HANSARD

Printed and Published by Nova Scotia Hansard Reporting Services

ECONOMIC DEVELOPMENT COMMITTEE

Mr. Keith Colwell (Chairman)

Hon. Judy Streatch

Mr. Keith Bain

Mr. Chuck Porter

Mr. Clarrie MacKinnon

Ms. Vicki Conrad

Mr. Leonard Preyra

Ms. Diana Whalen

Mr. Harold Theriault

[Mr. Clarrie MacKinnon was replaced by Mr. Trevor Zinck.]

IN ATTENDANCE:

Mrs. Darlene Henry

Legislative Committee Clerk

WITNESSES

Canadian Federation of Independent Business

Ms. Leanne Hachey

Vice-President - Atlantic

Ms. Juanita Cirtwill

Member Services Counsellor

HALIFAX, TUESDAY, FEBRUARY 26, 2008

STANDING COMMITTEE ON ECONOMIC DEVELOPMENT

1:00 P.M.

CHAIRMAN

Mr. Keith Colwell

MR. CHAIRMAN: Good afternoon, everybody. I would like to bring the meeting to order and welcome everybody here today. I'm going to start by doing introductions around the table.

[The committee members and witnesses introduced themselves.]

MR. CHAIRMAN: That's great. We have a new mic system, the clerk tells me, so if I don't identify you when I ask you to speak, if you would just state your name before you speak to make it easier for the recording.

I'm going to start with Ms. Hachey, if you could make a presentation first, and then we'll go for a round of questions.

MS. LEANNE HACHEY: That sounds great. Now, as I understand it, I have about 10 minutes to just make some remarks, so while I have handed out a presentation, my plan isn't to go through it all because it would be much longer than 10 minutes, but I'm hoping that some of the questions that arise will allow me to talk to some of those slides. Does that work for the committee?

MR. CHAIRMAN: Yes, you can take longer, you can take 15 minutes if you like.

MS. HACHEY: Okay, I never say no to more time. First off, thank you very much for inviting CFIB to present to your committee, it's an honour to be here. Before I get started walking through some of the issues facing small- and medium-sized business, I thought I'd first take the opportunity to introduce CFIB, for those of you who may be unaware of what CFIB does.

The Canadian Federation of Independent Business is an advocacy group representing small- and medium-sized businesses across the country. We've been around for about 36 years - we were the result of a tax protest way back in the day. Our founding member, John Bulloch, was actually the son of a tailor in Toronto and he had noted at that time, about 36 years ago, the federal government was coming down with a tax increase specifically targeted to his dad's business, to a small-business owner.

Our founding member, John Bulloch, was outraged because he didn't understand why government was targeting his dad's business, so he got together some like-minded small-business owners and they took their protest to Parliament Hill and were successful in ensuring that tax increase never happened. At that time, he noted that while there's a whole bunch of advocacy or lobbying happening with the large business community and residents and consumers are relatively well represented too, there was a gap for the small-business owner.

Collectively, small-business owners have a tremendous amount of economic and social power, but individually they feel very isolated and alone. What our founding member, John Bulloch, took the opportunity to do based on that tax protest is to join a collective of small- and medium-sized businesses that could lobby together, and that is how we were born.

Right now we have 106,000 members across the country, we have 5,200 members here in Nova Scotia. Our organization is built upon a few fundamental principles. One is we are non-partisan - as you all know, we talk to all political Parties. We share our information widely and in a minority government situation, that's certainly the best way to go, so definitely non-partisan and have been since our inception. Secondly, we are based on a one-member, one-vote principle, meaning each one of our members has an equal say in the policies that CFIB comes up with collectively. I will say that our policies are based on what our members tell us, so Juanita and I take our direction directly from our members. Again, we're non-partisan, we're one member, one vote and we're 100 per cent member funded - meaning we do not accept any money from government, from big businesses, from banks. We are directly accountable to our members and those are our three founding principles.

One of the reasons I'm so proud to do what I do is because of the people we represent. Again, collectively they are a powerhouse in the Canadian economy and in the Nova Scotia economy. They employ about half of Nova Scotians, they're responsible for approximately half of the GDP, and they create approximately 40 per cent of new jobs in the province too. So economically they're truly powerhouses - while they may be small, collectively they are huge.

Also, the softer side of the small-business owner is their social contributions to community. Our members truly are rooted in community. We have members who have been with us since the beginning for 36 years, because their business has been passed from generation to generation. Our members are the ones who sponsor local soccer teams, local

baseball teams, they're the ones giving your sons or daughters their first job. They are truly connected to their community, and in many cases those connections are very long-standing. While small businesses certainly bring a whole bunch to the table when we talk about the economy, they bring just as much to the table when we talk about their social contributions.

It is for all of this that actually small-business owners have been rated by Canadians as the profession they most respect. When Leger asked Canadian citizens across the country a few year back, how would you rate your level of respect for different institutions, farmers came first and small-business owners came second. Interestingly, we actually have farmers as members of CFIB, because agri-business owners, for those of you who represent rural communities, are extremely astute business owners too, so certainly Atlantic Canadians, Nova Scotians respect small-business owners. They also trust small-business owners to create jobs, more so than they trust government or multinationals to create jobs.

Finally - and this is what I find most encouraging - is that more of us want to be entrepreneurs. Entrepreneurship is the most-wanted career amongst Nova Scotians, about 41 per cent of Nova Scotians say that.

At this point I'll say that CFIB firmly believes that the future prosperity of the province is directly linked to our ability to make that happen for people, to make more Nova Scotians become job makers as opposed to job takers. Where we see the role of government in all of this is to empower Nova Scotians to do just that and to empower our current business owners to be able to create that one more job, to be able to increase wages, that extra $1, $2 or $4 an hour, what have you. So again, that is truly where we see the appropriate role for government, is to empower us, to empower future entrepreneurs and to empower current entrepreneurs.

Now it's not nearly as sexy as having a big business come in and create 1,000 jobs like that. What we're talking about is helping current entrepreneurs and our future entrepreneurs create one job at a time, but with the 33,000 or so businesses that we have in Nova Scotia, can you imagine if even 10 per cent of businesses were able to do that, that would truly be significant.

I want to talk a little bit about the year that was, 2007. As we all probably appreciate, we are right now in a time of relative economic uncertainty. We have been going down that path for the past few years, the early 2000s, 2001 with that slight blip with 9/ll, confidence in the province was extremely high. CFIB does what we call a quarterly business barometer where we measure our members' business expectations, the confidence they have in their ability for their business to create jobs. In the past two-quarters of 2007, we saw a significant decline in that confidence. Again, that was not necessarily unique to Nova Scotia, that was happening across the country for a variety of reasons.

I do want to say too, we ask our members about their ability to compete because, whether we like it or not, we do operate and live in a global environment right now. It doesn't matter if you're a business owner in West Hants or in the HRM or elsewhere in the province, likely your competitor is not across the street, they could be in the province next to you, but they could also be in a jurisdiction around the world. In this environment we have recently asked our members about ability to compete, can your business compete right now under the current tax structure? In order for a business to survive you need a few fundamental things. You have to be able to compete, and what that means for businesses is you have a competitive tax structure, you have a competitive regulatory environment, and you can get the people you need to work in your business. So there are three pretty important components.

When we asked our members about that first component, about the tax component, about over one-third of our members said they couldn't compete. When you think about why that is, there are many reasons why that would be, and I will just list a few: Nova Scotia has the second highest workers' compensation rates in the country; we have the second highest level of fuel taxes in the country; we have the lowest level of basic personal exemption in the country; we don't index our personal income tax rates and we're the only province that doesn't; we have the third highest small-business tax rate in the country; and on top of all of that we have a shortage of qualified labour. So it comes as little surprise that small-business owners in Nova Scotia, a good third of them, say they're finding it difficult to compete. On the tax side, our members and CFIB don't believe we are competitive right now.

If we just look at what is happening across the country, there are more provinces than not that are taking measures to improve their competitive taxation structure, and I'll point to a few. The federal government, as we all know, has decreased the GST; they have also decreased the personal income tax rate in the last October economic update. P.E.I. decreased its fuel tax, New Brunswick decreased its fuel tax, Newfoundland and Labrador had the largest personal income tax cut in its history in its last budget, the B.C. budget of just a few days ago lowered the small-business tax rate, and Saskatchewan decreased its taxes two budgets ago. So there are tax cuts going on across the country.

The position that leaves Nova Scotia in - because we have stayed at the same level for the past few years - is that while we're stuck in neutral everyone is moving forward, meaning the net outcome is that we're falling further behind. I'll just point to one that impacts all Nova Scotians, it doesn't matter if you're a business owner or not, which is the indexation of personal income tax rates. Again, a pretty complicated tax subject, but there is such a thing called inflation.

Unfortunately, our personal income tax brackets, none of our tax brackets incorporate inflation into them, so every year if a Nova Scotian makes a little bit more money than last year, more of their income will spill over into that higher tax level. That's an inequity that

doesn't exist in the rest of the country, it's unique to Nova Scotia, not something we should be proud of.

[1:15 p.m.]

Secondly, we have the lowest basic personal exemption in the country. It's a perfect time to be talking about this because we're all filling out our tax forms, we're all filling out how much money we get to keep before government starts taxing us. In Nova Scotia, we keep less than everyone else in the country. In other words, we are taxed sooner than everyone else in the country. Fortunately, the Government of Nova Scotia has identified this as an issue and has made a commitment to increase our basic personal exemption by $1,000, and I think we're entering into year two of that. However, as we're doing that everyone else is too, so even though we're increasing ours, we'll still be in the bottom third on that index. Again, this isn't something that just impacts small-business owners, it impacts their employees, their customers, their suppliers, it impacts us all.

On indexation, again, Nova Scotia - and I'm talking about personal income taxes, you've noted, and the reason why is that when we asked our members of all of the bevy of taxes that they pay which impacts your ability to compete the most, personal income taxes are at the top of the list.

So I talked a little bit about the basic personal exemption, with indexation, you may all know, again, as I say, we are the only province that doesn't take into account inflation when it comes to our personal income tax brackets. Again, government has recognized it as a problem, but has made the promise that it's going to start incorporating indexation, not until the year 2011. So as every other province is bumping up their tax brackets, we're remaining stable until the year 2011 which means, in essence, we will be falling further and further behind.

Not indexing our personal income tax brackets is the equivalent of a hidden tax increase every year because any amount of money that we make, due to inflation of our salaries, will spill over so that we're taxed higher. This is something that CFIB has long been on record for and it's a fight not just for small-business owners, but it's a fight for every one of your constituents too. It means all of us will be keeping a little bit more of our own money.

I raise indexation and the basic personal exemption now because, as we all know, there is a recent recommendation to increase the minimum wage by 27 per cent over the next two years. The recommendation is for it to go from the current level of $7.65 to $9.60, I think, by the year 2010. I get very frustrated over this discussion because while we remain stagnant in having government do more to allow more of us to keep our own incomes, the issue is being downloaded to the small-business community to pay more.

We have asked our members what kind of impact the minimum wage increase, if it goes through, will have, I'll step back and say can you imagine if your household budget increased by 27 per cent over two years, that's a phenomenal increase. It's an increase that not only impacts businesses that pay the minimum wage - because, as we all know, most Nova Scotians make more than the minimum wage, thankfully, about 96 per cent of us make more than the minimum wage - but anytime the minimum wage is increased, there's a rippling effect throughout all wages. If Juanita and I are working together and Juanita is making $5 more an hour than I am right now, the moment my wage increases, guess what Juanita is looking for too, she wants to maintain that differential.

So the increase in the minimum wage will impact most businesses in Nova Scotia and it's not just the added wage that will impact the business owner or the business, it's the additional costs associated with that. There are payroll taxes, as any business owner would know, that you pay on the bulk of payroll you have in your business and anytime the pot grows, the taxes that you pay on that money grows too. With a minimum wage increase comes an increase in CPP premiums, workers' compensation premiums, EI premiums, so it's not just as simple as a $2 increase - it's $2, plus whatever those additional payroll costs are.

So this is why we're once again going to be looking for government to index its personal income brackets in the upcoming budget. Now, more than ever, business needs to know that if you're asking business to provide more to its employees, then government should be right there with them giving Nova Scotians more money too, or leaving them with more of their own money.

Again, on the minimum wage, it's of little surprise given what I've said. When we have asked our members - and we asked about 700 of them - what impact this significant minimum wage increase would have on them, 68 per cent would say payroll tax has increased. So it's that bulk, all of their taxes are going to increase too; 60 per cent say all wages in the business are going to increase, as I noted; 56 per cent said their prices are going to have to increase; and then the rest I kind of classify as how they're going to pay for this.

I know some of you are small-business owners around the table, you don't pick money out of the sky to pay for some of this stuff. You have to make choices like any family does. Some of the choices business owners are facing are cutting staff hours, putting investments on hold and cutting back on the number of employees, so there is a cost to this.

The other point that I want to raise when we talk about tax relief, you need to talk about how government can fund this. Oftentimes, and I heard this argument lots, we can't afford a tax cut and to that, I'll point to the evidence that P.E.I. had a tax cut and its revenues actually grew. Anytime the federal government has cut taxes and we had a $15 billion tax cut last year, their revenues have grown this year because when you cut taxes, you're enabling the economy to grow itself, which means higher incomes, which in turn means more tax revenue, so that argument, I don't think, holds a lot of water. The second piece of that is

the other side of the books for government and that's our spending side - how much money are we spending?

Nova Scotia has increased its spending by about 121 per cent over the past decade - we've more than doubled our spending. At the same time, inflation accounts for about 25 per cent of that increase and our population has remained stagnant. Now, that 121 per cent of increase in spending, the only other province that has that increase in spending like that is Alberta, so we're spending as though we're Alberta. Yes, all provinces have certainly increased their spending, but very few are spending like Nova Scotia is. Again, when we look at how you would fund tax cuts, well, how about not spending as much money as you currently are or keeping a ceiling on how much we do spend.

We're asking our members right now about whether or not government should consider passing legislation which would cap spending to inflation, so that's one possibility that we're looking at to bring some fiscal discipline to the House.

MR. CHAIRMAN: I'll have to cut you off there - it has been 20 minutes.

MS. HACHEY: Sure. Oh wow, it goes by fast.

MR. CHAIRMAN: Who would like to start the first round of questions? I'll start out with 10 minutes apiece. Mr. Preyra.

MR. LEONARD PREYRA: I'll just ask you a quick question, because I know you're moving into this area. As you know, the Party introduced a bill last March essentially requiring the government to set up a small-business agency that would cut red tape and would essentially provide one-stop shopping to small businesses. Would you mind commenting on that? It will give you a chance to finish up what you were saying, as well.

MS. HACHEY: Yes, thank you very much. When we talk about a business climate for government, we talked a great deal - I mean business climate for business - about taxes. The second component is red tape and I actually have a picture somewhere of all of the red tape that businesses have to go through in order to start a business, run a business, expand a business.

Again, if you can just for moment put yourselves in the mindset of the small-business owner, if you wanted to start a business, you would have to find out from the municipal government what municipal licence you needed, what municipal legislation applies to your business. Provincially: occupational health and safety, Labour Standards Code, workers' compensation and, depending on the industry, it could be electrical permits, it could be plumbing permits, it could be the Building Code. There's so much stuff that business owners face, and then you go to the feds. You're talking about privacy legislation, you're talking

about CPP, you're talking about EI, your talking about CRA. This is all falling on the shoulders of the small-business owner; one person, for the most part, is doing all this stuff.

We actually asked government to quantify how much stuff of this we have. We have a whole lot of accountability when it comes to taxation so whether or not we like it, we know how much we're taxed, we know how much government spends, so we can make the valued proposition to ourselves, are my tax dollars worth it?

On the red tape side, businesses have had no way of quantifying all of the work they do for government and what they get for that work in return. We asked government to measure, bring some kind of concreteness to this abstract notion of red tape, and they measured that businesses in Nova Scotia spend 615,000 hours per year just filling out forms for the province. That doesn't include what the municipality has asked them to do, nor does it include what the federal government asked them to do. Now, this is a stinking huge number, but at least it's a number - at least we know how much we have. Measuring it is job number one; publicly reporting that number, which is what government has done, which is what we're going to be looking for in the budget too - because it is as important as taxation - is job number two; and job number three is setting targets for reduction.

What has happened in the past is that we haven't had a measure and because we don't know how much of it we have had, it has consistently grown. Now we have a number, now we know how much we have. Not only can it not grow, it actually has to reduce. By and large, our members don't say we don't need any rules, not at all. Our members are caring community members - they care about clean air, clean water, healthy workplaces. What they don't care about is unnecessary work that nobody gets any benefit for. That's what we're targeting, the stuff that doesn't matter, the stuff that businesses are doing right now that they don't really need to be doing. So that's one area that government has actually done some great work on, again, with the support of all Parties, which we're very appreciative of.

MR. PREYRA: Well, just to give you a chance to finish the last part of your presentation. (Laughter)

MS. HACHEY: I appreciate that.

MR. PREYRA: You know, we're moving into a federal budget tonight and the centrepiece of the next sitting of the Legislature will be a provincial budget. What are you looking for in terms of budgetary changes and recommendations that we can do?

MS. HACHEY: I'll come back to our member's priorities again - unleashing the entrepreneurial spirit. Allowing businesses to do more of the stuff they already do well, that is allowing them to do more, so allowing them to keep more of their own money. When we ask our members, how would you spend tax savings? It's never take a trip to Hawaii with my family and all my buddies. It is invest that money back into my business - increase wages,

increase employee training and invest in stuff that makes my business better. So we'll certainly be looking for some tax relief.

Again, when it comes to tax relief, we will be looking for stuff on the personal side addressing the inequities that currently exist - the basic personal exemption, the lack of indexation or bracket creep that all Nova Scotians are victims of, so that's where we'll be looking. We will also be looking for continuing support of that regulatory measurement to make sure that government doesn't drop the ball on that, because we have some good momentum happening and we'd like to see that continue.

Again, this isn't necessarily something that would be captured in the budget, but we have been pushing for legislation to capture the process we've begun on regulation in legislation so that we never go back to the way things were, we never go back to not knowing how much we have.

On the energy and environment piece - because that's a third priority of our members - we are very pleased to see at the high level the concept of environmental stewardship and that economic growth brought together and it was something all Parties endorsed. Our members are right there - they don't think it has to be either/or, it's both in concert. What is concerning though when it comes to how we're progressing to date is with the passage of the Environmental Goals and Sustainable Prosperity Act, which every Party voted for unanimously. The legislation is very strong when it comes to environmental goals - there are 21 of them - but under the economic growth piece there's nothing. It's weighted right now - and this is not to say that the environment isn't important. It is to say if the legislation is truly going to live up to what it says it is, then there should be measures on both pieces.

In the budget we certainly won't be looking for additional regulation on the energy and environment piece, but what we'll be looking for are some incentives to allow business owners to do more conserving, to invest more in technologies that will allow them to save energy, as opposed to the heavy-handed regulation.

MR. PREYRA: I have two quick questions, one on the minimum wage. I meet with small-business groups in my constituency quite regularly and two weeks ago I met with the Spring Garden Road Merchants Association and the Downtown Halifax Business Commission, and the sense I got from them was that the minimum wage was not the problem. They can't find people, even at the proposed minimum wage, and there have to be other measures to create incentives for people to stay and for small businesses to establish themselves.

MS. HACHEY: You raise a really good point because what we've noticed in speaking to some of our members on the minimum wage is that there appears to be two impacts: one on urban businesses and one on rural businesses. Urban businesses, some say

that the market is driving prices up anyway, so wages are going to increase anyway. Not so much in our rural areas, because they're not facing the same kinds of pressures.

The shortage of qualified labour, that's the second piece that you've brought into it - absolutely, our members across the board, particularly in the trades, are facing right now a shortage of qualified labour. We have been, I don't want to say, waiting for this day to come, but we've all been talking about the shortage of qualified labour. It's here, it is truly here.

The CFIB is coming out with a report in short order which will show that the concern over the shortage of qualified labour is drastically growing, and that is a very complicated issue because it speaks to the ability of employers to find good people, so you have to have a pool of people willing to work with the right skills. Employers have to have the ability to pay competitive wages so it speaks to the education system, it speaks to the tax system, it speaks to the competitive environment in which businesses operate. It's a very, very complex topic, but one that is here.

[1:30 p.m.]

MR. PREYRA: Even in rural Nova Scotia, there it's not so much the wage rate, there it is just out-migration, so two different answers but the same type of problem. They're not saying that the minimum wage is the biggest challenge that they face, so it's hard to know how we can address that bottom line. The cost of labour is not really being driven up by reasons that we can control at the moment, people are going to Alberta and going to Ontario, especially skilled workers.

I did have a question for you about the tax rate, as well, if I have a minute. Where do you see the trade-off in lowering the tax rate itself versus increasing the threshold? It seems to be a trade-off that we face when we move into the higher threshold we catch bigger businesses. So would you prefer that we move down from 2 per cent to 1 per cent?

MS. HACHEY: For the small-business tax rate?

MR. PREYRA: Yes, or would you prefer that we increase it to $500,000?

MS. HACHEY: It's interesting because we've actually asked our members that very question and they said, of course, both would be great, but if you had to choose one they would pick the small-business tax rate first and then the increase in threshold second. So that helps us kind of prioritize where we focus our efforts. Again, if would appear that's the case across the country, because many provinces have started to move their small-business tax rate down. P.E.I. has a promise to move it to 1 per cent by 2010, Manitoba has a promise to lower it to 1 per cent by 2009, and B.C. just lowered its small-business tax rate too.

One point I wanted to pick up that you had asked about earlier, which is the out-migration, we're talking about a shortage of qualified labour as we should be. What business owners are also talking about is a shortage of potential entrepreneurs, because business owners, just like all of us, are aging too. They want to sell their business and particularly in rural areas, they're turning around to sell their business and there's nobody there. So imagine in a very small community that's dependent upon one to 10 businesses on their main street - imagine if one, two or 10 of those businesses aren't able to be sold? What happens to that main street? What happens to that community? What happens to the employees who live there? What happens to the suppliers that serve them? So the shortage of qualified labour is absolutely an issue, but so is the shortage of potential entrepreneurs - that's as much as issue for our members too.

MR. CHAIRMAN: Mr. Theriault.

MR. HAROLD THERIAULT: Thank you, Ms. Hachey, it's always interesting to listen to your presentations. You have a pretty good handle on small business in Nova Scotia. You mentioned workers' compensation being the highest in the country.

MS. HACHEY: Second highest.

MR. THERIAULT: I know being in the fishing business it has gone up dramatically this past two or three years. You mentioned farmers as small business, but fishermen, too, are small business. Some of those boats, there are thousands of them in this province, they have as high as three, four or five people aboard them. It used to be two they would have aboard, and somehow workers' compensation came along. That came along, they say, because small business wanted it, and maybe you can get into that later. In the fishing business, there was usually just two people aboard the boat years ago. This past few years, especially in the lobster fishery around the coast, it has grown so that they put three and four aboard these boats. Once they went above two people, they hit this - workers' compensation kicked in because it's mandatory when you go above two people.

Well, here the fishermen are fishing in the Bay of Fundy with the New Brunswick boats side by side, same product, same market, and the fishermen in Nova Scotia are paying nearly $8 on the $100 to have this workers' compensation on them, where the boats next door in New Brunswick don't have to have it. It doesn't kick in for the New Brunswick fishermen until there are 25 involved in an industry, compared to our two. So I see what you mean by unfairness. I've argued that, so here in this past year the lobster fishing has dropped a little bit, so here they are laying off these one and two extra people who are aboard these boats, and going back to the two people, and they're going to get private insurance for one-tenth of the cost and 10 times better coverage.

Now, that may seem to be hard to believe but that's the truth. I've looked into it all. We bring it up about workers' compensation, this Workers' Compensation Board, and said oh, there's nothing we can do about this, this is what small business and businesses of this province wanted. Well, I've been in business 35 years and I was never, ever asked at any time in those 35 years if I wanted workers' compensation in this province. So I'm wondering - I'll get to the question here - you know in small business, like you do, with small business were you ever asked whether you wanted workers' compensation or not in this province?

MS. HACHEY: Well, I'll answer your question in a number of ways: one, I'll reflect back the dissatisfaction that small-business owners, en masse, have with workers' compensation. Again, I wish it was a simple thing but it is a very complex thing; Nova Scotia is the only province, with the exception of Ontario, where our rates have actually increased over the past five years. In every other province their rates have decreased again. It's like a laundry list of things that we're lagging the country in, and workers' compensation is one of them.

Now workers' compensation is a product of many things. Our workers' compensation rates are a product of the huge unfunded liability we have in this province. Everyone who pays a workers' compensation premium is paying for our past sins, they're paying for a tremendous debt that we've been carrying. That debt is a result of many things, it was a system that wasn't working for many years. It had political influence up the yin-yang, which was forcing coverage in areas that the system couldn't handle.

So again, it's also a product that we have more injuries in Nova Scotia than we should have. It's an insurance system so the money that's being paid out is for claims that are coming in. We have some of the highest levels of injuries in Nova Scotia and the people who are actually injured in Nova Scotia are off the job longer than in every other province. So it's the duration of claims, it's how many claims we have come in. For a small-business owner, though, we do know - and this is something that the Workers' Compensation Board will absolutely admit - that small-business owners for the most part aren't the cost-drivers of the system. They have, on average, an accident once every five to seven years and I'm not saying that's a good thing, but I'm saying that for the most part small businesses are safe workplaces. So they're not driving the costs in the system.

The frustration for the small-business owner is that they are a price-taker, so they have no influence over how much they're paying, even if they've never had an accident in their business for 30 years, their premiums could still go up. That's the source of a huge frustration for small-business owners, they feel a disconnect between what they do in their business to make it a safe workplace, as all employers are doing stuff to make their workplace safe because nobody wants an accident, and how much they are paying. So, as I say, they could have a completely safe workplace and still their premiums could go up. That's a source of huge frustration.

Again, I don't want to make the problem seem simpler than it is, it's a very complicated subject. I have been working in this area for about the past seven years now almost and I will say that we have seen a marked improvement in the governance of the compensation system.

Now what does that mean to a small-business owner? It doesn't mean a heck of a lot. What we're seeing is that it's now being run with more stakeholder input. So where small-business owners, through me, didn't feel they had a voice, we do feel like we have a voice now and I'll point to a concrete example. The employer community or the small employers, they are the overwhelming clients of the workers' compensation system. Again, imagine that five-person shop, it is the business owner who has to find their way through this maze that is the workers' compensation system. They had to do that all on their own, there wasn't any resource dedicated to helping that employer.

Finally, just this year, we have been given the go-ahead for an employer navigator and that navigator's job is just to answer questions of a small-business owner: how does the workers' compensation system work, why am I paying workers' compensation, what benefits am I getting from it? These are the basic questions that a lot of small employers have that they've never actually had an answer to.

So again, I'm certainly not saying that we're there, but we have seen some marked improvement in how the system itself is working. There is going to be a huge lag time between the improvements up there, to what it means to the fishermen, so that it is not a disincentive to hire another person in your firm. That's heartbreaking to hear because if that story exists in your area, you can just think that it's tenfold across the province.

Again, government shouldn't be set up to be a disincentive for people to hire more people, I think we can probably all agree on that. I don't know if I answered your question but, again, it is a frustration that our members certainly have too.

MR. THERIAULT: I have people telling me that they shouldn't be in this business. The government at one time was in the fishing boat insurance business. It ran for eight or 10 years and they had to get out of it because it couldn't run properly. I just don't know the problems that were there but they got out of it and they put it into the private sector, which has run pretty good, for the last 20 or 25 years that I remember.

We're saying that the fishermen are saying to me, put this workers' compensation into the private sector because most, with the two people aboard, have already got this private insurance, which is one-tenth of the cost of the government's and 10 times better insurance. So the people are saying, those who have to have the workers' compensation, they're pissed off because the fellow that's running the two people aboard the boat gets this much better insurance at a cheaper rate.

I mean why doesn't the government look at getting out of that? They got out of the boat insurance, so why not get out of the workers' compensation insurance? I'm speaking for the fishery here.

MS. HACHEY: Yes, it's not a question we've actually posed to our members and as I was saying at the start, we are based on a one-member, one-vote principle. It's not a question we've asked, we haven't asked, in the recent past anyway, should the workers' compensation system be abolished, so that could be a question we would ask for sure. Although probably like everything else . . .

MR. THERIAULT: No, ask everyone.

MS. HACHEY: . . . the solution has probably a lot of complexity that we can't even consider right now. That is to say that it isn't a question that we've asked our members, but you raise the point that it could be a question that we would ask our members.

MR. THERIAULT: But can . . .

MR. CHAIRMAN: I'm going to cut you off right there. Mr. Porter.

MR. CHUCK PORTER: Thank you, Mr. Chairman. I just wanted to touch on a couple of things - thank you for coming, very informative. A number of slides that you went through, I know that you were not able to make it through everything but I want to touch on your reducing red tape one just for a moment. You talked about although there seemed to be an awful lot of negatives within how the system and small business works, there are a few comments you've made there and I'd like you to expand on those just a bit, if you could. Page 9 I'm looking at.

MS. HACHEY: Yes, absolutely. So again just highlighting how far we've come as a province when it comes to reducing the regulatory burden, we are considered a leader in the country. There are only a few other jurisdictions that have taken it upon themselves to measure this beast that is red tape, and certainly every chance we get we're publicly supporting their efforts. We know it's not an easy thing to do, it is not a sexy thing to do, but boy oh boy does it ever make a difference in the life of a business owner.

So again, how they tally their measure is they had civil servants across every department - and we were very firm that it had to be cross-departmental because there are rules that existed in absolutely every department, so make it a cross-government initiative. Civil servants, to their credit, timed - took their stopwatches and timed - how long it takes to fill out forms. I can't imagine the enormity of that exercise, to think that they said they were going to do it. But they did it and they publicly reported it is something that we have not been shy about giving them credit for. To put that 615,000 hours in some context, that's 70 years; that's 70 years every year businesses in Nova Scotia were spending collectively just

filling out forms. Our question to government has always been, couldn't business owners be spending their time in much better ways?

Again, this isn't to say, I do want to clarify, it's not, let's get rid of all rules, it's let's focus on the areas where we can truly make a difference, that means something to business. When you put out a new rule, how about this, how about consulting on it? How about asking for feedback? How about asking a business owner, is this practical for your business? How about not making it prescriptive, because one size doesn't fit all when it comes to small businesses and that's what they've done. So they have done a bunch of things that we have been asking them to do. Again, we haven't been shy at all to give them credit. Again, it's something - their target is to reduce that 615,000 hours by 20 per cent by the year 2010.

I am now sitting back thinking okay, what happens after 2010, because we always kind of want to be one step ahead because when they hit that target, and I don't doubt that they will, we don't want to see all of the good work lost. Does that flesh things out a bit for you?

MR. PORTER: That's good and that form completion is painful at times. We spend a lot of time, probably in all of our offices, helping people fill out forms and they are way more complicated than they actually need to be, not only in small business but in a whole variety of areas, whether they're federal or provincial forms. They can be painful and they take a lot more times sometimes than they really need to, so I'm glad to see that we've had a pretty good look at that and I agree with you, what happens after 2010? I'd like to see that actually continually reduced to one page or half a page with the simple basic questions. Thank you very much and you could probably get your answer just as in depth as you could with four or five pages, I'm sure . . .

[1:45 p.m.]

MS. HACHEY: Sorry, I was just going to . . .

MR. PORTER: That's okay, go ahead, please.

MS. HACHEY: To add to what I was going to say again, very similar to what I was talking about with workers' compensation, a lot of good change has happened up here so we have a number, it has being publicly reported. We have reduction targets, fantastic, but how is that impacting the small-business owner, because ultimately we want a small-business owner to feel it. It has to mean something to our members, it has to mean something to the small-business owner.

What we're seeing, and again I don't want my remarks to at all undermine all of this good work, but we do see areas where they're talking about better regulation, they're talking about upfront consultation, they're talking about meaningful reform. Then they'll go out and

bring in tobacco regulations which require every convenience store to put up those silly - I don't know if you've seen them, the guy on our corner street has kind of done a job of hiding their cigarettes.

Well, our members, convenience-store owners, weren't consulted on that. We have no idea if them doing that is actually going to have an impact on lowering smoking rates because there's no evidence out there to suggest that it will. In some convenience-store owners' cases, that change cost thousands of dollars. So again, while the talk appears great and the exercise itself is fantastic, there is a disconnect between some of what is coming down the pipe and what they are saying up here. So we're trying to stay on top of those things.

MR. PORTER: Interesting. I also want to ask you a little something - I know my time is limited - about BizPaL. I know you're a supporter of BizPaL and I'm just kind of curious, you can go into a little detail about what it is exactly, for the record. I'm more interested to know how many people are using it, what kind of results we have had because of it, is of interest to me.

MS. HACHEY: Unfortunately, it's really in its infancy. I don't know how many people are using it, probably there are two communities in Nova Scotia that have it right now - HRM and New Glasgow. For those of you who don't know what BizPaL is, up until July every Nova Scotian, potential entrepreneur or if you're in business now, in order to start up your business you need a whole bunch of permits and licences. It was up to the business owner up until July to figure it all out. So I'll give you an example of a bed and breakfast operator. They had to get their business registered, a plumbing permit, a food-handling certification, a building permit, a fixed roof and accommodation permit, a development permit, an automatic machine licence permit, a signage permit, a film exchange licence, a SOCAN licence, an electrical permit, a fuel safety permit, a liquor licence, a vehicle permit and a gas permit. That's just to start up one business.

Permits and licences are only one small piece of the regulatory file. So up until July, the small-business owner had to figure this all out themselves. Imagine how much legwork that is. Meanwhile, government had all this information themselves, they knew exactly what the small-business owners needed so what they've done is come up with a one-stop shop that outlines, if I want to open up a bed and breakfast in Halifax, I type in this and like it or not, this is what comes out. At least I know, whereas up until July we had no idea. Now it's only in two communities, it's in Halifax and New Glasgow. There was a commitment to roll it out to every municipality in the province over a certain time frame - we're still supportive that's going to happen. We were hoping it would happen a bit more quickly than it has but again, the commitment is on the books so we're awaiting it to come to a community near you.

What a huge benefit to business. I mean it's too bad it took so long for it to come, but at least it's here, so we're very supportive of it. Again, Nova Scotia is one of only a very few provinces that have signed on.

MR. PORTER: Just a couple more things, one being the minium wage increase, knowing that it's under review. I'm hopeful that a lot of people will respond to the opportunity to share their views on whether - we would probably all agree that the increases are a good thing, you know we could fight poverty and a variety of issues, trying to increase and make better livings for Nova Scotians. However, the other side of that is interesting from the small-business perspective and I think it is important that they get those views shared before the report is accepted and finalized and decisions are made.

MS. HACHEY: Well, I know certainly CFIB is putting in a submission. One of our main tenets is that if the goal is truly to improve the lives of the working poor, government has a lot more effective tools in their arsenal than a small-business owner does. Again, a $2 increase over two or three years can't hold a candle to an increase in the basic personal exemption or cutting personal income tax rates. So if government truly wants to do what it says it wants to do, then it should put its money where its mouth is too.

MR. PORTER: Thank you. I know with regard to your comments on taxes and Nova Scotia being relatively high in taxes, you would never find me arguing that point. I guess from the other perspective, and everybody in this room every year around budget time is looking for roads and infrastructure and so on. It is a really tough job, I think. Somewhere in the middle has to be met but with a huge deficit that I'm sure you're aware we have in this province, and if we look at it, I think, as government probably looks at this and say, well, we have a lot of people to please and it's very difficult to do.

MS. HACHEY: Particularly in a minority government situation too. I don't doubt for one moment how challenging that would be. Again, you know, it's worth noting that we are in our fourth year of successive minority government and we're feeling the toll, Nova Scotians are feeling the toll.

MR. PORTER: Because those same small-business people still ring my phone and I'm sure everybody else's in here, complaining about the potholes in the road on their way to work. Just as an example, of one thing or another, that infrastructure issue still exists and you still do hear from those people.

I do understand what you're saying, though, in representing all those and I think it is a very good point and very fair.

MS. HACHEY: Yes, and to your point too, I will acknowledge that. Again, our members aren't saying to pour all the money into tax relief, what they're saying is find a balance between tax relief, debt repayment - again, we have the second highest debt per

capita in the country. How many of these measures do we have to be the worst on, really? So they want a portion put on tax relief, a portion spent on debt reduction so that we are paying less interest, so we have more money to spend on stuff and on improving infrastructure. So of all the areas that government can spend money, that's certainly one area where our members are relatively supportive, because they need good roads to ship their goods.

MR. CHAIRMAN: Thank you. Ms. Conrad.

MS. VICKI CONRAD: Thank you for your really well-presented report to the committee. I'd just like to go through some of my concerns and questions to you, because I think we tend to forget how important small business is to Nova Scotia and to the country. Small businesses are really the backbone of our economy here and when we're talking about job creation we tend to throw around big, huge numbers, you know the manufacturing sector employing hundreds of people or call centres employing upwards of 300 employees sometimes. When a business such as a call centre, as we have just seen recently, is needing to make a transition and let go employees, the tremendous loss economically is huge to a community.

Looking at the number of members that you have across the province, it is really impressive because I'm thinking that probably that number you have, in terms of a signed-up member, but if each of those members has anywhere between five and 20 employees, we really have to do a lot to protect our small-business community.

You mentioned that government tends to spend and certainly in this province we're spending like we're the Province of Alberta whose economy is just tickety-boo right now with the oil sands and all of the things that are happening positively for their economy. In one of the slides here you're saying that - and I'm assuming when you're saying government it's the Nova Scotia Government you're talking about - we have increased spending by 120 per cent in the last 10 years, meanwhile inflation has increased by 26 per cent. You suggested that perhaps there should be a cap to some spending.

Small-business owners are very conscientious about balancing their books, they know that they need to rein in costs when they don't have money to spend, so they look at their business and they have that living document, that business plan, that changes from year to year, so they have to balance their books accordingly and make some really tough choices about where they're spending their next dollar for the next year. What would you suggest or what is the business community suggesting where government could be cutting back on their spending? Of course, spending on the government side crosses so many different departments, influences so many different issues trying to be that brilliant economist that government really isn't. What would you suggest?

MS. HACHEY: Very good question because it's not good enough for us to say that government should cut spending without putting forth some solutions. What is really interesting, Vicki, is that when we've asked our members this, they want to start in their own backyard. All those economic development programs you've got out there, a lot of them don't impact us, a lot of them we can't access, a lot of them don't mean anything to us. We've actually asked our members, have you heard of or used the services of the RDAs and the CBDCs, and most of them haven't even heard of them let alone used their services. So it's interesting that business owners there would target something that you would think was put together for them. They've done it, number one, because a lot of them haven't heard of them and don't use them, but also because they fund their competitors, so if they're not getting help, funding, money, whatever, from an RDA, maybe one of their competitors is.

There are few things that are more irksome to the business owner than unfair competition, than having government support one of your competitors with your tax dollars. I would certainly say, looking at areas in the area of economic development and all of the schwack of agencies that are out there that are supposed to be helping them.

The second area - and again, this is a much more complex issue than all of us here today can determine the outcome of - is health spending. I think it's this year that we're supposed to tip the 50 per cent mark where around 50 per cent of our overall revenue is going to fund health. That is a tremendous number and that number, if all things stay the same, is only going to increase. Again, CFIB has been saying this for five years now, we need to be having a serious debate and discussion about the state of our health care and what we can expect, what are reasonable expectations, because the way it's going now is unsustainable. The way it is going now, it's not going to be long before all we do is fund health care in Nova Scotia.

Then, of course, I think our third greatest expenditure is our debt charges, it's paying down our debt, the interest that we're paying on our debt. So, again, if we get aggressive with some repayment plans we would be freeing up more money to spend on stuff like health or whatever. I hope I've answered your question, those are a few areas that I would certainly identify.

MS. CONRAD: I'm really pleased that you did identify all the great economic programs we have out there. As a small-business owner myself I remember the first time I was looking for some assistance for a business plan. There were just so many places to choose from and if you didn't know where to start, it was really confusing - from the RDA to the local South Shore Opportunities Agency, to the municipal economic development officer, to even your local bank offering you small-business planning. So it is sometimes difficult for small businesses to kind of work their way through all of the programs and you're right, they don't necessarily lend themselves well to the small-business person.

MS. HACHEY: No, and I would never debate their intention because I'm sure they're all very well intentioned. What I question is their coordination. Are they done in a way that they're not tripping over each other? Their communication, again, most of our members haven't heard of them and if they have heard of them, I don't even know where you would start because there are so many of them. Again, I'm not quite sure what they do differently from each other. Yes, I definitely feel there could be some rationalization there.

MS. CONRAD: I'm really pleased too that environment and energy are huge concerns of the small-business community. You and the community are absolutely right that the two need to be embraced together and there's really no separation, for one to move forward the other certainly does. You mentioned that the business community would be certainly welcoming any incentives for energy and environmental conservation. Could you just maybe elaborate on what those incentives could look like?

MS. HACHEY: Yes, absolutely. I should say that close to 70 per cent of our members, we've asked them about their habits in their business, have you taken measures to make your business more energy efficient, and about 70 per cent of them have. About 70 per cent of them have captured that low-hanging fruit, you know, the stuff that's easy to do: you change your light bulb, you turn off your lights at night, whatever. When we asked them, why did you do it, number one, interestingly most of our members do it because they believe it's the right thing to do. They're not doing it because they're saving bucks, I mean that's some positive outcome of it, but that's not their motivation. They are certainly not doing it because government is putting rules in place. They are doing it of their own accord, which is what you want people to be doing.

[2:00 p.m.]

So we know that they want to do stuff, they personally want to do stuff, we know that they have done stuff, so we asked them, what's preventing you from doing more? Two things: it's too confusing, they don't know where to go; and it costs too much money. In terms of incentives, they would need to be addressing those two areas.

Again, kind of like BizPaL, if you were a business looking to find the program that meets your business needs, it's a myriad out there. Go and try typing in energy efficient programs and small business, you will probably come up with 10,000 Google hits, so there really isn't a one-stop shop. All of the information is out there somewhere but it's not organized in a way to make it easy for me, the small-business owner, to find it. So that is one thing that we've actually suggested, that business owners say they need more information, we just need better organized information.

Right now we have Conserve Nova Scotia doing some programs, we have the Department of Energy doing some programs, we have Nova Scotia Power doing some programs, we have Natural Resources Canada doing some programs, then we have the NGOs

doing stuff too. So there are a whole bunch of people doing stuff - and I'm not saying that it's not good stuff, but it can be very confusing for a small-business owner to know what suits my needs. One thing that we would say - and this is not necessarily an incentive, but it just make it easy for people to figure out where the information is and what program suits their needs, because there is probably stuff already out there that they don't know about, that would be one thing.

The second thing is dealing with that sort of a time side, make it easier for businesses to save on time. In terms of saving businesses money, it could be anything from some of the programs that currently are introduced really are geared to either large businesses because, again, that's the low-hanging fruit. They spend a shwack of cash on energy, we can probably do stuff to help you upgrade your machinery or equipment or whatever and residents, there are a whole bunch of rebate programs for homeowners. Who is caught in the middle is the small-business sector, so there doesn't appear to be a whole lot of programs for small businesses. That could even be some incentive for the small-business owner to do something different.

One of the things why our members have gone after the low-hanging fruit is because it doesn't cost that much money - changing your light bulbs, turning your lights off at night. We actually had a member that rejigged their water system for their plant to save a shwack of water, but there are very few businesses that have the time and resources to figure all that stuff out.

Incentives could look like a navigator for the small-business owner, here are the programs that we have, this is the one that will meet your needs, this is how much it costs. Giving businesses information up front will help them a whole lot and there probably are some tax incentives and tax credits perhaps that could be introduced. What would probably be a smart thing to do is just do an environmental scan of the various - because I'm sure there are - tax incentives or tax rebates out there that are working in other jurisdictions. So it probably would be a wise thing to look at what is working in other provinces before going ahead and doing something new.

MS. CONRAD: One more?

MR. CHAIRMAN: Time is up. Ms. Whalen.

MS. DIANA WHALEN: Thank you, Mr. Chairman. You're following that 10-minute rule I take it. Anyway, welcome, Leanne, we're always really glad to get this information and to be reminded of the concerns of small business. Again, I know you speak on behalf of many people when you do come out with these positions and I also know you survey your members regularly, so you're not just picking numbers out of a hat. You actually know what the mood is and sort of the current concerns of everybody in business. With the 5,200 members, that is pretty significant, so you're representing a lot of people. I wanted to ask you

a bit about your membership, how it is divided rural and urban, because earlier on you mentioned about a difference that you saw in terms of minimum wage.

MS. HACHEY: Our members, like the Nova Scotian population overall, are pretty much 55/45, so we probably have 55 per cent of our members in urban areas and 45 per cent of our members in rural areas. We are relatively representative of the overall population.

MS. WHALEN: Do you see any other areas, you did mention about the skill shortage in terms of rural, but do you see other areas where they differ significantly in their views - succession planning or any others that come to mind?

MS. HACHEY: Minimum wage, actually. You may disagree with that, Leonard, but we've actually heard more so from our rural members on that one than we have necessarily from our urban members. With that said, our members are speaking pretty much with one voice on that issue, but we have heard more so from our rural members. Other issues that they would differ significantly, Juanita, can you think of anything? I can't. Sunday shopping was one, but that issue has been dealt with. I don't think so, nothing stands out.

Oh, banking. Now that's not an area of provincial jurisdiction, but we all know there has been a trend for the banking community to close branches in the rural areas, so the access to capital issue becomes a bigger issue in rural areas of the province than it does so in the urban areas of the province. That is not to say that access to capital is a shoe-in for urban businesses, but I would say it's a more pressing issue for our rural business owners.

MS. WHALEN: That is important as well. Do your rural businesses complain as well about infrastructure? I'm thinking there not just of roads, but of schools and school closures that seem to undermine whatever little businesses or manufacturing are in the area. If you lose that in a community you can't keep your workforce there. I know Vicki knows this around Greenfield, for example, where they've been fighting to keep a school. Does that ever come up, that kind of ties social issues into your economy?

MS. HACHEY: Yes, absolutely. I know we've surveyed our members in the past, this is probably going back about four years. We asked them those characteristics that make a community prosperous and vibrant. All of the pieces fit together, it's the ability to employ people, it's the ability to run your business, it's the ability to have employees' children go to a school nearby and have a church and have a bank, so it's really difficult to separate that, they all really do fit together as a puzzle. Our members have identified that you need it all, a community can't just be only businesses because you wouldn't have any place for employees and their families to enjoy. On the other hand, you do have to have businesses so that people have somewhere to go to work.

MS. WHALEN: Exactly. Well, they are integrated and I think it's important. I'm glad to hear you did survey that. Four years ago isn't that long ago, so it's on your radar screen as well, which I just think is important. On the issue of broadband and communication links, that cripples businesses that are outside of where those services are available. Are your members telling you that? I can imagine them folding up shop in places like Canso, you can't even get a cellphone to work.

MS. HACHEY: An excellent point and that's probably another area where there has been a trend as government tries to figure out how to deliver services. There has been a trend to put services on-line, so to have people access information by going to the Web site, and that's okay if you're in a community that has access to high-speed Internet, not so much if you're in a community that doesn't.

One thing that Nova Scotia is taking the lead on is having broadband access through every community in Nova Scotia and that's something certainly that small-business owners would be very supportive of and something CFIB is very supportive of, because it has been a barrier.

MS. WHALEN: We're moving on. I didn't know we were leaders, but we're moving on. I might disagree that we're leaders because the companies have been calling us and complaining and saying we have to have it, for a long time, so that is a bit of a concern. One of the things you talked about were regulations and how things come in a bit out of the blue. I wanted to talk to you about the safety issues, because I've had companies in my area of Clayton Park call about the safety plan that every company is now supposed to submit. Did you have any complaints or concerns around that?

MS. HACHEY: Is it the workplace violence plan?

MS. WHALEN: I think so, but I thought it was also safety in terms of being robbed perhaps or in terms of changing their . . .

MS. HACHEY: Yes, I think it's sort of like a workplace and that was on the heels of that awful, awful event that happened in Dartmouth at the gas station.

MS. WHALEN: Yes, exactly.

MS. HACHEY: What we have found is that typically rules will come in as a reaction to something. Again, not to at all take away from that tragic, awful event, however, is that the best environment in which to create new rules?

MS. WHALEN: Well, my thought at first was that it would be for those stores or businesses that were open at night but it's for every store, every business, every office, I think.

MS. HACHEY: Yes, and I think on those, again I guess you kind of look for the bright spots where you can find them. It's because the government has recognized it doesn't have the ability to truly enforce it, I mean this is often the problem with rules, that you put rules in place without any ability to go in and enforce the rules, which again is very frustrating for business owners. They have made it flexible enough so that the businesses can adapt it to their workplace.

So while it was done relatively hastily, we think, probably in an environment where we didn't have some emphasis on regulatory reform it would have looked a whole lot worse. It probably would have been even more cumbersome for the business owner and again . . .

MS. WHALEN: Because it was done without actually changing regulations, it was just a request, is that what you're saying?

MS. HACHEY: Yes, it went through a bit of a different process.

MS. WHALEN: We had no consultation, was there?

MS. HACHEY: Well, I think that there was some consultation, because we did have a member call in on this one too, didn't we?

MS. JUANITA CIRTWILL: We did, we had a few members call in. It was kind of mixed.

MS. HACHEY: Yes, there was I think, if I can remember, some consultation but it wasn't at all the exhaustive consultation that you would expect.

MS. WHALEN: Can I ask if you have a position about two people working at night in those stores that are open, or of other rules or configurations? There's a cost, for example, if you change a business so that it has to be locked at night. You have a sort of dropped drawer where you put the money in and I put your product in, and those are obviously a big cost to put that in.

MS. HACHEY: No, again we haven't directly asked our members about that and that would be before I come out with a position, CFIB comes out with a position, it would be something that we would have to ask directly from our members.

MS. WHALEN: You're very disciplined, Leanne.

MS. HACHEY: I do know that there's some evidence to suggest that having two people work doesn't necessarily solve the problem, which is ultimately what rules should be doing. If you put in a rule it should have some linkage to outcome.

MS. WHALEN: There should be evidence that it works.

MS. HACHEY: Absolutely.

MS. WHALEN: I know my time is short, so I'd like to just run through a couple of other things. With training on the job, one of the things we're talking about is that we have fewer people and that we know literacy is a problem in Nova Scotia, as it is across Canada. How do we get people to be more able to take the jobs that are available to help them train? NovaKnowledge has suggested sort of voluntarily that business come forward and dedicate money for on-the-job training, different skills training, that they would provide to their employees. Is that something that you've tested your membership on?

MS. HACHEY: Well, we have asked our members a whole lot about training because as everyone knows, anyone who has started a job, you get training, you do. It's either formal or informal; you either learn as you go or your employer sends you out to go get trained somewhere else.

For the most part small employers lean to the informal training because they don't have the resources to send out employees and it's very difficult for a business to operate when you're only a business of three or four, to have one person removed from the workplace for a period of time. So businesses en masse already do a whole bunch of training informally.

One of the issues that we have been raising is, is there some way for government to recognize that informal training because, number one, it benefits the employee, it benefits the business, but it also comes as a cost to the business. Is there any way - you know, we talk about incentives, is there anything that government can do to help incent businesses to do more of this? Likely one of the reasons they're not doing more is that they can't afford it, or else they don't have the time, you know, coming up to those constant, finite resources.

I will say again, our members place a high value on training. They train probably more than any of us give them credit for. A lot of it just isn't formal training, it's on-the-job training.

MR. CHAIRMAN: Thank you. Mr. Bain.

MR. KEITH BAIN: Thank you, Mr. Chairman. First of all I want to apologize for arriving late this afternoon because this is quite interesting. I have just a couple of questions and you might have already addressed these in your introduction. First of all, I have to say that prior to becoming involved in the political field, we had a family business and we were members of the CFIB for over 25 years and we did see a lot of advances as a result of the Canadian Federation of Independent Business.

Over those 25 years the actual role of CFIB has changed as well. It has broadened and I guess what I'd like to ask is, could you tell me what the average number of employees per member would be?

MS. HACHEY: Sure, absolutely - within CFIB?

MR. BAIN: Yes.

MS. HACHEY: Our average member probably has between 8 to 10 employees.

MR. BAIN: The reason I'm saying that is because when you go back over 25 years ago, we had a lot of mom and pop operations that were a part; they're dwindling but are those that are still out there members of CFIB - the majority?

MS. HACHEY: Oh, that's a really good question. I know we have an awful lot of mom and pop shops, for sure, we hear from them an awful lot. There's no doubt, though, that the mom and pop operation, their role in the community is changing. I mean there is a whole bunch of stuff that's happened. Just take the convenience store, this is what has happened to the convenience store in the past year: they've had tobacco regulations; they've been accused by the Atlantic Lottery Corporation of stealing from customers, of taking money; they've had Sunday shopping come in, which has taken away some of their advantage that they may have had; and now they're facing a minimum wage increase. That's just in one year.

That significantly changes their ability to be a viable business operation. Again, I wouldn't say that's happening - that is specific to that one sector. I know independent convenience stores are under an awful lot of pressure right now.

[2:15 p.m.]

MR. BAIN: I guess I was looking at more the rural areas. I know in my constituency there are some persons that Sunday shopping doesn't affect because they are remote enough that it wouldn't affect them, and there have been some small businesses established and, again, corner stores. I'm just wondering if you get a response that some store owners feel, no, the membership dues will be too restrictive for me, I can't see - I know you do your own PR and your advertising the benefits, and there are many, I have to say, but what do you find about those small businesses in the remote or small rural communities? Are they taking out memberships, are they renewing memberships?

MS. HACHEY: Our membership has grown over the past number of years and we've grown in all regions of the province. It hasn't just been growth in our urban community. I'm just trying to figure out how I would know that information, if we have fewer members now in those remote communities. I can say anecdotally how our accountability works, to our members, and you would know it, being a past member - we have face-to-face meetings with

our members once every year and at that time they can determine if they want to stay on with us or not.

In that team of people that have that network, anecdotally they've said that they see more business closures or bankruptcies in rural communities than they've experienced in the past few years, so there is that kind of anecdotal evidence. Now this isn't stuff that we've tracked at all, but anecdotally they're saying that things are changing in the rural landscape.

To address your first point about cost-prohibitiveness, CFIB makes sure that any small business that wants to be a member of CFIB can be a member of CFIB, so there is very little cost-prohibitiveness to CFIB.

MR. BAIN: I guess that's what I was waiting for.

MS. HACHEY: No, there's very little of that because we're all about one member, one vote - the more members we have, the more influence we have to impact the lives of small-business owners for the good.

MR. BAIN: You mentioned earlier about the RDAs and the various organizations out there but would you agree that the RDAs - and I'm going to use the one in Cape Breton as an example - are especially helpful to a new business starting up? Am I right in assuming that?

MS. HACHEY: Again, when we've asked our members, most of them haven't heard of them or used them and that's all I can say, that most of our members - and it could be because they have a fierce independent streak, I have no idea. What we've heard from our members loud and clear is that very few use them or have heard of them.

MR. BAIN: That's quite interesting. Those are all the questions I have, Mr. Chairman, thanks.

MR. CHAIRMAN: Mr. Zinck.

MR. TREVOR ZINCK: Thank you, Mr. Chairman. Thank you, Leanne, for your very impassioned presentation. I think small business, we've all been around it, a number of us around the table. A couple of quick ones, you made mention of Sunday shopping. I know with small business, both rural and here in metro, the way the vote originally went, rural didn't support it but urban did. Are you still hearing from your membership that they're being impacted in any way by Sunday shopping, in either area?

MS. HACHEY: Not so much, I would say.

MS. CIRTWILL: We don't hear a lot about it.

MS. HACHEY: No, from time to time it comes up. I think for small-business owners, they have so much coming down the pipe at all times. Once a decision has been made on something they typically just forge ahead. There are a few exceptions to that, but I think for the most part they probably have bigger concerns that are more pressing right now than a decision that has already been made. So no, I would say, I haven't heard a whole lot about that.

MR. ZINCK: I find it interesting to hear that because when Dartmouth Crossing opened up, the community supported it. There were some new business initiatives coming; a new retail sector coming to the park. Now we have Wal-Mart that's 24 hours now. I have to think that has an impact, if I'm an entrepreneur in Dartmouth trying to open up a small business of any kind, because when a huge entity like Wal-Mart comes in they're trying to capture every bit of the market possible. I find it surprising that you haven't had any feedback, but I do agree with you, with the amount of stuff you have coming down the pipeline.

MS. HACHEY: On that one we actually did reach out to a few members to gauge the impact. What we heard was that if you're a customer of Wal-Mart, you're a customer of Wal-Mart and it won't matter if they're open 24 hours or not - that's where you're going to go. Our small businesses do believe they have a competitive advantage when it comes to customer service and do think that people who go to small businesses go for a lot of other reasons than that they're going to get the absolute best price. Not to say that they won't, but there are other benefits to going to a small business.

One member in particular who I spoke to said that, you know, checked out the competition, went in there after-hours and it really didn't make business sense for his particular business to try to compete with that. It may make sense when you're a business of that size, but it wouldn't make sense for his particular business. So those were some of the comments that we heard from members when we asked about that specific issue, about the 24-hour openings. It was one of those things that was in the back of their minds, but it wasn't staring them in the face as, this is going to make or break my business, because for the most part, customers who go to small businesses go there for a number of reasons, only one of them being price.

MR. ZINCK: I'd have to agree with you as well, service definitely and uniqueness and what they have to offer. I just wish we could promote it a lot more and that's the one thing that Wal-Mart would have because of the advertising funds.

I want to touch briefly, it is February, our colleague, Ms. Whalen, made mention of trying to have a holiday in February. It has been a topic that has been discussed over the last two weeks across Canada. Have you surveyed your members on the impact that would have or if you haven't, have you heard anything?

MS. HACHEY: Yes, we have asked our members about an additional statutory holiday and for the most part the majority oppose it for the following reason - it's very costly. Again, most Nova Scotians don't know this but when you open up your business and you bring an employee on, you're paying two and a half times the rate. So if I was making $10 an hour, I would be making $25 an hour. That's awfully expensive, so you face that or you close your business for the day and forego any revenues.

What's frustrating on this particular file is, we can galvanize around statutory holidays when again it doesn't cost government anything, it costs businesses a whole lot, but we won't galvanize around something like increasing the basic personal exemption to give every Nova Scotian family more money, or we won't galvanize around getting rid of indexation, or we won't tackle some of the, we're the worst offenders list on this. That's, I guess, what small-business owners probably find frustrating, that there's a whole lot of hype around an additional statutory holiday but very little hype around the unfair taxation facing every Nova Scotian family.

MR. ZINCK: Just one more.

MR. CHAIRMAN: You have another five minutes.

MR. ZINCK: Okay. If you look at the businesses that government in the last 10 years has been attracting, like the call centres, initiatives like RIM - we're talking the financial sector now - IT, all of these organizations. Well, minus the call centres - I'm not a big proponent of that - but RIM has been successful in employing people. We always go for, earlier you had said, the sexy company coming in and employing a large group of people. Would you say - and I'll go back to the recent Throne Speech back in the Fall. There was no mention of farming, fishing, and forestry - the traditional industries - small businesses, families. Would it be the opinion of your organization that perhaps our government has lost its sense or spirit for entrepreneurial endeavours and small-business initiatives?

Along with having these companies come in and set up, we've also given payroll incentives and rebates. We don't do that - we don't embrace the small-business sector. I think what I've heard today is that if we raise minimum wage, there should be something to offset that. It's more of a balanced approach, is what your members would be asking for from government and not even consulting us on anything, just here, deal with it, and then eventually we end up closing up and going away. Would I be fair in saying that?

MS. HACHEY: Well, we're non-partisan, so I'm certainly not going to point the finger of blame. What I can say is that I certainly don't want to set up a situation where it's either a big business or a small business, because they are very dependent upon each other. Many of our members would supply larger businesses and larger businesses bring value to communities too. So I don't think it's an either/or scenario, just like the environment and the economy are an either/or scenario; they are symbiotic.

What CFIB is proposing is, just create a more competitive environment to allow all businesses to succeed. Let's not pick and choose, let's just make a more competitive environment so that we can all benefit from it.

On the economy, there has been very little talk from anywhere on the state of the economy and our ability to compete moving forward. That, again, has been a source of frustration and I'm not pointing out any one particular Party - I would say it's across the board. It was really indicative in that Environmental Goals and Sustainable Prosperity Act. It was talked about up here how important economic growth is and it was silent in the legislation. Again, that's something that all Parties unanimously endorsed. I would say overall the economy hasn't been really on anybody's agenda and all Nova Scotians will end up paying for that, either now or down the road.

MR. ZINCK: Again, I want to state that I think a balanced approach is the point I was trying to make. You made mention of the convenience store situation - we know the importance of fighting smoking-related illnesses, as did all the convenience-store owners, but they were consulted the day before it was brought forward in the House, which sent a strong message. I guess I'll just leave it at that. I think a balanced approach would lead to a fair playing field.

MS. HACHEY: Just quickly on that regulation, it wasn't necessarily that our members didn't think something needed to be done. The question is, can we make it flexible so I can do it in my business without costing me $5,000 to put up these nice fancy shelves? For instance, I think in Alberta, they allowed business owners to put a nice shower curtain across, so it still met the goal of hiding the product but it didn't cost them a whole lot of money. I think that's what we were looking for, because I do think you're absolutely right - for the most part, small-business owners are right in line with most Nova Scotians because they are Nova Scotians, they want a balanced approach. But what they don't want is something that's too cost prohibitive and just doesn't make sense to their business.

MR. ZINCK: I think the most interesting thing - and I'll end on this point - was that it was actually the tobacco companies that gained in the beginning because they saved on all the advertising money, so the regulation actually helped them more than anything else. We're losing, of course, with the sales of illegal cigarettes, but they gained because they saved all that money up front, contracts were cancelled right away. Thank you.

MR. CHAIRMAN: Thank you. With the committee's permission, I would like to take 10 minutes for questions, if that's okay. (Interruption) Time me, it's going to be 2:37 p.m.

It's very interesting and you have one figure wrong, when you talk about a business. I ran a manufacturing business, so I know exactly what you're talking about in all of this stuff. When you say if you pay someone $10, it's $25 that it costs you; it's not, it's $30. If you're only charging $25, you are losing money with your business and those people would

be out of business within two years - it's that simple. So if you increase the minimum wage by $2, you're actually increasing the charge-out rate by $6. You can just go through it - you can do all the math, you can work it anyway you want - but that is what the number is and that's how it works.

So there are going to be substantial increases as that goes and I think there's going to be more impact in the rural areas where people are willing to work for less money and can actually live a better lifestyle in a rural area than they can when you get nearer to Halifax or any big urban centre where everything costs so much more. So I think that's an issue.

You talked about the RDAs and I totally agree with your members. I think it's a self-employment program, a lot of these, for the people who work at the RDAs, some of them, and I've had that view for many, many years when I ran my business, and I still have that view today.

I remember when I was an MLA in 1993-94, I challenged a local RDA to show me how many jobs they created and compare that with the jobs that I personally worked with community members and created. I think my ratio was about 100 to 1 over what they created. I had no resources to do that, but I knew how to run a business. None of them did, none of them ever ran a business, never had a clue how to run a business, and that has been our problem - that really has been a serious, serious problem. There is a lot of money wasted in these programs that could easily be done - the same thing could be done if you channeled it through Economic Development and did it properly like it was done years ago. I'm not saying they did it perfectly, but anyway that's just my personal opinion and I'll probably never have an impact on that, so it doesn't really matter a whole lot.

[2:30 p.m.]

It is very complex running a small business, extremely complex. Most people, like you say, by the time they get through all this red tape, for example, using a bed and breakfast, it's even worse if you're manufacturing or exporting. If some family or husband and wife decide they're going to retire and run a bed and breakfast - which is very important to our economy because it means that the tourists who come here have an excellent experience and come back and get their friends to come back - by the time they go through all this and by the time they go through all the tax regulation, pay all the taxes and everything, it's not worth it.

I talked to a gentleman today who works overseas and he's thinking about moving out of the country to work and he can easily do that because a lot of his work is outside the country. That will mean several hundred thousand dollars a year that this province is not going to get from his spending, from the taxes that he pays and so on. So I'm a firm believer in what you do and what your organization does and the issues are so complex. When you look at one thing happening in a small business, it affects 10 other things. Then you have to

adjust those 10 things to make the first thing work. By the time you've adjusted all of those, you have a huge expense on your hands and then you have to continually juggle and work to get those to work. I lived through that for 18 years and I really enjoyed doing it and got to travel all over the world and export products all over the world and design and develop new technology.

Most of the people don't have those opportunities or don't have the expertise to do it and it's very unfortunate. But, again, if we have a corner store, that's as important a business to me as maybe one of the large manufacturers are in the province, although they're very important as well.

So when you work through all this stuff, have you ever really sat down and had a forum with your members - I know it would be difficult or in different locations in the province - to say okay, how do we fix all this mess, because it's a mess, quite honestly. If I was going to start a business today - and I'm a Nova Scotian, I believe in this country, I believe in this province - I would not set a business up in Nova Scotia. Now that's a horrible thing for me to say as a politician, but it's true. So how could we fix it? What would be the five or six things that businesses would want that would say okay - besides they love Nova Scotia and want to live here - what are the things that we could really, really do to make a difference?

MS. HACHEY: Well, fortunately, our members give us a great deal of direction on priority setting because, as you know, we can't tackle it all at once, there's an awful lot that we could be working on, but we need to focus our efforts. Our members have clearly told us - told me - that when you're presenting to government, focus on three areas: tax relief; regulatory relief; and working out that balance between the economy and environmental stewardship, that energy-economy piece. So that's where we're focusing our efforts. That's the reason why the majority of my comments have focused on the need to be competitive when it comes to taxation, the need to be competitive when it comes to how difficult it is to start their business, how many forms you have to fill out. I don't think that anyone can truly appreciate what that process looks like until you've gone through it.

I can guarantee that most people don't know how much time and energy it takes to start a business, to run a business, nor how much time and energy it takes to hire one more person. There is a whole bunch of pain that comes with that extra hire.

On the tax front, you began your comments by talking about the minimum wage. One thing that I neglected to say is that there's a certain thought out there when I talk about the basic personal exemption. Originally, the intention of the basic personal exemption was to have government give its citizens the amount of money they would need to live on before taxation. That's why Alberta has their basic personal exemption at about $15,500. It is not by coincidence that they have that alongside a $7 or $8 minimum wage, because the two work in concert.

Again, our basic personal exemption in Nova Scotia is $7,461. So the assumption is, that's what the average person needs to live on a year. So again, when we talked about the minimum wage, I did want to mention that because there is a role for government, there absolutely is a role for government. That was the intention of the basic personal exemption, to allow each Nova Scotian or each Canadian citizen an ability to make a living.

So I don't know if I answered your question about priority setting. It would be fantastic if we could sit here and wave the magic wand to say we need to do x, y and z. What I do know is that we do need to set priorities. We can't be all things to all people - CIFB can't, government can't, so we need to pick the areas that we can excel at.

One of the areas that we need to excel at is to be competitive. We have to have a vibrant economic environment if we want to continue to have families raise their children here, to have those children stay here, to attract new families to Nova Scotia. People will go where jobs are; evidence is right here in Alberta. People are going there because there are opportunities there. So if we can focus on creating opportunity and building Nova Scotia to be a place of opportunity, I think that would be resources well spent and that would be a very good priority to focus on.

MR. CHAIRMAN: Yes, like you say, it's very, very complex how all this works. The trouble is that most people don't understand how complex it is and if you change one thing, how it affects so many other things. Then you've got to adjust all the way along to make it all work.

I firmly believe in better tax situations for businesses because business will invest. If you're spending all your money on taxes, you're not buying new equipment, you're not training the new staff, you're not looking into new products. You're not doing the things you have to do in order to improve your business and to improve things and to ensure that you can employ that extra person. As you said earlier, 33,000 small businesses in Nova Scotia, if 5 per cent of those created one new job every year, we would not have an employment problem in this province; we would not.

That seems to be overlooked and you keep seeing - I'll give you an example. This burning tire thing that they were going to do and everyone except the government was against this and would have not created any job and the solution of the Resource Recovery Fund Board was, here's a big company that will take them all, end of our problem, see you later.

That was no solution but that's the way to look at it. In the meantime, there are some entrepreneurs out there who could use a portion of that raw material and create some more jobs. They can't get them, so there's something wrong with our whole system here.

This is a topic that's very dear to my heart because you see the opportunities and you see municipalities taking over places that small businesses used to operate, which operate more efficiently than any municipality or any government can operate, and they're doing more and more of this. Eventually there's going to be no tax base left to supply all the money for these things that are happening, and it has to reverse.

I know I talked a long time ago about the education system to the people in the education system. I remember going to one meeting in particular, all the senior people in HRM went there in education that were in the Education Department and they invited me and some other businesses there and they said how well the education system was going and all that and I said, well, it's going great, except when I get someone from your high school who can't read or write, I get someone from your trade school and I've got to retrain them for three years. I won't hire them, so where do I get my employees?

They said, well, that's not true. It is true - I'm an employer and there are other employers there who say exactly the same thing. So when you say that the literacy problem is a problem, we got a problem with education in Nova Scotia - simple, we've got to fix it. That's something that the small businesses really should be pushing. That's a question I'd like to have you ask sometime, what the people feel about the education system in this province. My time is up with that.

MS. HACHEY: We actually have asked our members questions on that. I don't have that data on the top of my mind right now because it was a few years ago, but we have asked our members' satisfaction with the various levels of education in Nova Scotia. If I recall correctly, and again I don't remember all the numbers, but they are relatively pleased with the community college system, not so much with the university system and I think less so with the P to Grade 12. But again, that's just the top of mind.

MR. CHAIRMAN: Okay, we'll go around with the second round, one member from each caucus, five minutes each, whoever wants to go.

MR. PREYRA: Could I have two and a half minutes and share my . . .

MR. CHAIRMAN: Sure.

MR. PREYRA: Just a quick comment on the minimum wage in rural Nova Scotia. It's not that I was saying the minimum wage is not a problem in rural Nova Scotia, it's just that they're facing more of a challenge with out-migration. The skilled workers are leaving and so they have this odd situation where they have a shortage of skilled workers but they also have unemployment from people who no doubt meet literacy and numeracy problems.

I have a question about main streets. One of the challenges we have is in the allocation of resources from small businesses to business parks - you know, like Dartmouth Crossing and Burnside. You have limited resources and those resources have shifted to these larger parks. The implication, even in downtown Halifax, has been that main streets have started to suffer, and I was wondering if you had done any survey of your members of the main streets program itself and how do you revitalize main streets in small-town Nova Scotia and in downtown Halifax?

MS. HACHEY: I can speak to that. It's more of a municipal issue in a sense. The way our current property tax system works in HRM, if you want to take this as an example, is that there are disincentives to opening a business downtown. There is an urban rate, there is a rural rate and there is a suburban rate, and there are those three rates both for residents and businesses too. It just so happens that the urban rate is higher than it is for the rural or suburban rate.

I know some of the power centres, or whatever they're called, often happen to locate in rural areas or suburban areas for a reason, because they pay less tax. That's one of the reasons why they tend to operate there, and there's that chunk of land that they need. So there's this disconnect between having a vibrant main street and what the property tax system is telling business owners at the municipal level. So there's an incentive to open up that business outside the downtown area and there's a tax disincentive to open it up or expand it in the urban area.

Again, we have raised this disconnect many times because one would think it would be almost the opposite because it would cost less to provide services in a dense area than it would be in a less dense area. So what we have said on the property tax front is that there should be that connection between cost of service and what you pay. That's the relationship that all taxpayers are looking for and it makes very little sense for - oh, sorry, am I cut off?

MR. PREYRA: No, I'm cutting myself off because I promised my comrade two and a half minutes. I'm sorry, but finish it.

MS. HACHEY: No problem. So we have raised some of the inequities built into the property tax system at the municipal level. I will say, too, that some of you may or may not know - those of you who were in municipal politics would know - that businesses pay three and a half to five times the amount of property tax than residents do. Again, you talk about the value for money - some businesses actually get less service as a business than they do as a resident. They don't get garbage collection, for instance, they have to pay for that out-of-pocket.

We have raised some of these property tax inequities and I'm hoping that somewhat addressed your question about main streets. Again, it's focused on taxation but our members have raised that as an issue.

MS. CONRAD: Thank you - thank you, Leonard. I'm very concerned about sustainable economic development in rural Nova Scotia. When we were taking about convenience stores, or my colleague here, I have three convenience stores - two are up for sale and one is in the process of making a decision whether or not they'll close their doors. Not only do these convenience stores kind of house the mainstream goods but they also have hardware supplies and are integral to the communities that they reside in.

That being said, I do have a constituent who walked through my office doors the other day. This small-business owner, who is a member of CFIB, has been in business for over 28 years, and through no fault of the business, they are now in a position of needing to relocate after 28 years. They are also struggling with the products that they offer because they rely on the forest industry for a lot of their sales and the service end of their business.

The question that the constituent had for me was, is there any transitional planning - I mean we talk about succession planning for small businesses but when a business is pretty much forced to relocate, do you know of any programs or support systems that could be available for a small business needing to transition to another location? There are all kinds of other issues around bylaws and rezoning, to some of the locations that this person has already looked at, not to mention once this person goes through the transition of relocating, but also trying to mainstay the business with the changing forest industry. So not only are they faced with that, transition relocation, but also how we can now reinvent the business that we're actually capturing maybe a unique market.

MS. HACHEY: Are you aware of any . . .

MS. CIRTWILL: I'm not aware of any programs, but . . .

MS. HACHEY: Just to clarify, Juanita's role with CFIB is she's a member service counsellor, so if a member has an issue they would call Juanita and Juanita would do all of the legwork for them to research to see if there was anything out there.

MR. CHAIRMAN: I'll let you finish, but then I'll have to cut you off after that.

MS. HACHEY: No, certainly, I know nothing offhand, but certainly have them give me a call because many times it just takes a bit of research.

MS. CIRTWILL: It's a new issue to me, but certainly it's something we can look at.

MS. CONRAD: We've zeroed in on some things that could be done, but thank you for that, Juanita, I'll touch base with you on that.

[2:45 p.m.]

MR. CHAIRMAN: Mr. Theriault.

MR. THERIAULT: Mr. Chairman, just one quick question - everything else has been answered, I believe. Nova Scotia Business Inc., what kind of help have they been to your members or other small businesses in Nova Scotia, to your knowledge?

MS. HACHEY: A lot of their public efforts anyway seem to be focused on larger businesses. When we did ask our members - and this was a few years ago - about the various agencies that were set up to help them, Nova Scotia Business Inc. again was one of those associations that didn't seem to have a lot of pickup for small business, anyway. Some of the responsibility also lies with CFIB - and I had brought this to their attention a few years back - and given the host of issues that have been facing small-business owners over the past few years, our efforts have been in other areas.

I answer that in that way because Nova Scotia Business Inc., while it may not be geared to small businesses - and I think probably most of our members would say that for certain - their ability to attract some of the large marquee players would certainly have a positive impact on businesses that may benefit from increased incomes, or from a business that needs a supplier. So I would somewhat categorize them in a different spot than I would the associations that have been set up solely to help small business, and that is the RDAs and the CBDCs because that is their mandate. Nova Scotia Business Inc has a bit of a broader mandate.

MR. THERIAULT: Thank you. I hope you do your survey on workers' compensation, I'll be looking forward to that.

MS. HACHEY: I'm sure Clare does too.

MR. THERIAULT: Thank you.

MS. HACHEY: You're welcome.

MR. CHAIRMAN: Diana.

MS. WHALEN: I'd like to take the rest of the time there from Mr. Theriault. I wanted to go to your comment around municipal tax and the burden that it has on business. I know that over a long period of time we were working on the business occupancy tax which was at least a move in the right direction and that was heralded as a good thing. When you talk about the provincial government spending going up so fast, so has HRMs spending. I can't speak to the other municipalities, but HRM is spending a whack of money these days. I'm

wondering whether, as a lobby group for small business, you do any scrutiny of those kinds of budgets.

MS. HACHEY: Yes, we absolutely do. I would say most of our efforts are focused provincially because our members span Nova Scotia, so it's difficult for us to get involved in each of the 55 different municipalities. We have, though, commented on HRM's budget in the past and we have noted that their spending has increased quite significantly too, Diana, so it's a very fair point.

As well we have raised in the past that their role in various areas seems to be growing - so on the immigration front, on cultural affairs, on recreation, again, there seems to be a widening of their responsibilities. Certainly when we ask our members about what the municipality does really good, it's the core stuff - it's the fire services, it's the police services, it's their core reason for being. I would think it's fair to say that across the country municipalities are venturing into areas far outside those core areas.

The second thing I would say on municipal taxation is that we will be seeing the impacts of property assessment caps that the province passed, because while caps applied to residents, guess who they didn't apply to? The business sector. So we had the differential between the residential and commercial rate already. Guess what's going to grow? The differential, because the assessment cap doesn't apply to commercial businesses. This was something that happened at the provincial level, but that is something that's going to have a spillover effect for our members in every municipality across the province, more so in the areas where the assessments are on the rise.

MS. WHALEN: That is a good point because the cap, I don't think, is a long-term solution, but it was certainly something I supported and I felt we needed and I know we raised a similar issue around what you had suggested, your taxes tied to the services you actually receive, even for the residential. But in the long term we need to look at some kind of solution like that, because the cap in place for residences will make an even greater gulf between business and residential. But there certainly was a need to do something to move into that area, but I just felt that sometimes the city is not scrutinized, we don't look at their level of spending.

I would just say I think that there's a need for more recreational spending. It has traditionally been an HRM responsibility, or a municipal responsibility and I think because costs have gone through the roof for any kind of building, it's really important that the provincial government take a greater role. That's why we see the services that we have available as a major capital city being much less than is available in other capital cities and major cities. I think we're falling behind and that hurts our competitiveness too, because you want people to come here. So it's all connected, as you said earlier, I just have to get it on record that it's all connected.

MS. HACHEY: Yes, it's all connected . . .

MR. CHAIRMAN: I'm going to cut you off with that right there.

MS. WHALEN: Was that two and a half minutes?

MR. CHAIRMAN: No. Mr. Bain.

MR. BAIN: I'll be kind and share it around the table.

MR. CHAIRMAN: Actually, I think we'll wrap it up there. I thank you for coming today and I'll give you a few minutes to wrap up and maybe answer some of the questions I cut you off for.

MS. HACHEY: I just want to say again, I very much appreciate the opportunity to come here before you. It's nice to speak to business owners because there are a few of you around the table, it's always nice to speak to people who have been there. I guess I have a question for the committee, if that's okay. I'm wondering, where does this information go? I talk about this stuff, and what happens?

MR. CHAIRMAN: What it is, this is an official committee of the Nova Scotia Legislature and all of it is transcribed. You can get a copy of that and it becomes an official document of the Legislature. At the end of each year we do a report to the Legislature which highlights all of the different things we've talked about through the year. So it's officially on the record now and if at any time you want to get a copy of that, we would be only too pleased to provide it to you to use the information any way you want.

MS. HACHEY: Does the committee have the ability to make recommendations or is it . . .

MR. CHAIRMAN: Yes, the committee does.

MS. HACHEY: So is that typically done? Again, sorry for asking.

MR. CHAIRMAN: Sometimes it does, it depends on what the members' wishes are and we can always do that. The recommendations aren't always followed by government, but they do have an impact.

MS. HACHEY: Okay. Then I guess the final thing I will say . . .

MR. PREYRA: I just wonder if I could follow up on one thing.

MS. HACHEY: Yes, absolutely.

MR. PREYRA: Our caucus monitors this very closely and we're getting ready for the Spring sitting of the Legislature and the budget. Eventually there will be a platform that will be developed for the coming campaign . . .

MR. CHAIRMAN: Just excuse me for a second, that's politics. We're talking politics. We're talking about campaigns and what you're preparing for, and that's out of order. So thank you, if you could continue, please.

MR. PREYRA: Oh, sorry.

MS. HACHEY: You'll get your slap later - just joking. I was just curious because you like to know where stuff goes.

I guess the final point I'll make is you'll be hearing a very consistent message from CFIB, we're going to be attending the budget lock-up and after the budget all of the stuff that I've shared with you today is stuff that we've been sharing with all caucuses, with deputy ministers, so we're pretty consistent in our message. The stuff that I shared with you today are things we're going to be looking for in the upcoming budget. Again, I very much appreciate the opportunity.

MR. CHAIRMAN: Just for your own information I have twice introduced a bill that would tie the cost of services in HRM to the actual services you get on your property tax bills, business or otherwise, and I haven't gotten any support on that from the . . .

MR. PREYRA: Is that not out of order?

MR. CHAIRMAN: . . . from the other caucuses. No, you guys mentioned a bill that you put forward and that's fair, but that's not talking about a campaign. Anyway, you can see that we have a very good group here. It's a pleasure to have you here and we appreciate you taking the time to come.

MS. HACHEY: Okay, take care everyone.

MR. CHAIRMAN: Just one last thing we have to do. Our next meeting is March 4^th at 9:00 a.m. We're going to talk to the Canadian Manufacturers & Exporters. Thank you.

The meeting is adjourned.

[The committee adjourned at 2:53 p.m.]