is happening in this Province then I encourage you to go after breaking that because that should not happen. We aren't going to progress anywhere in this lucrative crab industry if we don't take care of that first of all.

Second thing, I guess - and these are the things that are unfolding, and you only get bits and pieces of it, so I'm glad to be able to ask you the questions here tonight - the multi-species licence. Can you basically tell me, I guess, what is happening with that now, where we are with that, what the idea and the concept are behind that?

MR. EFFORD: The concept of a multi-species operation is to get away from the dependency, as I stated earlier, on placing emphasis or your earnings, whether you are harvesting or processing or working in a fish plant or whatever, on any one species of fish, because we know what happened to that in the past. If we are going to be sustainable in the fishing industry in the future, whether it is in harvesting or processing, we have to create an environment where people involved in the industry can catch more species, are not dependent on any one species of fish.

We use the example of - in the fisheries that I have been used to, in the spring of the year we used to start off with salmon. Then we would go into caplin. Well, caplin and cod probably overlapped. Then in the summertime or early in the fall we would go into squid, and we would go into herring or we would go into mackerel. We fished right up until Christmas and trawled in the fall. What we are saying to the people is that is the type of system we have to have in the future. People cannot go out there and get involved in a lucrative fishery and get four, five to six weeks employment and then be situated financially for the rest of the year, because nothing like that can last. That cannot happen again in the future.

We are working with all of our energies and working with the federal government to try to develop the other species of fish that we know have a lot of potential, are commercially valuable. I will give you one example that is already known, the sea urchins. There are instances in the industry now where a fisherman, or a couple of fishermen, can earn as much as $20,000 in just harvesting sea urchins. We can go on into kelp and the roe from herring. We can go on into, well the clams and the scallops that years ago were never harvested by the people. Then we take marine cucumber - and this is not touching the cucumbers in Mount Pearl by any means; this is the marine cucumber.

Seriously, up on the South Coast there was a boat from my district which got an experimental licence to go up there and research. In two tows they had 14,000 pounds of marine cucumber. What are you going to do with marine cucumber? The Asian market is crying out for it.

Everything in the ocean, from the kelp to every mussel and everything that crawls, shellfish or whatever, is commercially valuable. We just have not placed enough emphasis, in our thinking or our imagination, on what is there. What we are saying is, wherever opportunities exist, we have to educate the industry to doing what is right, first of all in the manner in which it is caught, but nevertheless harvesting as much product as they can, taking the different seasons of the year and making sure that a fish plant, a fisherman, will use that thinking; and that is the condition on which we will expand licences.

So what I am saying is, if we go out to expand, in the case of the Atlantic King Crab, we will give somebody a licence and then we will say: Here is the king crab, here is shrimp. Do you have a pelagic licence, do you have a groundfish licence, do you have all the other licences, and all that will come into our decision-making in giving out further licences. As long as that company, and again the same thing with fishermen, can prove to us that they can be involved in that type of industry; otherwise we are not interested in talking to them.

MR. SHELLEY: Okay, so basically what you want is a package of multiple licences, and that plant will say, we will do this, this and this and that is the way the licences will be (inaudible).

MR. EFFORD: That is what we are thinking we have to do, yes.

MR. SHELLEY: Also now, I would like to mention at the same time - it is along the same route anyway - about the newer crab licences.

MR. EFFORD: What new crab licences, the king crab?

MR. SHELLEY: Yes, the different crab aside from the crab we are doing now. So what plans do you have for those, for processing licences?

MR. EFFORD: Well, we have already given out two experimental processing licences and several harvesting licences. When we are satisfied that the experimental licences have proven to us that there is a sufficient resource there, then we will look at giving out further licences, but we will not be giving out half-a-dozen licences until we are satisfied that the resource is there.

MR. SHELLEY: So (inaudible), is that experimental?

MR. EFFORD: I am hoping, yes. It depends on the success of the commercial harvesting that is underway now. It could be a year or could be much less.

MR. SHELLEY: Back again to the multi-species licence potential: Could some of those go out this year, multi-species licences?

MR. EFFORD: Yes. We can give out licences in the case of shrimp, in the case of the king crab and in the case of other things if a request comes in for harvesting and we have the permission from the federal government for further experimental work. We will give out licences according to the requests and the needs.

MR. SHELLEY: Are there down plants in the Province any where this year who want to go after these multiple licences and different things? Is there potential for that for this year?

MR. EFFORD: Most of the plants out there have groundfish licences, have pelagic licences and most of them, I think, have some underutilized species licences, but is any fish plant that is now in the Province can come forth to the Province with a good proposal, a sound proposal, and say: We are doing this now and this is the amount of work that we have out there. Last year we worked thirty weeks with underutilized species and the other things we have and if we had another licence we could give forty weeks or forty-five weeks - and I am only grasping at these numbers - we would certainly be interested in talking to them; but only if it is planned in that manner. We are not going to give out a licence to someone who can operate six, eight weeks or ten weeks and make a bundle of money and walk away from it and leave the community high and dry; not a chance.

MR. SHELLEY: That is fair enough too. There are a lot of questions to be answered, and I have not gotten into any numbers here yet, but I have gone a bit beyond my time to start off. So what I will do is, I will yield and maybe come back later.

CHAIR: Mr. Woodford.

MR. WOODFORD: Thank you, Mr. Chairman.

With regards to the crab agreement this year on pricing, what is new on that? Can you give me an update on that?

MR. EFFORD: Right now they are going through the normal channels of negotiation between the union and the industry, but I think as of yesterday, there was a mediator appointed - as of yesterday, right?

WITNESS: Yes.

MR. EFFORD: There was a mediator appointed by the Department of Labour for negotiations between the two groups and they are meeting all this week.

MR. WOODFORD: So, do you see any possibility of an agreement there? From the talk I am hearing, it is possible there might be nothing before the fall. Is there any substance to that?

MR. EFFORD: I have talked to fishermen, like yourself, on a regular basis and I tell you, there is a lot of frustration and not a lot of confidence out there that there is going to be a settlement. One of the concerns that you hear expressed on a daily basis is the word `cartel,' because they have this group together. Whether that is a reality, that it will hold it up until the fall or not, I don't know. There are nineteen processors on the Island and they know that the fishermen out there - the federal government just increased the number of permits to 1,300 in the small boat fishery, a supplement on the permits for the small boats, and we have all the other licences, a supplement under thirty-five feet, then you have the larger supplement and the you have the full-time. So there is going to be a lot of pressure and I think the industry knows that. So: Will it not open until the fall? That is anybody's guess right now.

MR. WOODFORD: You mentioned something about a cartel. I have witnessed in the last number of years, on different occasions - one that comes to mind is with regards to pricing. The price last year: What was it set at, $2.25 or $2.50, in the agreement with processors.

WITNESS: (Inaudible).

MR. WOODFORD: Okay, they settled on that.

I was just having coffee one morning and I was talking to a couple of processors, they got up and said: Now, we got our price, the price settled for the Province, but now I'm going down to negotiate mine. Now I know it is a different thing and I suppose everybody does it, they sell to one. Rather than sell to P. Janes & Sons, they'll sell to someone else if they can get 25 per cent more, whether it is under the table or whatever. Those are some of the things that have been going on in the crab industry. It is natural to assume that if John Efford or Paul Shelley or anybody else is going to give me an extra twenty-five or thirty cents a pound - I don't know if there is any way of tracing that or not but it is being done in the industry, not only with crab but in other things as well. That is how some people are getting a so called monopoly on -

MR. EFFORD: One of the things behind the cartel was fishermen moving around in a free and competitive manner, say, they were supplying me with crab and then you offered them x number of cents a pound more, and then they move from me to you. That put the crab industry into a position where they said we are going to do something about this. That is where it really all started.

MR. WOODFORD: With regard to the caplin fishery, has there been any thought given lately - I know it has been kicked around for years - with regards to bay quotas?

MR. EFFORD: (Inaudible).

MR. WOODFORD: But I mean the total this year. What was the total this year?

MR. EFFORD: Forty thousand tons.

MR. WOODFORD: Forty thousand tons. What is it for White Bay?

WITNESS: (Inaudible).

MR. WOODFORD: No, but usually the problem with it, when you talk about bay quotas, there are bay quotas alright but what happens when you start out here, for instance, in St. Mary's -

MR. EFFORD: St. Mary's is usually the first (inaudible) of the gulf.

MR. WOODFORD: That's right and then they start going all up around the coast, and they eventually make their way over to the west coast. Mostly the same people are following the caplin right around the coast, they are taking everything. When it gets into Jackson's Arm, it is open for one day and then it is finished.

MR. EFFORD: Well that's like out in Conception Bay. I mean Conception Bay is a very large bay and there are an awful lot of fishermen out there, but all the fishermen from around Newfoundland congregate in St. Mary's Bay and Conception Bay. It is one day and it is all over but that's the industry. I (inaudible) agree with it actually.

MR. WOODFORD: Yes, unless you are in some of those smaller communities over there that have the smaller boats.

MR. EFFORD: The people who suffer from it are the fixed gear fishermen.

MR. WOODFORD: Fixed gear fishermen, yes.

MR. EFFORD: But it's (inaudible) short of a time that they don't have an opportunity because they can only handle so much in their little boats.

MR. WOODFORD: That's right.

MR. EFFORD: I know out home, the last time the caplin fishery was operated, a friend of mine, who I grew up with, had a trap fishery and he had one haul out of his caplin trap and that was it, the quota closed.

MR. WOODFORD: Minister, I understand that there is a request gone to fisheries now for some seal meat for the fox farmers in the Province. Could you probably give me the status of that now, if there is any chance of it being approved?

MR. EFFORD: No, the problem with the fox farmers within the Province was they were not willing to pay the price that the industry was asking for seal meat even though it was subsidized by both levels of government. While we had fox farmers in Ontario and other parts of Canada jumping at it because they thought it was an excellent product, they were reluctant to buy here. There have been some negotiations ongoing lately, and we are going to give them further assistance to get some of the seal meat into these local farmers. I believe once they get the seal meat and they start to see the advantages and the better product that they will get from feeding their animals that seal meat, I don't think it will be so big a problem in getting them to pay a better price for it in the future.

So the subsidy is being given and we feel - well I guess the answer is, yes, it is happening and fox farmers now will buy more. I was a bit shocked and surprised they did not buy it earlier. Gee, I said, if we can ship it to Ontario, what is going on here? But they say there are two different animals.

WITNESS: Mink versus fox.

MR. WOODFORD: The pelts. So there is a good possibility then that it will be looked after?

WITNESS: Oh, it is.

MR. WOODFORD: Oh, it is looked after? Okay, great. Because I talked to agriculture earlier and then I talked to a fox farmer in my area and he was very anxious to have something done on it because he really wanted to get into it.

MR. EFFORD: And there is a good supply of meat around.

MR. WOODFORD: And there is a good supply of meat, especially this year.

It was mentioned this morning with the Minister of Development and Rural Renewal about the Fisheries Loan Board. I think she was saying at that time that there were some $44 million outstanding with regards to small loans and $40 million in Government Guarantees. Have there been - not likely, I suppose, but I am going to ask the question anyway - have there been any guarantees lately with regards to -

MR. EFFORD: Any new guarantees? No.

MR. WOODFORD: No.

MR. EFFORD: In fact, the bank guarantees are something we have very, very few problems with. The $40 million in bank guarantees for the larger boats is something very, very seldom, unless extenuating circumstances could happen. Even if they happen to be unfortunate to have a fire or something, insurance covers it, so it is a very unlikely thing to have that problem. There is a problem because of the moratorium with some of the smaller boat fishermen which was done through the Fisheries Loan Board. Really even that is not significant now in the last year or two, and all cases are dealt with individually by the system.

MR. WOODFORD: What is new on the squid situation? Is there any indication of what has been happening on the squid? There has been practically nothing for the last while. I really want to ask that because I am pretty well sure that P. Janes & Sons still have an offshore quota. I believe they had an offshore quota there a few years ago and never utilized it.

MR. EFFORD: Rick, if there is any one fishery that science knows very little information about it is the squid. It is a peculiar fish, and it swims in reverse. There is very little information out there on it.

MR. KINGSLEY: DFO, Mr. Minister, used to do an offshore survey to get an indication of what was around in the spring, but they stopped those a few years ago. So really until the summer comes you will not know.

MR. EFFORD: Yes, the one thing that I was going to say about is, that from the information that I looked at over the years, the squid seems to come in in a one track on a regular basis; and that is the people I have talked to in science. I have always been concerned about the emphasis that is placed on that area that the Japanese, with the ability and technology to trap that squid in the way it comes in, and the offshore quotas, I wonder does it have an impact on squid coming inshore, if they are fishing in those large amounts and know exactly. It is not a fish that swims - they seem to come in in the one area. There is something strange because it is really 1980 since we had a large volume of squid. We have had some spots here and there over the years. I find it interesting that every now and then in the winter months some squid will turn up.

AN HON. MEMBER: That is Arctic squid.

MR. EFFORD: That is Arctic squid, is it? Okay I just learned something new. I never knew that one before. Arctic squid.

Anyway, it is a peculiar fish, a mammal that we do not know much about. You know, you wake up one morning and there are millions of them out in the ponds and rivers and everywhere else, and then for five, six, seven or ten years you cannot find one to eat. I mean, I did quite a bit of squid fishing myself. In 1982 - 1983, before I got into politics, I sold my business and I used to go up on the fishing ground 2:30 a.m. and you would probably wait until 9:00 p.m. the next night, patiently, patiently. Other boats would leave and go home, and I would say: Damn, I am not going home. All of a sudden, at three o'clock in the afternoon you would be there and bang, in about half an hour or an hour you would wheel in about 10,000 pounds or whatever, and then gone for another twenty-four or forty-eight hours. You would not see one. That is it, it is strange.

MR. WOODFORD: It is too bad, because there were some experiments done. I think P. Janes and Sons (inaudible).

MR. EFFORD: A big market.

MR. WOODFORD: A great market for it. They had a 1,000 ton offshore quota, didn't they?

MR. DEAN: Mr. Chairman, the biology of the squid is rather interesting. The squid that come to Newfoundland waters migrate from off the Eastern Seaboard of the United States. Squid is an animal that lives to be about one year old and basically they move north and then they move south and spawn in the eastern deeps off Cape (inaudible) and that area. Basically that is their life cycle.

MR. EFFORD: One year?

MR. DEAN: Yes.

MR. EFFORD: How do you get giant squid?

MR. DEAN: Well, that is a different species, the giant squid.

MR. WOODFORD: A different species?

MR. DEAN: Yes, the giant squid. I mean there have only been about twenty of those found in Newfoundland waters in the last 200 years. I mean that species is fished -

MR. WOODFORD: (Inaudible).

MR. EFFORD: Like I said, a squid is a mysterious fish, and there are a lot of things we do not know about it.

MR. DEAN: It is no different. The cycle of squid generally parallels the surface temperatures. They are a warm water species like mackerel, and mackerel is a species that disappeared from Newfoundland waters for forty years on occasion. They came back and fishermen who had fished in Newfoundland waters for thirty years did not know what the species was. Squid, I mean, normally had tended to show a seven or eight year cycle. We harvested in 1979, 95,000 tons of squid, which is a phenomenal harvest of squid. The few years subsequent to that, it is down to 6,000 and 7,000 tons. Two years ago there was a fair concentration of squid in one area around Bay de Verde, for example, and up your area. The biology of the squid is quite phenomenal.

MR. EFFORD: I find it interesting that we can't jig squid. If the squid came in tomorrow you would not be allowed to go out and jig a squid, but yet they live one year and they die, mating I think.

MR. WOODFORD: At that time I do not think there was any moratorium. It is rather interesting because when they gave that offshore quota - is that right, there was an offshore quota given to them at that time?

AN HON. MEMBER: Yes, a very small quota.

MR. WOODFORD: I think it is 1,000 tons; I am not sure. That may sound like a lot, but when you really get a squid that is (inaudible) one day. It is interesting too: Why would they give the offshore quota? Could you explain that to me, why versus anything else?

MR. EFFORD: Well it wasn't versus anything else.

MR. WOODFORD: That is it, is it?

MR. EFFORD: The Japanese found where the squid is offshore and the concentration of squid at any particular time. I mean, if they were allowed to go out there and harvest that squid and the squid was not moving inside, I mean, why not?

MR. WOODFORD: Thank you, Mr. Chairman.

CHAIR: Thank you, Mr. Woodford.

WITNESS: I will yield to the Member for St. John's South; I think he has a meeting or something.

CHAIR: Oh, sorry. Mr. Osborne. Yes, and I apologize. You should have flagged me. I know you mentioned it this evening but I just forgot and I apologize. Go right ahead.

MR. OSBORNE: Mr. Efford, congratulations on your new portfolio. I know it is a portfolio that you have wanted for quite a while. One question, before I ask any questions on the Budget: I had a call, actually this weekend, from a constituent of mine who has a machine, has a patent for it in both Canada and the United States, to process sea urchins. Apparently this machine is designed in such a fashion that he can process them undamaged. He is wanting to set up a meeting to speak with you. Anyway, where can -

MR. EFFORD: (Inaudible) authority.

MR. OSBORNE: I didn't ask him. On the fifth, I didn't ask him.

MR. EFFORD: Do you expect an answer?

MR. OSBORNE: No. I guess I will give you a call tomorrow to set up a time, your schedule permitting, unless you can give me a time now and I can contact him this evening.

MR. EFFORD: You haven't answered my question.

MR. OSBORNE: I don't know.

MR. EFFORD: Call my office tomorrow morning.

WITNESS: With the ad, sir?

MR. OSBORNE: Alright, so I will contact you tomorrow.

Under section 2.1.01, Purchased -

MR. EFFORD: 2.1.01?

MR. OSBORNE: Yes, page 127. Purchased Services has gone up to $115,000. I am just wondering what you have that designated for.

MR. EFFORD: Well, from the notes on my paper here, I am surprised that we have anything gone up here in our Budget, trimmed the way it is, but it is increases in rental costs and aquaculture staff in Gander and the field representatives from marine service centres, and accommodations.

MR. OSBORNE: Also, 2.1.02, Grants and Subsidies, that has gone down. I am just wondering why that particular amount has gone down?

MR. EFFORD: Well, why has it gone down? It has gone down simply because, in every area in government we made cuts where - and my department was not unlike other departments - where we had the least amount of impact or the least amount of pain. So we looked at the department, when we had to adjust our budget according to the direction from the budgetary process, and this was an area where we felt there would be the least amount of pain, in reducing that portion of subsidy.

MR. OSBORNE: Okay. That would probably answer my question on 2.1.04, Labrador Fish Plants. Basically, all expenditures for that have been eliminated with the exception of Grants and Subsidies.

MR. EFFORD: Yes. We don't operate the plants in Labrador ourselves as a department anymore. They are leased out now to fish companies, Torngat fish companies, therefore we would not encounter any of those general expenses.

MR. OSBORNE: Now, there are sections, 2.1.05 and 2.1.06, on last year's estimates that were omitted from this year's estimates.

MR. EFFORD: 2.1.05?

MR. OSBORNE: Yes.

WITNESS: That was transferred to ENL.

MR. EFFORD: Yes. I was going to say, I don't have that because that is not in my department.

MR. OSBORNE: Yes, that is last (inaudible).

MR. EFFORD: That is not in my department, that is transferred to ENL.

MR. OSBORNE: Is that right? Okay.

WITNESS: It was in our department.

MR. EFFORD: Last year.

MR. OSBORNE: Just one last question. Under 3.1.01.10, Grants and Subsidies. This year there are no grants and subsidies at all.

MR. EFFORD: In my department?

MR. OSBORNE: Yes. I'm wondering....

MR. EFFORD: Again, a reason why there are no grants and subsidies is trimming the budget. Where we have monies we spend it, in current account. We have to operate the department. Where we could see a reasoning and justification to do without grants and subsidies in certain areas, it was done. That is another reason why we said: No further grants and subsidies.

MR. OSBORNE: Thank you very much.

CHAIR: Thank you, Tom.

Go ahead, Mr. Fitzgerald.

MR. FITZGERALD: Thank you, Mr. Chairman.

Minister, continuing on down there, 3.1.03, Middle Distance Fishing Vessels.

MR. EFFORD: Yes.

MR. FITZGERALD: Where does that cost come from now?

MR. EFFORD: Where does the cost come from?

MR. FITZGERALD: Do we still have a middle distance fishing vessel?

MR. EFFORD: Yes, we still have one vessel left that government has not yet disposed of. It is leased to the Memorial University.

MR. FITZGERALD: Is that for experimental reasons?

MR. EFFORD: Training and research.

MR. FITZGERALD: I thought all the middle distance fleet had gotten - it's not used for fishing or anything? What is the $630,000, Loans, Advances and Investments? What is that, the cost of maintaining the vessel or the money that is owed on it?

MR. EFFORD: There is your answer, you just answered the question. It is lease payments on the boat.

MR. FITZGERALD: I was surprised when I saw that there because I thought those had all disappeared.

MR. EFFORD: We were surprised, as a government, when we took it over.

MR. FITZGERALD: I guess there will be lots of surprises when the next government is over there.

SOME HON. MEMBERS: (Inaudible).

MR. EFFORD: As you can see, she is going to be cleaned up.

MR. FITZGERALD: Yes, I can see, I know.

MR. EFFORD: By the time you fellows get to take over the currency will be changed.

MR. FITZGERALD: I know all about that, I've heard that kind of stuff before.

MR. EFFORD: Back to the English pounds.

MR. FITZGERALD: Minister, you spoke about crab licensing a few minutes ago and you talked as if: Come on in, boy, and if we feel it is okay we will give you a crab licence.

MR. EFFORD: It depends where you are from.

MR. FITZGERALD: Doesn't it also depend on whether you are federal or provincial?

MR. EFFORD: Pardon?

MR. FITZGERALD: Doesn't it also depend on whether it is federal or provincial?

MR. EFFORD: No, we are processing, we don't give out harvesting licences.

MR. FITZGERALD: That is what I'm referring to. You had indicated in a line of questioning: We can provide you with licensing or -

MR. EFFORD: Experimental licences in harvesting.

MR. FITZGERALD: Experimental licences are provided provincially?

MR. EFFORD: We get permission from the federal government to give out experimental licences and then we give them in that manner in the harvesting as we just did recently on the shrimp and the king crab. Then we select a processing licence depending on a proposal as submitted by a fish plant, by the operator.

MR. FITZGERALD: Those licences are still controlled by the federal government (inaudible).

MR. EFFORD: Once it gets beyond the experimental stage. The commercial harvesting licences are controlled by the federal government.

MR. FITZGERALD: You also talked about another processor involved in king crab. Who is the other processor? Is it J.W. Dawe out in Brigus? Is it Brigus?

MR. EFFORD: J.W. Hiscock.

MR. FITZGERALD: J.W. Hiscock. Is he one?

MR. EFFORD: J.W. Hiscock is the one we have issued to date. We have another one that we are in the process of issuing, but it has not gone out to the companies yet.

MR. FITZGERALD: Okay. Speaking of the crab fishery as well, and taking into consideration the problems we have now with licensing, and it looks like we may not have a spring fishery, is it possible that if we don't have a spring fishery the complete quota could be moved ahead to the fall fishery?

MR. EFFORD: The quota, what is in place now, is there until the end of this year. Does the federal government have the same fiscal year as we do?

WITNESS: No, it is on a calendar year.

MR. EFFORD: So it is on a calendar year. The problem is, if the crab is not caught now, can it be caught in the fall? The licensing and the harvesting plan is there. Whether it can be caught in the fall is another question. That is the concern that I have.

MR. FITZGERALD: Why wouldn't it be able to be caught?

MR. EFFORD: The fishermen tell me that the crab, for some reason - it certainly happens in the summer months and sometimes in different areas in the fall - has a softer shell.

MR. FITZGERALD: Soft shell. In that consideration, if we don't have a crab fishery within the next couple of weeks, then the spring one will have disappeared, because, correct me if I'm wrong, but around the middle of June the crab shell gets soft.

MR. EFFORD: Well, the middle of June, or probably later. The other thing about it is, then you have an overlapping fishery with the caplin.

MR. FITZGERALD: Yes, and usually you find both harvesters picking on the same species.

MR. EFFORD: There are a couple of problems here with the way we operate the damn system, and government has to take some responsibility for this. First of all, there is the timing in which their management plan comes down. I'm saying to the federal minister now that the management plan should come down now to tell us what is happening next year. That would give the proper process and time for negotiations and everything to take place. I think there has to be some kind of a system put in place, because it is unfortunate that we have had fishermen's boats tied up for the past two or three months, and now, as the management plan comes down, they are only sitting down to the table negotiating prices. This is something that has to be corrected if we are going to have a fishery of the future. There has to be a whole lot of emphasis placed on - it is not just managing the resource, it is managing the industry in an efficient manner.

MR. FITZGERALD: In this particular type of year, if you did have a settlement on prices, I mean there is no reason why the crab fishery could not have been active for the last two months and have people fishing.

MR. EFFORD: Two months at least. We have people tied up, boats tied up, people without food on the table, people who depend on that for a living and it is just not happening. You know, we probably should go back to the horse-whipping days, whip somebody.

MR. FITZGERALD: Minister, I know that in your thoughts on the fishery of the future, aquaculture plays a big part and so it should. I think there are lots of opportunities there. I think, with some of the experiments that have been carried out around our coast that they have been very, very encouraging. In order for people to become involved in aquaculture, it seems like they need some funding along the way, and it concerns me that it was only earlier this month that the federal government took away water-sampling provisions that they had offered at one time free of cost to people involved in aquaculture. This particular sampling and this particular service will cost an individual involved in aquaculture probably up to $8,000 which is a lot of money. Do you have any concerns about that or have you consulted with the federal government regarding getting that reinstated? That was under, I think, the federal Department of Environment.

MR. EFFORD: Just let me speak to another issue that I wanted to have an opportunity to talk to and then I will address that. I will address that first. Under the new agreement that is now being signed and the format there now that is going (inaudible), there may be (inaudible) assigned and completed by the federal and provincial governments. That is $20 million. So things like that will be addressed under this new agreement.

To take it one step further, outside of the research and development and some assistance with technology and testing of water and stuff like that, private industry must become involved much more in the future development of not only aquaculture but many other industries, but in particular aquaculture, if it is going to succeed. If it has to be totally dependent on government funding then it is not going to go anywhere, nor should it. If it is worth doing, then it should be worth investing in. We have to create an atmosphere where private industry participates, banks and industry participate, the financial institutions, in investing in a business. Aquaculture is a very rapidly developing business, by leaps and bounds in many other parts of the world and a couple of good examples here in the Province. It is a job to convince Mr. Smith out there, who has x numbers of dollars, to invest his or her money in it.

I think that is the emphasis that I, as minister, and other ministers in government, must take the responsibility to place when we have the opportunity to speak to business groups, to say: These are opportunities here, don't feel that they are not going to succeed. If you are going to put your energy and your time into them they are going to succeed. We have to wean people away from their dependency on governments and their saying: If government does not do it, we don't do it. That has been our failure in the past.

MR. FITZGERALD: The only thing is, aquaculture is something that you do not go and invest in today and get a return tomorrow. Most of them, you know, are probably two and three-year operations and must longer than that. I am thinking about helping people along the line you know.

MR. EFFORD: Roger, I started a wholesale business back in 1966 and I didn't have any money, not a nickel, but was very fortunate that a friend of mine - in fact the banks wouldn't lend me anything. It was no different then than it is now. I was two years before I took any money, except enough to buy - I was single at the time fortunately - a plate of French fries to keep some food in my body, but that was about it. No business makes money for the first couple of years.

WITNESS: (Inaudible).

MR. EFFORD: You are some lucky you are on this side.

MR. FITZGERALD: Yes, I know where the minister is coming from but I disagree. I think in those cases, if they are depending on it, sometimes we need to provide a little bit of help to get people started and provide the guidance, suppose it is interest-free loans. I don't think anybody should be given anything, those days are gone.

MR. EFFORD: The money that the governments are providing today, and it is needed, is in research and development. When you invest in the research and science end of it and you can overcome all those obstacles that otherwise would be there in the development stages, that gives any business, any business, a great advantage. A prime example is the scallop hatchery, the spat hatchery in Belleoram. That is now a proven technology but there was a lot of research and development that went into that. Look at the advantage to the industry; twenty years Mr. Kingsley tells me.

MR. FITZGERALD: Minister, getting back to the sealing industry again: I will never understand - and you will probably disagree or agree with me, whichever - but I will never understand why when we go to increase the volume of seals that we are allowed to take, we put out a news headline, splash it all over the paper and make a big thing of it, you know: The federal government approves the harvest this year of 286,000 harp seals whereas last year it was 150,000, or something like that. We provide all kinds of ammunition to the people out there, the international animal welfare fund and everything else. Isn't there something that we can do to allow people to fish and extend the quota, to do it ourselves and keep it within our own backyard rather than displaying it to the world?

MR. EFFORD: No, that's the last thing we want to do and I am very strong on that issue. I think if we are afraid to confront the animal rights groups and the critics of the sealing industry upfront we are going to lose. We lost when they came here because we did not confront and because we did not battle them. We felt complacent and happily just sat back and allowed them to do it when we should have been more like some of the individuals were. To stay in our backyard and not do anything is only giving them that much more of an opportunity to get ahead of us.

The one thing that I am very pleased about, and I think my deputies and assistant deputy ministers will agree with me on this one, is they have lost a lot of credibility, a lot of credibility. Look at what they did out in Petty Harbour. That is unbelievable! It is disgusting, it is sickening and everything else, but they did not even get anywhere with that one. So the world out there is saying: Look, the seal is an animal that has been harvested in a manner -we are educating the public in the manner in which it is being killed, cured and everything else, and the people around the country are accepting it because the word is out there. Gee, we don't talk about sheep, we don't talk about cows, deer, moose or anything else. Why only the seals? What we are doing in the manner in which we are harvesting seals, we have nothing to apologise for, absolutely nothing. We are gaining credibility and they are losing credibility.

So, no, I don't think we should we should, as any level of government agencies or any individuals or citizens of this Province, back down. I can see the sealing industry being a major, major industry. I mean it is the highest protein valued meat in the whole world of any animal, bar none. The concentrated oil that comes from the fat of the seal is one of the most highly medical valued oils in the world. It reduces cardiovascular problems in the human by a minimum of 40 per cent. It is the purest oil in the world. It is just phenomenon of what is happening in other countries. The damn problem that we have here in this part of the world is that we are not ready to accept what is in front of our faces, and we have to overcome some of this thinking.

In North America and the United States they have a law on the books that you cannot import any seal product. Now you try and get that taken off the books. But I am telling you the North American people, if they had the opportunity, would accept the product. The wallet I have in my pocket, my credit card case and my brief case are seal products; coats and everything else. We will go off to some other part -

WITNESS: And the seats in the House of Assembly.

MR. EFFORD: And the seats in the House of Assembly. We go off to other parts of the world and we buy a product because it was made in Australia from some animal hide, but it is right here on our doorsteps and we are not promoting it. So what we should be doing is we should be standing on the mountain tops talking about it and educating people, not backing down.

MR. FITZGERALD: Yes, I don't know what you would call backing down. It is just a way of allowing people to go out and take the quota but not go out and tell the world what the quota is sort of thing and put it forward in that way.

Is there any possibility of government looking at doing away with requiring the domestic person to have a seal license, or making it available to anybody, I should say?

MR. EFFORD: I have always been a strong advocator and a promoter of that issue. I have a license myself, I was grandfathered in fortunately, but I just cannot imagine getting aboard my boat and seeing him pop his head out of the water and my not shooting him, license or no license.

MR. FITZGERALD: You should be giving out ammunition rather than -

MR. EFFORD: This is where the federal responsibility - I had a call from Mr. Small today on how upset you can get with the federal system. They have a law or regulation - and I didn't know this until this afternoon, because I thought it was the craziest thing, that the lump fishermen are out there with nets in the water. The seals get tangled up in the nets and because they are in a net you are not allowed to sell them, so the fishermen throw them overboard, they wash up on the beaches and then somebody is blamed for damaging the environment.

The federal government brings in a law: You aren't allowed to sell seals that are caught in a net, so you have to throw them away.

MR. FITZGERALD: I can remember, and you can, when it was a common thing to see a seal net made out of rope. You put it out and you caught your seals and you sold the pelts and you used the meat and everything else; and I'm not nearly as old as you are.

MR. EFFORD: Well, you aren't allowed to go out and shoot the seal with a 12-gauge shotgun because you would do some damage to the seal or the pelt. You may not kill it, and the pelt is not as good. Then the seal goes out and gets caught in a net, and there is no damage to the pelt whatsoever, and you can't sell that one. We have to change the federal thinking.

MR. FITZGERALD: That is right. The other thing, continuing on with the seal fishery: There was some indication that there was some individual or some entrepreneur looking to open a tanning and, I suppose, a sealing manufacturing business here, up around Fleur de Lys somewhere - I think this was sometime last year - doing pharmaceutical supplies and taking advantage of the whole carcass. Is that still on the go or is it (inaudible)?

MR. EFFORD: I was fortunate enough to be up in that area just a few weeks ago to a function, and prior to going to supper, I met with the company, and they are expressing a great interest, not only in that area, but other areas around the Province. We are saying to any business interest group out there: If you want to start a processing of seal meat or seal products of any kind in this Province, we are only too excited to assist you and talk to you. But it requires private industry.

MR. FITZGERALD: A lot of places this year, I think, were fairly successful at it.

MR. EFFORD: Pardon?

MR. FITZGERALD: Some of the places this year have been fairly successful.

MR. EFFORD: Yes, and people who are involved in the industry are saying: We are ready, once the markets are suited and the supply is there, to further invest in processing the concentration of seal oil. In talking about a tannery: the world is ready for it, the market demands it, and it is going to happen. We are in that age now where the need and demand is there. It is basic economics, supply and demand.

MR. FITZGERALD: To get back to the question that I asked in the House today - and now that we are outside of the environment of the House I will come back to it again - you indicated that you had contact, or you were in consultation with, your federal counterpart regarding the exorbitant inspection fees that are being charged some of those small processors. To me, I think that is totally ridiculous. In order for people to come out and -

MR. EFFORD: (Inaudible) we feel that it is unnecessary, and it is the impact on the industry today is - especially those who are affected by the moratorium, and those with smaller operations, that we should revisit it. As I answered the question to you in the House today, a couple of people from your own district brought it to my attention.

MR. FITZGERALD: (Inaudible).

MR. EFFORD: (Inaudible) from Bonavista Bay, came in here last week. They had a concern about a small operation that was going to cost them as much as $4,000 for a licence. So, yes, there is a concern about it. We are revisiting, we are asking the federal government to revisit it, and hopefully there will be some level of understanding about the different sectors.

I think what has driven everybody to it is when they looked at the industry over the last couple of years - and a number of people have expressed it publicly, about all the multi-millionaires out of the crab industry. I think they saw that as a measure to get the money, you know. They are making lots of money and they look at it because if twelve or fourteen or nineteen are doing it, the whole industry is doing it; but that isn't the thinking.

Of course, then the other thinking is a user-pay system. Levels of government are saying: If you want a service, you are going to have to pay it. They are saying: Look, if you want inspections to be done in your plants, health inspections, restoration or whatever, that is a service that you are asking for and there is a fee for that service.

MR. FITZGERALD: Why did the federal government get involved in inspections? Is it strictly because of the export -

MR. EFFORD: Health benefits.

MR. FITZGERALD: I know it is health, but for the export business? So if we weren't doing export, if it was only catering to the domestic market, would the Province provide that service?

MR. EFFORD: We do inspections now.

MR. FITZGERALD: But in this particular plant and in those particular areas the federal government, I think, does most of the (inaudible) inspections here but the Province issues the licences.

MR. EFFORD: For the processing. They do it because of export markets, export demands.

MR. FITZGERALD: It is something that I would encourage you to look into because it could very well drive some of those people out of business. Some of the markets they are getting into, with the fee structure now of $500 per, like marinated and drying and that kind of thing, some of them have very little margin to play with there, and a lot of it is still in the experimental stages; but because they do it then they have to pay that fee. Then you have the giant fish companies probably paying very little or nothing compared to what a little plant with 1,000 or 1,500 square feet might pay.

MR. EFFORD: Certainly it is a major concern. There has to be a different thinking on the whole fee structure. I am certainly not going to say there should be no fees, but certainly there has to be a readjustment to the thinking on how fees are going to be implemented to the different size operations out there.

An individual who is operating a small operation, such as the one in Princeton, who is working day and night to make ends meet - it is a small operation, a cottage industry in a community - cannot be expected to pay the same level of fees as the Daley Brothers or Art Quinlan and others who probably made $2 million or $3 million profit over and above their expenses last year.

MR. FITZGERALD: When you are talking to your Federal counterpart -

MR. EFFORD: I was going to say it is your MP too.

MR. FITZGERALD: I know. I tried to call him and I will be bringing it forward. I was going to say, since you are the minister maybe you can try and convince him that we might be able to get a food fishery this year as well.

AN HON. MEMBER: I called him too, and he did not return my call.

MR. FITZGERALD: He does return my calls, I have to say that for him.

MR. EFFORD: You do not want me to spend five or ten minutes answering that, do you?

MR. FITZGERALD: No, I don't.

CHAIR: I think we debated that well enough in the House today. We should spend time focusing on that which we are charged to do.

Anna.

MS THISTLE: Thank you, Mr. Chairman.

Mr. Minister, although I represent a district that is really inland, I have always had a fairly good interest in the fishery. There are good signs all around that the cod fishery is returning. I am wondering - there have been other species on the market to substitute our cod, particularly Alaskan pollock, and down in the U.S. market some farm raised catfish and so on. This might seem like an unusual statement but when we are actually into the cod fishery again, do you envisage your department having to do a marketing job to sell it again?

MR. EFFORD: No. You are quite right that the demand for other products is there in the market. It is not because there is a lack of cod. In fact, there is an over supply, an over abundance of cod found in the Bering Sea from Norway. It is just that the market out there now is other species, as we are talking about, underutilized species being developed. The market is demanding different species of fish and it is causing a drop in the demand for cod. Now a drop and demand means a drop in price. Will we do more marketing? Whenever there is a necessity to do marketing in any species of fish, you will have to do it. I can tell you, Anna, it will be a long, long time into the future before you will see a major supply of codfish, the way it used to be in the past in Newfoundland. No matter how thick the fish comes back, I can tell you there will be management trawl, and you will not get the emphasis placed on harvesting as you did in the past, with hundreds of millions of pounds brought in annually.

Nevertheless, there will be a marketing concern. The one thing that we will have to do for all species of fish, cod included, is the quality of product that you put up, the type of product that will demand world attention - I think I touched on that one in my opening remarks. That is what is essential to the future development of all species of fish. The whole world is looking towards more and more fish in the wild, and in the aquaculture, and if we are going to have a place in the market we will have to look at quality, further processing and value added products and people have to look to us. Marketing in that sense, yes. I think we are doing that today preparing for the future.

MS THISTLE: I know it is going to be unusual situation when we are actually going to have to market, you know, what has been the primary species for a long time; but that is a possibility, isn't?

MR. EFFORD: It is a possibility. Everything finds it own level. It is amazing how things go and you have such ups and downs, but the level always finds itself because we learn even though we look at all the negatives of the moratorium that was called, we all have our different reasons for doing it. Then there are a lot of things to be gained, that if we look at the positives we can learn from them, and let us not repeat them in the future.

So, yes, there are future concerns with marketing and oversupply, but probably by the time the cod fishery reaches a stage like that here in Newfoundland, who knows, other supplies of fish throughout the world may be down and the cod may be in demand.

Marketing is a major thing of the future in all species of fish, the king crab, the shrimp that will now be starting up, all the sea urchins, the marine cucumbers and on and on, the kelp and everything else. It all depends on how good we are at our marketing. That is one area we are low, and I'm not talking about just as a government or a department. The industry is very low in marketing.

I will give you a prime example from my own district. A company went out there, a small operation, and invested hundreds of thousands of dollars into a smoking operation. They went over to Germany and brought it over. It is out there in Bay Roberts now putting out a magnificent product. I mean, it just melts in your mouth to taste, but they don't know how to get it to the market.

MS THISTLE: That is right.

WITNESS: Selling to the world market.

MR. EFFORD: Selling the product to the world markets: They haven't got the avenues opened up to get it there, is what I'm saying. They need help in that area. They are putting out a wonderful product.

AN HON. MEMBER: What (inaudible)?

MR. EFFORD: Steelhead trout, salmon, herring, caplin, mackerel; Bay Roberts Seafoods. That is a problem with all of the industry, marketing.

MR. DEAN: Mr. Chairman, on that point, though, I think it should be noted that some companies tend to be more successful for whatever reason. I mean, one of the exporter awards of this year was a processor in Centreville, Bonavista Bay, involved in the smoking industry, that won an export award based on a smoked product going into the European market, which is one of the most competitive markets there is for any product. You take the 230,000 tons of farmed salmon coming out of Norway; 90 per cent of that goes into the smoked market in Europe. Yet this little operation down in Centreville was able to compete in that market. So some companies, for whatever reason, tend to be more successful than others.

You take Fishery Products International. Fishery Products International today is the leading fish processing and marketing company in the world.

MR. EFFORD: In the world.

MR. DEAN: It has won every single export award or major award, marketing award, in the United States, for example. In terms of product development, in terms of marketing, there is not one fishing company in the world today that can match Fishery Products International. If you -

CHAIR: Could I just interrupt to ask one question here?

MR. EFFORD: Sure.

CHAIR: Why don't we tie in the synergies then of this world class company with this company with the smoked fish?

MR. EFFORD: Exactly. It is happening. You are absolutely right. In fact, the company that does a lot of the marketing for FPI, this individual is now going to that marketing company, Clouston's. So that is happening, yes.

There is a lot of cooperation out there, even though it is competitive. There is an awful lot of cooperation between the industry people, helping one another.

WITNESS: Especially as it relates to marketing.

MR. EFFORD: Especially as it relates to marketing, yes.

MS THISTLE: Mr. Minister, I must commend you for taking a lead role in this new department, for announcing two underutilized species. I know that you can recall, crab was considered to be -

MR. EFFORD: A nuisance.

MS THISTLE: Well, it was considered to be an underutilized species. If you recall, it was P. Janes and Sons in Hant's Harbour that were the pioneers in developing crab. For all of sitting around the table now, we look at crab as being so ordinary, but say twenty years ago - or maybe longer, is it?

WITNESS: Sixteen.

MS THISTLE: That was considered to be a new fishery, underutilized. I'm wondering now, with the two fisheries that you announced the other day, are you also going to be able to provide markets for these new fisheries?

MR. EFFORD: First of all, the markets are there for the shrimp, and certainly the markets are there for this king crab. If you look at the Alaskan market, the Alaskan fisheries, the Alaskan king crab, the crab we are talking about would be in competition with the Alaskan king crab. So the markets are there in Japan and the markets are there in the United States. It is a matter of how the product is put out, and that is how we are talking about here: Harvesting and processing that product in a manner so that when it comes out of the water it is a jewel, it is a diamond, it is gold or whatever, and you handle it in the best manner you can until you get it to the consumer's table. We have a bad history and a bad record: Fishermen walking on crab, fishermen walking on cod, fishermen walking on fish, and not handling them -

WITNESS: We have come a long way.

MR. EFFORD: We have come a long way but we have a long way to go. So, the markets are there, there is no doubt.

MS THISTLE: Quality has always been a big concern.

MR. EFFORD: I would love to see every licence that we gave out - seven, was it, for the harvesting in the experimental?

WITNESS: (Inaudible).

MR. EFFORD: No, in the Atlantic king crab.

WITNESS: They are going to give us five.

MR. EFFORD: Five, yes. The first time the pots are in the water, I would like to see the boats coming in with crab crawling over the masts because the markets are there. If we can get the product, there is no problem selling it.

WITNESS: (Inaudible).

MR. EFFORD: Mr. Kingsley reminds me that one of the first things we did in the experimental stages was to go and get enough to test the market. It all works hand in hand you know.

MS THISTLE: Mr. Minister, you also mentioned that with this underutilized fishery you are bringing in, you have exercised that you are planning to take more of a lead role in the management of the fisheries. Does that mean to say that you are also looking forward to a more active role in monitoring the fishery as well, in the field of enforcement and protection? This is already done by federal. Are you looking for a more leading role in that area?

MR. EFFORD: No, no. I think if I were to say, what role should Newfoundland have in fishery of the future and what role should the federal government have, the monitoring, enforcement and measures like that should be and must be a federal responsibility. The provincial fishery should play a major role at the developmental stages as we are doing. That is not only in the department where the work is done by the staff but we have to get out around the Province. I, as minister, and all of us, have to get out around the Province and at every opportunity speak about other species of fish and implant it in the minds of people, that there are opportunities out there and we have to take full advantage of them. You just can't sit and wait for it to come to you.

So our responsibilities are in the developmental stages and in helping people get over that hurdle and get to where they should be. The federal people are responsible for enforcement in that area.

MS THISTLE: You don't see the Province playing a role in that in the future?

MR. EFFORD: No. You know, when it comes to the monitoring and the enforcement of the harvesting sector, that has to be a federal responsibility because of the cost associated with it. When it comes to the quality and the enforcement of that, then that is provincial. I mean, I am, and we are, going to play a major role in ensuring quality from harvesting and processing alike. We are not going to just sit back and say: Well, it is not being done. Mr. Federal Minister and Mr. Federal Government, you should do it. We should be playing a role in that too.

We have to be very careful because there is a major cost associated with the fisheries. We just don't want to go out and say to them: Well, Mr. Ottawa, we are going to take that responsibility. Who is going to pay the bill?

MS THISTLE: Absolutely.

Do you see any area of the fishery now being handled federally, that could be better handled or more efficiently handled by the Province, any particular area?

MR. EFFORD: Every part of it and more efficiently, if they let me at it. No, seriously, the areas which I just spoke to you about, the developmental stages and the experimental stages and in the area of aquaculture, there is no doubt about it in my mind. We have the ocean science centre down Torbay, the Marine Institute, Memorial University, we have the resource here at hand and we believe in aquaculture. We believe as a government and as a department, in the future of aquaculture.

So I believe, in the developmental stages of underutilized species, new fisheries and aquaculture, that the Province must play a major role and a lesser role for the federal system in the fishery of the future.

MR. DEAN: Mr. Chairman, just to follow up on the question by Ms Thistle: There is one area where we, as a Province, have always had some concerns and that is with respect to basic fishery science. In the current federal - let me rephrase. Over the past several years, with the downsizing of the federal government, we basically, have taken the position that science is one area that should not be compromised on, because there is so little we know about fish resources generally.

Two years ago we took the decision as a Province, to fund a chair in resource conservation at the university and the Budget this year makes an allocation of $300,000 in support of that commitment. It is $300,000 a year for five years. The reason the Province was motivated to do that, is because we wanted, in some small way, to at least have some role in fisheries science; certainly, in focusing scientific research in areas where we think there should be some increased priorities. I think it is not an issue of jurisdiction, it is just an issue of the Province wanting to find comfort, increased comfort, in knowing that some of the research that is being undertaken is relevant to the real world out there and is reflective of what the industry is demanding.

MS THISTLE: Mr. Minister, I want to tell you that out in rural Newfoundland, there is a new enthusiasm since you have been in the portfolio. Go ahead and take the risk, Newfoundlanders are waiting for you to make it happen. Thank you.

MR. EFFORD: Thank you.

CHAIR: Bob, do you have any questions.

MR. McLEAN: Just one.

You speak at great length about the fishery of the future, and today you passed out a bill dealing with professionalization and you talk about multi-species and things like that. What is your view of the future for the harvesting of groundfish? What do you see in the future in harvesting technology?

MR. EFFORD: That is a good question, Bob. I appreciate the opportunity to talk about that and expand on it.

I said in my opening remarks and I have said many times, that the ground fishery of the future is going to be a lot unlike the ground fishery of the past in many ways. One of them is, as I said already, that we cannot allow the emphasis in the harvesting methods, the numbers that we caught in the past, to happen in the future. There has to be a better management and a better control.

How I see the fishery of the future unfolding - and I will begin with the inshore fishery - I think it has to be a hook and line fishery. I am talking about the harvesting, the manner in which we catch it, the hook and line and the cod trap fishery. We have to educate and instil in the minds of our people who are out there in the industry that because we haul up a cod trap we have to be very careful that we do not destroy as we haul. So we have to have a proper mesh size to allow the smaller fish to get away. That is getting the people thinking the right way. This is mine, and I want that one to be there next year, to be bigger and better because it is going to mean more dollars and cents for me. So conservation, in every essence of the word, to be understood and developed and managed and controlled by the individuals. It will begin, no doubt, with a small operation of the inshore fishery, and that thinking: We cannot allow any technology to take place that will destroy and destruct the industry like has happened in the past.

Will there be a place for the offshore fishery? There must be, because there are so many species of fish that do not come inshore, as are offshore. If we want to get them to the consumer's table and to the markets we have to have a means of catching them. Will we catch and harvest them without any respect for conservation or spawning grounds or anything, in the future like we did in the past? No. We have learned from what we did, we have learned from the mistakes. So the time and manner in how we fish them, and the type of gear we use, will have to be determined. The process must be put in place now, with consultation with industry and everybody involved, to work out those things for the future. But it is happening.

So the methods and the thinking: I tell you the key word is the `thinking' here of all people, the attitude as to how we manage that resource. I mean, we go into our own homes and the things we have gathered around us, our personal effects and everything else, we think a lot about them, and we do not want to destroy them, we want to hold on to them. That is the type of thinking we have to utilize in our fishing industry in the future. If we had had that in the past we would not be in the mess we are in today. So let's learn from it.

That is the type of talking that you and I and everybody around this table must do, because it benefits all of us. The fishing industry impacts on every man, woman and child in the Province of Newfoundland and Labrador. We have seen it. Just think, use our imaginations: If NCARP and TAGS had not been in place, can you imagination what kind of an economy we would have today. God help us if that had not happened. So you can see how vital it is to Newfoundland and Labrador, and not only rural Newfoundland. When I hear people say, I live in St. John's, I do not care, you take rural Newfoundland that is supplying money in urban centres like St. John's and you will damn well see how bad we are all going to be off.

With all the other industries that we have on our doorstep, the threshold is ready to be developed, and it is going to happen. It has nothing to do with government, it has nothing to do with politics, it is going to happen. God gave us the common sense to develop the fishery into an industry that is going to be properly controlled to the best of all our advantages in the future. Boy, what a beautiful Province and economic we will have, but one cannot happen without the other.

MR. MERCER: I appreciate your answer with respect to the inshore, hook and line and trap, very environmentally friendly technologies.

The offshore, the deep-sea draggers, one comment - and again I do not come from a fishing district, as you can appreciate.

MR. EFFORD: You did originally.

MR. MERCER: I was born in one, but I migrated to a different one.

MR. EFFORD: In my district.

MR. MERCER: Yes. Well, we do not spread that around a lot, John.

On the offshore, the deep-sea draggers, from people whom I have talked to the doors are likened to the blades of D-7 tractors, pulling them over the ocean bed. I know what kind of damage that would do on the land, and just because we cannot see it at the sea bottom, it must be doing tremendous damage to the sea floor. So that kind of technology, seems to me, not to be the type of technology one would like to see in the fishery of the future.

MR. EFFORD: Bob, it is amazing - well I should not say it's amazing, I am quite pleased with the consultation and the meetings that I have had with people who were involved with the inshore fishery of the past, and with the thinking they have for the future. I am telling you it has been a hard lesson, a hard fight out there, but we have learned a lot and they have learned a lot. I think new technology, the thinking of the people involved in the industry, is going to allow an offshore fishery to be developed in the future. It will have a lot less impact on the environment than it did in the past. A lot of emphasis in research and science, new technology, types of gear, the ability of people, and just the respect of the individuals using that technology, is having a lessening on the damage to the environment.

One of the first things that came out of a discussion that I had recently with some offshore people: No longer will we ever allow the small fish to be destroyed like they were destroyed. No longer will I be a part of a boat that is going on a spawning ground and just take, take, take, with no respect for the reproduction of the fish stocks. That is the thing here, people. You can imagine sitting home in a community like Catalina where they don't know tomorrow if they have a community, or Marystown where they don't know if they have a future, and all because we made a lot of mistakes and people are taking responsibility for it.

So, yes, there will be an offshore fishery. Yes, there will be an inshore fishery, but it will be much more professional and managed with much more thinking of the future, not just today's livelihood, not what I can earn today, but what I can get in the future.

MR. MERCER: I am glad to hear that the industry is thinking in that way because I believe that as we move into the future the harvesting of the fish resource, like the forest resource and all the resources, will not be determined in the main by the harvesters and the processors. It will be determined by the public, and I don't think the public will allow the fishery that we had in the past to proceed in the future. So it is nice to hear that they have learned some lessons and they will implement (inaudible).

MR. EFFORD: Yes, I am not suggesting that there is going to be a perfect situation out there but I can tell you that a lot of things that happened in the past will not happen in the future. You are quite right when you refer to the forestry and the other resources out there. Everybody has learned a major lesson from it, and I can see some good things happening. I like when I am in communities and hear individuals say it to me and say it to us -

MR. KINGSLEY: (Inaudible)

MR. EFFORD: Yes, Reg, thanks for that, because that is another message that we are all very proud of, is the emphasis that was placed on the foreign overfishing, and today the European countries, and other countries across the world, are respecting, understanding and cooperating in the overfishing. They have observers on boats now and the people on these boats, the crew members and everybody, are talking about the same thing, because they now realize: Well, if we keep on doing this, where are we going next year? So everybody, right across the world, it is not just on our own doorsteps.

CHAIR: Paul, do you have any questions?

MR. SHELLEY: I was just going to make a suggestion, and you were going to mention a break. I suggest that before we break, we have a few more questions and get out a bit earlier. If that's okay with everybody else.

WITNESS: You might even get a phone call, Paul.

MR. SHELLEY: I don't mind. I am suggesting that, if that's okay with everyone. I don't know if the minister needs a break.

MR. EFFORD: No, I don't need a break.

MR. SHELLEY: The minister doesn't need a break, no.

Okay, I just have a few more questions. I am going to try to get to a couple of specifics on the estimates but it looks like I am not going to get to a lot of them because I still have a couple of generals here yet.

I just want to mention, first of all - well before I start that, and because you're making some comments here and I cannot help but make a comment on it, but rural Newfoundland: I said it in the House today and I have said it many times before, and I am agreeing with him on a lot of things tonight, but I would like to state it, when I hear that attitude about St. John's, Corner Brook, the bigger centres or Grand Falls not being involved in the fishery out around, saying it is a rural Newfoundland problem, it is not. I really believe rural Newfoundland goes to the beat of cities like St. John's, Gander or whatever. You know, if rural Newfoundland survives and thrives than so do the bigger centres in this Province. So that has to go hand in hand, I agree with that.

The second thing I agree with is the attitude. That is what it is all about. The main struggle of this whole revamping is the attitude of everybody, not just people in the industry but the whole Province, business and so on, that they believe that attitude. That spreads to everybody. There is no doubt about it, the whole problem came from the word `greed.' Snow crab is like gold, get it as quick as you can, do the deals you can and get out of it as fast as you can. That was the attitude of every fishery in this Province and that has been the problem. So that's your goal, to change the attitude and I guess that's going to be the emphasis over the next little while as we try to get started on the right foot again.

I just want to mention the sealing industry. Roger mentioned something already that I was going to bring up. I know there is a company looking around Fleur de Lys that is interested in that area. Of course, I have always said Fleur de Lys is the centre. As a matter of fact, somebody told me the other day that in 1982 when the Canadian Sealers Association was formed, there was a motion passed that Fleur de Lys would be the centre of the sealing industry because of its location geographically and so on. I know that this company - and I do not know a lot about it, because they are going about their own business - is talking to the minister and the Federal people and so on. I know this company is very interested in full utilization of the seal. Like you mentioned earlier, the cholesterol breakdown, the potential of that oil and so on, is big on the market these days. Of course, then there is the tanning and so on. This type of company, I do not know what the final details on it are yet, but I know, at least from my talks with them, that they had the right approach to it, full utilization of the seal, their own investment dollars, from what I can understand, and so on.

Now the thing is - and the minister said this earlier the year and I agreed with him - that we probably should have doubled the seal quota this year. Then again, I guess the attitude of the Federal Government is that we have to take it slowly and take it one step at a time. So fair enough. I think we can be harvesting many more seals than we are and I think that is going to grow very quickly over the next year or so.

The last media on this group, IFAW, they were apparently at the pavilion in Bristol a few days ago, and it is really just running off, they are not getting any credence whatsoever. So I think it is time for us to progress in the sealing industry and, I think, it is going to be a big part of the fishery of the future.

I just want to make one more comment on the new thing released lately, on the shrimp. Can you just elaborate on that a little bit? What exactly is planned for the summer with that new fishery experiment, where is it going to go for this summer?

MR. EFFORD: As I said earlier, in my opening remarks, the shrimp fishery appears to be, according to Nova Scotia and other places, a fall fishery. It should start in September and end in the spring of the year. We did not get those experimental licences issued from the Federal Government until just recently when we made the announcement. So we have pots in the water and the experimental fishery is taking place in certain areas around the Province, in several bays. We do not believe it is enough. The deputy, the officials and myself have been meeting with the Federal people down here to get more experimental licences, more pots, and then we can concentrate on a very heavy experimental fishery this fall as is (inaudible).

The way that I see the shrimp fishery, I think it is going to be a major substitute to the incomes of the small boat operators in this Province. We know there is shrimp out there. The harvesting technique is being developed, the small pot, and it is environmentally clean. There is no by-catch of any amount into it. There has been a lot of work done already and once we get a sufficient number of licences, that we are satisfied that a satisfactory amount of experimental work can be done, I can seen major things happening a year or so down the road.

MR. SHELLEY: So the time scale you are talking about is a year to two years?

MR. EFFORD: Well, if everything goes according to the way we have planned, once September comes. There are hundreds and hundreds of applications coming in; people want to get at it. As I said, it is a fall fishery. We have the pots now, and we are ready. There are some in the water now, by the way, and we are ready to go further with it.

MR. SHELLEY: This is aimed basically at small boats, you say?

MR. EFFORD: Well, yes, sure, but not necessarily.

MR. SHELLEY: No, no, but give them the opportunity.

MR. EFFORD: If we get to the stage where the larger boats can go further out - but we are starting with the small inshore boats. There is no reason why a thirty-five or a forty-five or a fifty-five or a sixty-five foot boat couldn't have pots out on the Grand Banks or different area, where we know there is shrimp out there, and the researchers are telling us we can go out and catch the shrimp as well as inshore.

MR. SHELLEY: The next one I want to ask you - and I know the jurisdiction of this is Federal, but I get lots of calls on this, on cubic capacity boats. I know it is especially a big problem out in my area, but I would like to hear what you have to say now about that. I hear numbers, and you can correct me if I am wrong, that there may be as many as 300 or more boats in this Province that are over that capacity of their licence, that went ahead in larger boats. Now, what is going to happen?

MR. EFFORD: Well, the one thing that you have to look at: Governments get involved in rules and regulations and put people into a position that is unmanageable. I think, there is one area where the restrictions are allowing people to utilize a particular size of vessel according to the fish that they were able to harvest. Boy, it really has happened out there in the boats of the Province. I mean, if you want to go out to my area, and I'm sure you have them up in your area, and you look at a sixty-five foot boat, you don't know if it is wider than it is longer, or it is higher. Then when you go out on the Grand Banks for fourteen days, 330 to 350 miles out, fishing swordfish with seven, eight or nine men in a sixty-five foot boat, not only is it unsafe, it is unhealthy; it is damned well unhealthy, because somebody has a restriction that you should not go out in a particular size boat because this is a regulation on the books. There are major changes that have to come to the size of boats that we allow fishermen to build for comfort and for safety and other reasons.

The question you asked: There are a number of boats out there that are over the regulation size, what is going to happen to them? I think what I would like to see changed is the regulation that allows fishermen to go out and build a boat or expand on the size of their existing boat, or when they build new boats build them to a reasonable size, depending on the area which they sail to.

MR. SHELLEY: I know some people who went in some dangerous situations. As a matter of fact, a friend of mine lost his boat while sealing this year.

MR. EFFORD: That is right.

MR. SHELLEY: The current problem is right in front of us, of course. I don't know, I haven't seen any letters from them, but I have had calls. They say they have gotten letters, all their licences are renewed, but their boat licence hasn't been renewed, not completed. They are being told by DFO: You have enlarged your boat and we don't know what we are going to do with you.

MR. EFFORD: If it was one, two or three boats in the Province, there is no doubt they would act on them quickly.

MR. SHELLEY: There are hundreds.

MR. EFFORD: As you said, the numbers are much, much greater, and there are some adjustments that have to be made to the thinking of the federal people on this matter. That is another issue that I am personally, as the Minister of Fisheries and Aquaculture, responsible for, to work and speak on behalf of the fishermen to deal with that at the federal level. But there have to be changes brought (inaudible).

MR. SHELLEY: Because I'm asking this on behalf of the people who are calling me now.

MR. EFFORD: Yes.

MR. SHELLEY: I said I would ask it tonight and let you know, that an answer should be soon on that.

MR. EFFORD: Yes. There has to be some level of comfort out there. Boats are made larger for reasons beyond a fisherman's control. They had to have a larger size boat. There was an opportunity, if they were fibreglassing their boat or were reconstructing their boat, rather than building a new one, some of them have risen the boat a cubic foot or -

MR. SHELLEY: It is pretty important because, of course, within days they are talking about going out fishing, and right now they can't move anywhere.

MR. EFFORD: I don't think it is that serious.

WITNESS: (Inaudible).

MR. EFFORD: No.

MR. SHELLEY: Well, I will recheck that, but I've been told, just by telephone, because I haven't been in the district since last weekend.

MR. EFFORD: If you have a particular isolated problem and you need two or three boats, let us know and we will talk. I can't imagine that the restriction isn't going to allow a fisherman to go out to fish if his boat is - I know boats in my area which are larger than was originally planned, by some cubic measurements, but they are going out fishing.

MR. SHELLEY: They sent me out a list. I think it was twelve from the La Scie area the other day. I will find out. As I say, I don't have anything in writing or any letters. It is just phone conversations right now. I will look into it and I will (inaudible).

MR. EFFORD: I know now of sixty-five foot boats out at the scallop fishery with thirteen men aboard them.

WITNESS: Probably eight bunks.

MR. EFFORD: Probably eight bunks, that is right.

WITNESS: (Inaudible).

MR. EFFORD: That is right.

MR. FITZGERALD: (Inaudible) go down to Labrador when they go down to the turbot fishery and they are down there for weeks and months.

MR. EFFORD: Weeks and months.

MR. SHELLEY: Well, I will leave those alone for a few minutes and I will just go to some specifics, just some numbers here. Tom asked you a little while ago, on 3.3.01. I just want to go a little bit further. In Grants and Subsidies, last year's budget was $35,000. You said they were eliminated this year because of down sizing. Can you tell me, one of the deputies maybe, what that $35,000 was used for?

MR. EFFORD: What number?

MR. SHELLEY: 3.3.01, Marketing.

MR. EFFORD: Yes. What we were doing is we were subsidizing funding to market council for that amount of money. Again there were areas where we had to cut, and we said to the council: You have an association, let these members pay a fee and finance your operations. We had, again, no choice. Do we close a hospital bed or do we cut out a fund (inaudible), and we chose this one as one that should go.

MR. SHELLEY: No problem. I just wanted to know where it was.

MR. EFFORD: Lemieux just scored, boys.

MR. SHELLEY: Okay, 3.5.01.

MR. EFFORD: Was that one before or after we got the score from Lemieux?

MR. SHELLEY: After. We are getting there. 3.5.01 and 3.5.02, Economic Renewal Agreement, both of them together. That is always a question I ask at these estimate committee meetings. Can you give me some specifics as to how that funding is going to be spent in terms of capital?

MR. EFFORD: Totally, hopefully, in aquaculture research and development.

MR. SHELLEY: That is the answer I was looking for. Totally in aquaculture.

MR. EFFORD: Totally in aquaculture.

MR. SHELLEY: Okay. I will skip a couple and just go to one more there. In 4.3.01, Professional Services, there is $248,000. There was nothing before. It was non-existent before. Where is that?

MR. EFFORD: That is funding that we have allotted for the fishing industry renewal board. That is the one I mentioned earlier about the harvesting and the processing adjustment board. That is our share of costs. We contribute to the operation of that board which is federally cost-shared.

MR. SHELLEY: That is it for me, Mr. Chairman.

CHAIR: Thank you, Mr. Shelley.

Mr. Fitzgerald.

MR. FITZGERALD: Thank you, Mr. Chairman.

The first question I would like to ask, Minister, is if you are aware of a problem - I'm going to relate this one right to my own district - where just last year the fishermen's association in a little place called Duntara in Bonavista Bay took over the fishermen's shed that was there, and the slipway and the wharf. The agreement for taking it over was that the Department of Fisheries, Food and Agriculture provincially would provide them with a slipway. In this particular town a slipway is more important to them than the wharf because they are wide open to Bristol, England.

It was put out on contract, if I recall correctly, and the contract went for something like $60,000 or $65,000. The contractor at the time put in the slipway according to the specifications provided by the engineering drawings provided by the Department of Fisheries, Food and Agriculture, and the first time we had a high tide or springe the top came off the slipway, before either boat had a chance to use it.

The slipway is existing there today, unusable, taking up space where the other slipway was, and of no benefit whatsoever. I think the Department of Fisheries and Aquaculture now is saying that: We don't have the money to put the slipway back there by issuing a contract. The people in the area there are probably a little bit reluctant, at least the last time I spoke with them, not to have it put back there and have to take the responsibility for doing the work themselves. Since it was a contract and it was done according to specs, they felt that it should be put back there according to the agreement that was signed by the Department of Fisheries, Food and Agriculture. You are aware of that, obviously.

MR. EFFORD: I am aware of it. In fact, it was only today in the House of Assembly I was looking at some information. One of the problems I have to deal with is the amount of money we have available in the department to allow for the rebuilding or the work to be done on structures like that across the Province, look at them on a priority basis, and make sure there is enough money to do different ones. I have people out in my area sending in requests to get that done too, so I have to look at where the priority is, the priority need.

MR. FITZGERALD: I know you must be saying it in a joking way, knowing how political you are. I think that is certainly -

MR. EFFORD: No, I'm serious. We have to prioritize the need.

MR. FITZGERALD: Well, that should be prioritized and it should be put at the top of the list, if something like that has happened, and it has happened because -

MR. EFFORD: Surely to goodness you aren't saying it is only in Bonavista we have storms.

MR. FITZGERALD: No, I'm not saying that. I'm saying that we should go back and repair the slipway and put it back there the way it was meant to be, and live up to the agreement that was signed and entered into with the fisheries association.

MR. EFFORD: We are looking at it, yes.

MR. FITZGERALD: You don't want to tell me that you have some positive news, so I will tell them it is forthcoming.

MR. EFFORD: I wouldn't do that if I were you.

MR. FITZGERALD: I will do a press release when I go back.

Minister, the other thing is - and I would like for you to be sincere about this as well - you witnessed what is happening, I suppose the fear and everything else, with the people down in my district in Bonavista, in the Port Union - Catalina area, as it relates to their two fish processing facilities there. I thank you for taking the time out to travel down there that night and meet with - I suppose there must have been 500 people who gathered at the hall. They were only people from one particular town, to come out and let the minister know their concerns and let him know how important that particular fish plant was in the town of Bonavista.

Now, here we see a plant that people look at and say is old and dilapidated. It is old, certainly, I don't know if it is dilapidated or not. Just because it is a wooden structure doesn't mean to say it is a dilapidated structure. It meets all the specifications according to inspections and that kind of thing. We can look at who allowed it to be dilapidated.

What can you tell the people in Bonavista as it relates to maintaining that plant? When the fishery does return - and you are saying that your government is not going to interfere, not going to take any part in what plants open or what plants close - don't you think it is only fair that somebody is going to have to step in, because I don't think FPI is going to do it and I don't think the other companies are going to do it, but somebody is going to have to get in there and move in one direction or the other.

My personal opinion is that a place like Bonavista, that has had this industry there for sixty years, should not be allowed to die and allow Joe Blow up the road, to have been a Johnny-come-lately there this past two years, to survive and go on doing exactly the same thing.

MR. EFFORD: Well, Roger, you were at that meeting that particular night in Bonavista, and you heard my comments when I got up in front of the people. I didn't back down. As you say, there were 500 people out there, and all the speeches before me and what they were trying to do, get the people in a confrontation mood, but I was quite honest with the people.

MR. FITZGERALD: Oh, it was a good meeting.

MR. EFFORD: I told them very clearly, in fact I believe my very, very last statement was: Do I think that both plants will survive? I said: No, I do not.

You are looking at a plant a few miles down the road that is equipped with the facilities in such condition that it can last for a lot of years to come versus a plant in your area, in Bonavista, which is aged and will cost a lot of money to put into operation. What company in its right mind, would expend s number of millions of dollars when they have one a few miles down the road; and that all depends on availability of resource. If there were enough resources to keep the two plants, or a dozen plants, going at full capacity, there would not be a question.

The fact is, there is not enough resource and no company - we, you or I, or any government or any agency, cannot insist on somebody investing x number of millions of dollars in a plant because of an historic attachment to the fishery. It is just the fact that there is not enough resource for a company to make that investment. Tell the people, and I told the people that night: Do I believe both plants will survive? No, they will not. Do I think that there is enough there that one could survive? Yes, and it has to be a multi-species plant because it can't depend on 100 millions pounds of cod coming into one plant. I believe that is what came in Catalina in one year, 100 million pounds. Will that happen in the next nine or ten years? No, it will not.

Let us be honest with the people of Bonavista and tell them: Look, let us work together as a region, let us make sure that with the changes taking place, as I said that night, are used to your advantage, not to your disadvantage. If we have to drive x number of miles down the road, and we know -I just forget now the total number of both work forces.

WITNESS: About 40 or 50 per cent (inaudible).

MR. EFFORD: Exactly, about 40 or 50 per cent of the work force were from Bonavista. So if there were 1,000 jobs in the past and by joining together there will be 500 or 600 jobs in the future, my God, that is what we have to go after. Let us not fight and tear each other apart because nobody benefits. So let us tell the people; I told them, you heard me, you were there in the audience.

You also know that night that when I finished speaking, there was a silence over that room and people looked at each other and said: You know, he is right. You know that, you saw it there that night. In fact, when I was going out through the door, because I had to leave to drive back to Port de Grave, the committee members asked if I would stay behind, there were an awful lot of people who went through that door ahead of me. Going out parking lot: You know, Mr. Minister, we needed to hear that because you told us the reality and what to expect.

MR. FITZGERALD: But you can understand their concerns which are much greater than the ten miles or the ten kilometres drive. That is not the big issue. That is what people build it up to.

MR. EFFORD: Yes, but the reality is a little bit better than nothing.

MR. FITZGERALD: That is what people build it up to, but it is much greater than that. I can understand their concerns.

MR. EFFORD: Oh, yes. I wish there was enough resource for them. Look, I have fourteen - I think I told you that - fish plants in my district. Will fourteen fish plants survive? Absolutely not. So there is going to be some pain but I would rather have some pain than all pain, and say: Let us work together and whatever is going to open is going to open, but it is going to be a better industry.

MR. FITZGERALD: If FPI applies to move their crab licence, is there any problem with that happening?

MR. EFFORD: FPI has not requested to move a crab licence yet. I said, when I was appointed minister, that I know that I have to make some hard decisions. I know in the future I am going to have to make some tough decisions, but there has been no request by FPI to transfer that licence as of yet.

MR. FITZGERALD: Fisheries marine service centres: Were all those privatized a few years ago? Does Fisheries own any marine service centres now?

MR. EFFORD: All but two of the existing marine service centres in the Province are leased today. In fact, it was only a week-and-a-half ago, I had a meeting with most of the lessees on some concerns; all but two today.

MR. FITZGERALD: Some people in my district work in the Clarenville Plant. Is there any indication, that you know of or that you heard of - and it has nothing to do with the strike, I know they have labour problems there now - but any indication that that plant may be moving outside of Clarenville?

MR. EFFORD: No, Sir. Dispel any of those fears or any of that thinking. From all the indications, the conversations and talks with company officials, they have major plans for that operation in the future.

MR. FITZGERALD: That is a concern that has been expressed to me. I have not heard it, but I thought I would raise it. Those are the only questions that I am going to ask.

The other thing, Mr. Minister: We talked about the quality of fish, the things we have to do and the changes that have to come about, and change our way of thinking. You know, we have come a long way from where we were, and it is only a few years ago. I worked in the fishery for thirteen years. I mean, you go down on the wharf and you see the prongs going, you see people walking over the fish and the fish would be lying on the wharf. You go down to Black Tickle in Labrador and it was not uncommon to see thousands of pounds of turbot that was in the sun there day after day. It was handled like it was going to be put on the garden for manure rather than something that the consumer would eat. Today I think we have all come much, much further than that.

MR. EFFORD: We have come much further, but we still have a long way to go.

MR. FITZGERALD: We are conscious of what we are doing. What we are handling is something that is edible and something that somebody is going to eat somewhere down the road. I think if we continue to go in that direction and start in the schools - it is harder sometimes to educate the older people - start in the schools and build up; the same as litter along our highways and everything else. I think we can come out of this and have a very viable fishery and hopefully rural Newfoundland will survive and continue to be as it was in the past.

In the past, Mr. Minister, most ministers have taken the committee out for dinner. If you would like to give us a rain check for tomorrow or arrange to take us out maybe we can move on.

AN HON. MEMBER: A fish dinner, Roger.

MR. FITZGERALD: Pardon?

AN HON. MEMBER: A fish dinner.

MR. FITZGERALD: A fish dinner, sure. I had to fight for a leg of a crab.

MR. EFFORD: Let me see if I get this right now. In the past?

MR. FITZGERALD: Yes.

MR. EFFORD: I have been here since 1985, and I have been a minister since 1989, pretty well all of the time, and I have never done it. I only took my own crowd out.

MR. FITZGERALD: The government, boy. There is a new change.

SOME HON. MEMBERS: What?

MR. EFFORD: I will take you people out, yes.

MR. FITZGERALD: What do you mean your own crowd? Aren't we all here together? You talked about working together and (inaudible).

MR. EFFORD: You are pulling my leg again, aren't you?

MR. FITZGERALD: (Inaudible).

MR. EFFORD: Can you imagine myself and a Tory out at the Swiss Chalet eating supper?

SOME HON. MEMBERS: Oh, oh!

CHAIR: Thank you, Roger.

AN HON. MEMBER: I'm a Liberal.

SOME HON. MEMBERS: Oh, oh!

CHAIR: The Chair recognizes Paul.

MR. SHELLEY: Of course, for the last two hours we have been talking about provincial issues, and that is what I have been doing as Vice-Chair of this Committee. I do not want to finish the meeting without asking this last question. It is more district, but it is to do with the LaScie Plant down there. Of course, I know, as you said, that there is going to be a process in place and there is going to be some pain and so on. But as that region is, and you know the region very well, as far as multi-species and groundfish and so on, how do you see the future of the LaScie Plant, for that particular reason at least, and its chances of being the plant?

MR. EFFORD: Its chances of being the plant?

MR. SHELLEY: For that region.

MR. EFFORD: I thought it was or it is the plant.

MR. SHELLEY: Remaining open; of reopening it?

MR. EFFORD: That would depend on the owner and the operator.

MR. SHELLEY: It depends on more than that.

MR. EFFORD: Yes, I think, it is possible.

MR. SHELLEY: I just want to know what you think of the LaScie plant's chances of surviving and being one of those plants that has the potential to open, let me put it to you that way then.

MR. EFFORD: Well, I would think the fact that there was a caplin fishery announced just last week that will be one species that will come out of that plant this year. But, you know, who owns and operates that plant.

MR. SHELLEY: I know that is why you said that. I know there are a lot of intricate details to all of this, but outside of that, the owner and so on, as far as that region - I have always said, long before I was in politics, that the hub of the Baie Verte Peninsula with regards to fisheries was LaScie. Not just LaScie but the whole surrounding area of all those communities. I mean it was mining in Baie Verte, yes, but the LaScie plant was another part of that peninsula.

MR. EFFORD: I mean the licence that the owner holds, depending on the resource and if he wants to invest and operate that plan, he has the freedom to do whatever he wishes. He has some problems to get straightened out in the area down there.

MR. SHELLEY: Yes, I know that.

Okay, that is it for me.

CHAIR: Thank you, Mr. Shelley.

Any further questions?

Thank you very much. I would just like to recapitulate a bit what I heard tonight before we have the vote. It is an absolute irony that 0.4 per cent of the Budget impacts the people in rural Newfoundland and Coastal Labrador to the extent that it does; it is an absolute irony. What I heard here tonight were some exciting possibilities and potentials and an emphasis on the fishery of the future. What I heard was the minister and his staff wishing to change attitudes, wishing to promote conservation, quality, having Newfoundland and Labrador synonymous with excellence in terms of quality food from the fishery. I heard that we need to meet or exceed the expectations of the market-place. I heard about the fishery of the new species that we are developing, aquaculture and the seal fishery. It is all very encouraging to see that there is a well-rounded focus in terms of what we can develop within the market-place for the fishery for the people of rural Newfoundland and Coastal Labrador.

There were a lot of thoughtful questions and very thoughtful answers. I appreciate the time the minister and his staff have spent here, and the Committee has spent, in terms of dealing with this particular department.

I will now ask the Clerk to call the headings.

On motion, 1.1.01 through 4.3.01, carried.

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

On motion, Committee adjourned.