Fisheries Committee on May 13th, 2008

[The Chair, Conservative, Fabian Manning]

I call the meeting to order.

Welcome to everybody here, and thank you for coming out this morning. We are the Standing Committee on Fisheries and Oceans, and we're in the process of conducting a study into the small craft harbours portion of the Department of Fisheries and Oceans.

We've had the opportunity to travel to the east coast of Canada. We are travelling to the west coast in the latter part of this month. Today we have the opportunity to be in Belleville. Our purpose is to try to put forward some suggestions to improve the delivery of the program and enhance its funding.

We have heard from stakeholders throughout the country and from people within the department. They've had an opportunity to look at and hear about a little different aspect of what we've been used to thus far.

Our committee is made up of all parties of the House of Commons. There's the Conservative Party, the Liberal Party, the Bloc, and we bring along the NDP just for moral support. He's down there in the corner. As long as you don't play soccer any more, you have one less risk to worry about.

So we're delighted to be here today. Before we begin the formal part of our meeting, I'm going to ask Mr. Daryl Kramp, the MP for the area, to give a little welcome. Then I'll come back and we'll begin our meeting.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you, Chair, Parliamentary Secretary Kamp, all the members of Parliament here, and the clerk and all the staff who work hard to bring about something like this--translation, etc.

Welcome to Prince Edward--Hastings. This is an opportunity to further the study on the divestiture of the small craft harbours. We're here in Belleville and the county because we have a number of sites, all in various stages of completion and/or divestiture. I believe an examination of these sites and the various problems and opportunities that have been presented by them will prove valuable in the assessment of this committee in future deliberations as to how we should continue the divestiture program, discuss issues of funding, etc.

Welcome to Prince Edward County to people here for the first time--with the exception of Scott Simms. Welcome back, Scott, after attending Loyalist. If you're from this region, it is affectionately known as the county here. If you call it anything other than that, they know you're not from here. What you really have here are miles and miles of beautiful beach, a provincial park, agriculture, quaint shopping, some world-class wineries, a strong farming base, and a really active arts and culture community.

We have our representatives from Belleville here today, and of course that's where we came in on the train today. Belleville is the industrial and commercial epicentre of our riding. Everything flows from that: our governance at the county and municipal levels. We're very well represented here today.

Of course, if you happen to be like most Canadians, you are a hockey fan. You'll be paying attention to the Memorial Cup, and our Belleville Bulls will be one of the teams representing Ontario. We're very proud of that, so there's always a “Go Bulls Go” chant when that comes around.

If you continue north in our riding, through centre and north Hastings, there are hundreds of lakes and rivers and a very diverse but rural population. I certainly don't want to take time away from the meeting, because there are some serious issues to discuss, but one of the things we're absolutely known for is our quality of life. I think you can see it. It's an idyllic situation with a great blend of everything. And really, the predominant feature here is the friendliness of the people. I know that's what I grew up with, and it's what drew me back here.

I'll just finish with a saying from Helen Steiner-Rice, that strangers are friends we have not met. So I can assure you that in this area no one is ever a stranger.

Enjoy the hearing today. I look forward to some information coming out that will be helpful for both our communities and the federal government in its progress.

[The Chair, Conservative, Fabian Manning]

Thank you, Mr. Kramp.

Instead of me introducing our guests, I'm going to ask our guests to do it.

Basically, our set-up is that after introductions we allow an opportunity for opening statements from your group. Then we'll open the floor for questions from around the table.

First of all, I'll let you introduce yourselves, for the record.

[Neil Ellis, Mayor, City of Belleville]

I am Mayor Neil Ellis, from Belleville.

[Steve Hyndman, Chief Administrative Officer, City of Belleville]

I'm Steve Hyndman, and I'm the CAO for the City of Belleville.

[Marjorie Buck, Director of Recreation and Community Services, City of Belleville]

I'm Marjorie Buck, director, recreation and community services, City of Belleville.

[Rick Kester, Director, Engineering and Public Works, City of Belleville]

I'm Rick Kester, director of engineering and public works, City of Belleville.

[The Chair, Conservative, Fabian Manning]

Thank you very much.

The mayor will make some opening remarks for us.

[Neil Ellis]

I'll make this quick.

I'd like to thank Daryl and everybody for putting this together on such short notice. It's just great. It shows both governments working together and having input. It's fantastic that we could come here today and speak on probably one of the biggest projects in our city's history. It's great that this project is going to go forth. There were a few obstacles, but it seems that with Daryl and our staff, we've been able to get through them.

Today we'll have a tour in Belleville at around 3:20. We'll go through the project and see firsthand what's going to happen.

With that, I'd like to turn the floor over to our CAO, Steve Hyndman.

[Steve Hyndman]

Thank you very much, Mayor Ellis.

I'm going to speak a little about the divestiture program in general, in terms of the experience from Belleville's perspective. Then Marjorie Buck is going to speak specifically about how the program worked in Belleville.

The first thing I need to say is that I believe the divestiture program the federal government is instituting is very good policy. I think it's the direction the federal government needs to move in.

Harbours and waterfronts, in most instances, are an integral part of the character of the communities in which they are located. Therefore, it's extremely important, in my view, that there be local control and local say in how those waterfronts and harbours are used. That is what this program enables local municipalities to do. From Belleville's perspective, from my perspective, I believe the government is instituting a very solid policy in pursing this particular approach.

For some communities, and this may not be quite the case in Belleville, the harbour itself really is the most important economic development platform they have. It is an extremely important one for Belleville. It's not the only one, as Daryl mentioned. We have a very strong industrial base in this city. But the harbour has a tremendously important impact on the character of our community. Even though we have a strong industrial base, the harbour in Belleville is what I believe makes the city what it is. That's how important the harbour is to our community. I think that's the case for pretty much any community across this country. From that perspective, I believe the work you're doing is extremely important.

I'm going to ask Marjorie Buck to speak specifically about the program in Belleville and about some of the issues and problems and things we uncovered through the exercise.

Go ahead, Marjorie.

[Marjorie Buck]

Thank you, Steve.

It's my pleasure to speak this morning about the waterfront of the city of Belleville. I'm going to speak from two perspectives: first as a resident of the area—I did live in the county for a good number of years, Daryl—as well as a city employee.

I want to first stress the fact that the Belleville waterfront is unique, inasmuch as when you look at our area—and I'm very proud of the county—there's one aspect of the county at the north end: its limited access for the public. There are very few areas where we can get to the waterfront without going over private property.

The City of Belleville had the foresight many years ago to start looking at the waterfront and start working with our federal government and entering into an agreement. In 1984, we took over the management of what we refer to as the Meyers Pier, which is our number one harbour.

We have two that are in your jurisdiction. The second one is Victoria Harbour, and we operated it with volunteers many years ago. In 1994, the City of Belleville created an agreement with the federal government, with a lease for the waterlot, and we took over the management of it.

Since 1984, the City of Belleville, in conjunction with the small craft harbours program, has invested a lot of money into our waterfront. We had non-capital funding from the federal government and we had capital funding. This has allowed the City of Belleville to develop a waterfront that is unique, and we refer to it as the jewel of our community.

In the region, we have many municipalities that have waterfront, but again, limited access. We have Meyers Pier. It allows transients to come to our region and enjoy what we have in the city of Belleville. It also permits our seasonal boaters, our local people, to enjoy our waterways. We are fortunate that we got into this agreement.

When the federal government announced the divestiture program, we had great concerns initially. We were afraid we would lose access to our waterfront and that the city would not have the opportunity, because the dollars required to operate it would not come forth.

Fortunately, our federal government came forward, and we entered into a number of agreements over the years to allow us to get involved with the divestiture program and take a look at where we can go in the future. We did share-costing programs to do a master plan, and we did some environmental assessments. Then finally, with the results of those studies, we entered into an agreement in 2003-04 for a partnership whereby, through the small craft harbours program and Treasury Board and a number of other departments within the federal government and through the city, we could look at cleaning up the Meyers Pier and waterfront area and developing it for the city to take it over.

That was a $10 million commitment from the federal government and a $5 million commitment from the City of Belleville. At the City of Belleville, and in particular in my department, a $5 million expenditure, let alone the money you're providing, is a lot of money for city taxpayers. We have the commitment, and we made this commitment with the view that with the combination of $15 million we could have an outstanding waterfront and be able to operate it safely for everyone involved.

In the years that have passed since we got into this partnership, a number of things have changed in the province. Our Ministry of Environment regulations have changed, and we need to adhere to those as a municipality. The federal government, of course, works with the provincial government and tries to adhere to them, but we have to adhere to them.

Unfortunately, in our original projection we were looking at $10 million and $5 million as a reasonable amount to get to where the city could afford to operate it. Now, to date, as of this past week, we have spent $3,060,000 on studies, to get the waterfront area studied and get our certificates of approval from the Ministry of the Environment and conditions of use for our property. So there have been a lot of extra studies, and a lot of extra money has had to be spent.

Believe me, I do appreciate the $10 million, but we are now looking at possibly considering that there are some additional liabilities that are going to come along. In our tour this afternoon I will gladly show the committee members where we're going to go and how we're going to proceed.

The $15 million—I'm pleased to say we put our tender out, and the tender is within budget, so we're ready to enter into that.

As it relates to the city operation, in our 2008 operating budget for the City of Belleville, we're forecasting $49,000 of tax subsidy to operate the waterfront area. When we as a city take it over, there are a number of issues we need to address in regard to costing, and that will be the costing as it relates to the need to have a pre-treatment plant for the water, the underground water, because of the contamination at Meyers Pier, and also the need for maintenance of the facilities, because the infrastructure that presently is the federal government's will be ours and we'll have some liabilities.

We, as a city, want to take this on, and we want to have that waterfront a reality for us. However, I also have to look at what the impact is on our taxpayers for that operation. Our council is committed to it. We are here now to see whether the committee would look at the future in regard to the small craft harbours operation in their budget. Would there be consideration for the small craft harbours program to work with the City of Belleville, as it relates to a fund that would allow us to slowly go into the full cost of operation of that harbour, whether it's a reserve fund or some kind of funding, through your annual budget, which would be allocated out for these types of harbours?

I know you still have a number of harbours left on the sites. I believe there are approximately 120 that are still federally owned and are involved with this divestiture. But there are realities in regard to the costing for any taxpayer, whether they're paying taxes to the federal, provincial, or municipal government. We, as a city, want to proceed and are committed to proceed. We would ask this committee to recommend that the funding for such harbours that are being divested to the various municipalities be given consideration for operating costs and potential additional unexpected capital costs.

[The Chair, Conservative, Fabian Manning]

Thank you, Ms. Buck.

Is there another presentation?

[Steve Hyndman]

I believe that is the end of our presentations.

I believe, Mayor Ellis, you were going to speak on behalf of Angela Genereaux.

[Neil Ellis]

It is unfortunate that Angela had another appointment. She is our partner with the Chamber of Commerce. Basically, as a city we partner with the Belleville Chamber of Commerce on tourism, to promote the area.

The chamber is behind the project presented, as we all say, but the point is to make Belleville more than only a stop on the 401 for a Timmy's and a gas break. I think with this waterfront property, if we can get the means to make it a tourist destination.... The problem we have is tax dollars. When we look at taking it back and cleaning it up, we're still with a piece of land that really has no infrastructure on it, in the sense of buildings, skating rinks, etc. Our long-term master plan, which we have drawn up, is a plan that is going to cost, probably, upwards of $20 million to $30 million once we complete the dream.

Unfortunately, in Belleville the tax base and our income is only on the backs of user fees and property taxes. So as Director Buck stated, in order to keep parkland going, there's a cost. When $700,000 is basically 1% of the tax base, or a 1% increase in taxes, we have to look at partnerships and whether the partnership can continue with the upper tier governments, in a sense, to get the project to make it a tourist destination.

That's basically where the chamber is at. We can promote Belleville and we can get people to stop, but it's a matter of keeping them here and making this a destination and an economic driver in the tourism business.

When you look at Ontario as a whole, we have been very fortunate regarding employment and having a diverse economy with industry and a shopping destination. Our tourism has probably lacked in the sense that we do not have any big tourist attractions. We've been a kind of gateway to the winery in the county and a stopover.

With the harbour project, we see concerts being booked on the waterfront and hotels being booked up to come and see Belleville. I think if we can get people here and get them to stop, they'll stay, but we need to put more money in the waterfront.

I think a lot of the public feels that the cleanup is going to build buildings, that it will have a skating rink and is going to be complete, but basically the cleanup will only get us to the point where the Bay of Quinte waterway will be a better place to live, the contaminants that are leaching into the bay will stop, and it will be the start of the jewel, as Director Buck said.

I think it is important for us to keep the partnerships with both governments, and hopefully more infrastructure money will come down the pike in order to build buildings and make it a draw, not only for the health of the community and the residents of Belleville to enjoy the waterfront, but for others to stop and keep the dollars in our city.

[The Chair, Conservative, Fabian Manning]

Thank you, Mayor, and thank you all for your presentations.

Mr. Byrne is going to start our questions.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you very much, Mr. Chair.

It is wonderful to be here. I certainly enjoyed the drive in, but I am looking forward to a tour of the harbour facilities this afternoon.

I want to thank you for your hospitality, but we're engaged in a very important study, so I want to get right to the heart of the matter.

You mentioned that you had entered into a divestiture agreement. The agreement, I understand, and correct me if I'm wrong, was contingent on the expenditure of $15 million over a period of I am not sure how long--perhaps you would make notes and you can answer that. I will kind of clew up where I'm going and then we'll get into a back and forth. So it was an expenditure of $15 million over a certain period of time, and then you would assume ownership of the real property asset, the water lot and all upland developments related to the pier.

Is that a binding contractual agreement, or is it a sort of general understanding without any legal context attached to it?

[Steve Hyndman]

Perhaps I will start. We initially entered into joint project agreements to do some of the preliminary work, but it did eventually lead to a letter of understanding that was signed by both the small craft harbours program and ourselves that set out the game plan, if you want to look at it that way. It was not a binding agreement, but it was sort of an understanding of how we would go about studying this particular exercise.

It would lead to a point in the process whereby both parties would eventually have to commit, and we have reached that point where city council has committed. In a sense, we have bound ourselves to move ahead with this because we have committed to fund the major cleanup works that are now under way.

In a sense, council could have chosen to not award the contract, if you will, and decide not to go ahead with the program and we could quite rightly have parted ways at that point in time. But it was only about two weeks ago when that decision was made to move ahead, so we are now committed.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

For the $15 million, what time period are we talking about? I'm just trying to get the context of how this evolved as it did.

[Marjorie Buck]

With regard to our commitment of the $10 million from the federal government and $5 million from the City of Belleville, it was originally planned that this project would commence and be completed by March 31, 2007.

Unfortunately, due to some provincial Ministry of the Environment regulations, it was delayed, and we asked for an extension to March 2008. Now we're committed to having the final funding completed by March 2009.

This is a partnership through which small craft harbours staff, in conjunction with Treasury Board, were able to secure the funds.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

So of that envelope you've probably spent roughly $3.5 million. Have the small craft harbours people in DFO engaged in spending their $10 million share?

[Marjorie Buck]

Yes. Of the $3,060,000 spent to date, the small craft harbours program has committed to upfront money with regard to it, so the combination would be $15 million.

The funding we've received from the small craft harbours program to date is in the neighbourhood of $2.9 million.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

So the three and a half million was not out of the tax base or the general revenues of the municipality. That was the combination on a 50-50 cost sharing. You've spent approximately one-fifth of what you envision the budget to be thus far.

[Marjorie Buck]

That's right.

Just for clarification, if I may, $2,033,000 has been spent by the federal government and $965,024 by the City of Belleville.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

So you're not necessarily committed to taking on real property ownership yet. It depends on how it goes.

[Steve Hyndman]

I think we probably are at this point, and let me explain the reason why. The work to complete the cleanup is a $12.5 million contract with the city. We have hired the contractor to do the work, so now we're committed to honouring that contract.

And of course, in my view, the understanding we have with small craft harbours staff is because we've made that decision, we have in a sense committed ourselves to going ahead.

So our intention is, and council fully anticipates that at the end of this exercise we will assume ownership of the asset.