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

CHAIR (Mr. Ridgley): Order, please!

Good morning, everybody.

The minutes of our Estimates on the Department of Education were distributed, so the first item of business would be to entertain a motion to pass those minutes.

MR. COLLINS: So moved.

CHAIR: Moved by Mr. Collins.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Carried.

On motion, minutes adopted as circulated.

CHAIR: We will proceed, then, with the Estimates on Municipal Affairs. We are on page 239.

Again, for the benefit of the people downstairs, if we could just go through the introductions of who is here, starting with Mr. Ball.

MR. BALL: Dwight Ball, MHA for Humber Valley.

MR. BUTLER: Roland Butler, MHA for Port de Grave.

MR. BARRETT: Percy Barrett, MHA for Bellevue.

MS MICHAEL: Lorraine Michael, MHA for Signal Hill-Quidi Vidi.

MR. COLLINS: Felix Collins, MHA for Placentia & St. Mary's.

MR. CORNECT: Tony Cornect, MHA for Port au Port.

MR. FRENCH: Terry French, MHA for Conception Bay South.

CHAIR: Minister?

MR. BYRNE: Jack Byrne, Minister of Municipal Affairs.

MR. ROSE: Baxter Rose, Deputy Minister, Municipal Affairs.

MR. DUGGAN: Bill Duggan, Assistant Deputy Minister, Municipal Affairs.

MR. ANTLE: Gerry Antle, Assistant Deputy Minister, Municipal Affairs.

MR. CROCKER: Gerry Crocker, Director of Financial and General Operations, Municipal Affairs.

MS HAYDEN: Veronica Hayden, Executive Assistant to the Minister.

MS MacLEAN: Heather MacLean, Director of Communications.

CHAIR: The Clerk has the note from Friday in terms of Mr. Barrett replacing Mr. Langdon - that was passed in on Friday; I know that, I saw it - as critic. The papers were filled out on Friday and passed in, just for the sake of clarification. If you do not have it, it was passed in.

I would ask the Clerk to call item number 1.

CLERK: Subhead 1.1.01.

CHAIR: Shall 1.1.01 carry?

We will turn things over to the minister, then, for initial comments. Again, the same rules, with fifteen minutes for the minister should he want it. Then the first to reply would be fifteen and we will do tens after that.

Minister.

MR. BYRNE: Thank you, Mr. Chairman and Members of the Estimates Committee. I am pleased to be here. There are just a few notes I am going to read and then we will get into the Estimates if you want.

I am pleased to be here this morning to present the Estimates for the Department of Municipal Affairs, and look forward to answering any questions which you may have. You just introduced the people from my department, so there is no need to go through that again.

Let me begin by stating that the Department of Municipal Affairs continues to support our Province's municipalities through: substantial financial support; infrastructure development; legislative tools for municipalities; training for elected and appointed officials to ensure greater professionalism at a local government level; partnering with stakeholders such as Newfoundland and Labrador Federation of Municipalities, Newfoundland and Labrador Association of Municipal Administrators, Newfoundland and Labrador Association of Fire Chiefs and Fire Fighters, and the Combined Councils of Labrador.

I would like to make reference to a few areas which may come up for discussion this morning. Capital Works Commitments: Through cost-shared initiatives with our federal and municipal partners, the Province will invest $105.8 million in capital works commitments in 2007-2008 to support municipalities throughout Newfoundland and Labrador. The provincial contribution is $50.4 million.

Twenty-two point two million of the provincial funding will be invested in 2007-2008 in our Municipal Capital Works Program to help municipalities develop priority infrastructure such as roads, water and sewer, and municipal buildings. Historically, the majority of municipal capital works funding has been directed toward water and sewer infrastructure. In light of increasing demands, we have broadened investments in municipal infrastructure to address investment deficits in the areas of recreation, buildings and fire equipment.

In 2007-2008 we are moving to a system where we will pay down capital costs of construction rather than finance the long-term debt. This, when combined with earlier approvals of capital works, means accelerated expenditures in our capital budget.

We continue to leverage federal funding for municipal infrastructure under the $21 million Municipal Rural Infrastructure Fund - $9 million is provincial - and $6 million under the Canada Strategic Infrastructure Fund II - $2 million is provincial.

In 2006-2007, MRIF and CSIF, the programs just mentioned, did not generate the anticipated cash flows so you may have noticed lower than anticipated spending last year although we were on target with our commitments.

In 2006-2007 expenditures related to projects approved under the gas tax program decreased due to lower than anticipated applications from cities and municipalities for approved projects under the agreement. We anticipate an increase in 2007-2008 to reflect normal program funding and carryover for projects completed in 2006-2007.

Community Enhancement Program: In recent years, Municipal Affairs has been tasked with administering a number of employment support programs. In 2006-2007, $9.4 million was spent in support of Community Enhancement Programs, which reflects added pressure to provide sufficient funding and programs for fish plant workers to qualify for Employment Insurance.

Budget 2007-2008 provides $4 million to the Community Enhancement Program. There is an additional $500,000 identified as carryover from 2006-2007. So, the reality is, we have four point five this year and half a million is carryover.

New Fire and Emergency Services Agency: We are making a $1.2 million investment to establish a new Fire and Emergency Services Agency, mandated to develop and maintain an emergency management system to prepare for, respond to and recover from, major emergencies and disasters that may occur in the Province. That new agency will be made up from the Emergency Measures Organization, the Fire Commissioner's Office, and some new staffing.

In 2006-2007 the revised budget increase reflects the costs associated with the floods in Stephenville, the Northeast Coast and Burin. We also anticipate carryover costs for the Stephenville and Northeast Coast disasters in 2007-2008.

Now, if you have any questions in response....

CHAIR: Thank you, Minister.

I meant to mention, of course, it is the same, and I am sure most people are familiar, if you are prepared to answer a question - other than the minister, who will probably be back and forth - just mention your name, again, for the benefit of the people downstairs.

First up would be Mr. Butler.

MR. BUTLER: Thank you, Mr. Chair.

Minister, I will just go through some of the highlights line by line and leave some of the probing questions to the other ladies and gentlemen who are here.

Subhead 1.2.02., under Executive Support -

MR. BYRNE: When you are doing it, can you give us the page first so we can -

MR. BUTLER: I am sorry, page 239.

MR. BYRNE: Okay.

MR. BUTLER: Under Executive Support, subhead 1.2.01., at the bottom there where it says Total Executive Support, I noticed under Salaries. I think. there is an increase of $138,500, approximately. I was just wondering what that increase would be. Could you just elaborate on that?

MR. BYRNE: I am not quite sure - are you are talking about from $537,000 up to $653,000? Is that what you are referring to?

MR. BUTLER: That is the one, Sir, yes.

MR. BYRNE: Okay.

Over the past year or so we have had not a decrease, I suppose, but we never had a full complement of staff with respect to assistant deputy ministers and directors. Finally, we are getting there now. Mr. Antle was just hired recently, just announced. We have other people within the department, some changes, so that would address that issue.

MR. BUTLER: So, it is additional staff?

MR. BYRNE: It is not additional staff; it is just being staffed up, that we did not have in the first place.

MR. BUTLER: Okay.

MR. BYRNE: We had the new deputy minister appointed for Fire and Emergency Services, which would be included there. Mr. Antle was just appointed as assistant deputy minister. We had positions like that. That is what that is about.

MR. BUTLER: Okay.

Subhead 2.1.01., page 241, under Support to Municipalities, probably it is the same response there, Sir, but there is an increase in Salaries there, up by approximately $100,000.

MR. BYRNE: Yes, that is the exact same thing. It refers to the new director's position plus the negotiated increases with respect to the 3 per cent for the civil service; I would think that is in there.

MR. BUTLER: The other one I have is on page 242, subhead 2.2.02., Urban and Rural Planning. Under the Salaries there, I know in that particular case it is not a lot but it is a reduction of $59,700. I wonder if that is a position that is eliminated or -

MR. BYRNE: That is a director who retired and it was combined with another position, so in actual reality the staffing would be less - the dollar value - correct?

WITNESS: Yes.

MR. BUTLER: Page 243, subhead 2.3.01.

MR. BYRNE: Subhead 2.3.01., yes.

MR. BUTLER: Engineering Services, increase in Salaries there by over $429,800 over what it was last year. I am asking those and they are probably all the same answers, or basically.

MR. BYRNE: Yes, but that position there, if you look at it, we had budgeted $1.397 million and we only had spend $1.06 million and now we are back up to $1.498 million. Again, it refers to the delay in hiring approved plan positions in the MMSB, the Multi-Materials Stewardship Board for the Waste Management Strategy. That is where that would come from.

MR. BUTLER: Page 244, subhead 3.1.01., Municipal Debt Servicing.

MR. BYRNE: Yes.

MR. BUTLER: I was just wondering if you could elaborate. I think it is down by $4.9 million.

MR. BYRNE: Grants and Subsidies? Is that the one you are talking about?

MR. BUTLER: Yes, that is correct.

MR. BYRNE: What is happening here is that government, instead of financing, we are paying down the debt on a cash basis type of thing. The finance people can speak more to it than I can, but it has to do with paying down the capital works debt over the years that has been built up, and each year we are getting it down less and less - that is what is going on there - so we do not have to make the same payments.

Baxter, I do not know if you want to address that a bit more.

MR. ROSE: In the past, municipal infrastructure was financed through the Newfoundland Municipal Financing Corporation and it was amortized over a period of fifteen years. A few years ago, the Province decided to not finance through NMFC any further but instead to put the money in the budget on an annual basis to pay off current years capital works. The monies at NMFC were frozen as of a few years ago and the debt is being paid down, so all of those mortgages are being paid down. Each year the interest that we pay on the debt is reducing, so you will continue to see this number drop over the next, probably ten to twelve years until it goes to zero.

MR. BUTLER: Very good.

Page 245, under subhead 3.1.04., Community Enhancement, I know, Minister, you elaborated on that a little while ago. In 2006-2007, I am just wondering if you could go through that again where it was budgeted $4 million and it went to $9.4 million.

MR. BYRNE: What had happened was, as you know, in that program, we put in so much money each year - it is $4 million again this year for the Community Enhancement Program - and over the past couple of years we have spent upwards of $10 million a year because of the fish plant workers, the programs that we have. A few years ago we had the Crab Workers Support Program. Last year and the year before, and this year, we have the Fish Plant Workers Support Program. We spent an extra $5 million. This year we have budgeted $4.5, so if we get into a situation whereby we have to go down that road again we usually do it through either a special warrant or come back to the House to get the extra dollars to address it. That is why that is there. That is why it looks like a lot less for this year, but if we need it we will go after it.

MR. BUTLER: Yes, so it is the same thing -

MR. BYRNE: We do not know what is going to happen, the whole issue with FPI and these things.

MR. BUTLER: So, the possibility is there, the same - God forbid, we hope it will not happen but it is possible.

MR. BYRNE: Right. Exactly.

The same thing happened with the floods and the disasters with Stephenville, and what is going on up in Daniel's Harbour. We cannot predict it, but when it happens we will address it.

MR. BUTLER: Yes.

Under the Estimates for 2007-2008, I notice $4.5 million and you mentioned the $500,000 overrun. Could you just explain that to me?

MR. BYRNE: Yes, what happened there was, we had $4 million and we spent $3.5 million, basically, and $500,000 will be carried back into this year. That is for cost that we have not even paid out yet. Do you understand what I am saying?

MR. BUTLER: Yes.

MR. BYRNE: It is $4 million, we spent $3.5 million, and there is another $500,000 carried over this year, so it is $4.5 million.

MR. BUTLER: Was that only found out after the reporting came? What I am trying to find out, was that $500,000 there when other funding could have been released to help with some projects, or it was found out after the reporting came back in from the projects?

MR. DUGGAN: The situation here is that when sponsors for projects complete their final report and send it in, we have a review and audit process that we go through before we pay out the final balance, the grant. A number of the projects this year were winding down in March. We just did not think we had sufficient time to get the reports in from the sponsors, do a proper review of them, and then issue payments before the accounts were closed for last year, so we requested permission to carry over $500,000, simply to enable us to pay out the balance of those grants in the current fiscal year without impacting the current fiscal year's program. It is a cash flow issue, yes.

MR. BUTLER: Still on page 245, under 3.2.01, Municipal Infrastructure. I know, minister, you touched on that too, or I am sure that is the one you were referencing. I was wondering if you could elaborate on where or what projects, with regards to the wonderful increase, the $33.5 million? Is there any list of what that would be for or where, or anything like that at this point in time?

MR. BYRNE: That reflects the early approvals for Capital Works for the year. I think it was $30-odd million this year. It also reflects, as Baxter mentioned earlier, the pay down. What we are doing, as we mentioned, we will be, and have been - instead of financing through the Municipal Financing Corporation, we pay it off as we go, type of thing. We pay the projects down. That really is the advanced approval of a Municipal Capital Works Program. We had it approved last fall, $33 million.

MR. BUTLER: Page 249, 4.1.04, the Joint Emergency Preparedness Project. Under 2006-2007, revenue from the feds was budgeted at $282,000, but only received $170,000. I am just wondering -

MR. BYRNE: That is simply - again, under the JEPP program, the fire departments, through the municipalities, will apply for a federal program for funding for different equipment. There was a lower number of towns and fire departments applied for under that program last year, it is as simple as that. If they apply for it, it goes through the Fire Commissioners Office. He will either approve it or reject it, and there were less applications. Simple.

MR. BUTLER: So it was just a lack of applications?

MR. BYRNE: That is right.

MR. BUTLER: Basically, we lost out - not we, but someone lost out on funding they could have received for something.

MR. BYRNE: Yes, and all the fire departments and all the towns were well aware of this program and are notified of it; of the requirements and restrictions or what they can or cannot apply for under that program.

MR. BUTLER: No doubt about it, it is a good program. I saw some of the equipment that was purchased out in our area this year through the program. I will tell them this year to apply for lots more, there could be (inaudible).

My last question, Mr. Chair, at this time - in case I am getting close to my cut off. I only have one more at this point in time, is on page 250, 4.1.05. For instance, under .01, where it says Revenue-Federal. I know it was budgeted $8 million and Revised, there is nil. Then the estimate this year is for $21 million. I was wondering why there is nothing there? We were budgeted $8 million and I guess I can say we did not receive it or whatever. Maybe that is not the right terminology for it, but -

MR. BYRNE: What is going on here - again, we are hoping to get this addressed with the new staffing with the Fire and Emergency Service. We had people employed there, but the reason there is no money received there - under the previous disasters, for example, which was Stephenville, Badger and Gabriel, the federal government still owes us money on those programs under the Disaster Financial Assistance Arrangement program. It is just that their auditing system is so complicated and it takes so much time to get the money in from them that there was no money received this year. Basically, what they owe is $21 million. I will give you some numbers here. Gabriel, they still owe us $1.9 million; Badger, $3.6 million; West Coast flood, $2.3 million; Stephenville, $9.6 million; Northeast Coast, $2.9 million. It just takes time to get the money. We end up paying for it, but because of their auditing system, it takes time to get the money out of them.

MR. BUTLER: In that same section, minister, Grants and Subsidies is $11.26 million. The breakdowns there, what was Revised, there are no figures there under the Budget.

MR. BYRNE: I am not following you. The amount to be voted you mean?

MR. BUTLER: Pardon?

MR. BYRNE: Exactly where are you now? Grants and Subsidies, yes.

MR. BUTLER: Yes, on page 250. For each of the headings, like Salaries, Transportation and Communications, Supplies, under the Revised the figures are there but there are no figures under what was budgeted. I guess they are the same, are they? How come there are no figures there for the (inaudible)?

MR. BYRNE: These are costs that are related to the administrative costs of operating the - putting in the claims - our government's responsibilities with respect to the cost of administering those programs. Again, when it happens, it happens.

I do not know if someone wants to speak to it. We address it and then we try to get our money back afterwards. That is what is going on there. There was no money budgeted in 2006-2007 and we had to spend that kind of money to administer the programs.

Do you follow me?

MR. BUTLER: My last supplementary - I said it was the last question. I will call it a supplementary now to get away with this. I guess it is a general question, minister.

You explained it very well about the $8 million and how the feds have not come across with their portion. With the relationship we have with the federal government now, do you think we are going to come up with the $21 million that is budgeted for this year?

MR. BYRNE: Yes, that is not a problem. This is more of an administrative thing within the different government departments. We will get that money, but it just takes time to get it. This was all ongoing long before this situation arose. You always get peaks and valleys. It will happen. We will get our money.

MR. BUTLER: That is it for me, Mr. Chair, at this time.

CHAIR: Thanks very much, Mr. Butler.

Who wants to go next? Anybody?

Ms Michael.

MS MICHAEL: I would just like to pursue the last point first a little bit more so I am clear. I beg your indulgence where it is my first time doing a budget in Estimates. I may have questions that may appear simple, but I need to get things straight for myself.

Minister, on page 250 then, the same point that my colleague was looking at. I just would like some clarification as to why there was a budgeted line item for 4.1.05 but no details were budgeted. I am just curious as to where the budgeted line item came from?

MR. BYRNE: Are you talking about -

MS MICHAEL: Under 2006-2007 there was a budgeted line item for all of those expenditures. On page 250.

MR. BYRNE: The $11.26 million. I see what you mean, yes.

MS MICHAEL: Yes. There was a budgeted line item of $11,260,000, then it got revised, but I am curious as to why - the question that my colleague asked was why you did not have an itemization under the budget. I am asking a further question, how did you come up with the line item of $11,260,000 without doing the itemized budget, because the revision has everything itemized? I just want further clarification.

MR. BYRNE: Okay. I would assume that was a carry over from previous budgets, but Baxter might want to speak to this.

MR. ROSE: In the 2006-2007 budgeting process - you may recall, the Stephenville disaster happened in the fall of September 2005. By the time the Province fully assessed the impact of the damages in Stephenville and came to a decision it was very late in the budget process, so we did not have time to do a full breakout. We were not even, in fact, sure of the number of claims that would have to be settled or the amount of those claims, so there was one line item put in, $11,260,000.

MS MICHAEL: Okay. Thank you very much. That makes it clear. I appreciate that.

MR. BYRNE: That is what I said, it is a carry over from the previous.

MS MICHAEL: Right, yes, but the detail of what the carry over was I think is helpful.

MR. BYRNE: Okay.

MS MICHAEL: I would like to come back then - a lot of my line item questions have been asked but I have some others. Once again, some of this is helping me get information for the future.

On page 246, section 3.2.03, Grants and Subsidies. I would just like some explanation of under this program what the Grants and Subsidies cover?

MR. BYRNE: Yes, I see it. The Gas Tax Program, that is a federal program that deals with the municipalities. Money just flows through this department. It is $82 million over four years. Again, the federal government has a lot of restrictions on that program but the towns would apply to the provincial government, Municipal Affairs, for the funding. There is an agreement they have to sign. There is X amount of dollars for each municipality. There is a list. They all know how much money they are going to get. It could be in the $5,000, $10,000, hundreds of thousands. The City of St. John's probably gets upwards of $3 million. It is going to be done over four years. Now, I am not sure if you are asking that question. That program would be for the municipalities to do green projects, such as water, sewer, roads are included. The money itself has to be utilized.

The money they receive under the Gas Tax Program cannot be their portion of, say, a project under the Municipal Rural Infrastructure Fund. If we had a project of $1 million and the municipality was going to get $200,000, they could not take that $200,000 and put it as their portion. The project would then become a $1.2 million project, if they decided to spend it on that project.

MS MICHAEL: Okay. That is helpful and, again, information for me.

Is the greening of waste management included under this area?

MR. BYRNE: Pardon?

MS MICHAEL: The greening of waste management, carrying on waste management in a more environmentally friendly way?

MR. BYRNE: Oh, the gas tax?

MS MICHAEL: Yes. Is that included under the Gas Tax Program?

MR. BYRNE: Yes. When we were negotiating this with the federal government, I remember meeting with the deputy minister and told him that we were going to try and work an agreement with the Newfoundland and Labrador Federation of Municipalities to take a certain portion of the gas tax money to go towards the implementation of the provincial-wide Waste Management Strategy. They did not think we would have a prayer, but we did, and we worked 25 per cent.

The reason we did that was because the gas tax money has to go to all people within the Province, even the unincorporated communities and local service districts. There was no way that the unincorporated communities could avail of this money so we had to come up with a way that they would get a portion, even though they probably would not even realize they were getting a portion, and 25 per cent of the gas tax money is going towards the provincial-wide Waste Management Strategy. The Province has put in $5 million this year. With the money that is coming from them, I think it is going to be $22 million. We have already started implementing the strategy on a project-by-project basis in different areas of the Province, but with this now people will really see this starting to move off pretty quickly now.

MS MICHAEL: Okay. So this is where it is located. Thank you, that is helpful.

Page 247, section 3.2.05. This is a new agreement, I understand, isn't it? The Municipal Transit Infrastructure, affecting Corner Brook and St. John's?

MR. BYRNE: Yes, this is a - Corner Brook and St. John's. The cities involved have to supply transit cities $20.6 million, I think it was. This was done over two years. The way we negotiated it for the City of Corner Brook, we ended up with getting a base amount first; I think of $1.5 million for each city. Then after that it was on a usage basis. So, the City of Corner Brook ended up probably getting $1.5 million that they would not have gotten. Sometimes we try to negotiate that.

I remember when the Newfoundland and Labrador Federation of Municipalities were trying to negotiate the gas tax, they were hoping that everybody would get a base amount and then after that they would get it on a per capita basis. So we kind of took the same approach, and we were successful. It was only last week, recently, we signed off on that. It has gone off to the feds now. They signed off, so this is a done deal now.

MS MICHAEL: Okay. With this federal funding, is it only where cities are involved or can small towns or even regions of municipalities be included in this?

MR. BYRNE: No, it is for the cities. They had to have a public transit system. Some people were of the impression that we could use it as a Province for the ferry system, but it was not the case.

Now if, say, the City of Corner Brook or the City of St. John's had a ferry going back and forth like they do in Halifax, they could possibly utilize it for that purpose. But, no, it is just for the cities with public transit systems.

MS MICHAEL: Okay, and the system has to be in place. So a small town could not get this money in order to start one?

MR. BYRNE: Not that I am aware of, no.

MS MICHAEL: Okay, thank you very much.

On page 249, I think I know the answer to this one but I will ask it. I think this is the same answer as page 250. Page 249, section 4.1.03., the salaries under that section, I guess that was affected by what happened in Stephenville, was it? Is that the same? Because the salaries are up a fair bit there.

MR. BYRNE: Well, sort of. That led to it, but, as I mentioned earlier, we have a new agency now - and the deputy minister, Mike Samson, is not here this morning - the Fire and Emergency Services - Newfoundland and Labrador, which will be combining the Fire Commissioner's Office and the Emergency Measures Organization, with some new staffing, with fire protection officers, and we are hiring somebody to actually address the situation with the auditing of the federal program to try and speed that up, to put more emphasis on that. It is just strictly to do with the increased staffing for that Fire and Emergency Services. That is why that money is increased.

It is something that the Newfoundland and Labrador Federation of Municipalities and the Fire Chiefs and Firefighters Association have been after for some time. It is only recently that we got a couple of positions, one or two positions, advertised. Although we did have them approved, it took awhile because they have been overworked down there for some time, understaffed, so we are getting there.

MS MICHAEL: I guess more of a policy question, then, or policy related: Are you having a sense, then - from what you have said, I think you probably do - that we are moving towards being able to deal more efficiency and effectively in the time of emergencies with the EMS?

MR. BYRNE: That is the whole intent. Mike Samson, the deputy minister, has been tasked with this, to put an emergency preparedness plan in place which will be all encompassing, from hospitals, government departments, volunteer fire departments, the Red Cross, municipalities, and it is quite the task.

The thing is, in the past we have had some good people in that area, in EMO, with the fire commissioner and others - and I can name names. Take, for example, the Stephenville flood. When things happen it seems to come together, and it is probably because we put people on the spot pretty quickly and they know what needs to get done.

What we are trying to do is put an overall plan in place if, God forbid, you have a disaster like a plane crash. People need to know their responsibilities, who reports to whom, and all these types of things, what needs to get done all over the Province. That is what that is all about.

MS MICHAEL: When that plan is put in place, will there be an evaluation of places? I can think of regions - I will not bother to mention them - where, in the case of an emergency, you do not have immediate services sometimes where industry is located. Will there be an evaluation of what needs to be on the ground as an infrastructure?

MR. BYRNE: It will be all encompassing. Like I said, when you sit back and think about the logistics, what would have to be put in place, the plan itself, the staffing, who is responsible for whom, all these types of things, even to gear up and get to a site, all of that will be looked at. We have money in the budget now for Labrador, to put a plan in place for Labrador, which would be a part of this also.

To me it is, again, all encompassing. It is going to take time to put this in place itself. In the interim, we have been pretty fortunate to have the people there who could do a yeoman's task, really, in the past.

MS MICHAEL: If I may ask one more specific question with relation to it.

MR. BYRNE: Sure.

MS MICHAEL: I am looking at something like, for example, the hospital in Labrador West, and the fact that a new hospital is being looked at, et cetera. Would there be discussions back and forth between health and the emergency services with regard to - for example, the new plan might have expectations of what is needed in the hospital in Lab West because of the industry that surrounds Lab West. There are some things, yes, you could wait to get somebody over to Happy Valley, but there are some things that are essential that you would have in a hospital really close by. Would that kind of discussion go on as you are putting the plan in place?

MR. BYRNE: Well, again, when people are designing the hospitals, I would think that a lot of these things would be considered in the design and putting the building in place. We are still pretty early on, in putting this in place. In the past, we were always in probably more of a reactive mould when it came to a disaster, rather than proactive, so where we are trying to go is to be more proactive, and it is going to take time.

MS MICHAEL: Thank you very much.

Thank you, Mr. Chair.

CHAIR: Thank you.

Okay, we are going to pass the questioning on.

Mr. Barrett or Mr. Ball?

MR. BALL: I have just a few questions, actually.

Number one is on page 248, under 4.1.02., the positions for the Fire Commissioner's Office. I am just wondering where these positions will be located.

MR. BYRNE: A good question.

With respect to the new Fire and Emergency Services, we were hiring, as far as I understand, some new fire protection officers. There is one scheduled for, I think, Clarenville. We have people in Deer Lake now, and we have other people in Grand Falls. It will depend on what type of positions will be hired and where they would go, but we are looking at spreading them around the Province.

MR. BALL: On page 249, under 4.1.04. again - this seems to be a popular area today - is this for fire only, when you look at the assistance for emergency response equipment?

MR. BYRNE: Normally, we flow it through the Fire Commissioner's Office and EMO. In the past it has been mostly firefighting equipment and communications, like communications towers. It could have been suits - what do you call it? - the bunker suits, these types of equipment. I am not sure if you have a specific something in mind that it could be utilized for.

MR. BALL: In my mind, I was just thinking about some of our search and rescue groups around.

MR. BYRNE: Yes.

We have funded some of those search and rescues through the department. If they apply for assistance we have done that, not necessarily through this program but through others.

MR. BALL: There is one other question, I guess, and I do not know where it would fit in here. That would be, I guess, in early February or late January some time there was, obviously, on the Northeast Coast again, a storm that did some considerable damage in the boardwalk in Trout River, that area. I am just wondering if that would be included in these Estimates anywhere.

MR. BYRNE: What happens with respect to the disasters, under the Disaster Financial Assistance Arrangements Program, when there is a disaster - and they are the ones who define what a disaster is, by the way - it is the first $500,000; it has to be at least $500,000 worth of damage. Once that happens, when we reach that, then we try and see if the feds would come on side. We make application and have some discussions with them, and then it is on a pro-rated basis. The bigger the disaster, or the more cost involved, the more the feds would put in, but I don't think that qualified, did it? It did not qualify under that program.

MR. BALL: It didn't reach the $500,000 threshold.

MR. BYRNE: No, but I know that I have been talking to, I think it was Trout River, one of them, and they had some trouble with their boardwalk or something.

MR. BALL: That is the one I am talking about.

MR. BYRNE: Yes.

Again, we have different programs in place, like the Community Enhancement Program and these types of things, that I have been trying to promote to the municipalities and different organizations to get projects that are more long term and viable. If you deal with it in phases, even, from one year, two years, three years type of thing, we would be looking at that.

What they should be doing, too, and I cannot specifically speak of the boardwalk, where it was located or whatever the case may be, but maybe if they wanted to apply under a program that way but look at something that probably would not get destroyed if they did have another heavy wind and rain storm, flood and whatever.

MR. BALL: Subhead 3.1.04.

MR. BYRNE: Pardon?

MR. BALL: Subhead 3.1.04.

MR. BYRNE: What page is that?

MR. BALL: I will see myself, now. Page 245, item 9, Allowances and Assistance. There was $1.5 million last year and nothing this year.

MR. BYRNE: That had to do with, if you remember, was it Harbour Breton?

WITNESS: Yes.

MR. BYRNE: FPI agreed to put $1.5 million into that program, a one-shot deal. That is what that was. That is where it came from.

MR. BALL: I think that is about it for me, for now.

CHAIR: Okay.

Mr. Barrett.

MR. BARRETT: I have a few questions here under subhead 4.1.01., the new Fire and Emergency Services Agency.

MR. BYRNE: Which one, 4.1.01?

MR. BARRETT: On page 248.

MR. BYRNE: Yes.

MR. BARRETT: You have $365,000 there for salaries but there is only one position. The $128,506, I guess that is for the deputy minister, the ADM, or whatever that position, or the director, and the other $145,000 says it is for temporary and other employees. Is there no staff going with this, or is it just a call-in basis?

MR. BYRNE: I do not know if I got the first part of your question. That is the Executive Support, 4.1.01?

MR. BARRETT: The salaries is $365,000, right?

MR. BYRNE: Yes.

MR. BARRETT: But in the details on page 175 for the Executive Support, Fire and Emergency Services Agency, it lists the permanent employees as $128,506 and then it says $145,000 for temporary employees.

MR. BYRNE: That again would be part and parcel of the overall financing of the new positions coming into that department.

MR. BARRETT: So, they are going to be temporary employees are they?

MR. BYRNE: There will be some temporary but there are permanent employees coming in there too. There are two, I think, two or three, fire protection officers that are being hired. There is a person being hired with respect to the auditing, as I mentioned before, to address that. I think there is something like seven or eight new employees coming in. That is my understanding.

MR. ROSE: There are some additional one-time costs associated with the set-up of the agency in developing the initial plan and whatnot. The Fire and Emergency Services will be a permanent agency, but in the first year there will be some temporary positions associated with that to get it up and running and to develop the provincial emergency preparedness plan.

MR. BARRETT: Under heading 03. of 4.1.01., Executive Support for the Fire and Emergency Services Agency, Transportation and Communications is $170,000 for one person.

MR. BYRNE: No, that $170,000, I would think that would be for, again, getting geared up, getting the operation in place, the travel involved with that. As I mentioned earlier, this is going to be a pretty heavy, complicated, logistical (inaudible) to put all of this in place all around this Province and Labrador. So that $170,000, I would assume, is not for one individual. It would be for a number of individuals, that Transportation and Communications.

MR. BARRETT: Yes, but the only person in place right now - I guess you have a person appointed as the head of this agency, but there is nobody hired yet.

MR. BYRNE: Well, there are people there now. We have people in Deer Lake, people in Grand Falls, people in St. John's. We have the fire commissioner -

WITNESS: Marilyn McCormack. (correct)

MR. BYRNE: Marilyn McCormack is a new individual who has been just appointed the other day to assist at putting this in place. She is there for an appointment for a year, I think. So, it is not for one individual, it is for a number of individuals.

MR. BARRETT: Okay. These positions before, where were they? This is a new agency. You just told me -

MR. BYRNE: No, no -

MR. BARRETT: - that you have a whole slew of people on staff already. So did they come from the Fire Commissioner's Office or where?

MR. BYRNE: What is happening here under the new Fire and Emergency Services will be combined, the Fire Commissioner's Office and Emergency Measures Organization, combining them, which are on staff, a number of those individuals, plus another seven or eight people, plus people who are on a temporary basis to get this up and running in the first place and then the final plan will be put in place. It is going to take, as I said, some time, effort and money to put this together. It is a pretty comprehensive plan that is going to be done.

MR. BARRETT: Yes, but what I am looking at here, for example, there is an increase in salaries in the Fire Commissioner's Office.

MR. BYRNE: Yes.

MR. BARRETT: And there is also an increase in salaries in the Emergency Measures Organization.

MR. BYRNE: Yes.

MR. BARRETT: The salary in that organization has gone up from $283,000 to $402,000, and you also have the salaries in this one here of $145,000. You just indicated that these positions were transferred from the Fire Commissioner's Office and/or the Emergency Measures Organization to the new Fire and Emergency Services Agency.

MR. BYRNE: That is not what I said. What I said was that the Fire Commissioner's Office and the Emergency Measures Organization are going to be combined. We will be hiring people in the short term to help get this up and running, such as Ms McCormack. We will be hiring a permanent staff. I think we budgeted $1.5 million, was it? It was $500,000 for one-time costs and then something like $750,000 a year for operational, once it is up and running, for salaries and whatever the case may be.

WITNESS: (Inaudible).

MR. BYRNE: One point two million, okay.

WITNESS: One point two million, with $500,000 one-time costs.

MR. BYRNE: Yes, that is right. So it is $700,000. Out of the $1.2 million, $500,000 is for one-time costs and then $700,000 to operate the new Fire Emergency Services. I am not sure if I am getting that clear to you or not.

MR. ROSE: In the initial set up of the Fire and Emergency Services Agency there are a number of positions that are being seconded from other places within government, not from the Fire Commissioner's Office or Emergency Measures.

Marilyn McCormack, there was an announcement made on that last week. Pam Rogers is an executive support. As well, there is some secretarial support that is being provided to that agency. Part of the one-time effort is to get the planning put in place and thereafter this Budget of $1.2 million, as the minister indicated, there is $500,000 of one-time costs in that. So you will see that drop next year.

MR. BARRETT: Okay. I guess that explains, to some extent, what is going on here because there is such an increase in salaries. You must me transferring somewhere else because we are already one month gone out of the fiscal year and by the time you advertise for those positions you are up to September before they are filled, or October.

I guess, to note, these three divisions here, the transportation and travel costs for this agency is almost $500,000, $425,000.

MR. BYRNE: It is a combination of staffing for a one-shot deal. Within that $500,000 there would be temporary people employed upwards to a year. Now, when you are talking about travelling for the Fire Commissioner's Office and the Emergency Measures Organization, I mean the costs involved with that. Daniel's Harbour is a prime example. We have had staff up there like you would not believe, and there will be more staff up there to do the job.

Again, there are people travelling with respect to the Stephenville and the Northeast Coast flood. The list goes on and on.

Under the Fire Commissioner's Office we had a budget of $96,000 for Transportation and Communications under 4.1.02.03. We budgeted $96,000, spent $94,000, and we have $96,000 budgeted again this year for Transportation and Communications. Again, that is an estimate. It could go higher, it could go lower, it depends on what happens within the Province, which we have no control over.

MR. BARRETT: Okay.

Grants and Subsidies on page 246. You indicated that you were going to spend $36,240,000 but you only spent $23,740,000. We hear announcements about all of these projects and all the money in the municipal infrastructure program when obviously - it was indicated you were going to spend $36 million but you only spent $23 million.

MR. BYRNE: Yes. The reason for that is simply put - again, the Municipal Rural Infrastructure Fund and the Canadian Strategic Infrastructure Fund, it is federal government programs. We put money into it. They put in 33 per cent of any project. Once applications are made you have to go through their process. It is the uptake from the municipalities. There are a number of factors involved here. It is getting approval through the system, once we have an application in through the federal program. It also has to do with the number of municipalities that would apply under the Municipal Rural Infrastructure Fund.

Under the Municipal Rural Infrastructure Fund; again, what we have done over the past number of years, we have about fourteen municipalities that take advantage of the multi-year program where there are fifty-cent dollars, 50-50. The Municipal Rural Infrastructure Fund is usually geared to the smaller municipalities whereby they get a 30 per cent off the top reduction and then there is 66 per cent left. Sometimes we, as a province, will finance that 66 per cent from anywhere from 50-50, 60-40, 70-30, depending on the financial situation of the municipalities and other factors.

So, in reality, it is based on the uptake from the municipalities and the approval system with the federal government. We budgeted $36 million and only $23 million was taken, but that $36 million will be spent possibly in the next year; not that we lose it, or the towns lose it. Just because it is not spent this year does not mean that next year that $12 million of $14 million will be on top of what we would normally budget anyway. So, it will get spent and the municipalities will have the advantage of it.

MR. BARRETT: Actually, when you analyze this here right now, in this fiscal year, when you look at the fact that $13 million of it that is carried over were project that were announced - you announced $36 million, but you only spent $23 million.

MR. BYRNE: No, what we announced was that we would budget $36 million.

MR. BARRETT: Yes.

MR. BYRNE: Then it is up to the municipalities to apply for it and get approvals. If they applied for $23 million and it got done and spent, good. It would have been better if they had, within that year, spent the $36 million, but that $13 million that was not spent will get spent in the following year. It is the approval system which is the problem - that slows it down - and, again, the municipalities applying for it.

MR. BARRETT: So that $13 million is included in the $27 million this year?

MR. BYRNE: No. The $36 million to $23 million would be on top of. If we have budgeted $27 million this year, next year it could quite possibly be $40 million. Correct?

MR. BARRETT: So, technically, right now the $13 million that was not spent in the year 2007 is not included in these figures here at all now?

MR. BYRNE: It will be on top of. That money is allocated as we speak. We cannot put it there now on top of this because it has already been allocated within the previous Budget, but as the system flows and applications are made and approvals given, this $13 million that you are talking about will be on top of the $27 million. Is that not correct?

MR. ROSE: The numbers you see in front of you are the cash flows. The minister's commitments are made. It depends on the timing of the project, the development of a project and when the cash actually gets flowed. When the project is completed then the cash flows. This is not commitments. This is cash that you are going to see flowing on projects that were probably committed two or three years ago and are well underway, under construction.

MR. BARRETT: Therefore, it could be possible this year, if everything goes ahead, that that revised figure, instead of $27 million it could be $40 million next year?

MR. ROSE: If everything moves ahead according to plan, yes, that number could go up.

MR. BARRETT: Okay.

CHAIR: Okay. Mr. Barrett, have you finished that point? I wanted you to have time to finish up that point but if you are going to go on to a new point, you are actually gone beyond the time.

MR. BARRETT: Okay. I just started.

CHAIR: You started at 9:42.

MR. BARRETT: Okay. Come back to me.

CHAIR: We will come back to you. Are you finished that point, though?

MR. BARRETT: Yes, I guess I am. I am just as clear as I was when I started.

CHAIR: I am not sure where we are moving.

Ms Michael, did you have further questions?

MS MICHAEL: No, I am all right for the moment, Mr. Chairperson.

CHAIR: Any other members in the back? Mr. Collins?

MR. COLLINS: Mr. Chairman, I want to come back to the JEP program again. Minister, can you just give a quick summary of what that program offers? Any fire department, you said, is available to that program for ordering any kind of emergency equipment, bunker suits, this sort of stuff. Is that on a cost-shared basis? I do not understand your last point there: Expenditures are fully recoverable from the federal government. Is that the municipal - this department's share if fully recoverable? Can you set that out for me?

MR. BYRNE: The fire departments, through the municipalities, can apply for that JEP program. They can apply for bunker suits, they can apply for communications, towers, radios, whatever. There is equipment there - we call it the heat sensitive detectors, these types of things, that can be financed through that program. The applications have to go through the Fire Commissioner's Office. The Fire Commissioner will then recommend aye or nay, depending on if there is certain equipment in certain areas. Now, if you have a town with a certain piece of equipment and another fire hall within sight distance, is it necessary to have, you know - so he looks at all these figures and he makes a recommendation that it be approved or not approved.

MR. COLLINS: When it is paid for - my question is: What is recoverable from the federal government? Is it the amount that the Department of Municipal Affairs pays out?

MR. BYRNE: Yes.

MR. COLLINS: I am coming back to the local involvement again here.

MR. BYRNE: They make application. It is usually 100 per cent, isn't it?

WITNESS: The municipalities pay a share.

MR. COLLINS: I did not get that comment.

MR. BYRNE: The municipalities pay a share. I mean, I do not have that right here.

MR. COLLINS: Okay. The local group pays a share?

MR. BYRNE: Yes.

MR. COLLINS: Okay. That is not recoverable from the federal government?

MR. BYRNE: No.

MR. COLLINS: Okay.

The other quick question I had for you, back on page 244, Municipal Debt Servicing.

MR. BYRNE: Yes.

MR. COLLINS: The amounts put in the Estimates for this year, $23,854,000. That is just an amount paid to interest, is it, on the total?

MR. BYRNE: Where are we now?

MR. COLLINS: Page 244, 3.1.01.

MR. BYRNE: What is your question?

MR. COLLINS: Municipal Debt Servicing, $23 million to almost $24 million, that is the amount paid to interest on the overall Municipal Debt Servicing this year. Any idea what the total debt would be of municipal services at the time?

MR. BYRNE: The overall amount is probably up around $400 million, approximately. That is just a portion to the municipal financing corporation, which we are trying to get away from.

MR. COLLINS: That is all I have, Mr. Chairman.

CHAIR: Are you finished, Mr. Collins? Okay.

Any other members?

Ms Michael.

MS MICHAEL: That you, Mr. Chairperson.

Back to page 246. I do have a further question of clarification with regard to section 10; number 10 under 3.2.02. I am still not clear on the answers, minister, that you are giving to my colleague. Maybe if I ask it in a different way we might get it cleared up.

If $36,240,000 was budgeted in 2006-2007, and if the difference of $13 million has already been applied for and granted, as you have said, it is just that money has not been allotted yet. I guess my first question would be: Well, then, if we know that $36,240,000, in actual fact, was applied for and meeting needs out there, why is there such a drop in 2007?

MR. BYRNE: No, no, just to correct you, the $36,240,000 was what we budgeted to be spent.

MS MICHAEL: Right.

MR. BYRNE: Not necessarily that it was applied for, but that is what could have been spent.

MS MICHAEL: Well, the impression I had was that the $13 million has been applied for.

MR. BYRNE: No, no.

MS MICHAEL: In that case, then, I will further my question: If you budgeted -

MR. BYRNE: Just let me straighten that up first, okay, if I can? If I can't, I will get someone else to.

MS MICHAEL: Yes, because it is not clear to me.

MR. BYRNE: The $36,240,000 is what was budgeted, okay?

MS MICHAEL: Right.

MR. BYRNE: The $23,740,000 is the amount of money that we actually had applications on and approved out of that $36,240,000. That is the cash flow. Is that correct?

MR. ROSE: The $23,740,000 is the actual cash that flowed on previous years' commitments that were made. We had anticipated that municipalities would have taken up, consumed, the projects more quickly, that the projects would have gotten underway, they would have been completed and the cash would have been paid out as $36 million.

The municipalities, for whatever reason, be it environmental assessments, be it delays in the calling of tenders or delayed starts to the construction season, whatever the case may be, as a result of all of those factors the projects were not undertaken or the cash did not flow as quickly as we had projected. So, the money is not gone. The commitments are there. The commitments were made, but the cash flow simply did not take place as quickly as we had anticipated.

MS MICHAEL: So it was budgeted and the money is still there?

MR. ROSE: The money is still there. The projects -

MS MICHAEL: I am still confused, then, because I do not understand why that money is not put into the Estimates for 2007-2008.

MR. ROSE: We now have more experience with dealing with the federal government on these federal cost-shared programs, because that is what this is; all of this is federal cost-shared programs.

MS MICHAEL: Right.

MR. ROSE: We made commitments last year, for example, under the Municipal Rural Infrastructure Program. We made our commitments in April and May and we are still waiting on federal environmental clearance on a number of those projects today, so the federal system is slowing down the actual start of construction. The commitment is made, the commitment is in place, the municipalities will get their project, but the federal process for giving their clearance has slowed us down, so it is taking longer to get the dollars out the door while the commitments are being made expeditiously.

MS MICHAEL: I guess I am getting it, but usually in a budget you never see money sort of lost. Do you know what I mean?

MR. ROSE: These monies are not lost.

MS MICHAEL: But they are not showing up, so that is what I am confused about.

Let me put it a bit more clearly, then, how it is working in my mind. Usually, when you budget a certain amount and then there is a revision, if it is a revision up it means that there was more money and it was spent. If it is a revision down it means that is it, that is all the money now for that year, and the $13 million goes back into a pot somewhere. That is usually how it works in the budget, right? That is why I am talking about the $13 million lost. There is nothing here that gives me an assurance, or gives the municipalities an assurance, that the $13 million is still going to be spent, because that is usually not how it works.

MR. ROSE: The municipalities are operating on the basis of getting a commitment to do a project. Once they have their commitment, they are assured they have the money.

In these federal-provincial programs they do tend to be confusing, because as you see the amount of cash flow go down you will see a corresponding drop in the revenue that comes in. These are the monies that we are paying out, as a Province, for the federal share that we then bill the federal government for and they pay us as a revenue.

MS MICHAEL: Okay, that really helps. That really helps because I can see, then, what you are getting at, because you had $18,700,000 budgeted and you have in $10,700,000.

MR. ROSE: Right.

MS MICHAEL: Okay. That answers the question, actually.

MR. ROSE: The two go hand in hand. The monies are not lost.

MS MICHAEL: I can see what you are talking about there, but then I am still wondering why you only budgeted $27,752,000 for this year.

MR. ROSE: There are a couple of things.

One is, the Canada-Newfoundland Infrastructure Program has wound down. That program has been completed. The Municipal Rural Infrastructure Program, which is the replacement for the Canada-Newfoundland Infrastructure Program, is a smaller program and it is taking us longer to get that program ramped up and delivered.

MS MICHAEL: Smaller in terms of the amount of money coming in?

WITNESS: (Inaudible).

MS MICHAEL: Okay, thank you. That helps.

CHAIR: Are you done, Ms Michael?

MS MICHAEL: Yes, I am, thank you.

CHAIR: Any other members with questions?

I will go back to Mr. Ball and then we will go to you, Mr. Barrett.

MR. BALL: Just one quick question, I guess, on that same figure there. Out of a $212 million budget we were not expecting so many questions on 3.2.02.10. again.

I am just wondering how many projects would have been applied last year, and what would have been the total dollar figure?

MR. BYRNE: To answer that question, I could get the number for you. I do not know if I have it here, but it could very well be that the applications that we have in from the municipalities could certainly be in the hundreds. Each municipality sometimes has - not each, many municipalities - a five-year plan, and they have various projects and phases of projects and these types of things. I could get the number for you, but it certainly would be in the hundreds.

When we are trying to do our budget and we have a list that thick, halved by seventeen, with all the municipalities, all the projects, and trying to go down through them, we base it on the engineers' recommendations within the department, engineers from the municipalities, health, environmental, financial evaluation of the municipalities, what they can afford, what they cannot afford. On that, there is going to be something like - we had really budgeted over $105 million, I think, for this year for capital works. So, when you think about it, $105 million - and we still, with that amount of money, leave a lot of projects out there that do not get funded each year. I could probably get a number for you. I would not want to give it to you now, but I know it would be in the hundreds.

MR. BALL: Given the fact that all projects cannot be approved and are not approved, how do you put a priority on which ones you do approve?

MR. BYRNE: Again, as I mentioned, once we look at the projects, we look at what the engineers in our department recommend based on history. Some projects may have been approved for Phase I, and the continuation of that project; that is one factor. The engineers from the municipality, when we are dealing with a municipality, we see what they are recommending. We look at if there was sewerage running in a ditch versus in a community where it is not; that is a factor. Environmental reasons, health reasons, there is a combination of factors that we deal with. We talk to the municipalities to see what they would prefer. We have the different programs, we have the municipal capital works, as I said earlier. We have the Municipal Rural Infrastructure Fund, which is usually slower getting up and running; multi-year, with the cities and the bigger towns. There are many factors involved. It is not an easy task, let me tell you.

CHAIR: Okay, Mr. Barrett.

MR. BARRETT: I have sort of a general question.

We have $28,172,000 under the Federal-Provincial Infrastructure Program.

MR. BYRNE: Which page are we on?

MR. BARRETT: That is on page 246.

MR. BYRNE: Yes.

MR. BARRETT: Where is the regular capital works program that is provincial?

MR. BYRNE: Pardon? Where is what?

MR. BARRETT: Is that the only money we are spending on municipal infrastructure this year, what is federal-provincial cost-shared?

MR. BYRNE: No, on the page before that, on page 245, is municipal infrastructure.

MR. BARRETT: Yes.

MR. BYRNE: There is monies there.

MR. BARRETT: Appropriations provided for the payment of provincial contributions towards principal owing on municipal infrastructure projects relating to water and sewer projects.

MR. BYRNE: Road construction, pavement projects, recreation facilities and others.

MR. BARRETT: Yes, but reading that it sounds like we are paying for something that has already been done.

MR. BYRNE: No, not at all.

MR. BARRETT: Actually, the capital works program this year is $79 million?

MR. BYRNE: The overall capital works program this year, when you look at the different programs, which is the Municipal Rural Infrastructure Fund, CSIF, Municipal Capital Works Program and the multi-year, it totals $105 million. Out of that, I think the Province is putting in $50.4 million, the feds put in their portion out of the Municipal Rural Infrastructure Fund, and then the municipalities are responsible for the rest. This one here, under 3.2.01., Municipal Infrastructure, then you have one on the next page that you have been discussing here, which is the federal programs, it is a combination.

MR. BARRETT: We are actually spending $79,635,200 on municipal capital works?

MR. BYRNE: That is what has been budgeted. That is the cash flow. That is what has been budgeted, yes.

MR. BARRETT: Up from $46 million last year.

MR. BYRNE: Yes. That, again, has to do with, as I mentioned earlier when someone asked the question -

MR. BARRETT: So, it is actually $33 million more this year than it was last year?

MR. BYRNE: Yes. The thing on it, it has to do with the early approvals for capital works, as I mentioned earlier when Mr. Butler was asking about that - I think you specifically referred to that one - and to pay down the capital cost of construction. Instead of financing as in the long term we are doing it in the short term, paying for the projects as we go, we will say.

MR. BARRETT: Most of these would be on a 50-50 cost-sharing basis?

MR. BYRNE: These ones here, municipal infrastructure, not necessarily. It depends on the municipality. The cost-sharing ratio could be 50-50, 60-40, 70-30. It depends on - again, smaller towns, as we know, cannot afford 50-50. That is why we have the Municipal Rural Infrastructure Fund where they get 30 per cent off the top. It depends on the financial situation of the municipalities. We have a formula within the department that we look at, to look at the cost-sharing ratio for the municipalities, and we discuss that with them.

MR. BARRETT: I know when we were in government we cost-shared some projects with municipalities, particularly municipalities that are having difficulty, and some were 93-7. How many projects did you approve last year in the 90-10 range, and which communities got the funding?

MR. BYRNE: There were a couple, I think, but not very many, to be honest with you. What we have done since I have been there - when we first went there, in many municipalities their debt servicing ratio was like 40 per cent, 45 per cent, 50 per cent, the high 30's, and we try to keep the towns from going further in debt. I think there were only a couple that we approved for 90-10 last year. I don't even remember.

WITNESS: (Inaudible).

MR. BYRNE: Two?

MR. BARRETT: What two were they?

MR. BYRNE: I can't remember. I know there was one that was down on the Burin Peninsula - or was that the year before? It was Cottrell's Cove, where they had the water line -

MR. BARRETT: Cottrell's Cove is not a town council.

MR. BYRNE: It was a local service district. (Inaudible).

MR. BARRETT: Cottrell's Cove is not a town council; it is a local service district.

MR. BYRNE: That is right.

MR. BARRETT: Normally, you do not provide that type of funding to - that was after the by-election, was it? Okay, I understand it now.

What was the other one?

MR. BYRNE: What do you mean, you understand it now?

MR. BARRETT: That was promised during the by-election and it was delivered after the by-election. I understand why it was done now.

MR. BYRNE: I know one thing. What I remember about seeing it was in the local paper - that is what brought it to my attention - was a bottle of water and the water was brown.

MR. BARRETT: Yes.

MR. BYRNE: When I saw that, I said we should do this.

MR. BARRETT: There are lots of local service districts out there with brown water. I have them in North Harbour -

MR. BYRNE: I know that, but in the meantime -

MR. BARRETT: - but you don't provide that same funding.

MR. BYRNE: It may have been, but it was a commitment made and a commitment kept.

MR. BARRETT: Oh, yes, it was made during the by-election.

What was the other one, another by-election or what?

MR. BYRNE: We will find it out for you. We will get it for you. I don't know offhand but I can get it for you.

MR. BARRETT: You will get it for me. Okay.

I have some other questions that are not related to the Budget. They are more of a policy area.

The waste management, St. John's, the Greater Avalon Waste Management at Robin Hood Bay, I want to ask you a question, Minister. Do you feel comfortable that St. John's controls 51 per cent of the board of that agency and only has 38 per cent of the population?

MR. BYRNE: A good question - timely. I said this to a number of municipalities when we are talking about it Province-wide: If a municipality had a facility like that going in their district, would they not want to have control? Most of them would say to me, yes; but the question that you asked specifically, I have had discussions with the City of St. John's and we will have more discussions with the City of St. John's. Governance is an issue, there is no doubt about that. I am hoping we will get something that is worked out to the satisfaction of all the municipalities, that they will agree to. To be quite honest with you, I am hoping to have that done in the very near future.

Again, the municipalities will certainly have a say; they will have representation. It is a little bit early for me to make any comment more than that, but we know governance is a issue, we are dealing with it, and we will hopefully have it resolved in the not-too-distant future.

MR. BARRETT: From that I understand that you hopefully will negotiate that St. John's will not have 51 per cent control?

MR. BYRNE: What I am saying is that hopefully we will have something negotiated that all parties will agree to.

CHAIR: Just before we carry on with general policy questions like that, are there any other questions on line items? Because it is not particularly the jurisdiction of this Committee to consider general policy certainly. If the minister wants to stay and answer those questions then I certainly do not mind staying, but I would certainly like to make sure we finish line item questions.

MR. BARRETT: On a point of order, Mr. Chair, since when was it restricted in a Committee that you should not -

CHAIR: I am not restricting, Mr. Barrett. I want to make sure that we finish line items, because that is our mandate to consider Estimates. Then, if we want to get into stuff like that, I am more than willing to stay here.

MR. BARRETT: The mandate of the Committee is to consider the Estimates -

CHAIR: Exactly.

MR. BARRETT: - and the Estimates which evolves the policy of the department.

CHAIR: I would like to make sure that we finish the Estimates first, before we get into general policy.

MR. BARRETT: Okay, I am prepared to stop right now and if anybody else has any line-by-line -

CHAIR: I would like to make sure we finish that first.

MR. BARRETT: - because I do have a whole series of policy questions.

CHAIR: Are there any other line items?

MR. BUTLER: I don't know which line it would be.

CHAIR: Estimates questions, we will say.

MR. BUTLER: Yes, just a general question but I am wondering, with regard to regional government, is there any funding or any allocations made in the Budget or on any line item - I do not know where it might be - that would be related to the possibility of government looking at regional governments, or is there any request that funding has been put aside, that this would be looked at on behalf of municipalities?

MR. BYRNE: For regional governments for -

MR. BUTLER: Overall generally.

MR. BYRNE: I see, okay.

Just to let you know, as we speak, I think there is something like forty-seven municipalities with requests in to do either studies to look at sharing of services, towns coming together. We put $2 million in the Budget this year to address that study, as you know - like, say, Trinity Bay North, which was Port Union, Melrose and Catalina coming together - just to do that. Then, if the towns decide it makes sense for them to come together as one town or to share services, fire fighting, waste management, garbage collection or whatever, then we are going to be looking at that. There is $2 million in the Budget for that. I am sure the boys will look it up for you now.

The thing is, right now, as I see it, in some areas the people in the towns are head - some of the elected officials, along those lines, but we do have requests and there is money there for that. Once the towns decide to come together, if they do, then we try to look at their debt for them because you could have municipalities, some with a higher mill rate, others with a lower mill rate, to try to come up with a plan to bring them together. Some may go up, some may go down.

Again, I am not sure but that is the question you asked, I think.

MR. BUTLER: Yes.

So, there is funding available within the Budget for needs like that.

MR. BYRNE: Oh, yes.

MR. BUTLER: The other one - I will try to tie a bit of financial reasons to this one as well - I know you mentioned, you said you went as far as you could with regard to Robin Hood Bay, the City of St. John's and so on.

MR. BYRNE: No, I haven't gone as far as I can. I am working on that.

MR. BUTLER: That is what I am saying, but as far as what you can release to us.

MR. BYRNE: Oh, yes, I see.

MR. BUTLER: I know there was a lot of funding, I guess, went into looking at the Dog Hill location and so on.

MR. BYRNE: Yes.

MR. BUTLER: Are there any assessments or anything being done to further look at that in conjunction with what you are dealing with the City of St. Johns?

MR. BYRNE: With respect to the governance issue, aside from that, when we first came in here the previous Administration had a waste management strategy in place. As you know, there was no money allocated to the short term or the long term. It was a good plan overall, and we are following that pretty closely. There may be some tweaking it, changes, and that type of thing.

One of the first things we did when we formed the government, the Northen Peninsula regional waste management was the first regional authority appointed for waste management. The legislation had been on the books and was gone through the House but it was never signed off on by - what is the right word? - the Lieutenant Governor. It was never proclaimed. We did that and we put money into that area.

The issue with respect to Dog Hill, again, the City of St. John's approached us to look at natural containment. If Robin Hood Bay could be retrofitted to have natural containment, then would we consider keeping that there?

We said, well, fine, if you want to do due diligence, do the engineering work, have the geotechnical people in to prove to us that natural containment would be the same as lined landfills.

To remediate Robin Hood Bay would cost $30-odd million; to do Dog Hill would cost $40 million - that was the estimate to construct that - now you are looking at $70 million whereby Robin Hood Bay could be remediated, or retrofitted, or whatever word you want to use, for $30-something million. In the overall scheme of things it was going to save $40 million out of the waste management strategy, of the $200 million.

As I said, we have money in place now, $22 million, from the gas tax over the next four years. We have money in the Budget this year from the Province of $5 million to go towards it, and we are hoping to get money out of the MMSB to go towards it.

The thing is, you have to live in the real world, too, and if we can do the same thing and have the same situation and meet the same environmental standards by retrofitting Robin Hood Bay and saving $40 million, why wouldn't you do that? The big thing is, by doing that you are saving money for the municipalities and the homeowner on the end with respect to the tippage fees, so you are keeping the tippage fees down. When the city or municipality dumps at Robin Hood Bay or any landfill site, there is so much per ton to dump there.

MR. BUTLER: Minister, I will just elaborate a little on that. I think that is the concern that a lot of the municipalities out around have, what they are paying now by having to travel that distance.

MR. BYRNE: Yes.

MR. BUTLER: Maybe it will be only a few short years - and I know government will save the $40 million, but it is gone back on the people out there more.

MR. BYRNE: The thing is, though, if you went and did what they are talking about doing, the tippage fees in the immediate future, when they start, they would be up higher then they would be if you go with Robin Hood Bay.

The other point is cost neutrality. What we are working on now is, if a municipality is over 100 kilometres, once you go beyond that it will be subsidized, so we are trying to keep all the costs as close....

The other point is that there are ways - and I know there is a concern out there that some of the municipalities have, that the big city might put the pressure on them and charge them more than they are going to charge their own; but, anything that we put in place, there will be nobody paying any more for tippage than someone else, so that is not going to be a factor.

MR. BUTLER: Mr. Chairman, my last question is - and I know the minister referenced this in some of the figures that you were responding to my colleagues. I know you referenced - I will use the first phase and the second phase of the announcement for the municipality and infrastructure and what have you. Phase II, when will that be announced? That is not done yet, is it?

MR. BYRNE: I am not following you. Phase II of what?

MR. BUTLER: The announcements that were made this year, capital works and that.

MR. BYRNE: Pardon?

MR. BUTLER: I remember I met with the officials with some of the municipalities in my area and they said your request is in. Do you know what I am saying? You are probably not going to be recognizing Phase I, but Phase II you will be considered for. That is what I am wondering.

MR. BYRNE: Okay.

We are in the process now of approving projects. We have had meetings with various MHAs, and some have been announced. There are others being announced. The problem that we have with some of them, to be honest with you, is that under municipal capital works, if it is approved under that, it is completely provincial and municipal. We can announce it whenever we want, as soon as we have the money approved, done. Under the Municipal Rural Infrastructure Fund and CSIF we cannot announce it until the feds decide that they are going to be involved and they approve it.

For example, in my own district, the Torbay Bypass, under CSIF, we have had money in that for two years and we are still waiting for the feds to announce it and we cannot.

MR. BUTLER: That is all I have, Mr. Chair.

CHAIR: Are there any other questions?

Again, the object of the Chair is not to restrict but the questions should somehow be related to the expenditures of government or the Estimates and somehow - Mr. Barrett.

MR. BARRETT: Yes, thank you, Mr. Chair.

A question for the minister.

Avondale, the town council there has been shut down for six weeks and the clerk has been suspended. What is on the go in Avondale? Are you going to appoint an administrator or -

MR. BYRNE: Well, with respect to Avondale, there are a couple of towns now that are having problems that way, and Avondale is one. Six councillors resigned and we have one councillor left, who is the deputy mayor. We did have a meeting with him last week, because we wanted everybody to have their say, as we did in Port au Choix. At the meeting, we stopped the meeting and basically said, if you want to have legal council it is up to you to have legal council - because he mentioned it, and we notified him of that officially.

We have a meeting scheduled for next week, next Monday, to have further discussions with him. Once we hear from the deputy mayor, then the decision will be made what we should do.

We have a number of options. We can appoint an administrator if we believe that is required. We can have by-elections. Right now, we are just still at the hearing process, I suppose; we are gathering information at this point in time.

The town is not being administered now financially, or with respect to the capital works and these types of things, so it is something that we are on top of and we need to address as quickly as we possibly can. That is why we spoke to them last week. We had to give them due course, I suppose, or time to address the concerns that he might want to address.

That is where we are on Avondale.

MR. BARRETT: Okay.

Another issue, the firefighters in Newfoundland and Labrador are concerned over the lack of adequate life insurance.

MR. BYRNE: So am I.

MR. BARRETT: What?

MR. BYRNE: So am I.

MR. BARRETT: So, are you planning to do anything about it?

MR. BYRNE: I have had a meeting recently; the Fire Chiefs and Firefighters recently made a presentation to the SPC of government, the Social Policy Committee, and they had a number of concerns which we have. We work well with Fire Chiefs and Firefighters. I asked them to give me a list of their priorities. They had a number of asks. Insurance is well up there, plus there are some other issues. I am working with them and we will hopefully get it resolved in the not-too-distant future.

CHAIR: Again, the Chair requests that the questions - I understand these are all interesting, but -

MR. BYRNE: It is not a problem with me.

CHAIR: If it is not a problem with the minister, just in fairness to the Committee members and so on, I would request that they be somehow tied to government expenditures.

MR. BARRETT: They are tied to government. Every question I have asked is tied to government expenditures.

MR. BYRNE: Mr. Chair, that could be because -

CHAIR: Thank you, okay, as long as we are all happy.

MR. BYRNE: Just to clarify -

MR. BARRETT: Unless somebody else is donating it, but every question I am asking here now is tied to government.

MR. BYRNE: With respect to the cost involved, some of these, the insurance for the Fire Chiefs and Firefighters, we pay the premium on that.

CHAIR: As long as we are all happy.

MR. BYRNE: They have $100,000 coverage at this point in time, and that has been in place for a number of years. What $100,000 bought ten or fifteen years ago does not have the same buying power today.

CHAIR: I understand, Minister.

MR. BYRNE: Okay.

MR. BUTLER: Mr. Chair, my understanding is that the other Committees can ask probing questions and there has been no hesitation -

CHAIR: Again, I am just trying to be fair, Mr. Butler, to all members. I know that there are some who will say to me that has no place in the Estimates Committee. As long as we are all content to sit here and do it, I do not mind, but I just want to make sure that all members are acquiescing to what we are doing.

Mr. Barrett.

MR. BARRETT: Mr. Chair, I am just following the rules that traditionally have been done in this House of Assembly in terms of Committees.

MR. BYRNE: Just to comment on that -

MR. BARRETT: I have been on that side -

MR. BYRNE: Yes, I know.

MR. BARRETT: - answering the questions as a minister, and I have been on this side asking questions as a government member and an Opposition member, and I have never heard the likes of being restricted to the kind of questions you could ask.

MR. BYRNE: I think all the Chair is trying to do is try to address the line items. I have no problem whatsoever with the questions on policy - not a problem.

CHAIR: It does not necessarily have to be a line item, but somehow tied to how government is using its money and what we are doing with our money. (Inaudible).

MR. BARRETT: Well, the reason the minister is here - and every question I asked this morning of this minister concerns expenditures of the Department of Municipal Affairs. Now, if I was going to ask him what he was going to do with the Outer Ring Road, I could see you putting me out of order, or the Pitts Memorial Drive, or the bad state of the highway out there, I could see you putting me out of order.

CHAIR: Mr. Barrett, how the waste management system will be governed is not particularly a matter for this Committee to determine.

MR. BARRETT: Oh, yes. The funding for the waste - where is it coming from? Municipal Affairs, isn't it?

CHAIR: Valid questions.

MR. BYRNE: Anyway, let's not get caught up in this. If you have a question, ask away.

MR. BARRETT: Okay.

I have a couple of questions about the Daniel's Harbour landslide.

MR. BYRNE: The Daniel's Harbour landslide?

MR. BARRETT: Yes.

MR. BYRNE: Okay.

MR. BARRETT: This problem was identified last year in terms of, there was a serious problem there. Was there a recommendation that the armour stone be put at the base of the slide last year, and why didn't the department do it?

MR. BYRNE: With respect to Daniel's Harbour, last October - I am not sure of the date, mid-October some time - there was a landslide there. Again, the amount of damage there - when we were looking at this it was under the Disaster Financial Assistance Arrangements - it did not qualify. There was no property damage under that program. There are certain criteria that have to be met. There was no actual property damage, according to the feds.

There was work done up there. We spent $137,000 on geotechnical engineers up there which, at the request of the town, we paid for. They had sensors on site, drilled a number of holes down 100 feet and there was no activity at that time, so we were going on the advice of the geotechnical people. There was a home there. It was still, at that point in time, a fair distance from the bank or the landslide, so, at the request of the MHA and the mayor, I had scheduled a meeting to go up there in April, on a Monday. It just so happened that on the Sunday before I got there they had another landslide. I have a bit of a background with respect to working with engineers and these types of things, so I said in the media at that point in time that this is not something that might happen; it is going to happen.

By the way, I was up there again this past Saturday, had a meeting with the mayor and council, met with the family involved and told them what we were going to do. The federal government has yet to come on side. They are saying that this is not attributed to one major disaster or incident such as a tornado or a flood or an earthquake, or these type of things, so what we are doing we are doing on the provincial tab at this point in time. Hopefully, we will convince the feds to get on side, because it is going to cost millions of dollars to reroute the road. We have a temporary road in there now.

The homeowners, their homes will be replaced, or an agreement made with them for replacement value, as we did in Stephenville. I told them the logistical procedures that we have to go through with respect to appraisers. The appraisers will be in there this week. They have to do certain work, report back to us, and we will be dealing with it.

With respect to the question you asked, why there was nothing done last fall, it is because there was no activity at that point in time other than the initial one. There were sensors on site, we had done the study and that was it.

MR. BARRETT: Was there a recommendation in an engineer's report that there would be armour stone put at the base of this?

MR. BYRNE: No, not that I can recall.

One of the questions that I had asked when we met with them, with the town council there in April, and we had the geotechnical people on site, we had engineers on site, we had transportation, municipal affairs, the council, I said: Could we have relocated those homes? Could we have put a crane in there and lifted those homes off the site?

The answer to me - because that was the thing that was being thrown out there, I think, that we could do - the advice at that time was, no, we could not have done it because if we did, in reality, it would cause more pressure there and we could have caused more landslides and it probably could have done more damage.

I think at the time we did certainly what was within our requirements to do or should do at that point in time. Since then, of course, you know what has happened now and we are taking the necessary steps to address the concerns.

MR. BARRETT: You are saying that if the houses were moved it would aggravate the landslide?

MR. BYRNE: That is what I was told.

MR. BARRETT: The point is, if it was a landslide and there was nothing there, it did not really matter, did it?

MR. BYRNE: Pardon?

MR. BARRETT: If you move the houses - the concern, I guess, was people in houses there.

MR. BYRNE: The concern was, what I was told, if they put heavy equipment in on the site to relocate those houses, the person operating the heavy equipment could have gone over the bank.

MR. BARRETT: Okay, I can see that.

MR. BYRNE: It could cause more problems.

MR. BARRETT: Okay, I could see that.

Are you willing to publicly release any reports or engineering studies done on Daniel's Harbour?

MR. BYRNE: I was never asked. I don't see why there would be any concern not to.

MR. BARRETT: So you are willing to release the report.

MR. BYRNE: It was more of an engineering, technical thing with respect to the drill holes, the movements, and all of these types of things, and they are still trying to figure out what the cause was. I have my own ideas, but I am no expert in the field.

MR. BARRETT: The engineers must have recommended something to do, right?

MR. BYRNE: They recommended we put in a zone, and that it is. As a matter of fact, we are still trying to figure out what we should be doing with respect to the location of the road. Again, could this have been prevented? You would have to see it. I do not know. It would take some armour stone to do, I would say.

MR. BARRETT: Armour stone might have been cheaper than replacing the road, probably, and the houses, right?

MR. BYRNE: It may not have done it. You saw it on television; you had to be up there and look at it. You had eight or ten feet of clay and rock and these types of things. Other than that, it was just pure, pretty well, sand. Then you have the bogland from the mountains out to this site, and all the pressure of what it happening; the pressure is building up on top of it.

In January and February when they had the machines down in the ground, the sensors, there was no activity. Then, all of a sudden, boom!

MR. BARRETT: That is it for me, Mr. Chair.

I have a lot more questions but it is my understanding that the House will be open until July so there will an opportunity to ask more questions.

CHAIR: I look forward to that.

Mr. Ball?

MR. BALL: Just one quick question to clarify something.

A comment was made a few minutes ago under the Waste Management Strategy, that the transportation costs up to 100 kilometres would be -

MR. BYRNE: No.

MR. BALL: I thought it was 60 kilometres.

MR. BYRNE: No, 60 miles really.

What happens with the plan with respect to cost neutrality is, the municipality or the regional authority, whoever would be involved, would be responsible to have the garbage transported 100 kilometres, 60 miles. Once it goes beyond that, if it is five miles, ten, twenty, thirty, forty, fifty, whatever, then it would be subsidized.

MR. BALL: I want to clarify that because coming out of the West Coast I think there is some miscommunication, because I think most communities out there feel that it is 60 kilometres, not 60 miles.

MR. BYRNE: I don't know where they got that, because when I met with the Humber Joint Council I told them 100 kilometres, which is 60 miles. That is where they - a one hour drive, right?.

MR. BALL: Yes.

CHAIR: Are there any further questions?

If not, I will ask the Clerk to call the subheads inclusively.

CLERK: Subhead 1.1.01 to 4.1.05 inclusive.

CHAIR: Shall subheads 1.1.01 to 4.1.05 carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

On motion, subheads 1.1.01 through 4.1.05 carried.

CHAIR: Subheads 1.1.01 to 4.1.05, shall the total carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Shall I report the Estimates of the Department of Municipal Affairs carried without amendment?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

On motion, Department of Municipal Affairs, total heads, carried.

CHAIR: Thank you very much.

I thank the Committee for their preparation for this morning's session, and the minister and his staff for their forthright answers.

Thank you all.

Our next meeting will be Wednesday night at 7:00 o'clock. for the Department of Health and Community Services.

MR. BYRNE: I would like to thank the Committee for their questions.

Feel free, any time, to pick up the phone. If you have any concerns or questions concerning the department, give me a call.

Thank you.

MR. FRENCH: Excuse me, Mr. Chair.

That meeting - when did you say? I thought it was Wednesday morning.

CHAIR: No, the one that is changed, HRLE is changed to the morning. Health and Community Services is still Wednesday night.

On motion, Committee adjourned.