Pursuant to Standing Order 87, Mary Hodder, MHA (Burin - Placentia West) substitutes for Bob Mercer, MHA (Humber East).

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

CHAIR (Mr. P. Canning): Order, please!

I appreciate everyone getting around this morning and beginning this Resource Committee meeting on the Department of Fisheries and Aquaculture.

I would first ask members, perhaps beginning with Rick, to introduce themselves.

MR. WOODFORD: Rick Woodford, Humber Valley.

MS THISTLE: Anna Thistle, Grand Falls - Buchans.

MS M. HODDER: Mary Hodder, Burin - Placentia West.

CHAIR: Perry Canning, Labrador West.

MR. FITZGERALD: Roger Fitzgerald, Bonavista South.

MR. BULLEN: Department of Fisheries and Aquaculture.

MR. BLACKWOOD: Department of Fisheries and Aquaculture.

MR. DEAN: Department of Fisheries and Aquaculture.

MR. WARD: Department of Fisheries and Aquaculture.

CHAIR: The first order of business will be to deal with the Minutes of the last meeting, of the Resource Committee Estimates, dated April 29, 1997.

MR. WOODFORD: What about the chairman part of that, does that just revert now to the original chairman?

CHAIR: Yes.

MR. WOODFORD: Okay, no problem. I move that the Minutes of the last meeting on the Department of Tourism, Culture and Recreation be adopted.

On motion, Minutes adopted as circulated.

CHAIR: I ask the Clerk to call the first heading so that we can begin debate.

CLERK: Subhead 1.1.01, the Minister's Office.

CHAIR: Maybe, Minister, you can open with a brief statement, then we can begin the debate with respect to the Estimates.

MR. EFFORD: Thank you, Mr. Chairman, colleagues.

Before I begin, I just want to clarify the introductions. Jerry Ward, sitting to my right, is the new Assistant Deputy Minister responsible for Aquaculture Development and Glenn Blackwood is the most recently appointed Assistant Deputy Minister responsible for Fisheries Development, two new changes in the Department of Fisheries and Aquaculture and we look forward to a major year on both sides in aquaculture, as I will get into in my statement, and in fishery development.

I have a prepared statement here and I do not know if there are copies given to everybody, but I am certainly not going to read everything that is in there, I will just highlight some of the things in the interest of time and then we will get on to the usual debate questions and commentary.

First of all, I want to say it is a pleasure for me, myself, as Minister of Fisheries and Aquaculture, representing the Province of Newfoundland and Labrador and my colleagues, my associates, to be here this morning to highlight some of the issues that the Department of Fisheries has been doing in the past year, the accomplishments that we have made and the direction we want to take in the future. It goes without saying, that I believe and we believe, that the fishery is the backbone of the Province, of rural Newfoundland and Labrador, and we have to continue that focus to develop every opportunity in the fishery that we possibly can to stabilize the industry and certainly not to repeat the mistakes of the past both provincially and federally, in industry, with private citizens and those involved in fish harvesting.

We have been very vocal and made some major changes in policy and direction as to where we are going in the future and have gone over the last number of months, and we are going to continue to do that in the future.

One of the things that concerned me is that most people in the Province, for some strange reason, believes that because there is a moratorium on the ground fish stocks, there is no fishery. That could not be further from the truth.

In 1996, harvested landed was 170,000 tons of fish, with a landed value of $240 million and the production value of these landed was $530 million, 13,000 individuals were engaged in some level of the fishery while at peak and 10,000 individuals were employed in the processing sector.

The average monthly employment in the processing sector in 1996 was 4,500 compared to 3,800 in 1995, an increase of eighteen per cent. In July 1996, the fishery and the fish processing industry employed 11 per cent of the employed labour force in the Province. Now, that is due mainly to the shellfish industry in the Province, some pelagics and a lot of work by the department, in underdeveloped species and in the sealing industry.

We have been very, very active in diversifying the fishery in the Province. In the past we made a major mistake in depending on a few species. That must never happen again.

In order to have a successful fishing industry in the future, we have to take advantage of every opportunity in marine life. We all know that everything in the ocean is of some value, there are markets for everything. I often use the phrase that `Everything that creeps, crawls, swims or sticks to the bottom is a valuable resource and we have to concentrate on utilizing that resource. I mean, the kelp on our rocks, the seaweed, it is just unimaginable the potential in that alone; but we have not yet got the understanding out there in the industry how important that resource is to the pharmaceuticals, to the make-up industry - the mascara that people wear, and have made a multi-million dollar industry, and to the food industry, Korean, Chinese and Japanese.

We just have not been aggressive enough. We are now turning our attention to all sorts of underutilized species. Just naming a couple: the whelk fishery, the marine cucumber; and now the latest one that is going to be profitable to the Province, and that I will touch on a little later, is certainly not underutilized in some areas - the shrimp industry.

In Newfoundland and Labrador, we have approximately 13,000 tons worth $20 million to the Province - 21,450 metric tons of shrimp announced just recently by the Federal Government, and that is only the beginning. We have been maintaining for years that that shrimp fishery should have been the resource that Newfoundlanders and Labradorians could utilize both in the harvesting and processing. We all know that an industry in excess of $100 million is fished off the Coast of Labrador, mainly given to a few companies; the boat crews got the work, just a few jobs, and that is where it stopped. I have been a strong advocate for that industry in the past, and fortunately and luckily for us the minister and DFO have agreed with it. The most recent announcement supported the point that this is only the beginning.

The 21,000 metric tons could just as easily have been, Glenn, 150,000 metric tons, or 200,000 metric tons. The resource is there. But we wanted a cautious approach, because we recommended that from the Province's point of view. Because we are certainly not ready for the harvesting, and we are certainly not ready for the processing. If we had too much of an allocation this year and did not catch it all in 1997, then you know what happens when we go back for 1998, 2000: they will recommend a decrease, and certainly we would not get an increase. The cautious approach was certainly for those reasons.

We have some problems in the crab industry. That has been our main fishery in the last number of years, especially since the groundfishery closed; we have some market problems this year. The crab fishery has not yet opened and the negotiations are not getting off to a very good start. There is a poor market outlook in the Japanese market and in the American market because of the increase in the Alaskan crab quota and the Russian crab quota. Our increase went up this year by 4,000 metric tons, of which, if we harvest any this year, it will be around 95 million pounds.

We are also looking at opportunities in other parts of the world. I just had a recent visit to Italy in relation to the tannery in Baie Verte. The company that is putting that there has a major trading company called Teleos Trading in Italy. I think it is important that we connect into some of those countries, because they are major fish consumers and we are not exporting any fish to those countries. If we can expand our markets from Japan and the United States and, say, go into Italy and possibly a couple of other countries, then that will broaden our competitiveness in the market. It will improve our chances of getting a better price for our product and also enable us to sell the product. We would not be facing a closed shop, as we are today because of the competition from other countries.

We are working on that very aggressively. We have had people into Newfoundland. We have had them view the plant down in Port Union - Catalina just a week ago. They are interested there. We had them meet some of the companies, several of the major processors - they don't want to get involved in processing themselves. They want to buy the products packaged, ready for the consumer, and ship it. They just want to do the trading part of it. There are interesting things happening there.

There are also major interesting things happening in the sealing industry. Last year we harvested 250,000 seals, this year 283,000 seals. We have markets for in excess of 400,000 seals. My recommendation to the federal minister was not to put a number on the quota but to put what the market demands. Unfortunately, after about twenty-five letters and twenty-five phone calls, and a lot of talks with DFO officials, they maintained the quota at 283,000 seals. Last week I had supper with Mr. Nygaard of Carino. His company itself today has orders for 100,000 seals that it is not going to get. It is a crime to know that we have 8 million seals out there eating our fish stocks, we have markets for 500,000-plus animals, and DFO say because of the IFAW and other problems, they are not going to increase the quota. But we do not quit - we will keep working on it, and hopefully in the 1997-1998 season, we will get another 100,000 - 200,000 increase. We are certainly going to keep applying pressure.

The aquaculture industry is a very exciting one. We have a few problems there. We have some duplication of rules and regulations between departments of government, which we are working on, and through Minister Ernie McLean we have some of those straightened out. We are having meetings now with Minister Aylward on the environmental issues, to try to lessen the regulations and the frustration that people experience when they apply for licences. We also have some problems of duplication and timing with DFO and the coastguard when somebody applies for an application.

We are going to try to make it environmentally friendly when it comes to regulations, to lessen the regulations and make people more accessible to the applications when they submit a proposal. We can do that here within our government agencies, both federally and provincially, and we have taken some major steps.

One of the big problems that we have in aquaculture is the very high risk in getting financing. We cannot get the banks to co-operate where it is satisfactory to the investor or investors to come in and get the financing that is necessary. We are having ongoing talks with the financial community, and hopefully that will improve. Again, we will not stop until we do get some satisfactory moves towards the financing of the industry, but we also have to look provincially into things, and one of the things that I am considering is getting the government, the Department of Finance, involved in helping the aquaculture industry get off the ground. I have had some meetings with Minister Dicks and look forward to some meetings in the near future to get some light at the end of that tunnel.

We have made some changes in the reorganization of the Department of Fisheries and Aquaculture to better serve the aquaculture industry and we have, as I introduced to you, Mr. Jerry Ward, who is now the new ADM. We have a new director for fin fish, and another for shellfish. We have fin fish development officers in three regions, and the department's veterinarian is now located permanently at Bay d'Espoir. We have a salmonoid aquaculturalist who is also located permanently at Bay d'Espoir. In short, we are making a very, very strong commitment to be hands-on, from my office right down through the whole department in the aquaculture division, to ensure that the aquaculture industry develops to the position that it should be, because we are far behind other provinces in Canada, and certainly far behind the rest of the world.

We have recently put some major monies into research and development out at the Ocean Sciences Centre, at Jerseyside, Placentia, and we will soon be announcing a research and development centre at Bay d'Espoir, so there are major monies going into it and the industry is excited.

We had a conference in Gander last week where 300 people, I guess, attended the aquaculture conference. I tell it, it was very positive and upbeat from the beginning until the end of the conference, so that goes to show you, if we are working, all of us together in the one direction, with a positive attitude, it has to work, and that is the feeling I am getting right across the Province.

As I said, I personally will be playing a hands-on role for the rest of this year, the same as I did last year, in developing a new policy for the processing industry. Most of you are familiar with that, so I will just touch on it briefly in conclusion.

We developed a processing policy for the Province, not for 1997, not a Band-Aid approach, but for on into the future. We have reorganized the whole industry, hopefully to make it more stable, more sustainable to the communities and to the people who are depending on the industry for jobs in different communities. We have put a core establishment in place, a core policy framework, where we will have a minimum of sixty-five core plants with a multi-species operation. That is the only way it is going to work. You cannot have plants out there processing one or two species, opening their doors and closing them after a two- three- four- five- eight- or ten-week period, and leaving the people out there in despair, looking to government to supplement their income. That has to change. We have announced a policy and it is working well. We already have several applications in for transfer of licences to where they could meet the core criteria.

The major one that I was most keen on in that core policy was quality. We have created an awful atmosphere out there in the markets about the type of product we put into the market. I have announced a policy where the Province is going to take a lead in ensuring that the fishery is oriented towards a top quality product, in other words from the time the fish - whatever species -comes out of the ocean until it reaches the consumer's table, you must handle it as if you are going to eat it yourself. If not, you are going to be severely punished.

Not a Band-Aid approach, not a $5,000, $10,000 or $100,000 fine; I have told the industry that we will lift their licence if they do not follow the quality standards and if they attempt to dump a bad product into the market. I have met with Japanese people, I have met with other industry people when I was down at the Boston Seafood Show. One of the main reasons we are not getting a good price for our product is because we are not concerned about quality. That has changed and I am very serious about it.

If you saw the press conference when I got asked the question: `Will we be as forceful, as I am saying?' My answer to them was: `Test me, try me and you will see how forceable we are.' If we continue that train of thought and we are very serious about it, it is going to work. It will benefit not only the people in the processing and the fishermen and the plant workers but it will benefit all of the Province because the spin-off factors from the fishing industry is important to the whole survival of rural Newfoundland and to the economy of the Province of Newfoundland and Labrador.

So colleagues, with those few remarks, I am just going to say in conclusion that we are excited at what is happening in the Department of Fisheries and Aquaculture. We are talked about province-wide for - the department is alive and everywhere we go we are getting a good response, a good feedback and we just do not want to stop there and say, well, we are satisfied. We are not satisfied. We are going to be continually working as aggressively in the remainder of 1997, on into the future, as we were last year and the first part of this year.

CHAIR: Thank you very much, Minister. It is always a pleasure to sit at this particular committee and listen to you speak on behalf of the fisherpeople of this Province and your vim and vigour certainly comes through. You are a fellow who wears his heart on his sleeve and does not mind saying it. We are very pleased to have you here and to have you representing, as you have, fisherpeople throughout this Province.

Having said that, I will open the floor to questions. Perhaps, Roger, you might want to start.

MR. FITZGERALD: Thank you, Mr. Chairman.

First of all, I apologize for having laryngitis. It has nothing to do with the line dancing or it has nothing to do with the singing -I think there is something wrong with the ice at the Gander Hotel.

AN HON. MEMBER: Perhaps the yodelling?

SOME HON. MEMBERS: Hear, hear!

MR. FITZGERALD: Minister, you are right when you talk about what the fishery means to Newfoundland and Labrador. Even though there is a lot of revenue being generated and there is still a lot of activity, the problem has been, I suppose, that our traditional fishery has disappeared. That has been very evident right across Newfoundland and Labrador, especially in my district of Bonavista South, when you go down to Port Union, Catalina, Bonavista, Charleston and those areas and see what the people down there are going through and the uncertainty that they face as they wonder what is going to happen to them, whether their fish plant is going to open or whether they have to leave their towns, their communities and their homes and go somewhere else to go to work.

Those plants traditionally depended on the cod fishery and the flat-fish fishery, and that has certainly not returned to anywhere near the numbers and probably never will, that they enjoyed. I think the plant in Port Union, back in 1997, processed something like 50,000 tons of cod and the whole quota for Newfoundland and Labrador is something like 16,000 tons for this particular year.

You continued to talk, as you travelled across the Province, about the new fisheries; the whelk fisheries, seaweed, kelp and sea cucumbers. What, in your opinion, is the reluctance of Newfoundlanders in our business industry out there today to get involved? Even though you talk about it wherever you go, there seems to be very little activity - I do not know of anybody who has gotten into this particular production here in the Province today.

MR. EFFORD: Roger, I do not know where you have been to say that people are not getting into the production. Anyway, I will get into that in a second.

The traditional fishery is gone for a long, long time to come. Is it gone forever? No, it is not. It will come back eventually when we address some major problems. Now, while mankind caused the groundfishery to be in the situation it is - well, I guess the combination of man and nature. Right now, the biggest predator and the biggest problem we have in Newfoundland facing Labrador, the whole of Labrador, all of the Province put together, there is nothing as major as the sealing population, the sealing herd. So the groundfish stock is not going to come back, especially along the Northeast Coast, the northern part of Newfoundland, while we have those seals. I tell you, we are getting very little support from the Province as a whole. I am talking about the people who are getting out there and getting that message across. While we are talking about it as a Province, as a department, we are not getting much support other than that.

What is happening out there and why is it happening? Newfoundlanders traditionally and historically do not seem to want to change. All the species of fish that are in the ocean just did not come there since the moratorium. They have been there forever and a day, but always we depended on a few fish stocks, like in the groundfish industry. Even when the crab and everything came on stream first, such a rich resource but look at the problems and look at the time it took to get people right across the Province interested in the harvesting, processing, and the development of markets. Even to this day, we have not done it to my satisfaction, as I would like to see it.

But there are a lot of things happening. Sea urchins this year - we had several plants operating with sea urchins. In November, December, January, February and March, Bell Island employed thirty-five to forty people, a little plant right there where the ferry ties up on Bell Island, all of those months, eight, ten, twelve hours a day, November, December, January, February and March. Derek Green over in Trinity, in Green's Harbour, and Willie Waterman down in Wareham have been working on sea urchins, and in Long Cove, Derek Philpott, Pat Quinlan's. It is happening out there. It is just that we are slow to get off the ground.

The whelk fishery: There are hundreds of fishermen right across this Province now the last couple of years, through the experimental work at the whelk fishery pots, developing the markets. It just takes time. The problem with it was that when the moratorium was called in 1992 - I said it all through the years, and the Premier used to look at me saying: John, you are not the Minister of Fisheries, you are the Minister of Works, Services and Transportation, or you are the minister of something else, or whatever. But we should have begun in 1992 looking at other species and we would have been five years ahead of the game - I mean, it was looked at, but not on the scale on which it should have been.

It is happening. It will not replace all of those tens of thousands of jobs that the groundfishery created over the years - in the long term it will, but you have to combine it with the shrimp, the crab, the pelagics, the underutilized species, and that is what I am talking about, multi-species operations. For those people who remain in the fishery, they will get a long season employment sustainable to their needs in the environment and the community where they live. That is the reason why I am saying you cannot have 212 or 240 fish plants. You have to have sixty-five or seventy or whatever the number that will sustain it over a few years down the road, but starting with sixty-five, to give work to those communities.

Port Union, Roger, very quickly. If the people of Bonavista would listen to me, and Port Union, transfer those licences to that multi-species-oriented plant, their operational plant there in Port Union - Catalina, I can see three or four years down the road where that would employ not 1,000 people like it did before, but I can tell you 400 to 500 people for a very long season, with the shrimp, and with the crab, and with the pelagics, and with the other species. I think the company would invest if the people down there would co-operate.

We need a change in our attitudes and we need thinking - like up on the Northern Peninsula. I got kicked from here to you know where and back last week because we wanted to consolidate four plants in the one in Brig Bay. Because they had to drive fifteen minutes to work, nobody wants to hear talk of it. My answer is: What is wrong with driving fifteen or twenty minutes or half an hour to work if you have a job? It is a darn sight better than staying in the community with no work at all. That is the problem in Bonavista. You know that, of course.

MR. FITZGERALD: That is up to Vic Young, I think, to decide, Minister.

MR. EFFORD: Well.

MR. FITZGERALD: Until he assumes responsibility for that, he the fellow who owns the licence, he is the fellow who owns the plants. Until he comes out and says: This is going to be the way it is, then it will not be any different. Because all he has done now is generate a fight between two or three communities, and you know what the fall-out is there. But let him come out and make his announcement, let the fall-out happen, and get on with getting people back to work.

MR. EFFORD: May I interrupt for a second? I just wanted to make one point on that, Roger, and not to cut you off. It is strange. You are right, Vic has to make application, he is the owner of the plant, but he will not do it because he does not want the people of Bonavista. But I went down there to a public meeting last year. Mayor Tremblett was one of the most vocal people up in front of the microphone, 700 people in the audience. I was the only one who turned up to the meeting. Four or five people were up turning the people on. I found out the next day that Mayor Tremblett was the most vocal in keeping the crab plant in Bonavista from transferring to Port Union - he is selling his own crab in Trouty. There is a problem we have. The mayor of the community will not allow the licence to be transferred so the people in Port Union - Catalina can get to work. He is not even selling his crab in the area, he is selling it out in Trouty.

MR. FITZGERALD: Selling it somewhere else. I know what you are saying. But that is not for me to decide, and I am not intending to be the one caught in the middle on that. That is up to Vic Young or -

MR. EFFORD: Ah! (Inaudible).

MR. FITZGERALD: - John Efford to decide. I do not decide where the licences are going, I do not make the rules and regulations, and I do not own the plants, so I am not about to -

MR. EFFORD: Would you make a recommendation?

MR. FITZGERALD: - be caught in the middle. Let the people decide. If you have this between the plants, have a little plebiscite, if you would, to let the people decide that whichever way they want to go, let us do it, let us get on with it, one way or the other. But I do not blame the people in Bonavista, and this is not an argument for this morning.

I do not blame the people in Bonavista for wanting to keep the major industry in their town. Bonavista has been a fishing community ever since John Cabot came here. It is one of the holding licences, I suppose, on the Island, and I do not blame them. Because it means much more, Minister, than the fifteen-minute drive. It means the biggest taxpayer in a community, it means people will probably be moving out of that community and living in another, businesses across the street, and the list goes on. I know what you are saying, I understand what you are saying, but that is not for us to decide here this morning.

Foreign fishing is another issue. We talk about the wonderful things that have been done. There is no doubt about it, foreign overfishing has been reduced tremendously from what it has been, but still there is a lot of activity out there. I am wondering why our own people here, our own processors, do not take part in the shrimp fishery on the Flemish Cap. Is there a particular reason why we do not see Fishery Products International, or some other processors who have licences to harvest shrimp, out there competing? There have been as high as ninety foreign boats fishing shrimp on the Flemish Cap. It is not uncommon to find forty. We saw nine out there a couple of weeks ago, but I did not see any of our own Canadian boats.

MR. EFFORD: Yes, Roger, I am going to touch on something else, and I am not going to let it go until I get something done with it. If you think the foreign fishery is a problem - if I said to you tomorrow, if I had the authority as Minister of Fisheries for Newfoundland or for Canada, to allow 500 factory-freezer trawlers, 500 draggers, and every Newfoundlander and Labradorian who could get in a boat, to go out there fishing, you would say I was completely crazy and off my head. Yet, there are 8 million seals out there eating fish 365 days a year and you ask me a question about outside the 200-mile limit.

The few boats outside the 200-mile limit have observers on them - they are very heavily controlled - but even the twenty or fifteen or eighteen on a day-to-day basis is not even a scratch on the problem that we have facing this Province with 8 million seals, and that is where every Newfoundlander and Labradorian should put their energy.

As far as the Flemish Cap goes, the reason FPI and Canada are not fishing on the Flemish Cap is because we disagree, number one, with the way in which it has been overfished, and if we go out there and participate in the overfishing we are going to be as bad as the rest of the countries out there. We have to stop the way in which the Icelandic and the other people are fishing on the Flemish Cap. Otherwise, that is going to go the way of the groundfish stocks and there will be nothing for anybody.

CHAIR: If I could just interject for a second, I would just like to welcome Tom Osborne, another Member of the House of Assembly, to today's meeting. Welcome, Tom.

MR. EFFORD: You slept in this morning?

MR. OSBORNE: Another meeting.

CHAIR: Continue, Roger.

MR. FITZGERALD: Nobody, Minister, will argue against that. We have a real problem with the seal fishery, and until we eliminate a heck of a lot more than the 283,000 that we have been licensed for this year, it will not get any better. We continue to wait at home and try to find out what the problem is, but you cannot very justify it to say that the seal industry is the only problem. There are several problems.

MR. EFFORD: It is the only problem (inaudible).

MR. FITZGERALD: The foreign overfishing is a very big problem as well, and maybe we cannot stop all of it but we can try.

My understanding is that probably a couple of the reasons we are not out there fishing on the Flemish Cap is not because of some of the reasons you stated but, number one, because those people pay their crew in a different way whereas they can afford to go out there and fish, because the crew is paid a percentage of the catch - no catch, no pay. The other part of it is because of the colour of the shrimp, that we cannot find markets for that particular colour of shrimp that is caught on the Flemish Cap. It does not have the texture or the colour, that the Japanese market is looking for.

MR. EFFORD: I wish I could get all the shrimp that I could sell from the Flemish Cap. It has more to do with the overfishing and the size of the shrimp that is out there now than anything else. They are very, very small. It has nothing to do with the colour.

I can tell you, the Icelandic people are landing shrimp and selling it, and all of the other countries that are out there fishing are landing their stocks and selling it. That is not a problem. It is the size.

If we go out there now, we are supporting what is happening. How can we say we should be reducing the catch out there if we are going out and harvesting 2,000, 3,000, 4,000, 8,000 or 10,000 tons? That is the real problem.

The other thing, I guess, if you get into the economics of it, is the cost factor, but certainly the overfishing is a major problem on the Flemish Cap. But we do not, as a Province or as a Country, have control of the Flemish Cap. That is a NAFO - is that right, Les? That is a NAFO and there have to be some changes made at NAFO before NAFO has the teeth to do anything with overfishing anywhere.

MR. FITZGERALD: Minister, why do we still charge a licence for people to go out and harvest seals? I think we are allowed to take six per person if you have a licence, is it? That is what it was last year. Why do we charge a licence for anybody - a Newfoundlander - to go out there and kill six seals to, I suppose, help us control the nuisance, pest, that is destroying our way of life?

MR. EFFORD: The problem we have is an attitude problem in DFO. We are into discussions in the department every day of the week. In fact, it consumes most of our time, because it is a major problem.

You have the IFAW show the example of what happened here in St. John's and out in New Harbour last week. We do not care here in the Province, we have no respect for them. We do not care how much noise or how much news media attention they bring, but that is not the same in Ottawa. Our problem in Ottawa is External Affairs and DFO. Those people are afraid of the IFAW causing problems with the export of other products from other provinces in Canada and we are suffering because of it. Should we have an open seal fishery? I believe we should have a sea fishery in accordance what the market demands, total utilization. I think that signs - DFO, the Canadian scientists in the fisheries and ourselves have to reach an understanding of what the sustainable number is. I believe that sustainable number should be 2.5 million. We have an 8 million population of different species out there. If we could get DFO and the scientists to support us, the sustainable number should be at 2.5 million, as it used to be back in the 1940s, 1950s and 1960s and we should have a hunt over the next four or five or ten years to get it from 8 million down to those numbers, but we have a lot of work to do in changing the attitudes of people in Central Canada.

To take it to the next step, how do we do that and how do we get the people to agree with that sort of thinking, is simply that we, as a Province, and everybody in this Province has to be vocal on this issue. It is vital to the survival of Newfoundland and Labrador and if we do not get something done about it, I tell you, government will not be able to bring in policies enough and changes enough in the fishing industry to keep those communities alive, because without fish, you can have all the policies you like. It is an attitude problem in Ottawa.

MR. FITZGERALD: Do you feel one way to control it might be to bring back the bigger boat seal fishery again?

MR. EFFORD: The success of the industry, last year and this year, was certainly proven by the smaller boats; but if the quotas are increased to bring down the numbers to the sustainable number that I believe it should be - and I think a lot of people agree with me on this because I have had some discussions, even with some people in DFO, and they think I am right on it, too - yes, you are going to have to have the bigger boats. And you have to think, too: how do you get 1 million seals a year with the environment that we have here? And if we go down to the 2.5 million - because at 8 million seals and only ten per cent pups a year, that is 800,000 pups a year with a success rate of only ten per cent. And we are only hunting 275,000, so the numbers are going to go up.

The thing that bothers me about it is - and I mentioned this when I was down in Bonavista on Friday to the students, because one student said, `We should not have a seal hunt.' `Well,' I said, `if we do not kill them, nature will kill them. So, is it not better for man to hunt them, to utilize them for food, for the starving people of the world, pharmaceutical and all the other reasons why we can utilize the resource? It is the highest protein product of meat of any animal in the world, because as the food-chain runs out, nature will surely kill them and we know what the end result is then, the fish stocks are gone and the seals are being killed by nature.

MR. FITZGERALD: It was interesting the other day when there were some questions raised regarding the sale of Newfoundland Farm Products and they showed some scenes from the abattoir down here, where the chickens were in on the racks and the wings were flapping and the feathers were flying, and not one call came in, not one call. If that were the seal fishery, I can hear the Open Line shows now.

Minister, licensing fees, as it relates to the new fee structure that you put forward the other day, a proposal, I think, was what it was and you asked for input, and they had until April 30 to return back to your office. I have had a couple of calls, one letter which has been sent to your attention -

MR. EFFORD: Yes, I read it.

MR. FITZGERALD: - from a fish processor in my district, a small fish processor and I can understand her concerns. She is a small operator there and her processing fees have gone up tremendously from what they were in other years. And when you look at some of those other core plants and the costs they are going to be faced with compared to the increase in hers, well, I agree with her, it is probably not justified. Are you looking at those fees, the structure that you are planning on implementing, or are you wide open as to changing them and reducing the fee structure for some of those small operators?

MR. EFFORD: There is nothing frozen to the point that we do not have any flexibility, but you have to remember, the fee structure we put forth is very reasonable in relation to what the potential of earnings are for any fish plant, whether it be small, medium size or large. For years, we had no fee structure whatsoever and previously to that it was $200 a year. What we are looking at now is $1,000 a year for a small operation, $1,500 for non-core and it goes up significantly for core fish plants. Before we make the final recommendation, we will be taking everything into consideration - the size of the plant and the ability of that small operation to generate profits. We will take a look at it. I understand where they are coming from, but we have to have a fee structure in place because we cannot have those fish plants operating without paying some sort of fee, and $1,000 or $1,500 is not astronomical for an industry. You take the caplin industry this year, those plants in the caplin industry could make as much as - who knows? - $100,000 in a two- or three-week period, some $50,000 and some $25,000.

MR. FITZGERALD: I think you are talking about a different type of plant from the one this lady is operating, because when it comes to pelagics, she is a buyer only. She takes them and just transports them to another plant, and her fees have gone up from $300 or $400, I think, up to $2,200.

MR. EFFORD: Not from the Province.

MR. FITZGERALD: Well, you are paying $1,500 for a non-core licence and $700 for a buyer's licence so that's $2,200.

MR. EFFORD: Yes, she is wrong there. If she has a buyer's licence, she has a processing licence, and she thinks that - there is a buyer's licence, there is a processing non-core and a processing core, and she thinks one is going to be stacked on top of the other - that is not right.

MR. FITZGERALD: Well, that is not the information that is coming from your department.

MR. EFFORD: Well, yes, it is, Sir, and I tell you this: the Director of Fisheries Development and Processing in my department is Frank Pinhorn, and nobody in this Province is better informed or has any better knowledge of the structure. Geraldine is not understanding it correctly. We have a letter being drafted now to send out to her so she clearly understands it.

MR. FITZGERALD: I talked to a gentleman in your office as well and that is the way it was explained to me. The only one that was stacked there was one of the ones down below that for the -

MR. EFFORD: The buyer.

MR. FITZGERALD: Not the buyer's licence, no. The buyer's licence -

MR. EFFORD: Retail.

MR. FITZGERALD: The retail licence, exactly. The buyer's licence was stacked on top of the processing licence and that is the way she understood it. I called for clarification and he said I will check it out and get back to you and that was the information that was brought back to me. So she probably is understanding it wrong, and if she is, then maybe we can make a point of clarification to ease her mind.

MR. EFFORD: (Inaudible) sit down and try to explain anything to her?

MR. FITZGERALD: Anyway, when you look at some of the comparisons she has made there with Prince Edward Island and New Brunswick, there is quite a difference in the price there that they charge for processing and for buyer's licence compared to what we are charging.

MR. EFFORD: Where? In New Brunswick?

MR. FITZGERALD: The information she has put there for Prince Edward Island and New Brunswick, if it is accurate.

MR. EFFORD: It is not accurate.

MR. FITZGERALD: Okay, you have to let us know -

MR. EFFORD: Now, if you want me to charge it to her, I will do that. Do you think we should?

MR. FITZGERALD: Well, maybe the rate she has there she would not mind paying, if those are the accurate rates.

MR. EFFORD: If you want me to stack it, I will stack it.

MR. FITZGERALD: You are not going to stack it if you can give the lady a break. That is what we have to get into, boy, keeping people employed, not putting them out of business.

Minister, your department is now getting into inspections of processing operations?

MR. EFFORD: Yes.

MR. FITZGERALD: Will the Province now be taking over all the inspections of processing operations, including export, or would the export market still be controlled by the Federal Government?

MR. EFFORD: That is still going to be controlled by an arm of the Federal Government, the food -

MR. FITZGERALD: The food processing agency.

MR. EFFORD: - the national food agency, but the problem with DFO is that they set a minimum standard, and the minimum standard means exactly that. So they go into a fish plant and look at the operation, the plant and how it is set up, the cleanliness and everything else, and they have a minimum standard. That minimum standard does not put out a top quality product. All they care is what the minimal needs are for the industry. As a result, we have been sending products into the market that have been getting returned. We sent out turbot last year that was returned, we sent crab. In 1995 we harvested 65 million pounds of crab; 40 per cent of that was cooked dead and shipped into the Japanese market. Now, you do not think we never got much of a bad name for that? Our standards are, treat the fish, from the time it comes out of the ocean, as if you are going to eat it yourself. We are going to bring in inspection standards to ensure that will happen.

Another example, a fisherman comes into a crab plant or a fish plant where they treat the fish and it is not a good product. So Mr. Smith says: I am not going to buy that because I want a good quality product. The fisherman goes down the road and sells it to the next fish plant. They will buy anything. And that is not right. In about 75 per cent of the operations in this Province, the processing industry is doing a darn good job. But we have some guys out there who care about one thing only - no code of ethics, no standards, and the inspections that we are going to carry out will ensure that will not continue. Now, if we lift a licence of one fish plant this summer through those people putting up a bad quality product, I tell you, the attitude will change very quickly. So we are saying, our officers are going to be out there and if we catch anybody, just watch what will happen. We do not have a choice - we do not want to do it, but we are forced to do it.

MR. FITZGERALD: Vessel replacement - the rules and regulations that were brought down by the Federal Government a couple of weeks ago, that we all had been waiting for since November. Now that you have had a chance to look at those and assess them, are you getting many calls from fishermen regarding the unfairness of having quotas in a competitive fishery, where other fishermen who have the bigger boats in that particular category are allowed to go out in the competitive fishery and operate in an open -

MR. EFFORD: My position on the vessel replacement program is that we should not be involved in the size of a fisherman boat, any more than I can tell or the Minister of Industry, Trade and Technology can tell Sobeys or someone who wants to build a supermarket, what size of a supermarket, how many square feet should be in it. It should be built according to one's needs and one's ability to go out and harvest fish. We have set quotas and we have set IQs to control conservation measures.

Quality - if you get into a boat and go out there and we are insisting on quality product, you have to be able to properly ice and box that fish, crab, shrimp, cod, caplin or whatever else, and if you have to box that fish and bring in a good quality product, you have to have the space onboard your boat. The other issue is safety and comfort. For safety and comfort, we should allow a fisherperson to build the size of boat he needs.

The measures that came down last week did not go far enough, we are still involved in people's lives too much on a day-to-day basis and we should change that. But at least we made some rules, and people can go from a twenty-foot boat up to a larger size or thirty-four-foot-eleven can move up, a thirty-five can move up to a forty-five and a forty-five can meet to a sixty-five. The biggest problem that I have is quality, not being able to handle a quality product and the sixty-five footers should have gone to at least an eighty-five. Because if you have fourteen or fifteen men out for 200 days on the Grand Banks, in all kinds of winds, and with seven bunks onboard the boat and you have sixteen men, one has to get out of bed and the other fellow jumps in. That is crazy. It is not healthy, there is no comfort. It presents a safety problem and a health problem. While it is a move in the right direction, still it did not go far enough.

MR. FITZGERALD: I totally agree. How about your thoughts on the quotas being put on those people now that they are allowed to increase the size of their boats in an open competitive fishery.

MR. EFFORD: I do not think we have an open competitive fishery on everything, I think we should have IQs. It is the best way to go for conservation, the best way to bring in a high quality product. The caplin fishery - I mean, what has killed us on the caplin fishery in the past is a competitive fishery. The caplin fishery is a very, very short season, but it is a very lucrative fishery, if we handle it right. They brought in 25,000 pounds on larger boats and if they did not do that they would come in with 200,000 or 300,000 pounds in the holds of the boats, `squat up' and everything else. And the other thing is that when you have IQs on the caplin fishery, instead of blocking the plants, one mad rush to get into the plants, they could take their time and fish according to the needs of the plants so you can put in a quality product. IQs is not a bad way to go, I can tell you.

MR. FITZGERALD: For harvesters.

MR. EFFORD: For harvesters and for processors.

MR. FITZGERALD: It did not work very well last year in the caplin fishery.

MR. EFFORD: Yes, but do you what caused the biggest problem last year in the caplin fishery? It was the time the caplin fishery was opened. They opened the caplin fishery before the caplin were mature enough to be harvested. That was the biggest problem last year.

MR. FITZGERALD: They did had some problems. I did not get an answer to the question. The question I asked was: Now with the new vessel replacement size and people being allowed to get into larger vessels, should one group be involved in a competitive fishery and another group have quotas for that same fishery? You said you agreed with IQs. Should not everybody have IQs?

MR. EFFORD: Yes, I did not know there was - what are we talking about?

MR. FITZGERALD: If I am going to be allowed to -

MR. EFFORD: In a caplin fishery.

MR. FITZGERALD: No, no in a fishery. If I am going to be allowed now to increase my boat size from twenty-four foot to thirty-four-foot-eleven, and I am going to have a turbot license, what they are going to do is say, Yes you can increase the size of your boat to a thirty-four foot-eleven. We will go back over the past three years and see how much turbot you caught and the average of that will be your quota for this year, but in the meantime, you have been in a sector where you always had a thirty-four-foot-eleven boat, you have not looked to increase the size. You can go out in a competitive fishery and fish openly until the quota is caught.

MR. EFFORD: But my position is that, if we are going to have a controlled fishery of the future and have it fair to everybody that we should be looking at IQs for everyone.

MR. FITZGERALD: Treat everybody alike.

MR. EFFORD: Treat everybody alike.

MR. FITZGERALD: Minister, salmon licenses, topic of the day for people - 200 commercial, I think it is 100 in Newfoundland, is it?

WITNESS: One hundred.

MR. FITZGERALD: The commercial versus the recreational. What are your thoughts on that? Should there be a -

MR. EFFORD: Only when we are satisfied that the numbers of the stock is at the sustainable level where we can harvest them recreationally and commercially without hurting the stocks. The numbers are not yet back, and certainly the review has not yet been done.

When it comes to a salmon fishery, for a Minister of Fisheries, naturally I have to say that I support a commercial salmon fishery, but I have to be reasonable about it in understanding there is no point having a commercial salmon fishery if the numbers are not there. When the review is done, which will be done later this year, after the Summer, then I will make it more publicly known what my views are.

We have some problems in the recreational fishery. I do not agree with the way we are doing the hook-and-release at certain times of the year, killing fish. I have some problems with setting out a caplin trap, or a cod trap - well, a caplin trap in particular; I do not suppose a cod trap this year.

I will give you an example of a caplin trap that was put out just for one week for the caplin fishery. One fellow in Trinity Bay - I was over there, actually, in my boat and was talking to him that morning because he helped me to motor up my boat off his stage head. He had 107 salmon meshed in his caplin trap, dead, and he had to take that 107 salmon and drop them down in the water and let the crab and the sea lice eat them. That I disagree with.

We have to change our attitude to the way we bring in and administer our rules and regulations. But the bottom line is, a commercial salmon fishery for those people who have the 100 licences should be looked at very seriously when we get our review done this year, if the numbers are up. But, I tell you, there is not much evidence of the numbers being at that level yet, except in Labrador; there seems to be a great lot of salmon in Labrador, according to what the fishermen told me last year. Then we have other factors. We have a Greenland fishery, we have other factors, and again I go back to the seals. The seals are not eating salmon? Everything that we talk about in the fishery points directly back to that major problem.

MR. FITZGERALD: Minister, the idea of core fish plants, I guess, is like core fishermen; they will be able to receive whatever licences are available to them. I have two questions. Number one: Do you think there should be any such thing as a core fisherman designation now that we have the professional fishermen's board in place?

MR. EFFORD: My god, yes.

MR. FITZGERALD: Number two: Are you looking at giving crab licences and shrimp licences to all sixty-five core-designated plants?

MR. EFFORD: First of all, I believe in the principle of core. It coincides with and supports the professionalization legislation that we brought in last year. Because you have to have a core establishment in Newfoundland; otherwise, you cannot open up to everybody.

The professionalization - we are the first and only Province of Canada that has brought that in yet, and I think it is going to prove very, very good in the future.

As far as the sixty-five core plants are concerned, the goal that we hope to meet, they do now have a shrimp licence. All they have to do is submit a good proposal to the Province, in line with our policies of maximum benefits to the workers and to the industry as a whole, and they would automatically be given a shrimp licence. We are already now reviewing and hopefully within the next two weeks will make an announcement on an increase in crab licences. I am looking, in the very near future, to have crab issued to every core plant.

Right now, because I am concerned in the case of Bonavista, if we issued two crab licences now before the core status, the multi-species plants get set up, it could take away the employment from those people in Bonavista, so we have to make sure we do not fragment the industry any more than it is fragmented.

My policy announcement was that we were going to give out a minimum of five licences, so within the next short while there is going to be an announcement on more licences.

MR. FITZGERALD: Do you want to tell us where those licences are going?

MR. EFFORD: Mainly in the Port de Grave district. No, I am not going to tell you this morning.

MR. FITZGERALD: It is obvious, I would think, that probably Twillingate and La Scie may be considered -

MR. EFFORD: Where? And Port de Grave.

MR. FITZGERALD: - for a licence, and that will be very detrimental to the fish plant in Bonavista.

MR. EFFORD: You are guessing, Roger.

MR. FITZGERALD: I am assuming, and I would think that you would probably look at the report that was brought back from Mr. Cashin and his people. They suggested St. Anthony, Twillingate and La Scie, because of their historic attachment to the fishery and their geographic locations, so that will certainly have a big impact.

I am wondering about Triton, as well. I understand that FPI has applied for a licence for Triton.

MR. EFFORD: I have not made any decisions on any area in which the plant licences will be going. What we have asked for is proposals to be sent in from the processing industry that would give us the confidence that the crab that is going to be processed will be processed to its maximum value, creating the most jobs in a multi-species plant. So if someone sends in an application that he just wants to process crab, he does not stand a chance. If he sends in a proposal saying: We are going to do mackerel, herring, caplin, or whatever, and a multi-species, the crab is going to be added, and not just to cut it and ship it into the market, but the maximum value will be gotten out of it, the maximum number of work days, work weeks or work months, it will be considered. So, it will be those people who send in the best proposal on a regional basis, where there is not now an over-capacity in the processing of that particular species.

Triton is a nice area. I used to teach school in Triton, by the way.

MR. FITZGERALD: Liberal area or P.C.?

MR. EFFORD: It will be Liberal when I am finished with it.

MR. FITZGERALD: Minister, the shrimp licenses that you talked about or the shrimp quotas this year -

MR. EFFORD: It is Liberal now - Graham Flight. What am I saying?

MR. FITZGERALD: It is yes, that is what I said - but when you taught there.

The shrimp licenses or the shrimp quotas, you are saying that it was done this year on an exploratory basis, I suppose, and it will probably be increased next year and the year after.

MR. EFFORD: Not an exploratory, a cautionary approach.

MR. FITZGERALD: Okay. Do you see it being extended to the 3(L) area?

MR. EFFORD: I sure hope so, Roger. I sure hope that the people south of Cape Freels, which will take in all Bonavista, Trinity, and right around, get a greater opportunity than they had this year. We made a major step for the Province as a whole this year, but I tell you, there is a lot of effort that can be worked in those fishing as you are familiar with and we are all familiar with, along that coast. They have the ability, in fact, they have already been involved in experimental work in the past. The 2,000 ton quota they have this year is certainly not enough. I do not know what is going to happen to the St. Anthony quota, if their inshore fleet will catch that; I doubt it, but it is possible.

But nevertheless, the steps that have been taken this year are positive and I look forward to a major increase to the advantage of our fishermen along our coast next year.

MR. FITZGERALD: How many marine service centres does the Provincial Government maintain today?

MR. EFFORD: We have about twenty-four, but they are mostly all leased to private operators and we have a policy, now at the direction of government over the last budgetary process, and it is now being put in place to sell them to interested stakeholders.

MR. FITZGERALD: How many do you not have leased? How many do you still look after?

MR. EFFORD: We do not have any not leased. They are all leased.

MR. FITZGERALD: All leased?

WITNESS: And have been for a number of years.

MR. EFFORD: Have been for a number of years, working very very well, by the way.

MR. FITZGERALD: Yes, I know the one in Bonavista is doing very well there. The only problem with the fellow down there, Minister, is that whereby he is designing a shrimp winch, if you would, fashioned after one he got from - the prototype came from British Columbia, and he is not very happy with your department trying to implement the design of one from Nova Scotia. Is that true or not?

MR. EFFORD: I was there on Friday morning. My assistant deputy minister and myself went down there just to visit some fishermen, as we do when we visit any area. The first thing they said to me was: `Efford, I wish you would come down here and run for us.' That was the first thing they said.

MR. FITZGERALD: I doubt that - I am surprised they even let you in on Saturday.

MR. EFFORD: Did they not, Glenn?

MR. BLACKWOOD: I am sorry, I cannot get dragged into that one, but one of them did, yes.

MR. EFFORD: Yes, one of them did.

MR. FITZGERALD: That was the next question: How many?

MR. EFFORD: That is true, they did.

MR. FITZGERALD: Not they, one - correction - for the record.

MR. BLACKWOOD: There were a lot of people standing behind him.

MR. EFFORD: That is right, Sir, I can assure you, they would love it.

Anyway, to get back to the issue at hand, we had a chat with the fellow in the marine centre on Friday morning, I went down there to say hello and to meet some of the fishermen. And he is quite right, that whatever opportunities can be derived from the shrimp industry should be to the maximum benefit of the people of the Province. Just coincidentally, about a week before that I was talking to `wassisname' Barnes, in our department.

WITNESS: Brian Johnson.

MR. EFFORD: Brian Johnson, I am sorry, who is sort of in charge of giving out information on the opportunities in the industry and I have said very clearly, `Do not buy as much as a nut or a bolt outside of the Province of Newfoundland, I do not recommend, if it can be manufactured here in this Province.' We are not going to be bringing in anything - the marine centres or private industry will get full advantage of manufacturing whatever the needs of the fishermen are.

MR. FITZGERALD: He explained to you what he though his problem was here.

MR. EFFORD: He showed me the winch.

WITNESS: I checked on that this morning, Sir. We have not ordered a winch from outside the Province.

MR. EFFORD: No.

MR. FITZGERALD: I think they were looking at the design and probably suggested -

MR. CHAIRMAN: If I may, for a second, when the officials speak I would appreciate it if they would identify themselves for recording purposes and writing the Hansard.

MR. FITZGERALD: Minister, secondary processing, value-added. It seems that here is another area where we continue to say it is going to provide a great opportunity and we should never allow anything that we process here to leave this Province without having it ready for the supermarket shelf. We still have a long way to go, I say to the minister.

I went in - and I brought it to your attention - down in Charleston some time ago; and it was criminal what the operators down there were doing. I do not know if you checked it out afterwards or not, but it was a situation where they were packing herring ready for the export market, from what I understand. You did not know if they were packing them to be sold as hockey sticks or boomerangs or what. It was just being thrown in as it came - sea-run - as it came from the (inaudible), into the boxes and put into a master carton into cold storage, and then, I would suspect, outside the Province. Are you looking at ensuring that this is not allowed to happen, or those people are brought to realize that this is not the way to process and provide an export?

MR. EFFORD: First of all, just let me bring you up on the finished product. There are thirteen companies now engaged in further processing of fish products in the Province. The value of exports is about $50 million. It is not enough. The government can only set the policy and set the direction. It has to be up to private industry to do the value-added and the secondary processing. We are encouraging more to get into it, and there seems to be a greater interest.

One of the policies that we brought in in our recommendations and that was approved by government this year, was that no products are going to be shipped out of this Province, only what the market demands fresh. In other words, if it is going to be further processed outside of the Province of Newfoundland and Labrador, it is going to stop. Are we looking at it? Yes. It is not only looked at, it is being implemented now as we are talking. Now, that is not to say fresh mackerel or fresh herring or fresh caplin cannot go out if it is going to be used. In the case of herring and mackerel used for bait, you cannot process mackerel -

MR. FITZGERALD: (Inaudible) for food.

MR. EFFORD: If it is going to go out for food and be further processed, it must be done here in this Province. So hopefully before the end of this calendar year, we will have some major changes in that. The companies know I am not playing games, that I am very serious about it, and the first one we catch, they will regret that they did it. We are getting a good response right across the Province. In fact, even most of the processors agree with it.

But if the consumer or the market demands a fresh product, then we have to allow it. Tuna goes to the Japanese people fresh and they eat it raw; headed and gutted halibut or turbot that goes right to the consumer, and they buy a whole halibut or a whole turbot from the Boston fish market, or the Japanese fish market, or whatever. So it depends on what the market demands. Our policy is very clear. If it is intended to be further processed outside of the Province, then I am sorry. It has to be done here.

Now, on that one, it is not going to be as easy to maximize the benefits on caplin - What do you call it?

WITNESS: Shishamo.

MR. EFFORD: Shishamo. I get confused on that name. Anyhow, the Japanese are set up to do that in Japan. They take the fresh female caplin and they process it to its maximum for the market in Japan. We are saying now that we have to look at doing that more in the Province. We have a couple of companies now, one in - Breakwater Fisheries -

WITNESS: Cottlesville.

MR. EFFORD: Cottlesville, and we have one down in Happy Adventure. Moss is looking at it, and Quinlan's is looking at it now. We just cannot bring that to its maximum this year, but we have started it. To take caplin, 40,000 tons or 20,000 tons, whatever the female run would be, put it in freezers, and hold it until you process it, it takes months. You have to have a lot of money to support that. But anyhow, that is the only one, anyway, that we are not going to maximize right away, the rest of it we are.

MR. FITZGERALD: Lump roe is another prime example, I mean, where (inaudible) -

MR. EFFORD: Lump roe?

MR. FITZGERALD: Yes. It is shipped out in brine. I do not how big the barrels are but (inaudible).

MR. EFFORD: We already now have a company that has an application in for secondary processing, which really pleased me, on lump roe. We are moving in the right direction.

MR. FITZGERALD: Minister, is there anything positive about to be announced for the plant in Port Union? Anything that you know of that may relate into some activity there that might provide those people with some hope of getting into their plant there and going to work?

MR. EFFORD: No. I am not going to announce or talk publicly about the interest that has been shown to our office about that plant. I told you about the Italians who were down there. We have two or three companies which want a part of the plant, not all of it. Remember, I mentioned to you before about the chitin.

MR. FITZGERALD: Yes.

MR. EFFORD: In fact, I heard a good story on the radio this morning about the marketable opportunities for that product. I do not want to talk publicly about it until I am absolutely sure that something is going to happen there. Because people's hopes get built up, and then let down, and built up, and let down, and that is not fair to the people who live in any community. Too much of that has gone on in the past. When we are absolutely sure that something positive is announced, we will make sure the people know it as quickly as possible.

We do have some serious interest in that plant. When I was in Bonavista on Friday, in presentations I made to the children down there, the high school kids, they asked me that question several times.

I said, and I will still say as I said earlier, what should happen is that the licence should be transferred from Bonavista into Port Union and make it a multi-species operation, and then you would have lot more positive feeling about what is going to happen in the future. Then the other things could fall right in line with it. They all agreed with it, by the way. The kids agreed with it. Like they said: What is wrong with driving up the road? That hopefully will come over time, but the interest shown now, certainly I would not talk about it publicly.

MR. FITZGERALD: But some people are interested?

MR. EFFORD: Yes. It is a big plant. It is a major -

MR. FITZGERALD: It is, yes.

MR. EFFORD: Just imagine staffing (inaudible).

MR. FITZGERALD: I was down with the Italians on Sunday and went through the plant there. It is massive.

MR. EFFORD: It is massive.

MR. FITZGERALD: Massive. But the only thing is, you know, you can close doors and you can put up petitions, you do not have to operate at all.

MR. EFFORD: Well, yes, but if you had the shrimp and the crab and the caplin, if you had the other species, and you had some of the groundfish stocks, then you could make it worthwhile.

MR. FITZGERALD: Yes. It is a core plant, so you can get all the licences, right?

MR. EFFORD: It is not a problem.

MR. FITZGERALD: Last question. When you were down to Bonavista on Friday, did everybody you talked to down there tell you what a wonderful member they had?

MR. EFFORD: Not one. In fact, Glenn was down in the cafeteria, and when the kids were talking after I made my two or three presentations, they said: Isn't that Efford something?

MR. FITZGERALD: Something or something else?

MR. WOODFORD: (Inaudible) Efford.

CHAIR: Thank you very much for that, Mr. Fitzgerald.

Ms Hodder, would you like to ask a few questions of the minister?

MS M. HODDER: Actually, I do not have too many questions. I think the questions have been pretty much taken care of by the hon. member.

MR. EFFORD: Spend five minutes praising me up.

MS M. HODDER: I certainly could do that for much longer, because I certainly feel, and I am sure everyone else around this table does, as well as the rest of the Province, that the fishery is in the most capable hands - the most capable and most knowledgeable person in the whole Province to take care of this portfolio.

It is also very nice to meet your staff this morning. I think it is the first time that I have met your Deputy Minister since I came in here, but we have had several conversations on the phone. The reason we have not met is because I have had such immediate response to everything I have called about. Even last week, I called, and I had a major crisis there for a few moments, but when I came in on Monday morning, everything had been resolved. When you get that sort of action there is nothing to complain about.

Everything is looking really well in my district. I understand the Marystown fish plant will reopen in June -

MR. EFFORD: Yes it will.

MS M. HODDER: - and there is a lot of enthusiasm in the business community about that, because, of course, it is the fish plant that everyone depends on. The hairdresser, the taxi driver, everyone reaps the benefit when the fish plant is open, so everyone is quite enthused about that.

I am filling in here this morning for another member so it is not normally my Committee. I just glanced through this before I came in. One of the questions I was going to ask - there seems to be a variance there in the Grants and Subsidies. Could you fill me in a little bit on this? On page 117, 2.3.01.10, Grants and Subsidies, revised. Last year it went from budgeted $495,000, to revised, $748,000.

MR. EFFORD: That is the sealing. Last year we subsidized the seal meat. Actually, when we started up last year, we did not know how successful the hunt was going to be. As a result, it proved to be a total success. We harvested the 250,000 animals and a lot of the meat - some went into food for human consumption, but a lot of the meat went into animal food. As a result of opening and developing new markets, we subsidized to, what was it, 15 cents?

WITNESS: Fifteen cents (inaudible).

MR. EFFORD: Fifteen cents, yes.

MS M. HODDER: Thank you very much.

MR. EFFORD: Let me say just a couple of words. You are very fortunate on the Burin Peninsula and up around your area that the processing industry is very successful. There are a couple of other things I would like to see happen out there. We have had some talks with FPI. It is a very good company. I visited the Burin plant, I visited the Marystown plant, as you know. I only wish we had another half-a-dozen of those around the Island because in the secondary processing -

MS M. HODDER: Absolutely.

MR. EFFORD: It is one of the top companies worldwide. Down at Boston seafood show this year, it was a pleasure, it gave you that feeling of pride to be down there and see the way the FPI booth was set up, and the response it was getting. It was tremendous, you know. There is room for more of that in this Province. Hopefully, that company is going to expand, and people, through a little bit of forcefulness from ourselves, and yourselves, everybody, that we can encourage and - but the opportunity is out there.

The St. Lawrence, of course, is going to be a major addition because that is an integration of fishermen and private industry and they have a major supply of resource, multi-species. I think the official opening is scheduled for around the end of this month, so that is going to be another major addition to that area.

MS M. HODDER: Great times to be (inaudible).

MR. EFFORD: Yes it is, really, seriously.

CHAIR: Thank you, Mary.

Now the Chair recognizes Tom Osborne.

MR. OSBORNE: Thank you, Mr. Chairman.

Just one question to the minister: Under section 3.1.02, the Strategic Enterprise Development Fund. It was over budget in the revised in -

MR. EFFORD: Where?

MR. OSBORNE: In the Strategic Enterprise Development Fund.

MR. EFFORD: I do not know what it is, the Strategic Enterprise Development Fund. Is that fisheries?

MR. OSBORNE: No, I am sorry.

MR. EFFORD: You got development.

MR. OSBORNE: Yes, I apologize about that.

Are there any grants and subsidies allotted this year for development of small enterprise within the -

MR. EFFORD: What in the fisheries, species?

MR. OSBORNE: No, within the fishing industry?

MR. EFFORD: No.

MR. OSBORNE: I guess, more specifically, other St. John's districts, mine is probably more involved in the fishery than any of the others. As you know, I have three communities in my district that are involved in the fishery. The north side of the St. John's harbour - which is in another district, actually - as of this year, is no longer going to allow small and medium-sized fishing vessels to dock. They are going to have to dock on the south side, which is in my district.

MR. EFFORD: That is right.

MR. OSBORNE: As you know, the Fort Amherst boat basin right now is over-utilized and they are looking to expand. They are going to need to expand with the reopening of the ground fishery, as well as development in many other sectors of the fishery. The demand on that boat basin is going to be overwhelming, especially considering the fact that the small and medium vessels are no longer allowed to dock on the north side. I guess what I am driving at: is there anything available for those guys to help them expand their finger-piers and so on?

MR. EFFORD: Tom, as you know, all of that comes under the federal initiative, DFO, Small Crafts and Harbours, and Public Works Canada. There has been a major shift in harbour development by the Federal Government. In fact, they have gotten away from a lot of the duplication of building harbours. Out in my area, if you look at from Holyrood down to Harbour Grace, I mean, all of those harbours, wharfs and docks in each one is certainly an over capacity. So what they have decided to do now is make a couple of major harbours out there and get away from up-keeping all of the harbours.

In the case of where there is an over-utilization - in your case, I am sure there are programs in there by DFO. Certainly in all of the discussions I have had with Small Crafts and Harbours, where there is a need they will certainly look at it, but they are not going to duplicate. As you just explained, there is certainly going to be a demand for more space because of the changing in the operation of the whole port of St. John's. So yes, there will be some, but it is not provincially, it is federally.

As far as grants and subsidies provincially are concerned, in the processing industry, the only thing that we are going to get involved in is job training and research and development. I do not believe that the fishing industry -

The processing industry should be subsidized for its capital expenditure. I think it should, like any other business, operate on its own merits and not be propped up by government. Because in the past there was too much money given to the processing industry and that is the reason why we have so many plants that are now not operating around the Province, multi-millions of dollars wasted.

In the case of infrastructure, federally, yes, there will be monies where the need is definite. In fact, last year I had announced that in Port de Grave harbour we are spending $5.8 million over a four-year period, and down in Harbour Grace now they are doing an infrastructure there for fishermen because they have a problem similar to the one you have. The whole Harbour Grace port - where it used to be the Harbour Grace fish plant is not able to take the capacity of boats that are down there, and they are shifting them and building another marina. So my only suggestion would be to - when the need arises, discuss it with DFO - well, your federal MP and then, Small Crafts and Harbours.

MR. OSBORNE: Okay, thank you.

CHAIR: Thank you, Tom.

Ms Thistle.

MS THISTLE: Thank you.

Minister, as you know, I represent an inland district where forestry is everything, although I hear a lot about the fishery, being married for a long time to a guy from DFO, so I have always had a keen interest in it.

I was sitting here this morning and I was kind of - actually, I sat in the same chair last year and I heard your plans on what you hoped to do in 1996 after first being elected. That was not the first time elected.

MR. EFFORD: That is Fisheries and Aquaculture.

MS THISTLE: In your Fisheries and Aquaculture portfolio. You did bring about the new under-utilized species, which you said in the meeting this time last year you would do. I think what that has done, you have brought about a new type of optimism throughout the Province. People now believe that the fishery is coming back and it is coming back in a different way. I commend you for that. Keep up the spirit that you are bringing to the people. You have a lot of encouragement going out there. Continue to do that, because it is giving a new hope where for the past four or five years there was no hope. I commend you for that.

When you introduced your staff this morning, or they introduced themselves, this guy on the end, Jerry Ward, I have an appointment set up with him for the end of the week to talk about aquaculture in my district. I must say, keep up the good work, John, you are doing a good job, and we are interested in hearing more positive things in the future.

MR. EFFORD: Anna, thanks very much, but just a couple of words on that. While you directed your thanks at me, and I appreciate it, I just want to mention the staff of my department. I tell you, they are a tremendous staff. There is a lot of excitement down there. There is never a dull moment. We do not agree on every issue, but certainly what makes us healthy is we agree to disagree. There is an overall optimism right around the Province.

Most Newfoundlanders and Labradorians hear so much negative all the time and they need to hear positive things. Then it grows from that. You are right, there is optimism right around the Province. I know everywhere I go - like, I went down to Roger's district on Friday to make a presentation to high school students, and I dropped down to the wharf. One of the fishermen I talked to was just getting his whelk pots. They are interested in the shrimp and the beam-trawling and all these things. So people are starting to think differently and get away from the idea: well, there is no fish. Because that is what kills me, when I hear someone saying there is no fish. There is fish, you just have to go out there and get it. They hear so much negative all the time, but it is changing, you know. Our job in the department is to keep it changing. Thanks very much.

CHAIR: Thank you, Anna.

Rick Woodford.

MR. WOODFORD: I would just like to make a few short comments, Mr. Chairman. I just wanted to make the minister and his officials aware, and I am sure they are, in any case, of how important the fishery is to my area. You might say: Well, you represent the District of Humber Valley - what do you have to do with fish, other than when you eat it? Not so. I have the Bonne Bay South part of the district, especially where it pertains to Trout River and the Bonne Bay area, the Woody Point area. Then, I have the Jackson's Arm area, which has been ongoing for years. I am sure this gentleman here, who has just taken over the Assistant Deputy Minister portfolio for that department, is very much aware of what P. Janes and Sons are doing in that area.

For instance, I met with some people on Friday night who were talking about the squid. If that comes back this year like it did last year - I mean, the community of Hampden had some problems with it, because the fishermen did not want anybody else catching it and so on. But there was 6 million pounds of squid landed in Hampden last year. No plant, no fishermen in the community - now no licensed fisherman. There might be one licensed fisherman in the community of Hampden, but no plant, no anything, a little wharf there that they had over the years, and a lift they put there ten years ago that was not utilized for ten years. They picked up all the parts and got it all back together and got it working. That catch amounted to $1.3 million in the pockets of the people there last year. It helped students go back to university, students go back to high school, and so on. It is unreal the trickle effect, the employment effect, that one little species can have on an area.

However, I would like to make one comment, a statement, I suppose, and it is a cautionary one, to the minister. I am sure he is well aware of it. He brought up about the five crab licences that are going to be put out around the Province. Jackson's Arm, down at the bottom part of White Bay, in my area, is primarily existent and dependent on the crab industry. I would caution him to be very much aware of that in issuing new licences. It is no good to put a licence into another plant, a new plant, and put the other one out of business, especially when one is primarily dependent on the crab fishery.

Other than that, I could make all kinds of comments with regard to other parts of it, and go into it, but it would only be prolonging it. I do not know if anybody else has any other questions, if so, I would pass it over to him.

MR. EFFORD: Before you do, let me make a couple of comments.

The first issue that Rick raised is a valid one. We have to look at the squid fishery, and we have to convince DFO to look at the squid fishery, differently from other fisheries. The difference is, it is a certainly a unique species of fish. You do not know when it is coming, and when it comes it comes in spurts, and you do not know what time of the day or night it is going to end. But the quota for squid is 150,000 metric tons. We give the Japanese automatically, off the top of that, 35,000 metric tons, which I disagree with if we have the capability of catching it.

We have to allow people to fish that squid, to utilize it in the different communities, because it means the survival of some of those families in the Fall of the year, so we cannot close it off to just a strictly core fishery. We have to be flexible in that one fishery alone because of the reasons you just gave.

Down around Bonavista and those areas, going out and catching a few squid, drying it on the fence -

WITNESS: Especially for drying.

MR. EFFORD: Especially for drying, people have to be involved in it.

The other thing I have a problem with, we have a 150,000 ton quota. We will probably catch, in a good year, 8,000 or 10,000 tons, and we leave the rest in the water. Yet, we have a regulation where a purse seiner, a sixty-five footer or forty-five footer, cannot purse-seine squid, but we give 35,000 tons to the Japanese.

I am making presentations to Ottawa, and hopefully we can get some flexibility in that type of fishery. We all have to understand that we have to get the FFAW, or whatever union is going to be representing the fishermen in the future, on side, and fishermen's committees, because that is a real problem. How can you go down and refuse the people of Cottlesville or Bonavista or Port Union or others, and say: You are not allowed to go out and catch that fish but we will allow the Japanese to take 35,000 tons and we will have 120,000 tons stay in the water?

MR. WOODFORD: Let it wash up on the beach. It does not make sense.

MR. EFFORD: Let it wash up on the beach, yes. Squid is a totally different fishery, and it is crucial to the people's income at that time of year. It means a lot to families - kids going to school, and all the other reasons.

MR. WOODFORD: Can you imagine, over a million dollars in a small community like that, in the Fall of the year? It was life or death last year. This winter it made the difference in survival for people.

MR. EFFORD: Yes.

As far as the crab is concerned, we are going to be very aware, and we will not allow a plant to obtain a licence for crab, or any species, to do processing at the expense of another community. We have to be very careful of that, and regional balance is a key factor in the criteria.

CHAIR: I think Roger has a question.

MR. FITZGERALD: I have just a couple of more. Rick touched on the squid fishery, and I am very much aware of how important that particular fishery is.

I compliment the government of the day, I suppose, for changing the rules and regulations of how it had planned to carry out the squid fishery last year, because there were a lot of concerned people out there. I have never seen happier faces than back in 1979, 1980, and 1981, when the twelve-mile limit was extended to the 200-mile limit and when the squid fishery, I suppose, was at its peak right here in this Province. Clotheslines, fences, everybody was making money and everybody was smiling. I do not think people with a boat licence should be allowed to go out and compete in selling green squid, but fishermen - if there is an abundance of squid to the point where the plants cannot process it, and we have the everyday fishermen not be able to sell his catch, I disagree with that; nobody should be denied the opportunity to catch squid and dry it. There has always been a market for that particular product, and hopefully it will continue.

Minister, I noticed when somebody asked you a question on the appropriations here that you talked about a subsidy paid on seal meat. There is obviously a subsidy again this year?

MR. EFFORD: Yes.

MR. FITZGERALD: Is it back to eight cents again?

MR. EFFORD: No, it is reduced this year from fifteen down to five cents?

WITNESS: Nine cents.

MR. EFFORD: Nine cents, I am sorry.

MR. FITZGERALD: Nine cents.

MR. EFFORD: What they did this year - I am sorry - they paid so much a carcass.

MR. FITZGERALD: Yes, so they did.

MR. EFFORD: They paid so much a carcass, and that has to be reviewed.

MR. WOODFORD: A flat rate.

MR. EFFORD: A flat rate for a carcass.

MR. FITZGERALD: So they did. There was some concern about that as well.

MR. EFFORD: I had some concern, because the fishermen were not satisfied with it, and I was afraid they were leaving too much in the water.

MR. FITZGERALD: Yes, and the people who were buying it for meat had some concerns about it because they could see the smaller carcasses coming in rather than -

MR. EFFORD: It is a job to achieve a balance between what is the right decision - because if you keep the subsidies, then the processor will never up the price. If you do not pay the subsidies, then the fishermen will not bring it in. So we have to determine what the market is paying, and then ensure that the processor is going to pay the fishermen the better price, because we cannot keep subsidizing forever.

MR. FITZGERALD: No.

Is there another proposal being put forward to your office for a second seal tannery in this Province?

MR. EFFORD: I have not received a proposal yet, but I have had three different companies that have already talked to me about a tannery. You have to remember, there is some confusion about the tannery in Baie Verte.

MR. FITZGERALD: Yes, I know what you are saying.

MR. EFFORD: That one is not a seal tannery. That one is doing all animal hides, importing all over. But interest has been expressed.

MR. FITZGERALD: Port Union would be an ideal place for that, the Mifflin facility there. I do not know if you have had a chance to go through it.

MR. EFFORD: Yes.

MR. FITZGERALD: There is a lot of floor space there with cooling accommodations, and the plant is such that you can move into it today. It has been well-maintained and well-kept, right on the dot.

MR. EFFORD: It is not only the tannery, it is the sea oil processing and the meat. The sealing industry is only now starting to come on stream and it has to get bigger because the population is out there. And the markets are there, so it has to get bigger.

MR. FITZGERALD: Yes, that is all I have. Minister, you are trying, I will give you credit for that.

MR. EFFORD: We are doing.

MR. FITZGERALD: You are trying. If you can only convince your cousins up in Ottawa to get on-side with you and realize the needs here in this Province, then maybe we can take steps, make some progress, and move much faster than we are moving. Keep trying and one of these days I might get you back to Bonavista again.

CHAIR: Thank you, Roger.

MR. EFFORD: If I come back to Bonavista again they will never look at you any more.

CHAIR: Are there further comments or questions before we call the headings?

MR. WOODFORD: I move the adoption of the heads from 1.1.01 to 3.3.02, inclusive, Mr. Chairman.

On motion, subheads 1.1.01 through 3.3.02, carried.

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

CHAIR: Before we conclude, Minister, I just want to say that although I am representing a district that obviously is not connected to a sea, we are connected to it through a heritage and culture and family tradition, and on behalf of the residents in Labrador West, we appreciate what this department is doing for rural Labrador and rural Newfoundland. When we look back and see our families, all of us came from somewhere else and migrated to Labrador West to work in the mines. We all have family who are directly involved with the fishery throughout the whole of this Province and it is important to us to see that there are new opportunities being evaluated and new opportunities being met and dealt with in the marketplace. So, on behalf of those I represent, I want to say I appreciate your efforts and the efforts of your staff.

With that, I ask for a motion to adjourn.

MR. WOODFORD: so moved.

The Committee adjourned until 7:00 p.m.