NLIS 30
March 21, 205
(Natural Resources)
Maximizing benefit of
natural resources through responsible management
Ed Byrne, Minister of Natural
Resources, says the department�s allocation in Budget 2005
demonstrates government�s pledge to maximize benefits for the people
of Newfoundland and Labrador through strategic investments in and
responsible management of the province�s natural resources.
"We are ensuring that we leverage the maximum benefit of our natural
resources for the long-term interest of the people of the province,"
said Minister Byrne. "This government�s approach is to encourage the
development of our renewable and non-renewable resources through
responsible management and well-thought-out planning."
Minister Byrne notes the following key Budget 2005 initiatives:
Agriculture Policy Framework
The government continues its commitment to strategically invest and
build capacity for sustained growth in the agriculture and agrifoods
sector with $10.1 million in federal-provincial funding under the
Agricultural Policy Framework agreement. This is the third year of a
five-year, $32.5 million agreement with programming in five
elements: business risk management, food safety and quality,
environment, science and innovation, and renewal. The program has
seen approvals for over 300 projects representing an investment of
close to $12 million to date.
Farmland Consolidation and Development
Government will invest an additional $3.5 million in the first year
of a new five-year program to support the long-term consolidation
and development of farmland throughout Newfoundland and Labrador.
Under a multi-year arrangement, government will enhance the land
consolidation program and provide assistance to farmers to aid land
development. This represents the largest single government
investment in farmland development in recent provincial history.
Silviculture
Government will provide $7.3 million to support silviculture
initiatives at various locations in the province. This will be used
to support the Wooddale Provincial Tree Nursery and the Goose Bay
regional nursery, the reforestation program, and research and
development activities undertaken in this sector. Government
considers silviculture to be an integral component in meeting its
mandate for natural resource management on a sustainable basis.
Silviculture funding enables the implementation of numerous projects
which create meaningful employment opportunities for many rural
communities throughout the province.
Resource Road Construction
Government will invest $3.5 million for the construction of forest
resource roads. It will allow the department to undertake several
high priority ecosystem management projects as set out in the
department�s Provincial Sustainable Management Strategy.
Specifically, this funding will allow the department to establish
resource roads in difficult to access and partition wood stands near
the communities of Roddickton, Main Brook, Point Leamington, Gambo,
Gander Bay South and Fox Island River. In addition, it will also
provide for resource road construction along the south coast of
Labrador near the communities of Port Hope Simpson, Charlottetown
and Cartwright.
Value-Added Wood Manufacturing Program
Government will provide $300,000 in funding for a new initiative
that will focus on supporting the manufacture of value-added wood
products. The Forestry Services Division will provide support to the
industry to pursue these new opportunities. This initiative is
expected to complement recent efforts by government and the lumber
industry which to date focused primarily on the value-adding of
hardwoods.
Mineral Incentive Program
Government will maintain $1.6 million in funding under the Mineral
Incentive Program in the upcoming year. The mineral sector continues
to make a significant contribution to economic growth and employment
in the province. This program enables continued private sector
investment in prospecting and exploration activities throughout
Newfoundland and Labrador.
Bull Arm Site Corporation
Increased oil and gas exploration activity triggers a need to
maintain critical marine fabrication infrastructure. The Bull Arm
Site Corporation will receive $1.1 million in order to
internationally promote the site and provide for the day-to-day
operations of the facility to maintain a shelf-ready state for
potential future fabrication needs in the offshore.
Canada-Newfoundland Offshore Petroleum Board
The Canada-Newfoundland Offshore Petroleum Board (C-NOPB) will see
its budget increase through a cost-shared enhancement of the board�s
capacity to carry out its mandated responsibility for worker safety,
resource management, benefits monitoring, environmental protection
and regulatory compliance. The provincial government will provide
$300,000 to position the C-NOPB to respond to growth in the
industry. For example, there are currently four offshore
installations � two production installations and two drilling
installations. In 2005 and 2006, this will double to eight
installations including an additional production installation with
White Rose and three additional drilling installations � South Whale
Basin, Orphan Basin and Laurentian Basin.
Positioning the Energy Sector
The province�s wealth is critically linked to energy resources. As
such, government will invest $900,000 to strategically position the
energy sector to maximize benefits for Newfoundlanders and
Labradorians. The successful conclusion to the Atlantic Accord
negotiation demonstrates the benefit of taking a long-range approach
to resource planning. In keeping with this theme, a comprehensive
Energy Plan will be developed. Furthermore, government will
undertake a full assessment of the possible acquisition of petroleum
interests by Newfoundland and Labrador Hydro. Within this
allocation, funding has also been identified to provide the
department with the resources required to prepare for and maximize
the province�s returns from future major energy resource
developments.
"This government continues a commitment to invest public funds
wisely in key natural resource development priorities," said
Minister Byrne. "The forecast is positive for employment and revenue
growth through these commitments announced today in agriculture,
forestry, mining, and energy."
Media contact: Carmel Turpin, Communications, (709) 729-5282,
685-4624
BACKGROUNDERS
Positioning the energy sector
The Blueprint outlined a number of
key energy policy positions, two of which were the need for an
Energy Plan and an intention to either restructure Newfoundland and
Labrador Hydro or create a new Energy Corporation. Furthermore,
government is fully intent on having the resources and
knowledge-base to ensure that benefits of any future energy
developments are maximized for the people of this province.
In Budget 2005, government has allocated $900,000 to assist
government in positioning the energy sector to provide for long-term
benefits for Newfoundland and Labrador.
A portion of this funding, $350,000, will be used to support the
development of a comprehensive Energy Plan. This will be a strategic
process and, when completed, will have the potential to have a
significant impact on the province�s economy, society and
environment. It will provide a roadmap of the major directions and
policies to guide government�s management of the energy sector so
that the returns to the people of this province from their energy
resources are maximized. A discussion paper is being drafted and
will be released during spring 2005. Following the release of the
discussion paper, the department will lead a consultation process
with energy stakeholders and general public throughout the province.
While primary responsibility for development of the Energy Plan
rests with the Department of Natural Resources, a team approach has
been undertaken to involve Newfoundland and Labrador Hydro (NLH) in
the process.
Secondly, government will spend $250,000 to undertake a strategic
assessment of the possible acquisition of petroleum interests by
Newfoundland and Labrador Hydro. This assessment will look at the
trends and experiences of governments participating in the petroleum
sector; the funding required; financial impacts and risks; and
structure and governance.
The remainder of the funding will be dedicated to ensuring the
province is prepared for potential discussions and/or negotiations
with companies proposing developments in the province�s oil and gas
sector. This potentially will include having access to expert advice
and completing various assessments on issues in the sector including
the various tax and fiscal issues, infrastructure capacity to
support developments, and in-province refining.
Land consolidation
and development
While there has been a traditional
agriculture industry in Newfoundland and Labrador, this province
remains at a very early stage of development in the agrifoods
industry in comparison to other provinces in Canada. This presents
tremendous opportunity for significant growth in this industry.
Newfoundland and Labrador producers are challenged by access to
capital, climate conditions and availability of a sufficient acreage
of farm land. Currently, a very small percentage of the agriculture
goods consumed in this province is produced locally. For example,
only three per cent of beef and 15 per cent of root crops consumed
by Newfoundlanders and Labradorians are produced here. The expansion
and development of the land base provides the farming sector with
the means to increase local production and create opportunities to
increase the consumption of locally-grown goods.
Government will invest $3.5 million in the first year of a new
five-year program to support the long-term consolidation and
development of farmland throughout Newfoundland and Labrador. Under
a multi-year arrangement, government will enhance the land
consolidation program and provide assistance to farmers to aid land
development. This represents the largest single increase in
government investment in farmland development in recent provincial
history.
In the St. John�s area, an agriculture development zone was first
created through legislation in the 1980s to protect farm land from
competing uses. Government acquired land that had not been used for
farming within the St. John�s agriculture development area and
leased the land back to agriculture producers.
This approach is particularly important for the dairy and root crop
sectors in this province. In the dairy sector, the cost of feed is a
much higher component of production than in any other Canadian
province. The provision of an additional 31 million litres
(annually) in industrial milk quota over the next 10 years provides
an opportunity to double the province�s total milk production. To
benefit from this allotment, there needs to be an additional 15,000
to 20,000 acres of land into forage production. An additional 10,000
acres of land is required to achieve self-sufficiency in root crop
production. Access to competitively priced land is a critical
element in the growth strategy of both sectors.
Farming activity in the province accounts for $500 million in
primary and secondary production. Across the country, Newfoundland
and Labrador had the third highest growth rate in farm cash receipts
in 2003. The sector directly employs 4,000 people.
Land consolidation and land development investments by government
are one-time investments. The return in the form of provincial
revenues and employment continues for many years after the
investment is made.
Value-added wood
manufacturing and secondary processing
Government will provide $300,000 in
Budget 2005 for the first year of a four-year program to fund a new
initiative that supports the manufacture of value-added softwood and
hardwood products and strengthens the commercialization of
previously underutilized species. Of the allocation, $240,000 is
earmarked for new product development, marketing support and
industry coordination to stimulate softwood value-added processing.
As well, $60,000 is targeted to continue efforts underway in
hardwood value-added processing.
Government is firmly committed to maximizing the economic value of
our forest resources. The department will use this program to
develop new opportunities to further softwood production use in �I�
joists, finger-jointed products, solid wood siding, flooring,
fencing and pallet stock. In addition, this initiative will help to
continue our success in hardwood value-added product lines such as
kitchen cabinets, acoustic guitars, floorings, furniture, and wood
trim products.
The third element in this expanded valued-added strategy lies in the
commercial development of underutilized species. The consumption of
two underutilized species, larch and aspen, has risen over the past
five years. For example, larch is now used in flooring applications
and aspen is a source of pulpwood. Government�s plan is to direct as
much as possible of the available resource of these species into
value-added industries.
This program investment in the forestry sector leads to resource
diversification and increased economic value derived from our
existing commercial resource mix.
2005 03 21
3:35 p.m.
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