HALIFAX, TUESDAY, JUNE 15, 2004
STANDING COMMITTEE ON ECONOMIC DEVELOPMENT
9:00 A.M.
CHAIRMAN
Mr. Russell MacKinnon
MR. CHAIRMAN: Ladies and gentlemen, welcome to today's Economic Development Committee. Today we have the shipbuilding industry issue before us and our witnesses are Dr. Russell Saunders, Mr. Timothy Edwards of the Nova Scotia Boatbuilders Association, and Dr. Arthur Theriault, President of A.F. Theriault and Son Limited. I would ask if the individual members, starting on my left, would introduce themselves and then we will start off with the witnesses with a 10- to 15-minute presentation, if they wish, with questions thereafter or we can start with questions right away.
[The committee members introduced themselves.]
MR. CHAIRMAN: Dr. Saunders.
MR. RUSSELL SAUNDERS: Dr. Russell Saunders, I'm a consultant in the shipbuilding industry and I live in Clare.
MR. TIMOTHY EDWARDS: I'm Tim Edwards, Executive Director of the Nova Scotia Boatbuilders Association.
MR. ARTHUR THERIAULT: Arthur Theriault, President of A.F. Theriault and Son Limited, a boatbuilder in wood, fibreglass, aluminum, steel construction.
MR. CHAIRMAN: Doctor, the floor is yours.
1
MR. SAUNDERS: Good morning to all of you who have so generously given of your time to hear me prattle on about the concerns I have about the marine industry here in Nova Scotia. Perhaps, first of all, I should qualify myself as one who has some credibility in the industry. I started off in the marine industry at the early age of 16 years as a marine engineering apprentice and that was 45 years ago. Consequently, I have witnessed several boom/bust cycles in the industry. Most importantly of all, I have had the privilege of being part of the remedial action and recovery strategies to see the industry bounce back again.
The greatest contributor to the downturn of any industry is apathy. The biggest contributor to the recovery of any industry is vision. The best formula for recovery in this day and age is not to allow the bust to happen in the first place. We all can do that through co-operation and collaboration between industry and all levels of government, especially the provincial government. I will qualify that statement later.
Throughout my career I have had the honour of serving on several esteemed committees that have heavily influenced the marine industry in a positive way. The committees include but are not limited to: SIMAC, which I now serve on which is a Shipbuilding Industrial Marine Advisory Committee, a federal committee on the future and development of the roadmap for the shipbuilding industry in Canada; the Huntsman Marine Science Centre, which is in St. Andrews, New Brunswick, I spent 10 years as an adviser with them; ASTF, the Alaska Science and Technology Foundation, I was an adviser there for five years; a short term with the Science Council of Canada; and several international shipbuilding firms such as A.F. Theriault and Son, of Meteghan, Nova Scotia. Since I am a native Nova Scotian I have a desire to see our marine industry prosper; after all, we are Canada's Ocean Playground.
Besides activities taking place at the Halifax Shipyard, which seems to be getting its fair share of press, there are thousands of Nova Scotians plying their skills to support a marine export business on a national and international scale. So then, you can probably join me in my chagrin when I hear that our boatbuilding industry is almost non-existent.
In the Municipality of Clare there are about 1,000 people who depend entirely upon the boatbuilding industry and the domestic and foreign markets. Nova Scotians are innovative to say the least and I intend to pass this out to each one of you when I'm finished. We have copies ready for you so you won't have to take notes on it, except the questions you want to ask.
We probably are the only province where a medium-sized boatyard operates its own full-time research and development centre, including a materials testing facility - in fact, we are the only one. However, as I said before, there are measures to take when an industry so vital to our economic health is in jeopardy. Permit me to bring you up to date on the issues that if left unchecked will sink this time-old industry.
The Quebec Government provides client incentives to build their vessels in the province. This incentive is as much as 20 per cent of the entire contract or 40 per cent of the labour costs, whichever is less. Because of this, we have lost over $12 million to Quebec yards from the Digby County region alone during the past two years. In other terms, that equates to an average of 1.2 million worker hours removed from our local economy and that leaves small boatbuilders, who can least afford it, scrambling for work in the international marketplace.
One of the best boosters to the small vessel construction industry was the building of small craft for the federal government. The most recent was an order for 20 47-foot search and rescue boats which could have been built right here in Nova Scotia. To bid on such a project a builder would require a $20 million performance bond. The only company that could afford to tender was the Washington group out of Vancouver, B.C., and they're an American-owned company. Why? It's quite elementary.
Small Nova Scotian shipyards cannot obtain bonding facilities required by the federal government to bid on such projects. Why? That, too, is elementary. The insurance companies are no longer offering such bonding facilities to the small builder who cannot back them dollar to dollar; in other words the bonding company will issue the bond only if the builder can guarantee it. It's sort of a Catch-22.
So we're broke if we do and we're broke if we don't. Now the companies that traditionally tender on federal projects can no longer rely upon that client to help stabilize the industry. The spinoff resulting from such a policy is that since the federal government reserves the right to award contracts to Canadian shipbuilders only in cases where competition is evident, they reserve the right to go offshore for their vessels. So now the work that has traditionally supported the regional economy is not only being lost to Quebec, but to the builders outside of Canada as well. Down in Clare we call that a "faucher les jambes" or they cut the legs out from underneath us. Is that a correct pronunciation? Thank you very much. A double whammy.
The composite side of the industry is experiencing its own glitches. Although there is objective evidence that the industry is growing and there is the challenge to provide skilled workers for an industry hiring pool, the Nova Scotia Community College has not seriously addressed this issue, except to offer a course to the public for a cost of over $9,000 a year. That is not acceptable and it is out of reach for the average person as well.
So added to the cost of international marketing, the loss of work to other provinces and to the international boatbuilding industry, now the boatbuilders must bear the cost of training on their own. Since a vibrant industry is measured by its profitability and contributions to the economy, no wonder the educators state that there is no objective evidence that there is an industry here even to build upon.
Permit me a moment to explain the potential in this industry. In addition to what we are losing due to provincial and federal policies, thanks to Osama Bin Laden and his band of not so merry terrorists, there is a patrol boat boom on a global scale taking place right now. Other nations such as Sweden, Denmark, Norway, France, Italy, Germany, England, Australia, New Zealand, Turkey, and the United States of America, to name a few, have partnered with industry to develop a new patrol platform that will help fill the tremendous demand that is objectively evident. There is a patrol boom on now, taking place on a global scale, and I have never seen Canada's name pop up on a supplier route - and that includes Nova Scotia.
There's no question that Nova Scotia is supporting its boatbuilding industry to the best of its ability, which is directly linked to its human resources, but we're still missing the mark, and if we don't soon hit the mark, we will miss out entirely - not hit it. When the province provided over $80 million in loan guarantees to the Halifax Shipyard to construct a prototype ocean tug, I got excited. But then the momentum died down, only to get lost in a maze of the bureaucracy trying to discover the protocol to source the same kind of funding.
There are innovations and designs on the table right here in Nova Scotia that could put us in first place in the global boatbuilding and patrol boatbuilding industry. The most advanced technology in vessel construction is sitting on our shelves right here in Nova Scotia, simply because protocol mechanisms and financial facilities are not in place.
Let me give you an example of the competition we have here in Nova Scotia that we're facing. The State of Louisiana provided a $10 million U.S. grant to a shipyard for upgrading. They also provide rebates, incentives for shipbuilders, on wages paid. The end labour hours are costing them about $4.50 U.S. an hour. Thanks to NAFTA, the Canadian shipbuilding industry cannot build commercial vessels for use in the U.S.A., but the U.S.A. companies are permitted to build the same for use in Canada. The two offshore supply vessels recently purchased by a Nova Scotia company could have been built in Nova Scotia, but we could not compete for the business.
[9:15 a.m.]
I'm not going to prattle on about the challenges we face because we could be here all day, so I'll try not to overdo my welcome so permit me, if you will, to close off with a few suggestions, in fact, some solutions that I consider reasonable and objective and a strategy to thwart off any pending negative impact upon the industry as a whole. You've heard the challenges, I would now like to give you some of what I think, in my opinion, are some of the solutions.
First of all is to create, not a committee, but a marine secretariat with a mandate to recommend remedial action and present solutions for the future of the industry. Such a secretariat must be comprised of forward thinkers with substantial experience in the marine industry. It would report to the Minister of Economic Development.
The secretariat would be responsible to and for making due process more efficient and effective; making more readily available financial and bonding facilities; influencing community college officials to create strategic trades development for this industry, including advanced composites training; negotiating better export opportunities with offshore economic zones, such as Carricom, Chile and so on; providing an organized and effective approach to commercialization of the innovations for the shipbuilding industry; and creating a fast-track agency to address the day-to-day challenges that affect our industry.
Nova Scotia has the potential to create the most advanced and profitable marine industry in the world, but we need to collaborate and we need to act together. The time for promises, the time for lip service is well past. An objective would be to get ahead of Turkey and catch up with Sweden.
What the vision lacks is in its clarity. We must be definitive, decisive and determined to succeed in this venture of the future of boatbuilding. Together we can achieve these goals and many more that will inevitably surface once we move forward with conviction.
I thank you very much for listening to my preplanned speech. I could never have remembered all of that without it written in front of me. What you have heard there is my opinion from the things that I've been involved in, the committees that I've been on and the challenges that face the nation as a whole, but most of all it affects the small boatbuilder who is down the road from you here trying to keep his living going.
So the panel is now open for questions, we will try to answer them and I have two experts in the field with me who can certainly help support that. Thank you.
MR. CHAIRMAN: Thank you, doctor. I must say, you have so many initials after your name that I almost think you have a masters of the alphabet. I'll start off with the honourable member for Clare.
MR. WAYNE GAUDET: Mr. Chairman, I want to thank our guests for having come in to make their presentation this morning. I want to touch on a number of questions. The first one relates to securing bids, bonding, for shipyards here in Nova Scotia. If I understood correctly, this is to allow bids on federal contracts?
MR. SAUNDERS: Federal contracts require that.
MR. GAUDET: So, technically, when you're bidding on private work, you don't need this . . .
MR. SAUNDERS: Not always. Sometimes it depends on who it is, if it's a new client and they're coming in from offshore and they're asking you to tender, they may ask that you have a bid bond on the issue, but I think Dr. Theriault can answer that one better.
MR. ARTHUR THERIAULT: Yes, that is correct, it depends, but definitely the federal government, you are required to put a bid bond together. On the last boat we had, to give you an example, when we tendered it, there is a bid bond that you first start off with and then a performance bond. We got the bid bond with a price from them saying what it would cost; I'll give you figures, but it was like $25,000 to put this together, that was the price they gave us for the performance bond. Once we got the contract, they doubled their price on the performance bond from $25,000 to $46,000 that we had to pay them for the bonding company in order to get the contract. Right now, I'm not sure if I would be able to receive another bond because they don't want to bond any boatbuilders.
MR. GAUDET: So that's right across the country?
MR. ARTHUR THERIAULT: Yes, pretty well. I brought this up with the fellow who represents the government on our contract and he said that everybody's having the same problem.
MR. GAUDET: You've talked about incentives that Quebec is providing, and Louisiana is providing, so I guess in a global market it's very difficult to compete on tenders, especially that are awarded to Quebec and I suspect there's probably others involved - other states or even other parts of the country that provide incentives to shipyards. In order to try and compete on a level playing field, the obvious would be for Nova Scotia or for Canada to offer some type of incentives. I'm just trying to understand - if you could recommend specifics for the Province of Nova Scotia in order to compete, especially in our own country, what would you recommend? The second part is are you aware if B.C. or any other parts of the country that are offering incentives to shipyards?
MR. SAUNDERS: British Columbia is not. The only province I'm aware of - and this is through the Shipbuilding Industrial Marine Advisory Committee - is Quebec. It has affected everybody from B.C. to Newfoundland. And they don't hide it, so obviously it's something that they do to help stimulate the economy. The answer to your other question though, would I have any recommendations of what a government can do today? I think it's on two levels.
First of all - and this is just me talking - I don't like to see grants. I like to see repayable loans because it creates a responsibility, an accountability. Grants, I think we've all found out in the past, just don't seem to work. It's okay for some little areas that are not
in a profit position, but for this industry I think if the funding is made available in terms of a bonding facility, for instance, as remedial action until such time as we can, together, find bonding facilities - I say "together" meaning government and industry together going out and looking for the specific thing.
The other area that I am totally convinced that Nova Scotia can not only compete, but can exceed well beyond what's out there is in technology. It's extremely frustrating when you know what's sitting on a shelf and you see what's being sold in the international marketplace - for instance, 150 patrol boats were built for different countries around the world by Sweden and they built them out of aluminum. I want to tell you, having been a patrol boat operator way back in the early 1960s, I did not want an aluminum boat around me - they burn too. But there are some advanced composites that have been developed in Nova Scotia that quite frankly have over 10 times the strength of aluminum and they're lighter in weight. So they're more efficient, more cost-effective, there's virtually no maintenance at all on them for at least 10 years.
So, we have this technology here in Nova Scotia and we've been pushing it through the NSBA and through the shipyards. There are groups in the federal government that are totally sold on it, but there are some groups that are scared to death of it, so it goes nowhere. To be able to provide significant funding to do prototypes of a new technology for export marketing - I don't think we should sit around waiting for Canada to move on it. I say for export marketing, it would be an absolute tremendous boost to the economy based on resale and the sale of that vessel; in other words, the province holds the paper on it. If we have the technology and we can get out there and beat the marketplace, then I think that's where we should be. Did I answer your question, sir?
MR. GAUDET: I want to get back to the marketplace. With regard to federal contracts, I guess the fact that you have no bid bonding in order to secure these contracts, who is providing the federal government with the boats that they need?
MR. SAUNDERS: Well, an example is the 47-foot rescue boats, there were 20 of them that went up for tender. We couldn't even tender on it. He got a bid bond for a couple of million dollars, not a bid bond but a performance bond, but that was a $20 million one. Nova Scotia was quite capable of building those boats. There's no way they could have gotten a $20 million performance bond. They just won't offer it to us, because Arthur doesn't have that many draught horses to cover it or that many cottages. All his own personal wealth has to go up and secure a bid bond. Were you aware of that? You're a limited corporation, but they want your personal wealth to back a bid bond.
MR. GAUDET: So who's competing for that type of work?
MR. SAUNDERS: The much larger corporations, for instance the Washington group, which is an American company that works in Canada. Well, the other company went bankrupt that tried. There's not many left in Canada. We could here - if that's what you meant. We can do it here. A.F. Theriault can do it, the ABCO group could do it, they've done 47-foot aluminum boats and so on. It's all there, but getting those bonds is the big issue.
MR. CHAIRMAN: Mr. Taylor.
MR. BROOKE TAYLOR: Thank you, presenters, for coming in this morning to speak about this very important subject. According to a report by the Shipbuilding Association of Canada, there's a very real crisis in Canada's naval shipbuilding industry. Quite frankly, the experts are saying that our requirements far outweigh the vessels that are being built in this country, and we can't go on building a particular class of ships every 30 years. It's inefficient and, quite frankly, costly. I think our lead yard in Atlantic Canada, St. John, New Brunswick, closed less than 10 years after they started building the Canadian frigate class. The expertise of those shipbuilders has gone elsewhere.
I'm just wondering what your thoughts are on that. Now we have a federal election upon us, and there are all kinds of individuals and Parties making predictions and so on and so forth. Is the problem as profound as we're being told, especially by the experts and through the media, that it is?
MR. SAUNDERS: No, I think it's worse. I don't think you're hearing half of what the problems are on that issue. It goes on and on, and we talk a lot when it comes down to the defence problem. You mentioned vessels that every 30 years we have to replace. That's their choice. When the technocrats decide they're going to build a vessel of steel to hunt mines, I'm sorry, that's their choice. It's the assumption that there are no longer magnetic mines available in the world. But this goes on all the time in Canada. We do it, and I thought for some time we would be born without toes because we've been shooting ourselves in the foot for so long. I mean that in all sincerity, because we do it.
However, there are solutions available on the table, some in terms of composites and advance composites. I reflect on the Kockums group of Karlskrona, Sweden, who have very successfully built a 72-metre warship out of carbon fibre. In fact they've built seven of them, and they're totally stealth, and travel over 50 miles an hour and cost only $100 million apiece. They will last, and they feel that the aging - we say a minimum of 40 years, but they will last much longer than that because there's virtually no maintenance to the hulls or super structures, only to the mechanics that are inside.
We had one here in Halifax, actually I had it brought in. It was called the Skjold. Are any of you familiar with it? It was a surface-effect ship that came in here on September 11th, two years ago. It was in Halifax Harbour and took several dignitaries out for a trip. Your Premier was invited, and others. The Lieutenant Governor was on board and a Minister of
Fisheries was on board, Minister Thibault at the time. We took it for a ride. Unfortunately, it could only go slow that day because of the fog. It didn't hit over 38 knots, but it does have the capability of exceeding 60 knots. That boat is made of composite materials. They just got an order for six more of them. Again, they are also stealth and that comes from Norway.
[9:30 a.m.]
Every country out there is now looking at this. The United States of America has just signed an agreement with the Kockums group of Sweden for their Visby technology. The Coast Guard was the Visby technology, the United States Navy is the Skjold technology in Norway - they've signed up, it's all part of their literal ship replacement system.
When you look at that and you look at the opportunities that are out there, when I say we have the technology, we really do. We also have those people I mentioned in support of that technology Kockums have made it very clear, we would come to Nova Scotia and work with you and so would the other people - why not? It's a global thing now.
The key thing is, you can save a lot of taxpayers' money if you get the right product in the first place. That is a concern and it is a challenge that we have because it is a problem for some people. Did I answer that or did I get off? I have too much to say sometimes.
MR. TAYLOR: No, that's fine. I just think that we do have to revitalize our naval shipbuilding industry. I think the requirements are quite obvious and we've been lagging in that area - not just in the last decade, but in the last 30 years.
Another concern related to that is this business about the shipbuilding tariff that's in place on foreign-built vessels. I understand that there was talk at one time that Canada might potentially eliminate that 25 per cent tariff - do you know where that stands today? Have you any information on that?
MR. SAUNDERS: Not fully, but I do know it doesn't apply to NAFTA. Consequently, the American shipyards can build commercial vessels for Canada through NAFTA, but because of the Jones Act, we are not permitted reciprocity in that particular situation. That's a difficult one to deal with.
MR. TAYLOR: I think it applies to the European Free Trade Agreement, the existing 25 per cent tariff, does it not?
MR. SAUNDERS: Yes.
MR. TAYLOR: We were at one time very concerned that it was going to be eliminated and there hasn't been any confirmation to lead us to think otherwise. I don't know if you have any thoughts on that, but that's where it stands today. It's still sort of hanging in the balance - is it?
MR. SAUNDERS: It'll hang in the balance until it's to someone's advantage to change it. I'm not too sure that'll always be to shipbuilding's advantage.
MR. TAYLOR: Thank you.
MR. CHAIRMAN: Mr. Parent.
MR. MARK PARENT: I want to thank you for a very informed presentation, a very important and timely one. I live in a community which was once one of the shipbuilding centres of Nova Scotia, of Canada and of the world even. Now there's nothing happening there.
MR. SAUNDERS: Apple Tree Landing.
MR. PARENT: Yes. You know it well. It's sad when you look at the history and you look at the present day and so I really just want to commend you for bringing this to our attention and raising the profile of it.
I have a specific question about Nova Scotia Community College. What reasons do they give for not coming to the table and helping to provide the courses that would train the workers that are needed for the industry? As a college, that's certainly one of their mandates and I'm concerned they're not working with you better in order to meet this skills shortage.
MR. SAUNDERS: I'll answer part of that and then I'm going to turn it over to Timothy Edwards to give his views on it because I actually wrote part of the curriculum for the course. I did it pro bono so that it could get going and it was then offered through the public, through the newspapers, the media at about $9,000 a person. You have to understand, those of you who have been to university, you can get a couple of years in for $9,000. But to learn composites, that's totally ludicrous to do that. Consequently, nobody showed up for the information meetings and it was then dropped.
What might have been envisioned was it becoming a permanent course because it is the future, plastics are not of the past, they are of the future and we have to be futuristic if we intend to compete on an international scale. We're having difficulty competing in Nova Scotia, in Canada, but yet, now, we have to take on the international scene. So, composites are the leading material of choice on the international scene right now; even though aluminum has done quite well, it's degrading already. But I'm going to let Timothy respond to your comments.
MR. EDWARDS: Yes, I will try and do that. First of all, if I could just take this opportunity to clarify. Mr. Saunders has been talking eloquently on this subject, shipbuilding and boatbuilding and has been crossing freely from one domain into the other, which is splendid. In my capacity I can only speak on behalf of the boatbuilding industry and I just want to, or attempt to qualify what that is. It has been said that a boat is something you could put on a ship, a ship is not something you could put on a boat. I'm sure that makes it crystal clear what the definition is.
Some examples - and Mr. Saunders may correct me here - just to help you visualize the industry I represent, and I'm a naval architect who has worked in the big ship industry for many, many years and has also worked in the boatbuilding industry for many years as well. Then I'm going to come back to answer your question, if that's okay.
Some ships built by shipyards would be tankers, car ferries, frigates, naval supply vessels, offshore supply vessels. Some boats that would be built in boatyards would include patrol boats, fishing boats, paramilitary boats, motor yachts, and then we have boats like tugs, which some days they're ships and some days they're a boat. I'm hoping that I can just help you envision what the shipbuilding industry is and what the boatbuilding industry is. Our organization, the Nova Scotia Boatbuilders Association has been quite careful not to pretend it can represent the shipbuilding industry - that's ably done by the Shipbuilding Association of Canada.
The community college in Nova Scotia, we have been frustrating each other over the last six years with respect to finding and putting into place training for young people and for skills upgrading for existing workers for the trades in boatbuilding I can speak of. In defence of the community college, they haven't been able to respond largely because they haven't heard the drum of students' feet on the floors of the schools asking for courses. We're rectifying that ourselves as an industry and starting to get out into high schools to recruit youth.
One of Mr. Saunders' comments during his speech was that he hears that there isn't a boatbuilding industry, that it is basically non-existent. One of the challenges that our organization is faced with is promoting the fact that there is a boatbuilding industry, that there is a structured career path to be followed within it, and that there is some training available for young people to come into and progress in the industry. That's work in progress, and what we've heard from the community college is until they see and hear enough students knocking at the doors of the various colleges around the province for boatbuilding trades courses, then they're unable to respond. That is my answer to that.
MR. PARENT: The fishing industry is the backbone, I guess, of the boatbuilding industry in Nova Scotia, is that true? Could you give us a little more insight into the health of that and the relationship between the two?
MR. ARTHUR THERIAULT: I think you're right in the sense that a lot of the builders do build for fishing, but there is also, a lot of them are exporting. We presently exported a boat to England, and I've got a boat under construction now for England. I've got one for the U.S., a pleasure boat; the one for England is a working boat. It depends a lot on which yard - I don't know if you're familiar with how many yards there are across Nova Scotia.
MR. PARENT: No.
MR. ARTHUR THERIAULT: Tim, can you . . .
MR. EDWARDS: Very quickly, yes. In round numbers, it's about 50. Arthur Theriault's is the largest, from our perspective, boatyard in Atlantic Canada, without question. Arthur, if you would just permit me, your yard actually does have one foot in both the shipbuilding industry and the boatbuilding. I think that explains where Mr. Saunders is coming from.
MR. ARTHUR THERIAULT: Also, it pretty well goes almost all around Nova Scotia, in little communities that have boatbuilding. In that aspect, we consider it a very important industry for Nova Scotia because of the way in which all these little communities profit from the construction. The bulk of it is probably the fishing, but there is a lot out there as far as commercial yachts are concerned. There's still a lot of it that can be looked at, and try to go after. Basically we go for tenders on anything that passes. Sometimes we look at it and it's not feasible for our size. Like Tim said, we are almost in between, because we can build up to 130 feet in length, while most of them are in the 50 foot and under, except when you hit the Halifax Shipyard. They have a big capacity, even if they're not - basically, out of St. John they can build almost as big here in Halifax as they did in St. John.
MR. PARENT: One last question, the NAFTA, the Jones Act, could you elaborate on that more, because we're told that NAFTA means free trade which will benefit us and then we see these little wrinkles all over the place, and here's one that I wasn't aware of.
MR. SAUNDERS: Well, I'm glad that we brought something to light then. Basically the Jones Act was established many years ago to help the American shipyards and boatyards protect their economies, so that no one else could build commercial vessels and send them to the United States. You just can't even do it, there's not even a tariff but you're just not allowed. So when they negotiated the NAFTA agreement, the one thing that was left out of that, and the Americans would not give up on, was the Jones Act.
Canada opened the door. What's interesting enough, though, and this is a caution, these are the things that come against us, we're doing our thing here in Canada to destroy ourselves but there's a lobby at the present time in the United States, with the Congress, to include pleasure boats in the Jones Act. If they do that, then the domino effect is going to be
catastrophic for Nova Scotia boatbuilders, because we do have quite a nice export to the U.S. at the present time. The moment we become too competitive, that starts and it has started.
MR. CHAIRMAN: Mr. Wilson.
MR. DAVID WILSON (Sackville-Cobequid): Thank you for your presentation today. Reading through some of the information given to us and listening to your presentation and just following it over the years with different groups, trying to secure a shipbuilding policy in Canada, I'm sure many of the members here have seen a lot of the people involved in the industry in their communities trying to get support for this, I've realized that there are a lot of walls up limiting the progress seen in the industry, especially here in Nova Scotia.
I think there are two levels here, the federal government has responsibility and I think the provincial government also needs to try to break down some of the walls. So I will just ask a few questions on the federal side. I know that they've been trying to get a shipbuilding policy for Canada, I believe. I understand that every step it's kind of not gotten through the process. Where is it at now on the federal side, with say a Canadian shipbuilding policy?
MR. SAUNDERS: Well, I can only speak on behalf of my own experience in it. I do not represent the federal policy makers, for sure. I am a member of the Shipbuilding Industrial Marine Advisory Committee, and in that committee they are developing a road map for the future of the Canadian shipbuilding industry. It is mostly industry individuals and some government, but the majority are definitely from the industry. So the federal government is receiving advice on these issues as we talk today and every day, we meet twice a year. It is the first time that I have belonged to a committee group that I can actually say that we've actually achieved something in a year. So I would say that policy is coming forward. It's going to be a while because once SIMAC finished this work, it has to go through the whole process again.
[9:45 a.m.]
In the meantime, this is my caution, that we don't become a bit laid back because there is something being developed. Many, many Nova Scotian boatyards, and I say boatyards, I'll support Timothy on this one, boatyards are in the rural areas, shipyards are in your urban areas, and our rural economies are extremely important and in some cases totally dependent upon boatbuilding. These yards are in jeopardy today. I mean, we're here and they're still working but believe me it is coming down from all around them and if we don't move quickly on it, notwithstanding the policies that will come out of the federal government, it is my opinion that the provincial government could take an initiative and move ahead and say, let's knock down some of the barriers, let's move ahead, let's be progressive, let's form a group and let's make it with some teeth in it so we can take a bite out of this thing and get people moving, because, quite frankly, in this industry, it's sink or swim.
MR. DAVID WILSON (Sackville-Cobequid): So do you see the need - it's still unbelievable to me that we can't supply the U.S. market with ships but they can supply our markets here. To me that's outrageous. Do you see that we should have our own Jones Act, do we call it the Smith Act or whatever you want to call it, is that something you here in Nova Scotia would like to see?
MR. SAUNDERS: No. I'm an optimist, okay? A terrible optimist. It is my opinion that if we can absolutely get ahead in technology that we can beat them all, it doesn't matter what kind of subsidies they have. Seriously, if we can do that, as a team, as government and industry together, can formulate a plan, a strategy that puts us in a position worldwide and can do it now, this is not in two or three years or the next election or anything, do it now, and get it ready, that we'll actually beat the rest of them out and they can have their subsidies. They're going to need a lot more of them.
MR. DAVID WILSON (Sackville-Cobequid): So what can we do here in Nova Scotia to accelerate the technology part of it? Is it initiating educational programs in the universities or the community college, is that one or securing funding to try to propel the technology so we can get out into the market place?
MR. SAUNDERS: In this particular case, the tail may be wagging the dog. The technology is there because of innovation and I have to give great credit to the National Research Council's, IRAP, they have funded some, and ACOA has put some money into it, but if innovation hasn't got a place to go, it's very difficult to substantiate it. So the most important thing right now is that our province and our industry collaborate together and look at the technology that's available. Move some of that technology to the front lines and then in parallel to that, work a program out with the Nova Scotia Community College, and not one of these we'll wait and see how it goes things, but let's get on with it and do it and pull the stop gates out and get over those hurdles, because it's just too much rhetoric. I can't believe - I'm so frustrated - after six years, we still don't have a program. This is ridiculous.
MR. DAVID WILSON (Sackville-Cobequid): I think I would have to agree with you, I think if we wait to see the federal side of helping us out, we're going to miss the boat, if you want to say, I mean we really have to jump.
MR. SAUNDERS: No, that's not a pun, that's the truth. We're going to miss them all.
Mr. DAVID WILSON (Sackville-Cobequid): That's right. For the Nova Scotia Government, what avenue do we need to take? I know you had mentioned a few things like client incentives, like we've seen in Quebec, obtaining bonding facilities, loan guarantees. What do you see, if you could choose one, would be the first step for our government here in Nova Scotia to get things started? Is it a marine secretariat?
MR. SAUNDERS: I can't choose one. I would like to say the marine secretariat could choose them all, so if you had only one of them, then that would have to be it. But it would have to be a combination of government and industry. We just don't need another committee, we just don't need another department. What we need is a collaboration and that collaboration has to be experienced and knowledgeable of the industry.
MR. DAVID WILSON (Sackville-Cobequid): Have you approached the government about creating this marine secretariat yet?
MR. SAUNDERS: Yes, I have, right here, this morning.
MR. DAVID WILSON (Sackville-Cobequid): So this is the first . . .
MR. SAUNDERS: You now have my official application.
MR. DAVID WILSON (Sackville-Cobequid): I wanted to know if you got any response from . . .
MR. SAUNDERS: And I will volunteer to join it, too, if that is the case, if you want me on there. What I'm saying is, that is the first step we can take and then if it has a mandate, it can then work with Nova Scotia Boatbuilders Association, it can work with the shipyards, it can work with everybody to come up with the solutions we require, and they're going to have to be short-term solutions, remedial, and then develop long-term policy.
MR. EDWARDS: Mr. Chairman, could I just add something to that in response to the question?
MR. CHAIRMAN: Sure.
MR. EDWARDS: The NSBA did negotiate and meet quite long and hard with the province some years ago, Arthur Theriault is one of our founding directors. The province does provide a credit facility which is a loan-financing facility to eligible boatbuilders to help finance costs of producing prototype boats. The level of the fund is $1.5 million which, admittedly, when you start talking patrol boats, doesn't go very far. Nevertheless, it's a start and I just wanted to acknowledge that the province has responded to our industry, which is a smaller industry than shipbuilding, and the objective of that is solely to diversify the industry to help encourage new technology and to help it to grow into export markets. That is a step in the right direction, but there's many more that can be taken, that is for sure.
MR. SAUNDERS: There are so many issues.
MR. CHAIRMAN: Ms. Raymond.
MS. MICHELLE RAYMOND: Thank you, very much for coming in. I'm not quite sure how this came about but it's a very important thing that you have come to us.
You answered a couple of questions that I had along the way. One of the things I was wondering about was the interchangeable use of shipbuilding and boatbuilding. It sounds as though, I think you referred to maybe 50 feet might be an arbitrary cutoff but - am I allowed a few questions?
MR. CHAIRMAN: You are allowed 10 minutes.
MS. RAYMOND: I'm curious about the real niche market stuff. I've been interested, in years of being involved with rowing in Nova Scotia, off they go to pay $13,000 to a manufacturer in Wisconsin every time a new shell is required and nothing is manufactured in Nova Scotia. Is there any kind of initiative to fill those niche markets at all with Nova Scotian products?
MR. SAUNDERS: I think if you were to approach a boatbuilder and say look, we think there are 100 of these you could build a year - because you see to build one requires a tremendous expense in tooling but I'm sure there's a market for a hundred and then that person can get the funding to do a market study internationally. Then, of course, there is the competition of your name - well, who are you, who are these people - because a lot of people buy brand names. So I suppose all of that will effect it but the bottom line is there is no reason we shouldn't be able to.
MS. RAYMOND: Because there are a number of these . . .
MR. SAUNDERS: At one time I even looked at dragon boats. (Laughter)
MS. RAYMOND: So if it floats, it counts, that's fair enough. Another very quick question is you mentioned the innovation program, the IRAP coming out of the National Research Council and you seem to have a fairly broad understanding of innovation programs. How many of these things are there that are actually ending up dead-ended or beached because there is no prototype funding available? Is this specifically a nautical . . .
MR. SAUNDERS: That's not untrue. There is prototype funding available but it's for small prototypes and it's proportional, of course. What we're talking about here is in prototyping our patrol boats, this is the big market today, there is an international boom going on right now for patrol boats. Consequently, to compete in that you must have a boat, you have to show somebody the goods. If the guy comes to your door and he wants to sell pots and pans and says if I bring them around tomorrow, will you buy them? It's not going to happen. What we are looking for is a lot of money to build larger prototypes.
Back to your question, the funding that's available now is more for research into new innovations and new materials, new technologies. I worked on one recently, I'm not even allowed to speak about right now, but it's so innovative that there's nothing like it available right now in the world. It's sitting right here in Nova Scotia and it has the potential of going on the shelf with the rest of them.
MS. RAYMOND: So, is there any prototype funding that will be available for that?
MR. SAUNDERS: I don't think so. Well, I'm hoping, I'm not going to say no . . .
MS. RAYMOND: Dead ending it. No, no, you hope. Okay. Let's hope so.
Another thing - with the remaining minute or two, can you talk very quickly about the impact of the transportation policy on the shipbuilding market. I know that pretty well all the economic models that exist right now for the analysis of transportation modes don't cost in pavement costs and so on. That does mitigate severely against marine transportation. Do you have any more things that could be done at the . . .
MR. SAUNDERS: Well, . . .
MS. RAYMOND: . . . are you aware of it as a factor?
MR. SAUNDERS: It is a factor, in these terms: every time that you buy material to outfit a ship, you add on those shipping costs, those transportation costs. The cost of sending them back to get them repaired before they're even fixed, before they're even broken, this happens all the time. They show up in the shipyards and they're damaged in shipment and you have to do it all over again. The costs become phenomenal.
MS. RAYMOND: Okay, those are going back by roads not they're not recovering in any kind of subsidies. Okay, but that would be . . .
MR. SAUNDERS: There's a lot of wasted energy there, to be very blunt. A lot of wasted energy when you're looking at replacing damaged goods and that sort of thing.
MS. RAYMOND: Okay.
MR. SAUNDERS: Does that happen at all, Mr. Theriault?
MR. ARTHUR THERIAULT: One small example, we've just built a 65-foot cabin cruiser, close to $2 million U.S. and the transmission didn't work properly and we had to air lift it to send it away and it cost us close to $1,800 to get it there, freight it out of here, in order to get it fixed and another $1,800 to get it back. Just so the client wouldn't wait too long - to ship it the ordinary way, it can get lost somewhere.
MS. RAYMOND: It sounds like the ordinary way wasn't water. No, I was just wondering about the transportation policy and encouragement to the marine industry.
MR. SAUNDERS: We paid quite a bit in transportation here.
MS. RAYMOND: That's one thing that I was wondering about. Another thing is, the loss of ferry subsidies and so on - the cost of marine insurance. Are you aware of that having any kind of an impact, I can tell a few interesting stories about marine insurance as practised in Nova Scotia? Is that something that comes to you at all in the pleasure boat market, primarily?
MR. SAUNDERS: It's not difficult to get pleasure boat insurance, if you are prepared to pay for it. However, after Hurricane Juan, it's probably going to be a little more difficult to get it around here. Insurance - they're a business and if they're losing heavily, and since September 11th, there's been a lot of expenses going up all over the world, not just in Canada. Their business is suffering - at the same time, I know, they're making billions, but are they making as many billions as they used to? When you start downscaling, Nova Scotia shipbuilding industry, boatbuilding industry was the most vibrant in the world at one point. We're trying to hang on with the skin of our teeth today so I don't see the insurance industry as being much different, quite frankly.
MR. EDWARDS: I'm not sure if you mean product insurance or insurance for the yard actually building . . .
MS. RAYMOND: No, I mean product insurance.
MR. EDWARDS: That's becoming more of an issue for more of our members that build boats for the U.S.
MS. RAYMOND: You haven't noticed it having an impact on the market at this point?
MR. EDWARDS: The price has gone up.
MS. RAYMOND: Yeah, I know that's what I'm curious about. I'm going to leave it at that. Thank you very much again.
MR. CHAIRMAN: That it? Mr. Parker.
MR. CHARLES PARKER: An interesting discussion here. Certainly informative. I think it's great for us as MLAs to get this kind of information because some of it's new and some we've heard before. Certainly, our province, as you had mentioned, has a long history of being the best in the world at building ships in the 19th Century, the early 20th Century. I
know the area along the North Shore where I come from, has, throughout the province, ships were built in almost every little port.
[10:00 a.m.]
Certainly, I know in River John, the community near where I live, there were a lot of ships built there, in Pictou, New Glasgow and so on, and even in the Town of Pictou recently, over the years had a good history of building ships. Probably the most recent that was built there was the Confederation that plies the Northumberland Strait right now. Unfortunately, right at this time, they're not in the shipbuilding business, they're building offshore components, but they do still have a marine railway and they're still hopeful that at some point they'll be building boats and ships there again.
I guess I wanted to ask, first of all, you had mentioned there's 1,000 people employed in Digby County in the boatbuilding industry. How many would be in all of Nova Scotia, directly or indirectly?
MR. SAUNDERS: There's 1,000 people, I should say, in our area that are directly related to or depend upon (Interruptions)
MR. EDWARDS: Provincewide, it's about double that. The vast majority is in Southwest Nova, of builders, tradespeople, suppliers, people who supply the suppliers, and all of that. We've had two studies done by economists in the last two years, which verified those. (Interruptions) We've had a couple of socio-economic studies done for us in the last couple of years that looked into those numbers. The vast majority of activity now, which is not what it was let's say 100 years ago, which was shifting more up your way, is in the area between Digby, all the way around, through to the Pubnicos.
MR. PARKER: So it's a major employer in Southwest Nova, as well as elsewhere in the province.
MR. EDWARDS: Absolutely, right up to Sydney, Cape Breton, Cheticamp and down to Meteghan.
MR. PARKER: In my community, I think there's one small builder who's building fibreglass boats on a small scale, in the Caribou area. I remember a few years ago, at our Pictou Shipyards, under the leadership of Andrew Hamilton - you may be familiar with - had started there to build some luxury yachts, $1 million and up, up to $5 million yachts. It was a good project and people were employed, and then all of a sudden their parent company got into some financial difficulties, and that was lost, all of a sudden. I think it was halfway through the project, some of them went to New Brunswick, I know, to be finished, and I'm not sure where else. I was going to ask Mr. Theriault, that market for luxury yachts, is that
something that you have picked up on? I heard you mention a $2 million American contract you had. Is there a market across the world for that product?
MR. ARTHUR THERIAULT: Yes, there definitely is. I'm looking at it quite strongly. I'm familiar with what you're talking about. They did go through Caraquet those boats, to be finished up there. They were in the vicinity of 70-foot and 80-foot vessels. Unfortunately, the developer of that concept had some financial problems towards the end, and we had him as a broker. We're looking at another now and we're establishing our own marketing people ourselves, because we found going through somebody else created a whole lot of problems. But, again, it's like anything else, when you have somebody who's established, who has a good name, it's easier to sell your product. But we are looking at doing this ourselves, right now.
MR. PARKER: It was a good market, I know, that they had developed, and they had real potential. Local people were being employed, and it looked very promising. Then, all of a sudden, the parent company gets in difficulties.
MR. ARTHUR THERIAULT: When we build the 55s and we built three 55-foot and we built six 65-foot for that same company that was in Pictou.
MR. SAUNDERS: If you were to just go to one of the larger boat shows in Miami or Fort Lauderdale, you'll see that what we're talking about here is rather small, compared to what can be and what is available and what is required. People are spending $10 million to $25 million, not even worrying about it, on their new toy.
MR. PARKER: No, I know he had some contacts around the world and there were some very wealthy people that could easily afford that kind of product. It would be nice to see somewhere in Nova Scotia that be picked up again and ran with.
MR. SAUNDERS: That is marketing, show them the product.
MR. PARKER: I guess I want to come back, Mr. Saunders, maybe to your initial comments around the marine secretariat. You mentioned today, right here now, you are announcing it to us as MLAs but have you approached the Department of Economic Development yet?
MR. SAUNDERS: Oh no, this is my first thought.
MR. PARKER: This is it, right here.
MR. SAUNDERS: You got it here, fresh off the press and fresh out of the heart.
MR. PARKER: Are you planning on approaching the department with your thoughts or ideas?
MR. SAUNDERS: If that is an invitation, I will certainly plan on it.
MR. PARKER: It would be my suggestion that maybe that is next step, to follow up with the department. It seems like it is an innovative approach and could you just give us a little more of your thoughts on that?
MR. SAUNDERS: Well, basically, my thoughts on that are I need a place to consolidate my suggestions and my solutions and to just throw them into the arena is not exactly what you would call a smart thing to do because they will get lost along with everything else. So my thought was, well if we had a secretariat that was actually made up of industry and government and this secretariat had a mandate and had the ability to fulfill that mandate, that this would be an excellent spot. I came here with the hopes of suggesting that this, this committee would say, well, we should look into that and maybe we should talk about that at a separate meeting or at a separate working group and let's create it. Now maybe that was a big expectation of mine but I was kind of hoping it would. I'm certainly glad you have bit onto it here.
MR. PARKER: I think it is a great idea but you have to continue to push it and go with it and while we are all representative here of different Parties, I think the next step is to the government department that would responsible and I would encourage you to do that.
Do I have any extra time here, Mr. Chairman?
MR. CHAIRMAN: Two more minutes.
MR. PARKER: Okay. I'm going to switch gears then, a little bit. A few years ago, and I know you have talked about this, the government guarantee that was given to Irving shipyards to build patrol boats. I think all Parties supported it at that time that the government would do it. It was in 1998 or 1999, somewhere along there, that an $80 million guarantee, I think it was, per patrol vessel.
MR. SAUNDERS: That was for a tugboat.
MR. PARKER: A tugboat was it? That program is no longer available or it is very difficult to access or how could it be implemented again?
MR. SAUNDERS: I would like someone to be able to show me the protocol I have to go through to access it.
MR. ARTHUR THERIAULT: I have just one comment on that. I had a loan guarantee of $300,000 from the province and we were told that they would no longer give loan guarantees anymore, the province. When that happened, of course, the bank reneged on that. $300,000 compared to $50 million, I don't know, it might be mathematically the same but to me it isn't. It just stuns me when I hear something like that but maybe again it is because I am in the industry and when Russell mentioned about faucher les jambes I think that is an extremely good example of what I have gone through. I have come to Nova Scotia Business Inc. and I have finally received some assistance on a loan but that was after, since that happened, a good year of negotiation.
Also, one thing that I - if you will permit me just to say - found was astonishing on the Nova Scotia Business Inc. and I haven't got it here with me, I don't know why, because this was my intention. I would like you to ask them for a copy of - I can't think of the right term - part of the things that we have to sign in order to receive a loan. One of them is that we have to sign, we don't take any salaries and we don't take any bonuses I asked them if we should send our food bills to their account, they didn't want that. It's part of a one page that I had to sign in order to get my loan. I'm not sure of the intent, if the wording is the intent but I can make that available because I have signed it, because it's one choice. I have argued this with them, but they said that was part of their policy. I think that is a bit much when you have a loan and you're signing that you cannot take a salary, and I said that as soon as I sign I'm in breach of my contract because I am going to take a salary out of the company. They said, well we've never gone as far as implementing it and I told them you're right, but it's there. The choice I had was either sign it to get it, or if I didn't sign it it looked as though I wasn't going to get it but yet I still have to get a salary to live - I don't know why but it's one of the things that we happen to work for.
MR. CHAIRMAN: Mr. Dooks.
MR. WILLIAM DOOKS: Gentlemen, good morning, and thank you for your presentation. Boatbuilding/shipbuilding is very important to the economy of Nova Scotia, especially on the Eastern Shore. We have a number of boatbuilders there, I would say doing some fine work, like Rosborough Boats - I don't know if you're familiar with them but they certainly employ a lot of people. Boatbuilding/shipbuilding is worth about $200 million pumped into the economy of Nova Scotia and it collects $15- to $16 million in tax base - that's a lot of money.
What mechanism or structure do you have in place to actually lobby government for improvements in the marine industry, both federally and provincially, other than a committee making a recommendation? With a $200 million investment into the economy of Nova Scotia, do you have paid lobbyists? Does the shipbuilding and boatbuilding industry make an aggressive movement towards especially the federal government - the provincial government, of course, has a play in this but we're talking bigger dollars than what the provincial government can possibly deliver, assistance and so on and so forth. But as the
fishing industry lobbies Ottawa for licenses, for protection, for benefits for the fishing industry, do you have paid lobbyists to promote your industry and how do you do that, if so - and if not, why not?
MR. SAUNDERS: I think that the Nova Scotia Boatbuilders Association was formed about six years ago. One of their purposes was to lobby government, and I think they have done a good job of lobbying. The results aren't always there, but it's not necessarily the fault of the lobbyists, it's because we have a lot of changes in government, too, and in doing so things get put on the back burner and something else comes up and so on and so forth. I would think we do have a facility - we don't have a paid lobbyist individual - on the federal level we have a shipbuilding association, and it would do for the small boatbuilder to join if he had the $6,000 to do it every year, which most of them don't so, consequently, they don't get that kind of service at the federal level.
At the SIMAC table, I guess I took it on myself to represent a lot of small boatbuilders because that is who I know best and I'm not a big shipbuilder, have never been one, so consequently in the composite's world, I'm the guy that they dump that on. So I lobby as much as I can at the committee meetings and with the government officials who are there but it's a tough one. We get lost in the shadow of the huge shipyards that are closing down and I guess I could say rightly so.
MR. DOOKS: The reason I'm asking these questions is to identify certain issues. So basically, as far as the shipbuilding/boatbuilding industry of this province, it's coming from government to you guys, rather than you guys going to government and telling government what you want and what you need in the industry. Quite often I favour industry persuading, or telling, government what they need rather than having a group within government looking at industry and saying hey, guys, this is what's good for your industry. That's why I'm trying to turn that around.
[10:15 a.m.]
MR. SAUNDERS: Perhaps Timothy can answer that one.
MR. DOOKS: And this is why the paid lobbyists, if you will, certainly not a bad word, but they would be able to focus, they would be able to direct your concerns from your committee, because as people in industry, and as the mom and pop operations, the very small ones, even you guys in the bigger scale of things, you have to concentrate on the survival of your own industry and it's hard to separate yourself from that to be full-time lobbyists of government. So it's just my opinion that if you're organized, with $200 million being pumped into the economy, that committees - we have a very effective committee here, we make lots of recommendations, but after this committee is over we go on another committee and then go back and represent our constituents and we have our homes, and so on and so
forth. In saying that, I'm just a person who favours industry and people who would hire people to lobby government for the force to led from the industry side.
MR. SAUNDERS: I think that Timothy can respond to that, because I think he's been doing quite a bit of that.
MR. EDWARDS: First of all, the Nova Scotia Boatbuilders Association hasn't joined forces with the Shipbuilding Association of Canada. My board, of which Arthur is the director, has been very careful not muddle up with that, and we have reasons. We feel a bit like the mouse sleeping next to the elephant. The market for boatbuilding, the politics involved with boatbuilding are totally different to shipbuilding. Mr. Saunders mentioned earlier that shipbuilding takes part in urban centres, and our industry takes place in rural coastal Nova Scotia, like Sheet Harbour and Murphys Cove for example.
The NSBA is six-years-old, we're just starting our seventh year. Our primary aim was to increase the export sales of Nova Scotian-built boats. We've written two business plans during that period, we've just completed a sector strategic plan, submitted it to the province and to the federal government representatives down here in Nova Scotia. We have a very clear picture of where we're going as an industry. It's driven by people such as Arthur Theriault from our board. These are visionary leaders of the industry. We're then calling upon government resources such as education, for example, to help us in those areas where we believe government should be helping.
So we think we have a clear vision, it's industry-driven. We're taking that to the government. The government is responding well to some of our requests, but many they're not, yet.
MR. DOOKS: When you say government are you saying the federal government or the provincial government?
MR. EDWARDS: I'm talking about ACOA and the Department of Economic Development, in particular, both those departments. We spend some time in Ottawa - it's more on a technical lobby activity rather than policy. Our industry is not big enough, we haven't set aside enough, we don't have that money to pay full-time lobbyists. We're up in Ottawa at least twice every year at national, what's called CMAC - another CMAC, the Canadian Marine Advisory Council that looks at policies and regulations affecting the industry.
We would love to have full-time lobbyists in Ottawa. Maybe we will look at teaming up with th SAC, it's certainly a possibility.
MR. DOOKS: Thank you. They have answered my questions.
MR. CHAIRMAN: Mr. Samson.
MR. MICHEL SAMSON: Mr. Chairman, I'm wondering if the panel members could tell me who your contact is through Nova Scotia Business Incorporated, that is responsible to address the needs of the Nova Scotia Boatbuilders Association?
MR. EDWARDS: In our short history, we actually haven't really had any dealings with Nova Scotia Business Inc. They're certainly well aware of us. We've dealt, on the provincial side, with the Minister of Economic Development. We haven't dealt directly with NSBI. It hasn't actually become necessary to do that. I'm sure that they're aware of us and vice versa.
MR. MICHEL SAMSON: Are you aware of what NSBI's mandate is?
MR. TIMOTHY: Yes, I believe so. It's very similar, or part of it is very similar with the NSBA's mandate which is to stimulate economic growth, particularly export-oriented. I believe that's what NSBI is there for, to help. We have got a really good ear with Minister Fage's department right now, and some of his people in his office. We haven't seen need to go to NSBI.
MR. MICHEL SAMSON: Has NSBI approached you?
MR. EDWARDS: No.
MR. MICHEL SAMSON: So NSBI, which is the provincial government's arm to try to develop export markets, to try to work with industry to identify markets, and rather than industry having to use paid lobbyists, as what is being suggested to you today, it was our understanding that that's what NSBI was supposed to do on behalf of the taxpayers of Nova Scotia, to seek markets and work with industry and be able to identify them, not having you have to have lobbyists to lobby the provincial government. Yet, we're hearing today that Nova Scotia Business Inc. is not working with your industry, or has not even approached your industry to say, here's what we want to do to try to help you out. I'm curious, when you go to trade shows, who is there from NSBI?
MR. EDWARDS: At the trade shows that we've attended, I haven't seen anyone from NSBI. I don't know the ins and outs of NSBI, exactly, but I think because our industry is predominantly rural and coastal that it doesn't focus too clearly on NSBI's radar.
MR. MICHEL SAMSON: I appreciate that answer. That's about as honest an answer as you could give, and I think that's exactly why NSBI has been a tremendous failure for the taxpayers of this province as far as we're concerned, because of the fact that they're not looking at industries such as the NSBBA, which, in many areas, such as Clare for example, or in my own area, with Samson Enterprises, is a vital part of our economy. What all these
boatbuilders are struggling with is identifying markets, new markets to bring their products. I know Mr. Theriault has done a wonderful job at identifying some of the pleasure craft markets out there. I know Samson Enterprises, a great deal of their sales is to the U.S. It's not to the local markets.
Yet, as you've indicated, you're almost on your own to do this. It's ironic how, you've heard the government members here in the committee try to blame the federal government for everything here, yet their own arm of Economic Development, which was specifically established to identify markets for Nova Scotia industries is not involved with your association. Let's not be fooled here that this is a federal government issue, when Nova Scotians' own efforts, through the government, of developing markets is not even working with your industry.
I'm curious, one of the comments made by Mr. Dooks here was that Nova Scotia doesn't have the money to do this. I'm just curious, again, to your knowledge, how much was the Irving loan guarantee?
MR. SAUNDERS: It was over $80 million.
MR. MICHEL SAMSON: Mr. Theriault, I'm just curious, if you don't mind, how much was your loan guarantee, the loan that you just referred to, with the government?
MR. ARTHUR THERIAULT: It was $300,000.
MR. MICHEL SAMSON: That's the one you're referring to, where they made you sign those papers?
MR. ARTHUR THERIAULT: No, that was $650,000.
MR. MICHEL SAMSON: That was $650,000?
MR. ARTHUR THERIAULT: The $300,000 was a loan guarantee that they had at the bank that they cancelled.
MR. MICHEL SAMSON: And you're referring to a loan for $650,000.
MR. ARTHUR THERIAULT: Yes.
MR. MICHEL SAMSON: I'm curious if the Irvings had to sign the same guarantee you had to, about not taking a salary . . .
MR. ARTHUR THERIAULT: They might not need a salary. (Laughter)
MR. MICHEL SAMSON: True enough. We now know that the government has given an $80 million loan guarantee, and yet we hear statements saying Nova Scotia is not in the position to be involved in this industry, which I certainly don't accept and I think that loan guarantee proves itself. When one considers what you were put through, Mr. Theriault, based on your experience and the fact that you have a leader in the industry, I think it's deplorable, to say the least. I can only imagine that if you were put through that what the smaller boatbuilder, well, he must be being laughed at when he comes to the door asking for any sort of assistance from the government, if they've put you through that sort of example.
I'm curious, to your knowledge, what incentives are offered by the Nova Scotia Fisheries Loan Board to applicants who are seeking to purchase vessels built here in Nova Scotia?
MR. EDWARDS: Just immediately, the Nova Scotia Fisheries Loan Board has actually just partnered with the provincial Office of Economic Development to streamline this prototype credit facility I mentioned earlier, for prototype boats. So they are involved now in (Interruptions) No, it's not fishing boats, it's actually a new development for them and it's again in response to our meagre lobbying efforts, I should say, but we're very pleased about that.
I would just back up very quickly and give our relatively small industry - we have annual sales in the boatbuilding industry in Nova Scotia of $85 million. About $50 million of those sales get exported outside Nova Scotia and about $25 million to $30 million of those go south of the border. Largely thanks to companies like A. F. Theriault and Son, Ltd. in Meteghan.
The numbers aren't big, but where it happens is in places like Meteghan River. We have, over the past five years, had recognition of some support from the federal government to help us with initiatives, through ACOA and through the Department of Economic Development. But it isn't anywhere near the $80 million or the $50-odd million that helped Mr. Irving close down the facility in Saint John, New Brunswick.
We have a sunrise industry - the boatbuilding industry is a sunrise industry. Many people we've heard say across Canada is that shipbuilding is a sunset industry. I'm just putting in a little plug for the boatbuilding industry, the sun's going the other way, it's going up. Technology, like Mr. Saunders is talking about, referring to in products, that's exactly what we have to do and that's where the opportunities are.
MR. MICHEL SAMSON: I'm curious. You've made reference to working with the Department of Economic Development provincially, I'm wondering if you could tell us in actual dollars how much money has been offered to your industry or to your membership from the Office of Economic Development, either for prototypes or any other initiatives from
the Boatbuilders Association - how much actual dollars has been committed to your group or its members?
MR. EDWARDS: The credit facility is loaned money, not granted money. I think the total value of monies exercised through that office over the past few years has been about $1.5 million, repaid except for one project whose term isn't up yet.
MR. MICHEL SAMSON: So, $1.5 million. That was the total investments made by the province? And that was repayable.
MR. EDWARDS: Yes. That's two boatbuilders. They had some involvement in the now defunct Economic Diversification Agreement as well. The lion's share has come from the federal government - for us, anyway - through ACOA.
MR. MICHEL SAMSON: Through ACOA, and through the National Research Council?
MR. EDWARDS: Yes, and some support through the NRC, exactly.
MR. MICHEL SAMSON: I wonder if you could give us a ballpark figure of what kind of money we're talking about that has come from the federal government?
MR. EDWARDS: Well, I don't want to get polarized on the boatbuilding industry because I'm stealing Mr. Saunders' - I can't speak for the shipbuilding industry. The five-year Economic Diversification Agreement applied just over $1.5 million towards a $2.75 million project that we were implementing on behalf of our members and that took place over five years.
MR. MICHEL SAMSON: And that was repayable?
MR. EDWARDS: No.
MR. MICHEL SAMSON: Okay, that's what I thought. I just want to go again to the question I asked before. I'm a Nova Scotia fisherman and I want to buy a new boat. I go to the Fisheries Loan Board and I have two options - I'm going to buy my boat from A.F. Theriault and Son or I'm going to go over and get this new prototype from Vancouver. What does the Fisheries Loan Board say?
MR. ARTHUR THERIAULT: I'll answer that because I did have some concern on this because it was Nova Scotian money that was given, that they borrowed from the loan board. I have not had a direct answer. In the past, they would not finance a fisherman or anybody that built a boat outside of Nova Scotia for new construction. I have asked that question the last two years and nobody gives me an answer, so I cannot answer you yes or
no. You would have to ask the loan board - maybe the minister might be able to answer you, but I have not been able to receive a yes or a no on that.
MR. MICHEL SAMSON: So what you're saying is we don't know whether they are giving money to fishermen to buy vessels outside of Nova Scotia?
MR. ARTHUR THERIAULT: That is correct. To my knowledge, I have not been able to receive that.
MR. MICHEL SAMSON: To your knowledge, are any incentives given through the loan board to purchase a vessel built here in Nova Scotia?
MR. ARTHUR THERIAULT: No more than anywhere else. They will just lend you the money to have a boat built.
MR. MICHEL SAMSON: In New Brunswick, for example, are you aware of any of the incentives that are established through their Fisheries Loan Board with regard to either making renovations or building new vessels built in New Brunswick?
MR. ARTHUR THERIAULT: No. None.
MR. MICHEL SAMSON: I'm wondering if you're aware whether the Romeo LeBlanc policy still applies in New Brunswick where they actually tied in the catches as part of the repayment plan for any loans towards New Brunswick boats? The reason I raise that is I was made aware that recently there was a New Brunswick fisherman who made renovations to his vessel and there were incentives given to making renovations to an existing vessel from New Brunswick and the renovations were to be made in New Brunswick, which is why I raise that with you, whether you are aware of incentives being offered in that province for their local industry?
[10:30 a.m.]
MR. ARTHUR THERIAULT: I can only say rumours, I have heard the same rumours but I can't verify that.
MR. SAUNDERS: I think I would like to comment on something here anyway over this whole thing. It is very difficult for a boatbuilder to focus on what's going on in New Brunswick, British Columbia, Quebec or the rest of the world when the most important thing is he has to meet a payroll, he has to meet a deadline, he is in the rural area so, consequently, he is not tied into a great communication system. Your questions are good and they're valid but if I was a small boatbuilder in Murphy Cove, I really wouldn't know what was going on in the world and even if my association knows, I don't really have time to read the papers
because I'm trying to make a living. That is the reality of it, there's no sense in saying everyone is cognizant of these things going on - they're not.
When I go to government - and I've been there a few times - I always say give me your latest brochures on what this is all about. Well, don't you know? Just give me your latest brochures, please, so I can read them, so I can study them and I know what I'm talking about because usually, I'm out of date by about a week. So things change rapidly and to get that is difficult.
MR. MICHEL SAMSON: I just want to close with this. Mr. Saunders, we were led to believe that Nova Scotia Business Incorporated was being established to work with the small rural boatbuilders, the small rural enterprises and any Nova Scotian enterprise, knowing that they, on their own, should not be expected to be able to look for international markets, to look for new markets. We were led to believe that these individuals would go out to the small rural boatbuilders and say here are some of the new markets we've identified, here is some of the new product information that we've found, here are some of the new innovations that are out there that you may not have been aware of but we're going to bring them to you because that is our mandate and we want to assist you in growing this industry.
I think you are completely right, you can't expect these small operators to do this on their own. We were under the belief that NSBI was created to address the gap that exists and what we've learned today is that that is not taking place, which is extremely unfortunate.
MR. CHAIRMAN: For the second round, Mr. Taylor.
MR. TAYLOR: Earlier Dr. Theriault suggested, I believe, that we, as a committee, get hold of the application regarding the loan approval - not his particular one. I'm wondering, Mr. Chairman, if you have given that any thought. It troubles me that we would have Nova Scotia businesses and applicants signing something, knowing full well that they would be in contravention of some of the conditions. It probably is not unique to your case, Mr. Theriault, so I really think we would be doing the responsible thing by . . .
MR. CHAIRMAN: That is one of the items I had for the end, rather than interrupt the proceedings. I would just ask for that material to be tabled.
MR. TAYLOR: Thank you, Mr. Chairman. As well, I'm not sure if the previous speaker ever worked in the private sector and it doesn't matter if you are in the trucking industry, the farming industry, the forestry industry, or the shipbuilding industry, Nova Scotia businesses are extremely independent and very proud. I'm not sure if the member for Richmond is suggesting that NSBI go out and hire dozens and dozens of employees and send them out in the faces of the 50 shipbuilding businesses in this province or not. If he is, I think he's going down the wrong path. Most businesses that I know, coming from a business background, are very independent and like I said before, fiercely proud, so I don't think that
is what NSBI should be doing. I think they should continue making Nova Scotia businesses aware that there are programs in place and there are loan programs, and as Mr. Saunders said earlier, they don't particularly favour grants, they favour loans and that is what NSBI is about, loans and loan guarantees, so I wanted to make that very clear.
I just have a question to wrap up, we were talking about ships, boats and the distinguishing features between the two. I feel that tradespeople from both industries probably interrelate and interact and are very capable of doing that, but in the farming community when the cattle industry and dairy sector are doing well, Nova Scotia is doing very well. I just wondered if you could comment perhaps - either the ship representative or the boat representative - as to whether or not the two are interacted and how are they more so than just the employees, the tradespeople?
MR. SAUNDERS: When you are at sea and you fall off a boat and you're left adrift, or you fall off a ship and you're left adrift, it really doesn't matter the distinguishing facts between the two, you're going to drown. So when it comes down to this whole industry, whether it be shipbuilders or boatbuilders, when we're left adrift, it really doesn't matter what our label was, because the ocean is going to gobble us right up, and that's going to be the end of us.
So, consequently - back to my comments - I think we have to do something and I think this discussion has been absolutely tremendous. I really sincerely appreciate the opportunity to come here with these esteemed people, but at the same time I'm just the kind of guy who likes action and lots of it. Thank you.
MR. TAYLOR: Mr. Chairman, I understand I have a few minutes left. I just wanted to ask Mr. Theriault, if I could, how diverse is his shipbuilding business? If I could just preface that, during your presentation, Mr. Saunders, you said thanks to Osama bin Laden and I would say that because of Osama bin Laden - and I know we're probably saying that tongue-in-cheek - there is a boom, no question, out there, regarding patrol boats. Other countries certainly seem to be taking advantage of the boom. Mr. Theriault, I understand that you would have - a shipbuilding yard could build those patrol boats and are, but could some of the Nova Scotia boatbuilding yards also build these patrol vessels?
MR. ARTHUR THERIAULT: They could. One of the biggest concerns is basically the building, because these have to be built, in order to get to the controlled environment for the composite, because when you're talking about that kind of structural part of construction, you have to have a lot of material - not a lot of material, you have to have the proper building, the proper venting, the proper heating, it has to be in a controlled environment in order to have the best advantage to it.
By saying that, we used to build mostly in wood and now we're into steel, aluminum, fibreglass and composite as well, and that's what we found. Basically, in order to give you the quality that is required, we need some capital investment on our buildings, just the ventilation part of it, you're looking at maybe $50,000. Basically, if you were to look at the whole thing, $500,000 is nothing, that's only a building. It's a big investment to do it, and that's probably why we're trying it at the smaller end, so that we can make our facilities work, try to make them work as much as we can.
For those of you who aren't aware of it, we have built a pleasure boat all in foam and we are presently building a 45-foot lobster boat which will be totally built with foam composite. Some of you might not be aware of what it is, but it's basically to make it lighter so that it will go faster. My comment to the Department of Fisheries is that you fellows didn't want to move on it, we are going to build a boat that will go faster than your boat. Then you will have to come to us to build the next one faster than that. (Laughter)
MR. TAYLOR: Mr. Chairman, I would like to thank our presenters for coming in this morning. I know when we wrap up you probably will, but I think that by all sides and all fronts it would be agreed that this has been a very helpful and informative-type discussion this morning. I will yield the floor to another colleague.
MR. CHAIRMAN: Mr. Parent.
MR. PARENT: It may be one of the items, Mr. Chairman, that you want to discuss at the end, but just picking up on Mr. Parker's suggestion, I would encourage you to approach Economic Development, but I'm wondering if we can send a letter of support as well. I assume that's one of the things you have at the end, so I will come back to it later.
MR. CHAIRMAN: Mr. Gaudet.
MR. GAUDET: Mr. Chairman, I want to go back to the training. Hearing there are 50 boatyards or shipyards in Nova Scotia, Mr. Saunders, you indicated that community colleges are not doing enough to help the industry with skilled workers. I guess what I'm looking for is, are there enough skilled workers available in Nova Scotia? If not, or if there are, where do you recruit these workers from? Are there any shortages of workers that exist within the industry?
MR. SAUNDERS: First of all, there's a tremendous shortage. Secondly, the boatbuilders end up training their own people. In that case, if you have three generations of people training each other, you end up with, in some cases, some very poor technology. So the most advanced technologies are not actually reaching a lot of the shipyards. In my opinion, it is the responsibility of education to bring in advanced technology. Dalhousie has a composites program for engineers. It's being taught by Dr. Farid Taheri, a well-known composites guru, worldwide. That's good.
We have engineers who understand composites, but there are no technologists, there are no technicians, there are no opportunities for these people to go to school unless they go to Newfoundland, where they can study aerospace technology in composites or Quebec, at Cegep, where they have a very good program, which is probably one of my faults for being there back in the mid-1980s and suggesting it's a good idea. They've been doing it ever since. New Brunswick is now actively looking at establishing an advanced composites program, because they see the opportunities that exist, not just boatbuilding. We have industrial plastics, we have aerospace plastics in Nova Scotia and we have boatbuilding, and it's all relative. You add that all together, and you have a tremendous business. There's one business alone there in Lunenburg that's doing $19 million, $20 million a year, and they're in aerospace plastics.
I met with all of them, I met with industrial ones, and they said if we could only get a course. We've taken the NSCC people around with us and introduced them to these people, and they said if you're really going to do this, we're extremely excited. It's not done, they are no longer excited.
MR. GAUDET: I guess that was the next question.
MR. SAUNDERS: I'm sorry, maybe I got away from it there.
MR. GAUDET: Maybe from your perspective or even from the boat association, is there any dialogue taking place with the community college here in Nova Scotia, to try to look at the need or to work together in order to provide other skilled workers or make them available to the industry?
MR. ARTHUR THERIAULT: If I go, I might get mad. I've been in front of the committee, along with Tim, and probably I should let him. I just have an opportunity here to express my views on the community college. They took it from vocational to community college, and I don't think that has done any differently. Basically, the community college has gotten rid of a lot of the trades along the way, trying to centralize it. It has become a big problem for the rural areas. Also, they have taken - and for most, to qualify, you have to have your Grade 12. Again, that left a big hole for people who are extremely good with their hands but didn't want to go to school anymore. I'm not saying that to have a good education is not good, that's not what I'm saying. I'm saying that we have a big hole that we've created, and it's just there and nobody looks at it.
What I've said to some of the people on the community college board is - they said tradespeople are looking for tradesmen, and I told them, if you have a wheel missing on your vehicle and there's nobody trained to build the wheel, you'll never be able to get it replaced. Let's put our community college to the point - basically, if it's welding or if it's electrical or if it's plumbing, they can add the marine aspect onto this but the basic principle is the same.
MR. CHAIRMAN: Mr. Dooks.
MR. DOOKS: Gentlemen, my comments earlier about the lobbyists, I still stand by them, in saying that. It's unfortunate that the member for Richmond has taken my words and turned them around. I was trying to offer a solution. I do know that you're from the private sector and private industry in Nova Scotia. I know shipbuilding has been here a long time and has survived many challenges throughout the years, and I know you will be successful in your new endeavours and I wish you well. If there's anything, as a government member, that I can do, contact me and I'll make sure that the appropriate people are contacted to help your industry.
[10:45 a.m.]
Nova Scotia Business Inc. did make the announcement on the Eastern Shore, it was in the Rosborough boatbuilding facility. I do know a couple of boatbuilders who have received a benefit from that announcement and also monies to design new prototype and have been supported on both a national and international market. Thank you.
MR. CHAIRMAN: We obviously have two philosophies here. Ms. Raymond?
MS. RAYMOND: Three very simple questions, I hope. The number of naval architects that work in Nova Scotia - do you know?
MR. EDWARDS: The number of naval architects that work in Nova Scotia?
MS. RAYMOND: At the moment, yes.
MR. EDWARDS: Very few. The industry hasn't been there to support them. You can count them on two hands.
MS. RAYMOND: Okay. The other thing, there's been a lot of talk about composites and so on and I assume some of this is honeycomb stuff and some is carbon fibre, but do the facilities exist without the intervention of the Chromos people? Are there facilities at the moment for production of carbon fibre?
MR. SAUNDERS: Absolutely.
MS. RAYMOND: They exist here in Nova Scotia?
MR. SAUNDERS: I know of a client who has approached a shipbuilder to build a 75- foot multi-million dollar carbon fibre pleasure yacht. It's beyond comprehension, but that's what they want. Those facilities, that technology is available here in Nova Scotia and that
contract will probably be awarded here in Nova Scotia. He's a friend of mine and he asked the same question you did and the answer is yes. It's there.
MS. RAYMOND: Okay. Has it been used in other applications besides marine . . .
MR. SAUNDERS: Yes.
MS. RAYMOND: Okay, great.
MR. SAUNDERS: Controlled environment is what we're talking about here. Getting away from the mop and the bucket and the grinding and the dust and getting into enclosed infusion projects where you can stand there and you can't even smell vapour from it. Tremendously good for the environment. Seriously.
MS. RAYMOND: No, no, it's fair game.
MR. SAUNDERS: Just to answer that, I was in Paris recently at a show and they infused a boat every day inside a building with 2,000 people in it and they were laying the boat up and you didn't know there were any chemicals there because it was all infused and it's totally encapsulated. You get the best product that way, so quality of product comes from new innovation. This industry has that available. They need an opportunity to get out and strut their stuff, especially in the patrol boat marketplace. We actually have the technology to - I have to be careful not to sink the other ones - be ahead of the rest of the world right now in terms of that kind of production. I can't express that stronger. It's there. Now, what the industry needs is an opportunity to build something and take it out there and strut it. Not a big expense, not when it comes to the full spectrum of it, and the spinoff effect of that, the domino effect of that would be phenomenal, quite frankly. Nova Scotia? That's where they build those great boats. We can do it, we just need a chance.
MR. CHAIRMAN: Okay, we have time for a few short snappers. Mr. Samson.
MR. MICHEL SAMSON: I'm just curious, I'm assuming you've both attended numerous trade shows throughout the world dealing with boatbuilding and attempting to sell some Nova Scotia-made vessels. What role has the province played in those specific trade shows? Have they sponsored a booth, have they sponsored boatyards to attend those and have they had representatives there to lobby on behalf of Nova Scotia boatbuilders?
MR. EDWARDS: They've certainly had a part to play through the Economic Diversification Agreement. Our organization had some promotional projects, partly funded through the EDA, so, yes, the province through the vehicle of the EDA helped us promote our industry in U.S. trade shows.
I know the Department of Agriculture and Fisheries has been at some of the shows, like Fish Expo for example, which used to be in Boston and it's now in Rhode Island. They've had some presence there, as has Industry Canada on occasion.
MR. MICHEL SAMSON: I attended a recent energy trade conference in Houston. The province had a booth there, in fact very prominently displayed. It had approximately 15 to 20 civil servants from the province, from various departments, who were there very clearly to lobby for the province, and to go and meet with other exhibitors there, especially from other countries. I'm curious, are you getting that level of support at your trade shows?
MR. EDWARDS: I can speak for one that the NSBI participated in, the last Fish Expo we were at in Providence, Rhode Island. Anyway, it was within the last two years, and we were part of an Atlantic Canada pavilion. It was through the International Business Development Agreement at that time, I think. Our experience, our association with that is that we would not do that again because the visitors to that show saw us as government. These were fishermen and, unwittingly, our participation in that deflected a number of visitors to that pavilion because they thought we were government.
Now, there's not a very good reason I can explain for that, but I'm just telling you that that's what we experienced. So the next time around, we actually declined and preferred to be on our own as an industry independent, and if government could remotely help offset some of the costs then that's the best solution, in our experience.
MR. MICHEL SAMSON: One final comment, Mr. Chairman, just to clear up something. I don't think anyone who listened to my comments would have taken the interpretation Mr. Taylor gave, but let me clarify by saying this: NSBI should not be hiring 50 new employees to go bother the boatbuilders, they should have some of their existing employees go and find some of these new markets, learn of new products, learn of new opportunities, so that we can grow the industry, as has been suggested here, which is exactly what we thought NSBI was doing and what we've learned today is not happening.
Mr. Chairman, on that I would make the motion that this committee write to Mr. Stephen Lund, who is the head of NSBI, to ask for a summary of NSBI's activities in supporting the Nova Scotia Boatbuilders Association, what their role has been and what their level of participation has been on behalf of this industry.
MR. CHAIRMAN: We have two more individuals who have questions, and then we will come back to you.
Mr. Parent, a short snapper.
MR. PARENT: A very short snapper, and it's not a question so much as I appreciate your comments, Dr. Theriault. We've been raising them in our school board for quite awhile and with the government. You would be a little comforted to know that the Nova Scotia school boards have seen this as the number-one issue, the vocational training. The Department of Education tells me that they're working hard at it. We'll wait to see the evidence, but there are many people supporting you - there's a real gap here, a real hole in training that needs to be filled up. I'm sure you're aware of that already, but I just wanted to reiterate the importance of what you had to say.
MR. SAUNDERS: Mr. Chairman, may I?
MR. CHAIRMAN: Sure.
MR. SAUNDERS: I want to clarify something here. When I go to boat shows or when I have gone to boat shows, you're dealing with a clientele who have no interest in whether or not government is lobbying for you, you're dealing with a clientele - at international boat shows, 99 per cent of them are luxury boats - nobody needs a yacht, they want one. So they really don't need a government lobby saying you really should come to Nova Scotia to get your boat built, because they don't want to talk to you. They want to talk to a boatbuilder, someone who can sit down and go over specifications with them, explain to them that if they're going to use a boat in a particular area, this is the platform you should be using, someone knowledgeable. They do not want to talk to government. If that insults you, I'm very sorry - but no, I'm not. (Laughter)
MR. CHAIRMAN: Thank you, Mr. Saunders, all your comments are appreciated.
Mr. Parker, a short snapper.
MR. PARKER: I guess I want to ask a little bit about the traditional wood boatbuilding business. We've talked about all kinds of other products that boats are being made out of and I happen to come from a town where the good Ship Hector, a replica, a wooden boat - right down to dories. How big is the wooden boatbuilding industry in this province? How significant is it, or is it other technology that has taken over?
MR. SAUNDERS: About 5 per cent of the industry is boatbuilding. There are lots of repairs.
MR. PARKER: The 5 per cent is wooden boatbuilding?
MR. SAUNDERS: Yes.
MR. CHAIRMAN: I have just one short snapper, brevity is the hallmark of a good speaker.
Is there a decline in the total number of industries and people working in the industry from the last 10 years, or is it pretty much the same as it was 10 years ago? Is there a decline in the number of people who work in the industry, the number of businesses in Nova Scotia, and what's the average level of income for a boatbuilder?
MR. EDWARDS: It's important that we clarify which industry you're talking about.
MR. CHAIRMAN: We're talking boatbuilding.
MR. EDWARDS: Well, I can speak from the statistics we have, which are from our membership. Since we've been around, six years, the industry is growing. Export sales are growing. The industry is becoming more efficient, there aren't as many employees in the industry as there were during the heyday of the 1980s, early 1990s. It's becoming more efficient, sales are going up, export sales are going up. The skills requirements for the individuals working in the industry are more demanding and, hence, we need the training.
It's a growth industry. We have the stats, the economic studies are out there to show it is a growth industry, with emphasis on exports.
MR. CHAIRMAN: Perhaps for the sake of brevity, could you provide that detail for members of the committee?
MR. EDWARDS: Yes, I certainly could.
MR. CHAIRMAN: Okay. Unfortunately, our time is getting tight. The member for Richmond had a motion that he wanted to entertain. Mr. Samson, is that still on?
MR. MICHEL SAMSON: Yes, again, I recommend that this committee write to Mr. Stephen Lund, the Chairman of Nova Scotia Business Incorporated asking them for a summary of their involvement and support of the Nova Scotia Boatbuilders Association, and if they could provide us with a breakdown of their level of activity with this group to support their efforts.
MR. CHAIRMAN: Would all those in favour of the motion please say Aye. Contrary minded, Nay.
The motion is carried.
There were two other items in that. One was with regard to a boatbuilding or shipbuilding secretariat - I think perhaps as a committee we should refer that to the Department of Economic Development and the Department of Fisheries, asking for some feedback on that. Is that generally agreed?
Agreed.
The second issue is with regard to the issue that Mr. Arthur Theriault brought up with regard to the disclosure forms, the loan forms. Perhaps if we could send to Nova Scotia Business Inc. as well for . . .
MR. TAYLOR: Would you give some clarification on that particular form? Just on the form that we're talking about.
MR. ARTHUR THERIAULT: It's basically a document - I call it a document, it was only one page, but I had to sign that in order to carry on to get the loan.
MR. TAYLOR: Was it a disclosure form? I didn't feel that it was.
MR. ARTHUR THERIAULT: It's not disclosure, I don't know what form you used, but basically it says that I wasn't allowed to take any salary . . .
MR. CHAIRMAN: Terms and conditions.
MR. ARTHUR THERIAULT: Yes. I can easily make that available. Not a problem.
MR. CHAIRMAN: Perhaps we'll take that avenue for the time being and then we'll refer it back to the committee.
MR. ARTHUR THERIAULT: Yes, and then you can read it for yourself and . . .
MR. CHAIRMAN: Okay. Mr. Saunders, do you have any closing remarks?
MR. SAUNDERS: No, except I'd like to say how much I appreciate everybody coming out and hearing us, keeping in mind that this gentleman here works for an association, this gentleman has his own business, and I'm a volunteer.
MR. CHAIRMAN: On behalf of the committee, we would like to thank Mr. Edwards, Mr. Saunders and Mr. Arthur Theriault for coming and appearing and providing us with some extremely important detail. (Applause) And our colleague, Mr. Gaudet, for putting this on the radar screen. With that, we'll ask for a motion to adjourn.
Oh, wait now, next meeting date, and we have to, very quickly, review the witness list. We have a large number of unapproved witnesses. Back to the issue of unapproved items. There are two issues. One, when would you like to wrap up for the Summer? (Interruptions) Mr. Taylor.
[11:00 a.m.]
MR. TAYLOR: Whereas we may adjourn for the Summer months, I'm just wondering if we could call a meeting after the Summer break, so to speak. There may be some other more time-sensitive issues that come up over the Summer. You could pick one now. Do you think that would be reasonable, Mr. Chairman, or would you sooner . . .
MR. CHAIRMAN: Well, there are 10 here. Why don't we pick two or three, just to kind of get them in the mix, ones that are less contentious.
MR. TAYLOR: Did we agree that we would come back in September?
MR. CHAIRMAN: Okay. Is that generally agreed? (Interruptions)
The first week of September?
MR. TAYLOR: Well, let's have a meeting to discuss it.
MR. CHAIRMAN: September 15th or close to that. (Interruptions) Okay, we'll compromise. The middle of September.
Generally agreed?
Agreed.
Is it generally agreed then that we will have at least three out of the 10 here that people feel comfortable with? Mr. Parent.
MR. PARENT: Agreed. I'm just wanting to put forward one of the ones that's on the list.
MR. CHAIRMAN: Sure. Which one?
MR. PARENT: The Nova Scotia Federation of Agriculture, but I'm wondering if we can focus it a little more closely on Avon Foods. This has been a tremendous blow to the Valley economy, and it ties in with lots of different issues, the transportation costs to Upper Canada, et cetera. So I'm just wondering if I can . . .
MR. CHAIRMAN: Put your oar in the water for that?
MR. PARENT: Yes.
MR. CHAIRMAN: Since we're sailing here today.
MR. PARENT: Yes, put my oar in the water.
MR. CHAIRMAN: How do other members of the committee feel? Is that okay?
It is agreed.
Two others. Any suggestions?
MR. PARKER: The first one on the list. It might be interesting to get some information there on the credit unions, and the small business loan . . .
MR. CHAIRMAN: Who would you want to come in for that?
MR. PARKER: Well, I'm not sure. Who's looking after it in the government departments?
MR. CHAIRMAN: Nova Scotia Department of Economic Development, the appropriate authorities there? (Interruptions)
MR. GAUDET: I think we need someone from the credit unions, because they're involved on the front line.
MR. CHAIRMAN: Do you want to take that approach first then? Is that okay? Someone from the credit union? (Interruptions)
MR. PARKER: One of each, government and credit unions both.
MR. CHAIRMAN: Well, we could have both. Okay.
Is it agreed?
It is agreed.
One more. Any offers?
MR. GAUDET: Well, we're going to meet again in September, right? So we have two.
MR. DOOKS: I think that's enough for now.
MR. CHAIRMAN: I'm just thinking (Interruptions) We could always put the red tape task force in there. That's a favourite of mine. I figure after four years, maybe they have a final report. (Interruptions)
Motion to adjourn?
So moved.
[The committee adjourned at 11:04 a.m.]