MR. CHAIRMAN: I think we will bring this Committee on Economic Development meeting to order. As committee members, perhaps we could go around the table and introduce ourselves and then we will introduce the presenters and guests this morning.
[The committee members introduced themselves.]
With us this morning, committee members - you may as well introduce yourselves, John and Allan.
MR. JOHN MACLELLAN: I am John MacLellan, Timber Manager for MacTara Limited.
MR. ALLAN REES: Allan Rees, Vice-President for MacTara Limited.
MR. CHAIRMAN: Welcome. What we will do - I guess with the approbation of the committee - is ask our guests to begin by making a presentation to the committee.
MR. MACLELLAN: Good morning, everyone. As I said, I am John MacLellan, Timber Manager at MacTara. We were invited to make a presentation to you ladies and gentlemen this morning. I will just give you a brief run-through lasting about six to eight minutes on MacTara and then I will sit down and will be quite happy to take your questions.
Who is MacTara? MacTara is the largest sawmill in Nova Scotia and the single largest mill site operating in the Atlantic Provinces. We directly employ 340, plus 210 indirectly through direct contract operations; that is contract harvesting, contracting in silviculture services, as well as transportation, road construction and gravelling. Mr. Hugh Erskine is the sole proprietor with over 50 years in the logging and lumber industry of Nova Scotia
Our products. Our products are one inch and two inch dimension lumber for the North American market. The lumber is sold in lengths from 2 feet to 16 feet long. Softwood and hardwood pulp are also produced for sale to other companies such as the hardboard plant in Chester - it used to be called ABT Canada Ltd. - Canexel, and the chipping facility in Sheet Harbour for Mitsubishi. We also produce softwood chips for both the Kimberly-Clark and Stora Enso mills as a by-product of our lumber manufacturing operations in Upper Musquodoboit. We also produce pelletized bark fuel; we are now in our third operating year for export to Europe, which leaves via the Halifax Grain Terminals.
Fibre consumed. We purchase both saw logs and cut to length, that is 10 foot, 12 foot, 14 foot and 16 foot lengths, as well as the tree length form. We buy and harvest stud logs in 8 foot lengths. The maximum diameter, which is on the small end of the log, the butt, next to the stump, is 18 inches; that is the maximum diameter that we can process at our facility in Upper Musquodoboit and the smallest is 3.5 inches, inside bark, on the small end of the stick. The maximum diameter of the stud log is 8 inches, which is a small wood, high recovery line and the smallest is again, 3.5 inches, inside bark, on the small end.
Production in the year 2000. Production in excess of 180 million board feet per year, approximately $1.2 million spent on reforestation and thinning in this year and approximately 60,000 tons of bark pellets produced and exported to our customer in Europe.
MacTara's commitment. We are now an ISO 9002 certified facility. MacTara also regulates both the harvesting and transportation of forest products. We have our own standards which we have enshrined in what we call our new ERA program, which stands for effective, responsible and accountable, which means if you harvest logs on contract for MacTara, or if you do a pre-commercial thinning treatment for MacTara, or if you transport forest products on the highway for MacTara, we have definite regulations that require how that product is loaded, how it is secured and what condition your equipment is in.
MacTara also supports community projects through scholarships, a community playground project this past summer in Upper Musquodoboit and a high-tech classroom at Musquodoboit Rural High School.
In summary, MacTara is the largest employer in central Nova Scotia with employees living in Cumberland, Colchester, Hants, Pictou Counties and HRM. We actually have some employees who live in Antigonish and Guysborough but these are the primary counties.
MacTara provides an important market for forest products in Nova Scotia, spending $48 million on wood acquisitions per year. MacTara is an active steward of the forest with both private and public stewardship programs now entering their fourth year. In part of the information we passed out, these are a couple of examples of a MacTara log and a summary from 1999. These are our Stewardship and Reforestation Programs for 1999. A new one is being updated, it wasn't ready at this time, for 2000. The front page gives you a breakdown by county and it also gives you a breakdown by program and what we spent the monies on. If you have questions we would be quite happy to answer them. Thank you.
MR. CHAIRMAN: For the benefit of our guests I will also mention, from Queens County, Mr. Kerry Morash, MLA has joined us this morning. Are there questions from committee members?
MR. JOHN MACDONELL: Mr. Chairman, good morning and welcome, gentlemen. Ordinarily I am not on this committee; I switched with a member from Cape Breton. So this falls as much in Natural Resources as it does in all the periphery in Economic Development, I think it is pretty hard to separate the two. I think from our talk some time ago, John, I got a fair indication of MacTara's commitment, as far as stewardship agreements go and so on. Presently, I am wondering about the downturn in the industry, how that is affecting MacTara? I know everybody is feeling a bit of a pinch but how is it impacting on you?
MR. MACLELLAN: It is having a very dramatic impact, as it is on the entire lumber industry in North America. As the mill general manager, maybe Allan would want to address that.
MR. REES: Yes, we are in the process now of putting together a reduction in our production hours and will be looking at a lay-off of employees, effective in the new year, basically to reduce the amount of product. There is an oversupply in the market; it is a continued oversupply. We have been in a steadily declining market for the last eight months. Economists tell us there is no reason to believe this should turn around in the next 18 months. It is a horrifying thought. We don't see any other solution for MacTara except at this point to downsize and reduce our production capacity.
MR. JOHN MACDONELL: Will this affect your pellet mill or is that one of the things that can kind of keep . . .
MR. REES: At this point it will not affect the pellet mill. We have a contract to supply 60,000 tons per annum and at the reduced level that we will be producing, we will produce adequate material to make the 60,000 tons.
MR. JOHN MACDONELL: I think probably some comments I made to you from our trip to Quebec and maybe more recently with John, the day we were out to Stanley, I know MacTara is in the process of negotiating their volume agreement again, I think it is up in 2001 for the Stanley area?
MR. MACLELLAN: It is up in 2001 and we have just had informal discussions, we haven't formally started that process yet, we will be in the new year.
MR. JOHN MACDONELL: But the province certainly seems keen. They are not showing any signs that they are not willing to sit down with you. I was just thinking 2001 is getting pretty close, so I would have thought . . .
MR. MACLELLAN: As you know there was an IRM process which had been ongoing for several years and that has certainly handicapped the ability of the staff at the Department of Natural Resources to really work through any more commitments on Crown lands until that process is finished. That has been the part that has been kind of driving the agenda, I guess.
MR. JOHN MACDONELL: I will ask one more question and then give up to other members. It has come to my attention, through other people in the forest sector in my constituency, it has been a real sticking point about MacTara going into Stanley. At the time I think there was a proposal put together by five local mills that wanted access to the timber there and felt that they were shut out. I was looking at the price structure in this agreement and for softwood logs it is $47.11 per 1,000 board feet. I did some enquiring as to whether or not that was a good price. What is referred to as the upset price when a tender goes out, at that time, was $60 per 1,000 board feet and MacTara got this for $47.
I am just wondering if - and neither one of you may have negotiated the agreement and I think if I was in the mill business I would be looking for the best price that I could possibly get but as an elected representative of a resource that is the peoples' resource, which is Crown land - anybody bidding on that Crown land or any Crown land at the time knew that there was no point bidding below $60 per 1,000 board feet and they said some was even going for $80 or $90 per 1,000 board feet at the time, that they feel pretty well hard done by due to the fact the higher rate, the $60 per 1,000, would mean they would have to go in and build roads too but MacTara got that volume lease in there with roads already provided. Do you gentlemen ever try to account for the difference other than saying we produce jobs?
MR. MACLELLAN: I would be quite happy to speak to that on several points and I will start at the top. The first part is that is not the price that we have been paying lately for those logs, the price fluctuates each year.
MR. JOHN MACDONELL: What are you paying now?
MR. MACLELLAN: It is around $63 per 1,000 board feet, the same price as every other licensee and it has been that way for years; the price is adjusted every year. The price would have gone down this past year but all the licensees - which most, if not all of us, are members of the Maritime Lumber Bureau - of both New Brunswick and Nova Scotia requested that each of the provincial governments not decrease the price of lumber on Crown stumpage.
Also to speak to the matter, the mills in question that you referred to - the party of five - had opportunity in previous years to access the timber in the Stanley block. However, the small 100-plus year old, crooked, small diameter black spruce is not what is called a traditional saw log. It is not 10 inches at the small end, it is not all 16 foot and 21 foot material for bridging and decking beams and what Mr. Erskine proposed was to convert wood which would otherwise go to a pulp mill, into lumber by sawing it down to 3.5 inches. He committed to do that when he was in the process of expanding the mill nine years ago. It was all the process leading into expanding the mill.
We installed a line by the OptiMill Company of British Columbia and it was the first one of its type of high-recovery, small-diameter log line. We had the first prototype and it was installed in Upper Musquodoboit. So Mr. Erskine had made a commitment and for two years prior to the installation of this line, Mr. Erskine harvested that wood, attempted to saw it and this gentleman here was in charge of the mill and they attempted to saw it and they did saw what they could out of it with the older equipment, on the way to installing the new equipment eight years ago and that he did.
Mr. Erskine saw an opportunity to get higher recovery from wood which was otherwise going into the pulp mills. As you know, 10 years ago in Nova Scotia pulpwood would sit at the side of the road for months and maybe years and maybe never be sold because the paper mill capacity in Nova Scotia was such that it did not need the volume of timber which was growing, maturing, and over-maturing in the forests of Nova Scotia. What Hugh Erskine did was see an opportunity, he took a risk, he made an agreement with the Crown which allowed him to make the investment, to go to the Canadian banks to borrow money on this new prototype machine because he and the people who sell his lumber, which is MacNutt Lumber out of Fredericton, New Brunswick, saw an opportunity to make value of two-by-threes and two-by-fours and one-by-threes and one-by-fours, which would otherwise go to a paper mill to make newsprint and that is what he did.
So, looking back, in hindsight, we can give him credit for seeing the opportunity and seizing the moment and taking the risks. The fact that it has been very successful, I guess it is very easy to look back and say, maybe this should have been here and this should have been there. But it is timing and it is risk, and he took both.
MR. JOHN MACDONELL: Okay, thanks John. What I would like to pose to you is that right now, and for the past while, putting a cord of wood into paper, there is a far greater return on that roll of paper coming out of the mill than there is in regard to lumber. The prices that we allow pulp mills to get wood for is bottom line for what the resource could produce in value added when that paper rolls out, and we have been doing that for years.
The other point is, I don't blame Mr. Erskine for seizing an opportunity because if you make it great enough anybody would be a nut not to seize it. My concern is, in my conversations in recent days, now you say $63 per 1,000, well right now the going price is about $35 a cord for stud wood which would be about $70 per 1,000. So that means that even with this downturn, you said it's less because of the downturn so that means even if you're paying less than the $63 per 1,000, you are paying less than what the market is actually paying for saw logs.
I have a letter that I just got, actually I just grabbed it from my office, I didn't even get to read it until I sat down here. I had asked a question in the House about MacTara and how much volume MacTara had cut in Stanley and what they paid. In this letter it says that the average - this would be from the minister, I believe, I didn't even look to see who signed it, yes, Ernie Fage - price is $8.31 per metre cubed, or approximately $19.50 a cord. At $19.50 a cord, if there is slightly around two cord to the 1,000, that means you would pay roughly $40 per 1,000, which is a big difference from what you're saying at $63 per 1,000.
MR. REES: John, I hate to correct you but I do sign the cheques on the quarterly instalments to the Crown and if that is the price then I am going to have to ask Mr. Fage for a rebate. I don't know what you have there for numbers and I would have to have a look at it, but you have put me in a position here because you are quoting numbers from correspondence with Mr. Fage which I have no knowledge of and have never seen before.
The other thing is that I would be suspicious if they divided hardwood pulp and softwood pulp and everything else into that number. That is not the saw-log stumpage number that we are paying. As I said, I sign the quarterly cheques.
MR. CHAIRMAN: I wonder, Mr. MacDonell, if you would agree to table that document and Darlene could make copies.
Maybe I could ask a question before we recognize the next honourable member. Mr. Rees, you indicated during your opening comments, and John did during his presentation, that MacTara is, in fact, the biggest employer in central Nova Scotia, and I would say probably one of the biggest in the whole province. Because of the price of lumber and probably a number of other factors not as primary as that, you indicated that you are going to have to reduce the workforce and that certainly is a big concern to all of us because for the last number of years the job opportunities and economic benefits, on a consistent basis, that
MacTara has provided has certainly greatly assisted us folks and helped complement the Musquodoboit Valley.
I'm just curious, the workforce is somewhere between 340 and 400 direct and 210 indirect, what type of number, or would you care to disclose that information today?
MR. REES: I can't at this point. We are in the process of working through right now and it wouldn't be prudent for me to say. We haven't arrived at a finite conclusion yet. But I can say that it will be in excess of 50 people.
MR. CHAIRMAN: Let's say, for example, six to eight months ago the price of lumber versus today, could you . . .
MR. REES: Probably $80 per 1,000 difference.
MR. CHAIRMAN: The honourable member for Cape Breton The Lakes.
MR. BRIAN BOUDREAU: First of all, thanks for coming here today. I thought your presentation was excellent; it was brief, right to the point, just the way we like them. I want to congratulate you, of course, because according to the information I have here, you have a large number of employees and it appears, at least by your flyers, that you are well connected with your employees. Are you a unionized company, are your employees unionized?
MR. REES: No, they are not.
MR. BOUDREAU: It is obvious that you take pride in your workforce, you are involved with your employees. That's a good community, I can understand why the chairman has high marks. You would be a welcome addition to any community, I would suggest. I am interested, a little bit, in silviculture. Could you explain a little bit of your silviculture program?
MR. MACLELLAN: Certainly. Which part, the private lands program?
MR. BOUDREAU: Yes.
MR. MACLELLAN: The private lands program. We started in a partnership with the Group Venture Association of Nova Scotia, between the Group Venture Association and MacTara, four years ago. Two years ago we partnered with the Province of Nova Scotia in a stewardship agreement, into a much larger program, to all private lands on both Cape Breton Island and the mainland. Service has been delivered through what we call - actually, we have 15 - silviculture contractors spread around the province, and what we do is we call them our preferred service provider and they are responsible for doing everything from the
planning to the implementation of the planting; organizing the planting, the stock acquisition to be planted the next spring; site preparation that is required; and also layout and completion of the pre-commercial thinning operations which may be going on on private land. This year alone, of the $1.2 million we spend, about $870,000 will be on private land in Nova Scotia.
MR. BOUDREAU: Is that private money or government-sponsored money?
MR. MACLELLAN: That is what MacTara is spending. After we invest our money, the province is matching, basically $1.00 for $3.00 that we spend with the stewardship programs they had with our firm and with several of the other firms in the province like Stora Enso and Ledwidge Lumber and the Bowater Mersey group, just to name some of them.
MR. BOUDREAU: There is no federal funding involved?
MR. MACLELLAN: No, there is no federal funding involved at all and MacTara, as you would be aware, under the sustainable forest management legislation which has come into play in the province, actually nine large firms, such as ourselves, are already into a half year stewardship commitment and starting in January, all registered buyers over 5,000 cubic metres per year will have to either be paying into the sustainable forestry fund or actively operating their own stewardship program.
MR. BOUDREAU: A few years ago there was a federal program, isn't that correct, and it was eliminated?
MR. MACLELLAN: That's correct, and that ended - well, it must be five years ago now.
MR. BOUDREAU: That must have had a very negative effect on your industry.
MR. MACLELLAN: It had a negative effect on the amount of silviculture treatments that were invested into private woodlots in Nova Scotia, which make up - privately-owned land in Nova Scotia, on both small private and small industrial, make up approximately 50 per cent of productive forest land in the Province of Nova Scotia. So it did diminish the amount of treatments that have gone into those properties.
However, these stewardship programs basically started, I guess, four years ago with Stora Enso, which was the first one to have a broad-based, large program. Stora Enso and the forest fibre producers in the Province of Nova Scotia entered into the first of this type of stewardship agreement and started to invest a lot of money - millions of dollars a year - into the program. When legislation is fully in effect, this year, 2001, it will nearly replace what was invested from the federal government in the previous decades in programs on an annual basis.
The program, as it is set up now under this new legislation, should give more stability to the funding of silviculture treatments on private land, because it is now a requirement of your wood acquisition plan; if you are going to be a registered buyer of forest products in Nova Scotia, you have to submit, after January 2001, a wood acquisitions plan to the department. For that plan to be approved, you also have to either be investing monies into the sustainable forestry fund or operating your own stewardship program. The amount for softwood is $3.00 per cubic metre.
[9:30 a.m.]
MR. BOUDREAU: Could you just explain a little bit about what a treatment facility is?
MR. MACLELLAN: Which part is that, sir?
MR. BOUDREAU: I notice on your map you have treatment locations.
MR. MACLELLAN: That is just a graph representation of where the monies were invested in 1999.
MR. BOUDREAU: So it isn't necessarily a location for a treatment facility of any kind, it is just where you allotted money.
MR. MACLELLAN: That is where we did a new plantation or we did a pre-commercial thinning. We broke the province into four regions - Cape Breton Island is one region - so we invest the money from the stewardship program on a percentage basis. That is why you have a pie chart on the other side. We try to keep it in percentage to where the fibre is coming to our mill from.
MR. BOUDREAU: How do you calculate how much you spend in each region, is it according to your activity in that particular area?
MR. MACLELLAN: It is our procurement policy. Whether we buy the timber and we harvest it or whether we buy the wood roadside and deliver it to our mill, it is all in percentage to exactly what is acquired, in this case from Cape Breton Island, for example. I see in 1999 we acquired 3.7 per cent from Cape Breton Island and the monies went back in the same order.
You will notice that in Pictou/Antigonish/Guysborough, we acquired 41.5 per cent of the wood that we bought for the MacTara mill, so we invested approximately the same amount of the stewardship monies into those three regions.
MR. BOUDREAU: Just before the chairman cuts me off, all this funding that you are putting into your industry is voluntary, you are not forced . . .
MR. MACLELLAN: It was voluntary up until the last six months of this year. Because we are such a large consumer of softwood forest products, we are one of the nine firms that have to do a half-year program this year as a registered buyer, but starting in January everyone who is a registered buyer purchasing or consuming over 5,000 cubic metres per year, has to have a stewardship program or pay into the sustainable forestry fund.
MR. BOUDREAU: But that won't have a negative impact on your industry or your company? Do you feel it will have a negative impact?
MR. MACLELLAN: To tell you the truth, sir, companies such as MacTara and Ledwidge Lumber for example, to pick two of the sawmills that had been doing the voluntary programs, it will level the playing field for us. Up until this time our firm and Ledwidge Lumber had been working at a disadvantage in the market place with buyers out of New Brunswick, Maine and Quebec, and other mills in the Province of Nova Scotia who have not been operating or investing into a stewardship program. But come January 1st it will level the playing field. Unfortunately, it will level the playing field at a time when the lumber markets are in a decline. Lumber is a commodity, it has been seven good years - I am not going to say how many years might be poor, I don't want to bring my own fate upon me.
MR. CHAIRMAN: Mr. Estabrooks.
MR. WILLIAM ESTABROOKS: Thank you, gentlemen, for your presentation. I would like to talk about an issue that is of some consequence, I believe, perhaps when it comes to the PR war, but also because of concern about occupational health and safety. I recall, in the past, there have been some concerns expressed about the safety record of MacTara. I was wondering if, for the last two years, you could update me with the status of the Occupational Health and Safety Committee, the number of accidents - because, of course, you are in a high-risk business, I understand that - could you clarify a couple of those points for me?
MR. REES: I didn't bring any statistics with me, I'm sorry, but if you would allow me to speak to that in general . . .
MR. ESTABROOKS: Oh, please do.
MR. REES: . . . I think what you are referring to is an article that appeared in the newspaper which precipitated a rather thorough investigation of our operation by the Department of Labour. Their conclusions were that we were not the bogeyman that was portrayed in the paper. MacTara considers safety to be of paramount importance. I personally believe that as long as we have any accidents, it is too many. Yes, we do work in a high-risk
industry, but having said that, it is our duty and obligation to provide a safe workplace. People should be able to come to work in the morning and go home at night, and they should be able to arrive and depart in the same condition. So, we take safety very seriously.
We have a very well-functioning safety committee, its members are selected by the employees. We like to stack that committee if we can and have more employee representatives and fewer management representatives because I like to believe that people will look after themselves better in that respect. Safety is a prime concern, we have a full-time safety officer, we have a safety program, we carry out audits on our safety program, we are ISO 9002 registered, which also drives that program. We take that responsibility, we accept that responsibility and we intend to live up to and exceed whatever the rules of the province may be.
MR. ESTABROOKS: Mr. Chairman, ISO 9002, I have heard that and I don't apologize for not knowing the jargon of your business. Could you explain that to me?
MR. REES: ISO is the International Standards Organization and our quality program is registered to that standard. Basically, it means that you document what you do and you do what you have documented. All your policies and procedures, your entire operation becomes documented and then you must do what you say you do. If you provide an environment for people and you say you provide it, you indeed then must provide it. We get audited on a regular basis, we do internal audits, to see that we are living up to the standard and we get audited by our registration body on a regular basis to see that we are indeed living up to that standard.
MR. ESTABROOKS: The connection though with occupational health and safety and that standard is where I was going.
MR. REES: What it means is if I ask you to do a job and I say that I must provide you with a certain environment and certain safety wear or apparel and you must do the job in a certain manner, then that is documented under this system and we are audited - we audit ourselves - and how we do that job and if we reach that standard is documented and if we don't, we must and if we don't, they take away the registration. If I tell you to only lift a board in a certain manner, which has been proven to be a safe and prudent way, that is documented. If you don't do that, someone will come along when we audit you and say why are you not? Each individual location in the plant, each individual employee will come under audit at some time.
MR. ESTABROOKS: The last if I can is, the role of your health and safety officer, I would assume one of the primary roles is education . . .
MR. REES: Ongoing training.
MR. ESTABROOKS: . . . being out there on the job and those sorts of things. I guess we are in the business of - speaking for myself - headlines. When that headline appeared in the press last year, if I remember correctly, your reaction as a company of course was - you used the expression, or whoever said it - you are not quite the bogeyman that is portrayed. How was it allowed to reach that situation?
MR. REES: I am not so sure that what always gets reported is always the truth; it is a slant on the truth, it is a perception, it is a position. You and I can differ in an argument and if you report your side and I don't report my side, but I don't believe that MacTara is a bad or unsafe place to work, I don't believe that for one minute, and I don't think if you ask our employees that they will tell you that.
MR. CHAIRMAN: On the payroll for the last fiscal year at MacTara, Allan, what would that amount be?
MR. MACLELLAN: In the area of $15 million.
MR. CHAIRMAN: I know it is terribly difficult with the complicated payroll scheme that you have in place, but what would the average wage be of an employee at MacTara,a five to six year employee?
MR. REES: Probably in the $15 to $16 per hour range.
MR. CHAIRMAN: Mr. Chipman.
MR. FRANK CHIPMAN: First of all I want you to know that I don't consider profit a dirty word. What percentage of your products would you sell in the United States?
MR. REES: About 93 per cent.
MR. CHIPMAN: Of course we know with the exchange rate you are buying Canadian products with Canadian dollars. Do you find it is more of a premium - obviously it must be because you are selling 93 per cent of your products there but does that reflect back on what you pay for the products you purchase?
MR. REES: We market into the U.S. because it is the biggest market. We market into the U.S. because of the U.S.-Canadian lumber agreement which means that at this time you will probably find lumber in Nova Scotia that came from British Columbia, which is not a normal situation. There are mills not able to market their product into the U.S. and as a consequence it puts more lumber into the Canadian market and drives the price down in Canada.
MR. CHIPMAN: Say, for example, this past June when prices were up considerably more than they are now, what would your price received be in New England or New York for 1,000 board feet?
MR. REES: Right now I can tell you that we are receiving in the $300 range.
MR. CHIPMAN: Those are U.S. dollars?
MR. REES: Those are Canadian dollars, sir.
MR. CHIPMAN: That is in the U.S. market?
MR. REES: Yes, sir.
MR. CHIPMAN: It seems low because I know producers that are selling, I think, on stumpage rates some of them have been up to $122, $123 per 1,000 board feet. What are your costs per 1,000 board feet to mill the lumber?
MR. REES: That is a complicated question.
MR. CHIPMAN: But you know, you must have that refined because . . .
MR. REES: I can tell you at this level we lose money.
MR. CHIPMAN: So what you pay and what it costs you to sell the lumber and what you sell it for, you are losing money?
MR. REES: Yes, sir.
MR. CHIPMAN: That is interesting. One thing that is very curious, two foot lengths, what kind of a product would you sell in two foot lengths, paellet wood?
MR. REES: Two foot lengths are strictly a recovery item, we sell that to people in the Maritimes for fish boxes; there are a number of products made. We have sold some of that to our competition who has been finger jointing, but they have since stopped that because it is not profitable. There is a market for almost anything if you are prepared to sell it cheap enough. There is an adage in the sawmill business that we produce lumber and not chips so anytime we can convert something to lumber and sell it, we are further ahead than making chips.
MR. CHIPMAN: I must compliment you because I know quite some time ago in the last several years the price of pulpwood has been depleted but I know with your new mill you are certainly taking a lot of that market and utilizing it now for more of a value-added product. You trade off wood chips for saw logs with Kimberly-Clark?
MR. REES: Yes, we do.
MR. CHIPMAN: Those are the only questions I am going to ask for the time being but there are a couple more I would like to ask before the time-frame is up.
MR. CHAIRMAN: Mr. MacKinnon.
MR. RUSSELL MACKINNON: Gentlemen, how many acres of woodland do you consume a year?
MR. MACLELLAN: I can tell you we don't work it out in acres and we don't consume woodland, we do harvest . . .
MR. MACKINNON: You take an average . . .
MR. MACLELLAN: We do harvest the trees standing on the property but the property is intact for the next generation and to grow another crop. I guess we don't consume woodland.
MR. MACKINNON: How many acres of woodland are harvested, if you take an average of let's say 20 or 30 cords per acre, regardless of what figure you would like to use, on average, how many acres based on your consumption would that work out to?
MR. MACLELLAN: Well, lacking a calculator, I will give you a very broad number if that is okay with you?
MR. MACKINNON: That is fine.
MR. MACLELLAN: It won't be down to the decimal point but approximately 11,000 acres.
MR. MACKINNON: How many of the 11,000 acres receive silviculture?
MR. MACLELLAN: At this time we are planting and doing pre-commercial treatment on approximately 2,900 acres as of last year, 1999.
MR. MACKINNON: So that is about 25 to 28 per cent.
MR. MACLELLAN: That is what we are doing. Out of that approximate 11,000 acres, approximately one-third of that is Kimberly-Clark's raw material coming to MacTara and they have a very active reforestation program. I couldn't tell you what they do but they have a very active reforestation program.
MR. MACKINNON: You also have a preferred list of all the businesses that you do business with in the various counties. I notice in Cape Breton County you have 13 various sawmill operations and contractors that supply to you?
MR. MACLELLAN: That is right.
MR. MACKINNON: Do you have any idea how many acres they process a year? Do you keep any . . .
MR. MACLELLAN: That would go into that 11,000 acres. I just divided 30 cords per acre . . .
MR. MACKINNON: That's fine. That is the umbrella figure, is really what you are saying.
MR. MACLELLAN: Exactly.
MR. MACKINNON: Now I notice with the supply management contracts to companies like Stora Enso, there is a check-off on every cord that goes through the mill that is set aside for silviculture. I am not sure if it is $1.75 a cord or $2.00 a cord. Do you have a similar type program?
MR. MACLELLAN: We don't have the check-off, at this time MacTara bears the full cost of $3.00 a cubic metre, MacTara and other sawmills. I think at Ledwidge Lumber, they do take a contribution off the roadside price from the supplier as part of their agreement but at this time, ourselves, we do not do that.
MR. MACKINNON: My understanding is that one of the major flaws in the silviculture program here in Nova Scotia is it was essentially a program that was mirrored from similar type silviculture programs that were initiated down through the central U.S. The climate and soil conditions are much different here than the conditions for the program there. What is the success rate of your silviculture program? For every 10 seedlings you plant, how many survive?
MR. MACLELLAN: We are pushing for 85 per cent survival after five years and we can achieve that, but a lot of things go into play there. I should also point out that planting is only part of the program. The forests of Nova Scotia, because of our marine climate, we have excellent regeneration. The important part of planting is planting should go into those
areas and should be designated to those areas that are not restocking adequately or sufficiently to our needs or desires. That is where the plantations are really strong.
You can encourage natural regeneration through your practices, through leaving the brush on-site to maintain soil temperature and soil humidity, so the seeds can germinate and the seedlings that are there already germinating on the forest floor, when the mature trees are harvested, those seedlings are protected and can survive the first two years out in the open in the new environment, which is what the harvest block is, a new environment.
MR. MACKINNON: What does it cost for a seedling in the ground now?
MR. MACLELLAN: Anywhere from 28 cents to 32 cents a tree; that is for stock acquisition, planting and for site preparation if it is required. Planting is a very demanding enterprise because if the site is not properly prepared, if the planters are not well-trained and not well-motivated, if the people we work for don't run a good business, for example, or are not conscientious in what they are doing, you can have failure. If the stock is not grown and is not vigorous and healthy coming from the nursery, you can have failure. If the planters don't water the trees before they go into the ground, you can have failure.
With natural regeneration you have trees growing on the site which are acclimatized to that locale, whether it is the Margaree Valley or the Musquodoboit Valley, they are acclimatized to that locale and their ancestors have been there since they migrated there after the last Ice Age. So they have what you would call a built-in memory of the past thousands of years' environment on how they germinate and how they grow. So if you can encourage natural regeneration, it is actually the best tree for the site.
MR. MACKINNON: A certain percentage of your operation is on Crown land and a certain percentage is on private sector, obviously. What percentage of that 11,000 is on Crown land?
MR. MACLELLAN: Three per cent.
MR. MACKINNON: Out of that 3 per cent, how much of that is silvicultured?
MR. MACLELLAN: With our Crown licence, the Province of Nova Scotia looks after the reforestation or follow-on treatments of those sites.
MR. MACKINNON: So that would be a cost taken out of the stumpage toward the Crown?
MR. MACLELLAN: I believe so, yes. MacTara pays for road upgrades, construction and maintenance.
MR. MACKINNON: One final question on that aspect is - and I am only speaking for the county I come from, Cape Breton County - looking at the 13 contractors here, my understanding is none of these 13 contractors have access to Crown land and any access would be very minuscule, if any, that is my experience. I recognize all 13 of them because I did work in the woods at one time for a contractor. Does that have an impact on the quality of your wood supply? As you know in certain regions, some of the large pulp and paper mills control the forestry market. Looking at these here - and some of them specialize in hardwood for high-quality, particularly some of them focus on this bird's eye maple, which is very, very rare. I think it would go for about $300 a cord, something like that?
MR. MACLELLAN: It varies depending on the grade but it has, on occasion, gone higher.
MR. MACKINNON: And that is predominantly on Crown land, not on private land, for whatever reason.
MR. MACLELLAN: Given the topography and the settlement of Cape Breton Island, the hardwoods tend to be on the ridges and that tends to be the Crown lands, that is correct.
MR. MACKINNON: One other question, just switching over to WCB, on the accident rates, what is your average assessment per $100 on WCB premiums? Is it above or below average?
MR. REES: I can't answer that.
MR. MACKINNON: Would you give an undertaking to supply that? It would be germane to the question that my colleague from . . .
MR. REES: We could provide it, I don't have it, I am sorry.
MR. MACKINNON: You will give an undertaking to provide it though, will you?
MR. MACLELLAN: Can I speak to that question in a broad sense?
MR. MACKINNON: Sure.
MR. MACLELLAN: A mill like MacTara is a large facility and it is a very sophisticated facility. We have very highly-trained and motivated people who work in it. What happens with MacTara, the way the sector is broken down under WCB in Nova Scotia, is that a company such as MacTara would be better fit with a larger entity like a paper mill, as far as our safety, training and accident rate. What happens is that we are in the sawmill sector, so we are in there with a mill that saws 500,000 board feet a year to our old mill, we are in that same group, and we know . . .
MR. MACKINNON: You haven't answered my question. Are you above or below the average rate for that industry?
MR. MACLELLAN: I know as of last year we were well below but we will get you that number.
MR. MACKINNON: That is fine. One final question on occupational health and safety. You have made good note of the safety efforts of MacTara and what you are saying is you are quite pleased with this new culture under the Occupational Health and Safety Act that was adopted back in 1995-96, I don't have the exact year, but with the IRS . . .
MR. MACLELLAN: Could I ask you to speak up, please?
MR. MACKINNON: What you are saying by virtue of the safety program that you have, your Joint Occupational Health and Safety Committees and so on, the new culture that has been adopted under the Occupational Health and Safety Act of 1995-96 is essentially one that you would vouch for? Is that what you are saying?
MR. REES: I am in favour of anything that improves the situation. I am in favour of anything that makes any operation safer and better for the people who work there.
MR. MACKINNON: You don't find any encumbrance from the legislation at all, you don't find it taxing on your operation?
MR. REES: Listen, you people have enacted so many rules and Acts and whatnot, that it is almost impossible to do business in Nova Scotia, but having said that, one of the good things is the things that get done from the point of view of health and safety. We support those things.
MR. MACKINNON: So, you do support the Act?
MR. REES: Absolutely.
MR. MACKINNON: You wouldn't support doing away with those safety regulations?
MR. REES: No, I wouldn't support doing away with safety regulations in any way, shape or form.
MR. CHAIRMAN: John, you wanted to make a comment just before we . . .
MR. MACLELLAN: Mr. Chairman, I would like to respond to the last comment. You mentioned, sir, that silviculture systems in Nova Scotia are not adequate or are more conducive to the southern United States. I take exception to that and I will say that there are a lot of highly-trained and highly-experienced people who are not educated formally, who have a lot of experience, as well as a lot of highly-trained people in large organizations such as Stora Enso who are excellent land managers. I would also say that the Department of Natural Resources has a key group of core people who are highly trained and highly motivated.
The silviculture systems, the way we manage both softwoods and the way we are learning to manage hardwoods in Nova Scotia, is the product of years of experience and trial and error. I was lucky enough to spend my first three years out of college working for Scott Paper Corporation in research and development, and I know in the previous 15 years before I went there, there were a lot of experiments, some of them were grand and some of them were downright disastrous. But from that body of knowledge, the program that the Kimberly-Clark group now runs on their lands is very thorough and very well thought out.
There are not many firms in Nova Scotia that are active land managers such as those companies - of course even such as our own - that aren't operating with a very well-thought-out and well-maintained program. There is a lot to be said. Too many people diminish the quality and the talent of the people in Nova Scotia and our ability to do a good job and be successful in the world economy.
MR. MACKINNON: On a point of order, Mr. Chairman. I think our honourable guest, perhaps, slightly misunderstood what I was saying. There was a sharp learning curve and I think I was referring to the benchmark for which this program developed. I think you would readily agree that the learning curve is very short and I would have to concur on the final analysis that we are getting closer to the 100 per cent rather than the 30 per cent that we started off with. That is the point I was making.
MR. MACLELLAN: That's good, I just didn't want to leave with the wrong . . .
MR. MACKINNON: No, no.
MR. CHAIRMAN: I am not sure whether that was a point of order or not, but anyway, we will recognize the honourable member for Eastern Shore, Mr. Dooks.
MR. WILLIAM DOOKS: Gentlemen, I welcome you here today and I would also ask you to take my regards to Mr. Erskine with you when you go back. As past Councillor of the Musquodoboit Valley, I certainly understand and recognize the benefit that your company has given to your community with the park and the schools and many more things that you have not mentioned here today. As MLA for Eastern Shore, I am certainly pleased that your facility is able to employ many of the people who live in my riding - over 550 in total
throughout, but a number come from the Eastern Shore. It is very important for us to provide employment opportunities, as you well know.
Mr. Chairman, forestry is not something brand new to this province; it has been ongoing for many years. As a matter of fact, I think it had a lot to do with the founding of this province and the development of this province. I can remember as a small lad in the fall and winter cutting logs with my father and we used to have to get them to roadside by spring. I think you can recall some of those stories as well. At that time we were receiving $40 per 1,000 for timber and the last time we cut we thought that was a fair price. Now we understand that because of technology, we can utilize more types of timber; ordinarily things that have gone to waste before now can be produced into product, is that true? In relation to what it would be 50 years ago, do you have better technology now?
MR. REES: Yes, absolutely.
MR. DOOKS: That's for sure. Wood that we would consider scrap or firewood at that time can now be milled into product and be sold. I am getting to my point. The thing with the woodchips in Sheet Harbour, do you contribute to the chips that are shipped out of the port in Sheet Harbour?
[10:00 a.m.]
MR. MACLELLAN: Yes, we do. We just started about two years ago.
MR. DOOKS: I believe that chips are made from a second-grade hardwood?
MR. MACLELLAN: I can assure you that we attempt to recover all pallet wood and saw logs and veneer before we send it to anyone's chipper.
MR. DOOKS: So, if we weren't harvesting the second-grade hardwood, if you will, for chips, what would happen to that hardwood?
MR. MACLELLAN: Previously there was very limited market for it, and some private landowners, or other companies, were harvesting just the high-value material.
MR. DOOKS: So, we cut it throughout from wherever and ship it to Sheet Harbour, and it goes from the port to Japan, I believe. Your other products, you export overseas as well, raw timber?
MR. MACLELLAN: No.
MR. DOOKS: Not at all? Do you do any other type of shipping of your timber to Newfoundland or anyplace like that?
MR. MACLELLAN: No.
MR. DOOKS: So, it is mainly the chips that leave the port?
MR. REES: In our case, it is wood pellets that leave the port. We do provide some chips or provide some round wood to the facility at Sheet Harbour, but they are not involved in the exportation thereof. We are simply a customer.
MR. DOOKS: What I was trying to get to, I guess, is if you were exporting lumber from somewhere other than Sheet Harbour, I would encourage you to put your resource in Sheet Harbour and, of course, transport from there. (Laughter)
Gentlemen, I think that is all I have to say today and, once again, thank you for coming. I certainly understand the benefit of your facility to our area.
MR. CHAIRMAN: I hope the committee will forgive me, as MacTara is the major employer in Colchester-Musquodoboit Valley, from time to time I would like to throw a short snapper in there. I am a bit curious as to the wood pellet industry that you have developed at MacTara; I understand you have a contract with a city in Sweden to supply them with wood pellets. Are other industries, other cities or other locales looking at that type of source of energy; is there any opportunity there for expansion?
MR. REES: Yes, it is being investigated as we speak, I guess. The cost of energy continues to escalate pretty much worldwide, as we all know, and the amount of energy that remains in this world continues to diminish. We have just shipped some sample loads to a facility in Vermont where they have burned the pellets to estimate their recovery; we have had some sample shipments going to the southern U.S.; we have just shipped some samples to the U.K. I firmly believe that it is going to be an expanding business.
MR. CHAIRMAN: Allan, those wood pellets appear to be a little different than the ones that you purchase in the building supplies stores to feed the pellet stoves in Nova Scotia.
MR. REES: Today, as we speak, when I left my home, my pellet stove was burning pellets that we produced at MacTara. Our pellets are eight millimetres in diameter and the pellets that you are referring to probably come from our competition at Shaw or our competition at Eastern Embers; at AWT in Fredericton, New Brunswick, they have a six millimetre pellet. They are made out of sawdust, wood shavings, chip vines; our pellets are made out of bark.
MR. CHAIRMAN: Could you just tell us briefly a little bit about the process. It is a by-product, obviously, of the sawmill operation that is being produced into a wood pellet, but you are using the grain elevators here in Halifax - just, essentially, a thumbnail sketch of that particular operation.
MR. REES: Everything that we don't sell as lumber or burn in our furnaces to run our dry kilns, we run through a hammer hog, and we have reduced to what they call a three-quarter inch nominal, which means that no piece should be bigger than three-quarters of an inch in any direction. We dry that material, we refine it to remove rocks, miscellaneous pieces of tramp metal, whatever else that we don't want in the pellet. We then refine that material again and render it to a two millimetre size. At that point we put it in a press and we press it into a little piece as big as your finger. There are no additives. It is simply some high-pressure steam, bark, sawdust, chip vines, and we compress those and make a pellet. The pellets are transported from our location to the grain terminal here in Halifax and they are stored in the same silos that they would have stored wheat or corn or any other product should they have been that busy.
From there those pellets are downloaded, put onto a vessel and the vessel goes from here to Sweden. They are offloaded in Sweden and they are burned to produce hot water and hot water is pumped through the streets to each individual house to help heat the community.
MR. JOHN MACDONELL: I guess I am going to come back to volume. You said your recent price was $63 per 1,000.
MR. MACLELLAN: Approximately that, but it is the same price for every other licensee in Nova Scotia.
MR. JOHN MACDONELL: You're probably referring to every other licensee dealing with Crown land?
MR. MACLELLAN: Correct.
MR. JOHN MACDONELL: Is that the price right now in the downturn? Are you paying less because of the downturn?
MR. MACLELLAN: The price of lumber last year would have lowered the price of stumpage in the format that the Department of Natural Resources uses. The format they use, I wouldn't want to explain it to you. They have a series of indices and we get the result that they give to every other licensee. It would have indicated a lower price for the past year but the sawmills in Nova Scotia and New Brunswick, which are licensees, requested, to each of their provincial governments, to leave it where it is.
As you may be aware, the Maritime Provinces, Eastern Canada, have a separate softwood lumber agreement with the United States of America because of our high proportion of privately owned property, whether small private or large industrial. Actually the MLB is actively pursuing renewing that agreement. I can't state how important this agreement is to each of the Maritime Provinces. It is absolutely important. We cannot be
thrown in with the rest of the country which is predominantly 80 per cent to 90 per cent public lands. We just can't be thrown in with those people.
MR. JOHN MACDONELL: I guess what you are trying to say is, because the other lands in the rest of the country are public lands, that the rates at which the mills access those lease agreements, or the stumpage, is of such a competitive nature that if you had to pay what the market price is to private woodlot owners, if you were paying that to the Crown, you are saying you couldn't compete.
MR. MACLELLAN: No, John. We can't compete with job development from Quebec westward.
MR. JOHN MACDONELL: For what reason?
MR. MACLELLAN: We can't compete with the development of jobs on privately held properties in provinces west of New Brunswick where they are looking to develop jobs and they are probably helping with infrastructure.
MR. JOHN MACDONELL: You're saying the government is helping those industries and you cannot compete because you're not getting the same help from government here, is that what you're trying to say?
MR. MACLELLAN: No, not at all. What I am saying is that the Maritime Provinces are a more open market; private woodlot owners and individual logging contractors and even MacTara, could sell wood fibre, wood residues or round wood roadside, and do, to mills in Maine, mills in New Brunswick, Quebec, the Province of Newfoundland on occasion, even pulp into upstate New York. So that is an open, free-flowing market. When you get to Crown land, for example, in the rest of the country, it is licensed out to companies or firms or corporations and they have the exclusive, whether it is 50 year or 20 year or whatever, licence to that property. It is not the same situation as an open, free-flowing market. So we are not in the same situation as the rest of the country.
MR. JOHN MACDONELL: But they are selling on the open market. They are accessing the wood on Crown land but they are selling on the open market.
MR. MACLELLAN: Yes, they are selling on the open market but they have a much greater ability to control the cost of their fibre or acquisition the fibre because they are negotiating with the province.
MR. CHAIRMAN: Mr. MacDonell, we have a number of committee members who would like to ask questions.
MR. JOHN MACDONELL: I will just make one comment before I go. I am not sure if I understand you correctly, but I wouldn't say that if the other provinces are giving their Crown land away, that necessarily we should be. I don't know if that makes any sense to me. It seems to me that their consistency of price and their stability of price is not necessarily saying that it is the price that the industry would drive for on a more competitive basis in the private sector, because here we were paying $100 to $125 per 1,000 recently, going for $2,000 and $3,000 an acre, and MacTara was paying $63 per 1,000. So I can see a stability but I don't necessarily know that we need to give away the farm to accomplish it.
MR. MACLELLAN: John, let me remind you, the agreement is in its ninth year, heading into its tenth year, and if we could all invest our money in our RRSPs with the quality of hindsight, I guess we would all be in the Bahamas now as multimillionaires. Hindsight is perfect vision. When this agreement was made there was no saw line of the capability of our OptiMill line. The other mills had looked at it and turned it down because of what was involved.
MR. JOHN MACDONELL: You are only accessing 3 per cent of your wood, though, is that right? That's what you told one of the other questioners.
MR. MACLELLAN: That is correct, on total consumption.
MR. CHAIRMAN: We are going to move along because we do have a number of committee members. You have had a couple of kicks at the can, if we have time left we will go to you again.
MR. CHIPMAN: On the sustainability program, do you deduct from the supplier; somebody supplies logs to you or you purchase them, do you take the deduction for the sustainability fund off of his cheque? My understanding is, a friend of mine is cutting on a piece of property that belongs to my family and he gets the deduction taken off for the sustainability program.
MR. MACLELLAN: MacTara doesn't. Stora Enso do because of their agreement with the Forest Fibre Association. Stora Enso has a bargaining requirement with their supplier division, so they have negotiated that and that was the first program of its type. I think Ledwidge Lumber, I'm pretty sure, does at about the same proportion, but we and many of the firms do not. It is the price we pay to the landowner plus we take the cost on top.
MR. CHIPMAN: So to pay into the sustainability program, you would take that out of your own profits?
MR. MACLELLAN: That comes out of our revenue stream, yes.
MR. CHIPMAN: What about if you are cutting on Crown land, there is some depletion here, who pays into the sustainability program for the portion that is taken off Crown land?
MR. MACLELLAN: Crown land is not included under the forest sustainability regulations.
MR. CHIPMAN: So who pays for reforestation on Crown land?
MR. MACLELLAN: The Crown.
MR. CHIPMAN: Okay, the taxpayer.
MR. MACLELLAN: What we cover is the access. We cover road construction, road maintenance, bridge construction to access.
MR. CHIPMAN: What would you be paying right now, roadside, for stud with two-by-six or two-by-eight? In the Seffernsville area, I know this gentleman is selling it and they are picking it up in Seffernsville, just outside of Bridgewater.
MR. MACLELLAN: That's right, we are paying $120 a cord delivered to the yard in Seffernsville.
MR. CHIPMAN: So, that is roughly $240 or $260 per 1,000? The conversion factor, some use two, some use two and one-half.
MR. REES: Whatever it is it is too much.
MR. CHIPMAN: Well, I don't know about that; talk to the guys cutting wood there and it's not. So, if you are talking $120, you're looking at $240 and that is roadside.
MR. MACLELLAN: No, that is delivered to the yard.
MR. CHIPMAN: What would it be roadside?
MR. MACLELLAN: It would depend on the person transporting the product for him.
MR. CHIPMAN: My point is, he is in a situation where he is paying $122 for wood on the stump and it is costing him $55 per 1,000, $40 per 1,000 to cut it, which brings his cost up to $217 which is roughly a little over $100 a cord. Yet he has to deliver it for the $220 and you're saying that you're selling 92 per cent of your lumber in the United States for $300 per 1,000 and you're losing money, so where are you making your money? You have
to make a profit. Do you make it on the other 8 per cent? What is that 8 per cent comprised of that you make your money from?
MR. REES: We don't make any money at that price.
MR. CHIPMAN: But 92 per cent of your product you stated you sell in the U.S. market for $300 per 1,000 so you must be making a profit. You have to make a profit on the other 8 per cent. What product is the other 8 per cent comprised of that you make your profit on?
MR. REES: I don't know how much plainer I can be, we are not making a profit. Your example speaks to a specific portion of wood that we buy or we procure into our operation but it doesn't speak to the overall operation. We are not in a money-making proposition as we sit here today.
MR. CHIPMAN: Have you been in the past?
MR. REES: Yes, we have in the past.
MR. CHIPMAN: So how long ago did you start losing money, months, years ago?
MR. REES: I am not prepared to go there, sir.
MR. BOUDREAU: Mr. Chairman, I notice in British Columbia there is a lot of confrontation between community groups, environmental groups or whatever, with cutters, basically. Earlier in Nova Scotia we had some smaller confrontations in your industry but lately I believe there are no confrontations with community groups or environmentalists. Does your industry still have difficulty in that area?
MR. REES: To some degree I think we do but I don't know that we have the physical confrontations that you see in other areas.
MR. BOUDREAU: So you still have community groups who are concerned about the harvest and that sort of thing so you have groups that are involved, that ask questions. Is your company against that?
MR. MACLELLAN: Actually, we are members of the Nova Model Forest, the Nova Forest Alliance, which is an adjunct of the model forest in New Brunswick. We have our own here in Nova Scotia now in the last three years, the main office is based in Stewiacke. The Model Forest is an all-inclusive group and I really encourage the members to take some interest in that organization. They have done a lot, they have a lot of committees, they have a lot of forestry operators, loggers, people who truck forest products, build forest roads as
well as landowners, there are also tourism groups represented on it, there are a lot of communities.
One of the committees is about community relations, there is another committee on forest practices and right now they are in the process of finalizing a forest practices code of conduct for both loggers and landowners on how you should hire someone to do harvesting on your land, what you should ask for and look for; and for contractors just being conscientious about how they conduct their activities. As we all were aware, the month of November was mostly a rainy and cloudy month and that has a big impact. A lot of rain increases groundwater levels, makes ground conditions very soft and very easy to create disturbances on the sites. If you encourage people to become more educated in preventing these and to be more careful, it would really reduce the amount of conflict with the public.
In Nova Scotia - according to the statistics, as I understand them - approximately 50,000 people own the private woodlands of Nova Scotia, 50,000 people more or less and you can change that a little bit if you talk to different statisticians. That having been said, that is obviously not all the households in Nova Scotia so the majority of households in Nova Scotia do not own timberland, they probably live in the metropolitan area primarily or in Cape Breton around Sydney and that area, they probably live in a large town like New Glasgow, for example. They recreate in those forests, they want to go for a drive, a walk, a hike, they want to fish, they want to hunt, they want to run their ATVs up and down other peoples' woods roads or Crown roads and mostly they want to go in a place where all the muck is next to the stream, that kind of thing. So there are always going to be conflicts over use.
Here we have private land, you have the right to own private property in this country but people like to recreate in the forest and as landowners, whether you are large, industrial ones such as MacTara, or whether you are an individual such as myself, people value my woodlot as much as I do for other reasons, whether it is groundwater or whether it is because they like to shoot deer, for example. So there is always going to be some friction in there. Groups like the Model Forest are an excellent means of consulting people and getting people involved. So, I think we are a long way ahead of the troubles they have in British Columbia but we are not immune from those conflicts.
MR. BOUDREAU: In regard to the ownership, is foreign ownership a hindrance in your industry? Do you see it as something that could be a problem, is it a factor?
MR. MACLELLAN: You mean foreign ownership of large properties of just woodlots. Do you mean large corporations or individuals from Switzerland?
MR. BOUDREAU: Whichever. Do you feel it will affect your industry?
MR. MACLELLAN: It's not a problem, no.
MR. BOUDREAU: Just one last question. Old growth forest, given your experience, do you feel it should and can be harvested safely?
MR. REES: That is an area I would like to comment on, please, sir. The forest is like a garden. I don't know if you live in the city or if you live in the country but perhaps you do plant a vegetable garden and you plant it in the spring and you harvest it in the fall. You work it up and you plant it again next spring. Well, the forest is simply like a vegetable garden. You plant it and you harvest it and you plant it again. An old growth forest oftentimes is a very lonely place because wildlife tends to be where wildlife can scavenge food and old growth forests don't tend to support wildlife.
I think that is an emotional statement, old growth forest. I think people see that as very large trees that are 700 years old and have watched the turning of time but in actual fact, trees have a definite lifespan and when they pass that lifespan they tend to deteriorate and some fall down, some blow down, some are scavenged by insects, oftentimes they burn. I think one of the things that we do not do well in this industry is we do not educate the population. The forest is a garden and the garden must be tended, loved and nurtured and looked after but it must be harvested. You didn't grow the tomatoes to watch them rot on the vine.
Having said that, I understand it is an emotional issue and yes, for the sake of the general population, some areas should be left, but not completely left because they will not be what the population wants them to be. Yes, I believe it would be a good thing for the population of Nova Scotia if we did leave some tracts of land, maybe didn't leave them alone 100 per cent.
MR. CHAIRMAN: Just on that topic, we heard from a counterpart of yours, Harry Freeman, relative to the Wilderness Areas Protection Act, that he felt there should have been some provision built in so those old growth forests could be harvested, but harvested in recognition of the ecosystem. I would suggest, based on your comments, that you feel that way too. There are others, and in fact, members of the government of the day, indicated that they did not support that particular initiative. I think of the Tobeatic. There are hectares and hectares of forest there that you can't even take a hand axe in. I didn't support that legislation and I didn't support it for that particular reason; it is so restrictive.
MR. MACLELLAN: The IRM process was vetted in the public in recent months, the IRM process on Crown land that was under development for several years with the Department of Natural Resources. MacTara would like to reiterate, repeat, and emphasize that the Department of Natural Resources spent years, days, weeks and hours developing that integrated resource management plan for Crown land in Nova Scotia. They did a very thorough and well-thought-out allocation of the lands, the three planned-use classes.
The Province of Nova Scotia's industry, whether it is pulp and paper or whether it is the lumber manufacturing industry, cannot have 100 per cent of the Crown land put into a box, put up on a shelf and permanently locked away in these preserves. That large area, the Tobeatic, which has been taken out, will have a long-term deleterious effect on the forest products industry in southwestern Nova Scotia. It has to. You cannot remove such a large piece, in its entirety, of productive forest land, you cannot remove that size resource for long term, permanently, and not have a negative effect on the communities and the industries in those communities that they depend on, it is impossible. The problem? It is great to want to preserve everything, but the process of preservation has to start being linked more closely with the long-term study and understanding that to every action there is a reaction.
MR. MACKINNON: Mr. Chairman, I might be wrong on this point, but I believe Nova Scotia has one of the lowest stumpage rates in the country, am I correct on that, of all the various jurisdictions?
MR. MACLELLAN: On which properties, private or public properties?
MR. MACKINNON: Private and Crown.
MR. MACLELLAN: I can tell you it is not on private.
MR. MACKINNON: It depends on the quality of the wood, but on Crown I believe it is.
MR. MACLELLAN: On Crown, I cannot answer that. I think we could do a study that would go on for years with the other provincial jurisdictions west of us, and I think after years we would come away and not be sure.
MR. MACKINNON: The reason I am asking that is because, obviously, MacTara has leading-edge technology and application to its forest practices and production. What impact do you feel this will have on a lot of the small sawmill operations around the province, the small private operations. Do you foresee anything that will have a positive or negative impact on these operations? Have you received any feedback from them whatsoever?
MR. MACLELLAN: Do you mean the new legislation or the Crown . . .
MR. MACKINNON: No, just your forest practices in terms of - you have explained how you are using leading-edge technology to get maximum benefit, you have become very efficient, you are doing production on over 11,000 acres per annum and a lot of the suppliers, the small, private suppliers that are supplying you, obviously would not be in the position to do silviculture and so on and so forth. At some point there would be a point of no return for some of these small operations given the dynamics of the . . .
MR. MACLELLAN: The small wood product manufacturers, do you mean?
MR. MACKINNON: The ones that supply you, yes, the small, private sawmill operations that even don't do business with you.
MR. MACLELLAN: Actually, many of those firms have become very adept at developing a niche, a specialty market for themselves, and maybe contrary to perception, they are doing very well. Some have developed into high-value hardwoods; others have found uses for softwood products such as hemlock or larch which are not in demand in the paper or in the dimension lumber markets. So they have become very adept. It is a matter of competition; it is also a matter of adapting to change and seizing opportunities, and many of them have decided to stay at the scale they are at, in total cubic metres consumed per year, but what they have done is they have gone into specialty markets and they are adding value to these species which maybe are not in demand by other markets, by other consumers; or they are adding special value to them.
Elmsdale Lumber, we were a major supplier to them because we don't saw pine - white or red pine - in our mill. We are a major fibre supplier to Elmsdale Lumber because they have a carriage mill and they sell boards and they sell a lot of stock to the Shaw plant down in Cornwallis. We also sell hardwood logs to the Savoie/Dickson mill in Westville and to the B.A. Fraser mill in Margaree. We also sell pine to the Ibbitson mill in Yarmouth because again, as I say, we don't manufacture hardwood lumber or pine lumber.
MR. MACKINNON: You have indicated that about $1.2 million on silviculture on approximately 2,500 or 2,900 acres per year; that works out to approximately between $450 to $500 per acre on silviculture, which is pretty much in-line with the provincial average. Am I correct in that?
MR. MACLELLAN: I couldn't answer that, I'm not sure how the whole number comes together.
MR. MACKINNON: I believe per acre. So, on the reforestation, if you are planting your seedlings - I think six feet is the minimum . . .
MR. MACLELLAN: Eight feet now, I think.
MR. MACKINNON: So you would still be planting close to 1,000, at $32, that's $322 per acre, just on the reforestation on Crown land. If you break that down off the stumpage, that would work out to be a pretty good deal on Crown land, would it not? Instead of, let's say, if you want to use the figure $40 per acre and in reality, when you subtract off the silviculture cost to the taxpayer, the reforestation would work out to more like about $20 per acre.
[10:30 a.m.]
MR. MACLELLAN: I have to reiterate, the agreement is nine years old, heading into its 10th year, and a lot has changed. If hindsight were foresight - but I reiterate, it is nine years old.
MR. CHAIRMAN: Mr. Hurlburt.
MR. RICHARD HURLBURT: Thank you, gentlemen, for coming in this morning. Your presentation has been well received here, I would say, and you are getting some comments back; I don't know if they are negative or positive, you take it whichever way you want.
I have three little questions for you. Occupational health safety, you have a safety committee and chairman at your site?
MR. REES: Yes, we do.
MR. HURLBURT: You have a committee made up of the workers?
MR. REES: Yes, it is dictated by a committee structure.
MR. HURLBURT: They make recommendations to management?
MR. REES: Yes, on an ongoing basis.
MR. HURLBURT: Right on. So, the document is probably a little bit thicker than this manual that you presented here today of occupational health and safety, which was produced approximately four years ago in the Province of Nova Scotia. What the government of the day is saying is, we don't want to jeopardize the safety of the workers, but maybe we could streamline some of the regulations in the book; maybe some are redundant and what we need is feedback from companies such as yours, and with the safety committee made up of the employees. That's what you are saying you people have, as all companies are supposed to have in the Province of Nova Scotia today. So, feedback from that safety committee is what this government needs, the feedback from you people, because your own words, a few minutes ago, were that we are regulated to death and the red tape in this province for any company to do business is ridiculous. Is that basically what you said a few minutes ago?
MR. REES: Yes, sir, I would agree with that.
MR. MACKINNON: Not on safety.
MR. HURLBURT: On the safety aspect, I reiterate, not to jeopardize the health and safety of the workers, but I think there are aspects of the health and safety that could be looked at and streamlined, and I think that your safety committee maybe could help out in that for this province. If there is any information coming from that safety committee, I would love to receive it and I am sure all members would love to receive that.
MR. MACKINNON: There is a red tape task force . . .
MR. HURLBURT: Absolutely, and I happen to sit on that red tape task force and I would love to see any documentation that would come from your health and safety committee, or from any business in the Province of Nova Scotia. That's what we need, is feedback from the business community.
The second one, the regulations that are being enforced on January 1, 2001, that has been five years in the works, has it not, sustainable forest, for the Province of Nova Scotia?
MR. MACLELLAN: Oh, at least five years that has been going, but all good things take time.
MR. HURLBURT: Absolutely, but in saying that, do you think it is going to be fair across the board for even the small sawmill operators in the Province of Nova Scotia; do you think the stumpage rates for small and large sawmills are equal?
MR. MACLELLAN: I don't know how you would divide it out differently, I don't know how you would do it differently, because you would have to be King Solomon in all his wisdom to be able to do anything different. The legislation we have today, I am sure is imperfect, but I can say that it is the product of many years of debate and discussions and it is a consensus. It is a document built from the whole process of consensus and input and there are probably people at either end of the extremes who are not happy with it. I think the majority of people are. I see Don Downe came in a few minutes ago. He went through a very tough process of involvement and discussions with the group, trying to get the whole thing started on the road to a solution, which is actually where we are today with this new legislation, because of the ending of the federal participation in silviculture. He can attest it was a tough process.
MR. DONALD DOWNE: How did you do?
MR. MACLELLAN: We did pretty good, but it was tough.
MR. HURLBURT: The feedback I am getting from the small sawmills in my area is that the burden is all going on the small sawmill owners and there are different aspects of this. There is the landowner, the contractor, the sawmill, the person who gets the chips or
sawdust; there are numerous components of this and it seems like all the burden is going on the one aspect, and they have a concern with that.
MR. MACLELLAN: The basis of the legislation is the registry of buyer legislation which, I think, is entering its third year in 2001; I believe it is the third year. It is a means of tracking the harvest and formalizing and legalizing the requirement to report the consumption, purchase and sale of forest products in Nova Scotia. It was an essential element in deciding how much investment the Province of Nova Scotia, on all lands, has to make on reforestation or in stand tending, in forest tending, in tending the garden of our forest to be successful in the future and it is based on that.
The principle is the first consumer, the first facility to consume, so if you are a sawmill you are the first consumer, the first registered buyer to manufacture that product, if you are a paper mill buying pulpwood roadside, you are the first manufacturer. If you are a paper mill buying wood chips from a sawmill, you are not the first manufacturer. However, there is a business relationship between the sawmill and the paper mill they sell their chips to. The best part of this legislation is that both landowners or contractors and consumers - in this case sawmills or paper mills - can negotiate that relationship, can negotiate the elements of that relationship. What the legislation requires is that you have to be a registered buyer come January 1st - our firm and nine others right now have submitted a wood acquisitions plan - everyone who is a registered buyer, to be able to procure forest products, has to submit a wood acquisitions plan and you have to fund that at $3.00 a cubic metre for softwood, for example, into the sustainable forestry fund or conduct your own program. So it is very fair and it is a level playing field. It would be better if the lumber market was strong on selling price at this time to get it implemented but it is not.
MR. HURLBURT: Do you see this as a negative impact on small sawmill owners, that it is going to put some out of business in the Province of Nova Scotia? Maybe that is not a fair question to you, but . . .
MR. MACLELLAN: I can tell you that - as Mr. Rees has already alluded to - it has been very tough in the last several months in this industry, and there may be 18 months or 20 more months of tough market. Lumber is a commodity, it even has futures, you can buy them on the Chicago Mercantile, so it is a commodity. Other people set the price, no one group actually sets the price, the whole market whether it is North America or whether it is Europe - in our case, it is the North American market - the price is set by commodity. That selling price determines what your cost can be if you are a manufacturer and it goes right down the line. It determines what the cost can be to get to a point where you can break even, pay your bills, pay your employees, or make a profit.
When a commodity is low - as anyone who has been in say, the beef business, who has been a beef farmer in the last four years, you know there have been more lows than highs, so it is a commodity - when it is at the bottom you have to find a way to run your business,
to manage your costs. I say the same thing again, in the lumber industry we have to find a way to manage our costs to be successful in the bottom of the market. It doesn't matter if you are large or small.
MR. HURLBURT: Just a final question. In my previous life I was a small-business owner, which for the record I am not now, my three sons operate and manage the construction. Going back 25 years ago I remember when I only had two employees, I was a backyard operation, people used to leave you alone. When you got out and looked after the bigger contracts and employed more people - we were up to 100 people at times - everybody was always after you, everything was wrong, nothing was right. I remember Roger Hall who owned Motor Mart in Yarmouth, which is one of the success stories of Yarmouth, told me, he said, Richard remember, the higher you climb the pole the more you expose your - you can add to that whatever you want to add.
I was just reading the story on November 9th from MacTara and I think you people have to toot your own horn more. They only interviewed, I think, one person from your company, except for you, Mr. Rees. Like a judge said one time, there are two stories and then there are the facts so, I will leave it at that.
MR. CHAIRMAN: Mr. MacDonell, one question. We are going to limit committee members to one question.
MR. JOHN MACDONELL: I will make a comment before I make my question, then. Allan, your interpretation of old growth forests, it is much more complicated than a garden and I think we tend to - if we go through a chopping or whatever and we see a deer or go through the woods anywhere and see a deer - relate wildlife in the sense of rabbits, deer, coyotes, and a few things we see on the ground, but I think in terms of all those other creatures we don't pay attention to that old growth forests sustain. Those are things like flying squirrels, for example, which you don't find for years after clear cuts; spruce partridges and Parula warblers, which nobody ever notices because they are in the canopy. So there is a lot more to old growth forests than the notion of just planting, harvesting and planting and harvesting.
The 3 per cent, if that is all MacTara takes out of Stanley per year to meet their need, it doesn't seem to me to be enough to have excluded the other mills. The notion of the pulp mills not being interested in taking that smaller wood so it was an advantage for you to be there, I think government has the responsibility, they could have ensured, like they do in New Brunswick, that the pulp mills take small wood from private woodlot owners to help with silviculture. If you had no place to sell those little trees then it is pretty hard to maintain a silviculture operation.
My one question is going to come down to silviculture. In this agreement you are to do silviculture but on the day we were out you said you weren't doing any silviculture in Stanley on the Crown land and that the province was doing that. You refer to hindsight being 20/20 but to me, when the province enters into an agreement, this agreement seems to have shifted and changed over nine years. I am just wondering, when it says that the province will request the company to carry out forest improvement work and to claim funding under the provisions of provincial and/or federal forestry agreements, was that the demise of those provincial and federal agreements that allowed MacTara not to do any silviculture on that land? It is obvious to me, whatever price you are paying for your stumpage, and silviculture is part of the agreement, that if you don't do silviculture you should pay more. I am under the impression that never happened.
MR. MACLELLAN: John, I should point out that MacTara has conducted regeneration assessments on the harvest blocks, two to three years after harvest and it was determined by staff with the department that the regeneration was sufficient on those blocks. That was their determination for the management regime they were applying to Crown land.
MR. JOHN MACDONELL: The last thing . . .
MR. MACLELLAN: John, I should point out that we hired a consultant firm out of Truro and they did the work each year and that MacTara paid the cost.
MR. CHAIRMAN: Mr. MacKinnon, in the interest of time and the spirit of cooperation.
MR. MACKINNON: Mr. Chairman, back to occupational health and safety issue, I believe, gentlemen, you readily agree that since the new Act came into force the total number of accidents have been reduced quite substantially over the last number of years and the preventable number of deaths have been reduced substantially. As well, employers are now in a position to see a substantial reduction in their premiums - I am not sure if you are aware of that or not - in fact the CEO of WCB indicated that the unfunded liability will be paid off in less than 50 per cent of the allotted time-frame. It was scheduled to be paid off in 45 years and by the year 2010 that unfunded liability of $476 million will be paid off, meaning a substantial reduction to yourself.
My question, in essence, with regard to the Occupational Health and Safety Act is, is there any specific area presently - just dealing with the Occupational Health and Safety Act, forgetting about all your frustration about the red tape and so on, myself as a private businessman, I know what you are saying, but this particular piece of legislation - is there anything you can pinpoint that you see as an encumbrance or a liability to yourselves in doing business?
MR. REES: I would say that better training of field staff would be a definite asset.
MR. MACKINNON: Within the Department of Labour?
MR. REES: Yes. I believe they are pressed beyond their ability to cope.
MR. MACKINNON: So you need more staff, you mean?
MR. REES: I believe they need better training and better support so that when they come to visit a location they can be a positive influence. That is my opinion.
MR. MACKINNON: That is my opinion, as well. That is why we doubled our staff when I was minister. Thank you.
MR. CHAIRMAN: One thing that strikes me and I think we all recognize because of the profile perhaps that a Stanfields, or a Stora, or a Bowater, or Kimberly-Clark, maybe Devco, or Sysco and other companies have obtained in Nova Scotia, sometimes we forget the importance of a MacTara - not only to the Musquodoboit Valley but also to Colchester, East Hants, eastern Halifax County - is extremely important. I know that MacTara is extremely community-minded and we are especially proud of the contributions and donations that the President and founder, Mr. Hugh Erskine, has made to a number of groups and non-profit organizations. I know they are too numerous to mention here today but just recently the community received an incredible donation regarding the playground in Upper Musquodoboit. That is absolutely one of its kind, I believe, in Nova Scotia, if not all of eastern Canada. Plus, we have the high-tech classroom and the Armathea Co-op and so on and so forth. I wonder if you could just tell the committee a little bit about the high-tech classroom at Musquodoboit Rural High School and MacTara's involvement in that educational process?
MR. REES: If I could just say, Mr. Chairman, we believe that education is paramount to success in our business and in any business. MacTara supports education wherever we possibly can. We have a scholarship program and we would like to do more and we will do more as we are able to. The high-tech classroom is something that you really have to see to appreciate but it gives the students at the school in Middle Musquodoboit an edge on a lot of other people and it puts them on equal footing with children educated in the larger cities of our province. We are a big supporter, we must educate the population.
I am horrified when I read in the newspaper the statistics on illiteracy in Nova Scotia; it is absolutely horrifying. I think all of you gentlemen should read that and should be ashamed, as I am. We must do more if we are to maintain the workforce that we have and if that workforce is to improve so that we can better provide in this province. We will do whatever we can and the high-tech classroom is simply one small facet of it.
MR. MACLELLAN: The high-tech classroom is essentially - those of you who are familiar with Powerpoint or like the little presentation I printed here was from Powerpoint - a multimedia set-up and it basically allows the teachers and students, using the school computers, to produce multimedia presentations. It is also instant projection, the teachers giving lectures can include a multimedia presentation in their lecture done at home on their laptop or in the classroom on the laptop, they can include a multimedia presentation as well as live - when the teacher is writing they can actually write on this one tablet, it is a tablet about this size, you can actually write on it and it transcribes up on the projection. It is clear, it is crisp, it is high-quality, it is a very new and very creative process.
Two of our staff went down to speak about staying in school and getting an education and it was called the economics of staying in school or the economics of an education. It was one whole morning at the school about a month and one-half ago and both of the staff members came back and they were flabbergasted. They were really pleased. I have to say, the word was, flabbergasted, because the students wanted to show them the classroom. They showed them what they had done, some of the multimedia presentations they had put together.
Let's face it, they are learning skills. If you are learning to do a multimedia presentation and you are in Grade 11 in a high school in Nova Scotia today, it makes it easier for you to go to Acadia, it makes it easier for you to go into a workplace. Quite a few people in workplaces are 40 and over - I said 40, sorry, I include myself - and most of us are not really comfortable putting together a multimedia presentation at home or in the office because that technology is still new to us. It is emerging.
These young people are getting a real leg-up. They were really impressed. They just wanted to show it off. They ran through demonstrations and both our human resources manager and our quality assurance superintendent came away from that, and they were still talking about it the entire next day at our office. They were just flabbergasted how well it had been received and how well the students and teachers were using it. That is one of the great things that we are really proud of. It really has positive effects.
I should also point out, we have a SAW program. We have already had some graduates from our SAW program. Do you want to speak to that, Allan?
MR. REES: We provide, to the employees, an education program because we feel that the better educated the people are, the better they will be able to do their jobs. It is a selfish motive, I suppose.
We have a program called the SAW program which is School at Work. We are bringing people to the point where they can take their GED which gives them a high school equivalency. We had our first graduates last year and we have people in the program again
this year. We had an excess of people who signed up, people who we couldn't place because we just didn't have the room. But we will expand that program as time goes on.
The workers have been tremendously receptive, beyond our wildest dreams, signing up, people admitting that they didn't feel comfortable at reading and writing, and they wanted some help. It has been a tremendously successful program. I have to give total credit to our human resources officer, who initiated this and got it running. We are big supporters of education. We cannot succeed unless we educate.
MR. CHAIRMAN: Thank you very much. That does conclude our Q and A session regarding this hearing. If our guests would like to make, maybe, just a couple of comments, to leave us with a couple of thoughts, perhaps, in conclusion.
MR. MACLELLAN: Two things. One, back to Mr. MacDonell's earlier comment, I just want to respond to it. When government participates in the market place, it creates problems and it creates difficulties. The sustainable forestry legislation that is in place now is really partnership with government, but primarily, it is between the buyer and the seller, and the consumer of the product. That is the best way to do it. It is also the most sustainable way to do it.
The other thing is that the House is considering some new legislation on environment. MacTara and the Nova Scotia Forest Products Association, of which we are a member, we have reviewed that legislation off the website. I ask this one question that I will leave with you. Do we really need this legislation? Do we really need more regulations to protect the environment? If we need improvements, in what areas do we need the improvements?
The legislation is written to include everything and anything and anyhow, at any discretion and all discretion, as they usually are when they first come out. MacTara and the Nova Scotia Forest Products Association have some deep concerns about it and we hope there is going to be a long, involved discussion and evaluation of it, and the elements of it. That's all I have.
MR. REES: Gentlemen, thank you very much for the opportunity to be here today to meet with you. If I may be so bold, this committee is made up of the spectrum of our political leanings in Nova Scotia and I would just like to say to each and every one of you that it requires everybody's shoulder to the wheel to make this thing go. As much as we all support different sides of the spectrum, we must all work together. From a personal note, John and I were locked in a truck and drove from here to Quebec and back again so you can imagine that there were some interesting conversations.
Having said that, education, gentlemen, is the key to success and be it economic education, be it education for the purest motives, please, we look to you. Thank you very much for giving us this opportunity.
MR. CHAIRMAN: Thank you. On behalf of the committee I would like to certainly extend our gratitude for you folks coming in this morning. It has been informative. I think everybody will agree it was educational. It was nice of you to indulge us and be patient with us. We feel much better for it. Thank you very much.
We have a little bit of unfinished business there, committee members. Maybe we can take a couple of minutes now and come back.
[10:56 a.m. The committee recessed.]
[10:57 a.m. The committee reconvened.]
MR. CHAIRMAN: Committee members, if we could just briefly bring this committee back to order. Our next meeting date is January 16th we have the Nova Scotia Southwest Fishermen's Association, Mr. Fred Sears is scheduled to come in. Beyond that date, we have kept January 30th open and perhaps with the agreement of the committee, we could entertain a suggestion from the honourable member for Cape Breton The Lakes. Mr. Boudreau has a possible suggestion here.
MR. BOUDREAU: Mr. Chairman, I initially brought it up last meeting, I believe it was. New Deal Development has a project that is located in Sydney Mines that they would like to educate the committee on. I spoke to the group themselves. They are very responsive to come forward and do a presentation, so I would put forward that we ask New Deal Development to come and do a presentation in regard to their fossil centre in Sydney Mines.
MR. CHAIRMAN: Are there any comments? Is that agreeable by the committee? Okay, very good.
Just a little housekeeping. This morning, as you know, we met from 9:00 a.m. until 11:00 a.m. I am just wondering, do we keep that time-frame or do you want to move to 1:00 p.m. to 3:00 p.m.? Mr. Downe.
MR. DOWNE: I apologize for being late this morning as I had a conference - actually all three Parties have been involved in this for the last two months - with NovaKnowledge. Today was the last session but if we could coordinate between this committee and the Human Resources Committee. They meet the same day, which is fine, but they meet at the same time; periodically we will pick 9:00 a.m. to 11:00 a.m. If there is any way at all, because I really think this is an important committee and I really would like to be a part of this committee. I am also on the Human Resources Committee and if there is any way that we can have some flexibility there, it might even make it easier for other Parties.
I don't know about other members, how they feel about it, because sometimes some members are put in both of those situations where one of their colleagues is away or whatever. If there was that flexibility, that would be really appreciated, Mr. Chairman. I just ask you to consider that.
[11:00 a.m.]
MR. CHAIRMAN: Thank you, and I appreciate that. I personally would like us to establish a time and try to stick to that to be consistent. That is my own opinion. Richard, you have a comment.
MR. HURLBURT: Mr. Chairman, I have pretty near a four hour drive and if this committee was to meet on Tuesday afternoon, then I would get another day in my riding. Instead of having to come up here Monday night, I could come up Tuesday morning. So it would be beneficial to me but I know there are other committee members here and I know they are all going to abide by my wishes. (Laughter)
MR. CHAIRMAN: Further, I might add, when the House is in session, obviously . . .
MR. HURLBURT: Well, that is different.
MR. CHAIRMAN: . . . it is different. When the House is out, Darlene, we normally do meet from 1:00 p.m. to 3:00 p.m.
MRS. DARLENE HENRY (Legislative Committee Clerk): Yes.
MR. CHAIRMAN: So is it agreed? Do other members have any comments on this? Bill or John.
MR. JOHN MACDONELL: I am not usually on the committee. I am here replacing our member for Cape Breton Centre. He may prefer the afternoon. It may work well for him but I don't really have an opinion.
MR. BOUDREAU: The Liberal caucus agrees that 1:00 p.m. to 3:00 p.m. would probably be a better time.
MR. CHAIRMAN: Okay, I see Darlene has on here for the next meeting date, January 16th, 1:00 p.m. to 3:00 p.m. I hope that agrees with everybody's schedule.
I just might add, as chairmen, we do - although maybe sometimes it doesn't appear this way - try to be as fair as we can when we cut people off. Obviously, no chairman likes to do that but we have to be conscious and mindful of other committee members who might like to get an opportunity. Yes, Mr. Downe.
MR. DOWNE: It was interesting this morning, if I may, just for a moment, one of the discussions over the last three or four, two months anyway, at this conference was talking about the inability of government and how governments screw up, and it almost like this is the time when it is in vogue just to beat up on government, whether it is current government or past government or yet-to-be government or whatever. It is politicians.
The challenge came out about how we find it so difficult to work together. I spoke this morning about the fact that for example, the port, we had Dr. Hamm, we had Darrell Dexter; all three Parties worked on that in a very non-political way. We worked together on the post-Panamax option and we brought in the private sector and we brought in the education system. Everybody worked together on a common goal. People are saying they want more of that. I really do think they do. I listen here and I hear the little jabs here, well, the previous government did this, so stupid and they were this and that and then the next guy (Interruptions) No, I know.
It would be nice, Mr. Chairman, I know it is going to continue to some degree but it would sure be great if we could find the odd subject matter that we could show some leadership here, in my view. It is very difficult because we are all political animals and by nature we are partisan. We are politicians but at the same time, if we can find a vision or a focus or an issue that we can get away from the political game on one thing and try to focus our energy on - and there is nothing more important than growing this economy and a knowledge-based economy - if we can do that, to me it would be a real challenge for us.
As we enter the new year, all I ask you to do is think about it and if we could find one single issue that we can just take away the political partisanship for a period of time and allow ourselves to move forward on one issue and see what we can do, I think this province would be a better place. I just leave that with you and I would commit, whatever that issue might be, to try to work as hard as I can on that one issue; it is not going to be on everything because I know it just will never happen, but if we can fix one issue.
It would take a great deal of leadership by the chairman and all of us to take our swords and throw them out behind us for a little while and focus on one issue. I think it would be beneficial for all of us and is ultimately why we are here, and that is to provide a better province.
MR. CHAIRMAN: Frank.
MR. CHIPMAN: I concur with my friend across the table here, the member for Lunenburg West. We have two good issues here this morning over regulations, and education and illiteracy that we could work toward.
MR. CHAIRMAN: Are there any other comments? Folks, just looking at the lateness of the hour, I think it is probably time that we did adjourn. I want to agree with Don. He says we do need leadership. Perhaps he would give us an example in the House where he supported one or two of our initiatives. (Laughter) I am not making light of it. Don, good point. Maybe we all could agree to adjourn. That would be cooperation. Look, see, we are not even going to agree to adjourn.
MR. DOWNE: We can adjourn if you want but the reality is that I have given Ernie Fage credit on three or four occasions on initiatives that he has undertaken, as well as other government members. That never gets copied nor repeated by Opposition or government people. That is another point I made this morning, that you don't read that in the paper. I remember ministers, when I was in government, other members across the way, and Brooke, you and I have been through battle after battle but periodically you got up and you said something positive about me and that never got reported.
MR. CHAIRMAN: Don't tell those guys, they won't believe you.
MR. DOWNE: So even ourselves find it difficult to admit that periodically we do take the high road. I know I have said it repeatedly in the House and I have made a point of asking members to listen when I have said that Ernie did an excellent job on this issue and I complimented the minister, I have complimented the Premier and I complimented the government. Periodically, you know, it doesn't hurt if we don't use that in a bad way that we do acknowledge that.
MR. CHAIRMAN: Maybe we could try a pilot. You are talking as chairman of this committee. Maybe when Mr. Sears comes in, this fishing association, they have a lot of concerns and I think they are legitimate. I don't understand them fully and I don't know if anybody or everybody does around this committee table but that might be an issue where we really can collectively try to bury the partisan hatchet and try to . . .
MR. DOWNE: It is another jurisdiction. It is federal.
MR. CHAIRMAN: But it is not completely federal. Anyway, guys, thank you very much.
[The committee adjourned at 11:06 a.m.]