HANSARD

Printed and Published by Nova Scotia Hansard Reporting Services

Ms. Maureen MacDonald (Chair)

Mr. James DeWolfe (Vice-Chairman)

Mr. Mark Parent

Mr. Peter Christie

Mr. Graham Steele

Mr. David Wilson (Sackville-Cobequid)

Mr. Keith Colwell

Mr. Michel Samson

Mr. Wayne Gaudet

In Attendance:

Ms. Mora Stevens

Legislative Committee Clerk

Mr. Jacques Lapointe

Auditor General

Mr. Claude Carter

Deputy Auditor General

Mr. Gordon Hebb, Q.C.

Chief Legislative Counsel

HALIFAX, WEDNESDAY, APRIL 5, 2006

STANDING COMMITTEE ON PUBLIC ACCOUNTS

9:00 A.M.

CHAIR

Ms. Maureen MacDonald

VICE-CHAIRMAN

Mr. James DeWolfe

MADAM CHAIR: This morning I would like to call the committee to order, please. Today we have witnesses from the Department of Tourism, Culture and Heritage, with respect to Bluenose II and other related tourism matters. We will proceed in our usual manner with members' introductions, introductions from the Auditor General and staff in his office, and the introduction of our witnesses. Then the deputy minister will be given an opportunity to make a brief opening statement. We will begin with introductions.

[The committee members and witnesses introduced themselves.]

MADAM CHAIR: Ms. Dean, the floor is yours now for a brief opening statement.

MS. KELLIANN DEAN: Good morning. I'm pleased to be here to have an opportunity to talk to you today about tourism issues and also Bluenose II. I'd like to start by providing you with an overview of just how important tourism is to this province. Tourism is big business in Nova Scotia. Our revenues from tourism exceed $1 billion a year, and over 60 per cent of that is pure export earnings. That means people from outside the province spending money here in Nova Scotia. Tourism employs over 33,000 Nova Scotians in urban and rural areas, and supports 7 per cent of all jobs in the province. In short, tourism is one Nova Scotia's economic generators and most valuable industries.

About half of our department's $40 million budget is spent on tourism development and promotion. Last year the government invested an additional $10 million into tourism marketing and advertising, developing key tourist attractions, such as the Cabot Trail, Peggy's Cove, Joggins Fossil Cliffs, enhancing experiences such as snowmobiling in Cape Breton and birdwatching on Cape Sable Island and signature events like the Junos.

While we continue to invest, the reality is that the business of tourism is changing dramatically - 2005 was an unusual year for Nova Scotia tourism. We're used to seeing increases in our tourism numbers and last year, as you know, we experienced some decreases. Overall visitation was down 4 per cent, or about 96,000 fewer people, accommodation activity or the number of room nights sold in hotels, bed and breakfasts and so forth was down 1 per cent, and that impact was felt differently across the province.

As a result the overall revenues decreased slightly from $1.31 billion in 2004 to $1.29 billion. Our performance in 2005 was the result of a number of local, national and global factors affecting the tourism industry, many of which were beyond our control. We all know that the loss of the Scotia Prince ferry had an effect, and since last Summer we've continued our strong relationship with Bay Ferries and invested over $1 million to restore the Yarmouth to Portland CAT run three days a week beginning this Spring.

We've also invested about $1 million in a marketing partnership with TIANS and Bay Ferries to promote Nova Scotia, in Portland and the surrounding area.

Virtually every province in Canada experienced a drop in the number of visitors from the United States. In fact, the number of Americans travelling to Canada in 2005 fell to a 25 year low. The Canadian Tourism Commission recently completed a study on the reasons for this decline, among issues such as the rising Canadian dollar, or passport requirements had some impact. The biggest reason is that Americans are just not aware of what Canada has to offer and we're competing with other destinations such as Mexico and the Caribbean for our share of travellers.

Regardless, the United States is an important market for Nova Scotia. We simply can't ignore the fact that we're in close proximity to millions of Americans with a known propensity to travel here. We'll continue to invest there to maintain our market presence. The factors and trends affecting the tourism industry reinforce the need for a business-like approach to planning and a strong coordinated partnership.

That's why, in Nova Scotia, government and industry work side by side through the Tourism Partnership Council. I can't emphasize enough how important this partnership is. Together, we develop and implement Nova Scotia's tourism plan and we're stronger because we share decisions, responsibilities and resources. The tourism plan is grounded in research and covers a broad range of activity - improving transportation links, developing key attractions, exploring new markets, preserving our natural seacoast and continually investing in research.

Of course, marketing is another important element of the plan, the one that's most visible and we're now ramping up our campaign for the season. This year's marketing campaign which addresses some of the trends and challenges that I indicated earlier includes some exciting new elements. In response to a growing trend to plan and book vacations on

line, for example, we're continuing to enhance our Internet presence. We'll be advertising on popular travel Web sites such as Travelocity and MSN Sympatico, partnering with well known magazines and on-line contests and, for the first time, offering tourism operators in the province the opportunity to advertise on Novascotia.com. We've had a very positive response to that. We're also taking full advantage of festivals and promotional events to enhance our brand and take it to new markets such as Western Canada.

One unique opportunity to promote Nova Scotia exists in Bluenose II. This year, our foremost ambassador will sail right into key markets in the New England States throughout the month of June and will be here in Nova Scotia ports of call for the majority of the season. As you know, last year we signed a five-year contract with the Lunenburg Marine Museum Society to operate Bluenose II. I'm happy to say that because of this new agreement, we now have more input into the Bluenose II sailing schedule and we collaborate with the operator on marketing so we can make the most of opportunities to use our famous vessel to promote Nova Scotia.

Now, it is too early to tell what the 2006 tourism season will hold. Industry is targeting a 2 per cent increase in revenue, visitation numbers for the first two months in 2006 are up slightly over the same period last year and we certainly hope to receive a slight bump from the Junos this month.

At the end of the day, we have a solid, well researched tourism plan that was developed hand in hand with the industry. The long-term trends show that tourism in Nova Scotia is solid. While we experienced some challenges, we're confident that tourism will continue to be a $1 billion-plus industry in Nova Scotia. Thank you.

MADAM CHAIR: Thank you very much. The opening round to the NDP caucus.

David Wilson.

MR. DAVID WILSON (Sackville-Cobequid): Thank you. I want to welcome you to the Public Accounts Committee. I broke my questioning down into two sections - one deals with the Bluenose II and the other around tourism.

I'd like to start with the Bluenose II because it has definitely been a concern of mine since I was elected back in 2003. As the Tourism Critic at the time, there were a lot of events transpiring around the Bluenose II and the operations and handling of the Bluenose II and we all know a lot of it started, I believe, around September 2003, around the Bluenose Preservation Trust Society starting to request royalty payments from companies that use the image of the Bluenose. They stated that they had the intellectual property rights for the Bluenose so hence them charging royalties on it. I believe it was a small Nova Scotia company that was actually taken to court over not paying these royalties and I believe it was the Tall Ships Art Production Ltd. that most people would recognize. This is a small Nova

Scotian company that stood up and said that this was wrong and that they didn't feel that the Preservation Trust Society had the right to charge them royalties. We know that legal proceedings started and the small Nova Scotia company incurred high legal costs and in the end did not go through with the proceedings.

So, I would like to start off with, would you agree that the Province of Nova Scotia, hence the taxpayers of Nova Scotia and the residents of Nova Scotia, own the Bluenose II?

MS. DEAN: First of all I guess what I would like to say is that there are many issues surrounding the Bluenose, as you know, and the issue of intellectual property rights is one of those issues. What we've turned our attention to, over the last year, is establishing a solid operational contract and that is with the Lunenburg Marine Museum Society. So our first goal was to make sure that the operations of the Bluenose were solid and that we had a good solid accountable contract, and so that is where we focused the majority of our efforts, certainly over the past year. The issue of intellectual property rights still needs to be clarified, but Bluenose II, she belongs to the people of Nova Scotia, and she is the Sailing Ambassador for our province. She is a heritage asset of our province. She is an important cultural icon. It is our position that nobody has exclusive control or ownership of the name and the image of Bluenose, but we do recognize that there are some who would not agree with that, and that is an important issue.

MR. DAVID WILSON (Sackville-Cobequid) : I would have to say one of them was the Bluenose Preservation Trust Society, which ran the Bluenose. I know the Premier, today, who was the Minister of Tourism, Culture and Heritage stated many times in the Legislature and in the public that the people of Nova Scotia own the Bluenose. I would agree and I hope from your comments that it sounds like you agree and your department agrees. The one thing that I can't understand is how the Bluenose II Preservation Trust Society was able to acquire the intellectual property rights of the Bluenose II, without the province's knowledge or consent.

MS. DEAN: I'm thinking about my response to that. I guess what I can say is, it is an issue that is outstanding and one that we need to resolve and the whole issue of the operation of the Preservation Trust and its role vis-à-vis the Bluenose, is something that we need to look at right now and is something that we are trying to resolve. As you know, the Bluenose Preservation Trust was established to fundraise on behalf of the Bluenose and also had an operating contract with Bluenose and over the past year, the operating contract is now gone to the Museum Society. So the role of the Bluenose Preservation Trust is one that we need to better define and to have some resolution around and that is something that we are definitely are going to be turning our attention to.

MR. DAVID WILSON( Sackville-Cobequid) : But that still didn't really answer the question. Were you aware that the trust had the intellectual property rights, or from what I believe and what I read through some of the data I was provided is that the government didn't

know until this court case came about? Is that true? To your knowledge the Department of Tourism, Heritage and Culture didn't know that they had these rights until the court case came to light?

MS. DEAN : What I would like to do is ask David Ross to shed some light on that question.

MADAM CHAIR: Mr. Ross.

MR. DAVID ROSS: Sure, thank you. One of the challenges, I think, the province has had over the last number of years in dealing with the Bluenose II Preservation Trust Society has been the actual contract that was signed in 1998, didn't deal with intellectual property rights, it only dealt with the operational aspects of Bluenose, and allowed the trust to operate Bluenose II on behalf of the province, of which we then provided $650,000 per year. There was no mention of intellectual property rights in that contract. The trust, over a course of a number of years, did go out and acquire bits and pieces of intellectual property rights from various sources, and, to my knowledge, they were legitimate intellectual property rights, but the province, as I understand it, was unaware that was occurring.

[9:15 a.m.]

Over time, we certainly did become aware of it and, certainly, when the trust chose to take a private business to court over the use of the image of the Bluenose II, the province intervened in that because we felt strongly that, again, the position of the province was that as owner of the boat we certainly had certain rights over the name and image of Bluenose. The name of Bluenose and the name of Bluenose II are in fact official marks of the Province of Nova Scotia. The boat is certainly owned by the Province of Nova Scotia, and we feel that the ability of Nova Scotians to use the image of the boat should be protected. Having said that, we do recognize that intellectual property rights is a very complex issue and there are legitimate IP rights that certain people have, not just the trust, related to Bluenose and Bluenose II. However, having said that, the province has rights as well.

MR. DAVID WILSON (Sackville-Cobequid): Do you think maybe it was an oversight with the government at the time when they had this agreement settled with the trust company, do you think it was just an oversight of the government, not realizing the implications down the road? I know you weren't there at the time and it was a different government. It was a Liberal Government at the time.

MADAM CHAIR: Ms. Dean.

MS. DEAN: It would be difficult for me to comment on that because I was not there at that time. I don't know what people were thinking at that time regarding intellectual

property rights. What I do know is that it is an issue, it needs to be clarified, and it's something that my department is working on diligently.

MR. DAVID WILSON (Sackville-Cobequid): Is it not true, - and I'm not a lawyer trying to read through some of the Act - I looked through the Canadian Trademark Act and from my understanding in that Act, it doesn't allow for private societies to hold trademarks on public property. So, in my mind, I don't understand how the society could go after - which I feel and I think you feel by some of your comments, that the Bluenose II is public property of the Province of Nova Scotia, how that society obtained that. Any quick comments? I know we only have a short time, so could you respond to that?

MS. DEAN: Well, I would like to defer that question to David.

MADAM CHAIR: Mr. Ross.

MR. DAVID ROSS: A good question. I think the province would tend to share your view. We're not clear on why certain trademarks were issued and, certainly, we have the view that the trust wasn't necessarily a true public body in the sense of it being a Crown Corporation, which would normally be the type of entity that would have been able to obtain such a trademark. Unfortunately, with the federal government, there is a process that organizations go through to register trademarks, but the process to actually deregister trademarks or to have them challenged after they're approved is not clear; in fact, it's not addressed in the legislation. So the federal government recognizes that's an area they need to address, but, at the moment, it's challenging to fix that. As I understand it, at the time the trust did move forward to register trademarks, the province was unaware at that point in time that that occurred. After the fact, the trust then legitimately had registered trademarks.

MR. DAVID WILSON (Sackville-Cobequid): I think that just proves or shows that the federal and provincial governments need to work more closely on issues like this. I think alarm bells should have gone off when a society, or even an identity, was going after the Bluenose trademarks. It's not like it's something that's not that recognized in the province, in the country, for that matter.

Around the issue of the new Lunenburg Marine Museum Society now taking over the handling of the Bluenose, and the operation side of it. I know there has been a fight or somewhat of a battle to ensure that the assets and the funds that were raised through fundraising, souvenir shops - from tourists and residents - continue to go towards the operation side of the Bluenose II. The trust continues to run souvenir shops, I believe, to raise money to go towards the operation of the Bluenose II. To your knowledge, does the trust own the building in Lunenburg that houses the souvenir shop?

MS. DEAN: I don't know for sure. I don't have full financial statements of the trust.

MR. DAVID WILSON (Sackville-Cobequid): From my digging into things and my staff has dug into this awhile ago, to the best of our knowledge, they do own that building and it's an asset to the trust society. Since you're not really aware of it, could you maybe explain or tell us what the province is doing to go after these assets of the society to make sure they're going towards the Bluenose II and its operation?

MS. DEAN: Absolutely. The province has written directly to the trust asking quite specifically what it intends to do with the assets that were raised on behalf of Bluenose II. There has been correspondence that has been going back and forth for the last few months. Our minister, at the time, asked to have an answer on that. We believe the assets that were raised for Bluenose II need to be used for Bluenose II. To date, we have not had a response from the trust on what they intend to do with those assets and how they intend to use them. They have expressed the point of view they would intend to continue operating as a trust and raising money for Bluenose II.

It's the province's position though that we need to know exactly where those resources are going to go and what they're going to be used for. Right now they do not have the mandate of the province to do that.

MR. DAVID WILSON (Sackville-Cobequid): You've mentioned that some correspondence with the minister was sent to the Bluenose Preservation Trust - could you table that for our committee when you have time?

MS. DEAN: Absolutely.

MR. DAVID WILSON (Sackville-Cobequid): Excellent. This issue has been going on for close to three years now and I've mentioned it many times in this House and questioned the minister on it. I seem to get the standard answer - we're working on it, we're looking at it. The Minister of Tourism at the time is now the Premier and there are still these pending questions on funding and how much money does the trust society have? There were reports there may be nearly $1 million in their bank account. So, to your knowledge, do you know how much the trust society has in the bank account that was raised for the Bluenose II and the handling of the Bluenose II?

MS. DEAN: I have the estimates that you have. I don't know specifically what they have. The estimates have been anywhere between $500,000 and $1 million. I've heard what you've heard. I don't have the specific numbers on that.

What we have asked the trust is to tell us specifically how they want to direct those resources to support the museum society and to preserve the legacy of Bluenose II. Basically, there are a couple of options that the trust has to consider. They can transfer all of those assets directly to the museum society, they can transfer them to the province or they can

participate in discussions to determine what an independent fundraising body dedicated to raising funds for Bluenose II would look like.

We actually have a meeting scheduled with all three Parties in early May to discuss these options and to come to a resolution.

MR. DAVID WILSON (Sackville-Cobequid): So since this issue has been going on for many years now, are you giving the Preservation Trust Society a deadline? Is there a deadline? In my view, you have put a deadline in, the Premier has stated, I think, less than a week ago, that he will be considering alternatives. Are those legal alternatives? Is there a deadline? Are you going to give them a deadline?

MS. DEAN: Well, we're meeting early May and I would expect that we would have a resolution shortly on our next course of action.

MR. DAVID WILSON (Sackville-Cobequid): What's interesting and what concerns me is some of the comments made throughout this whole process and it concerns me because I think there's a lack of will from the former Minister of Tourism, Culture and Heritage because it seems like he has tried to buy time, and I don't know why he's buying time, maybe he knew he was going to be Premier some day and he could pass that on to the new Minister of Tourism, Culture and Heritage. That's one of the questions I have here, and one of the things I'm going to quote is the comments the Premier made on February 19^th in The Daily News.

The Premier was quoted, stating about this case, "There are still some other details being worked out on those funds . . . That will be worked out. I have to leave something for the new minister of tourism to work on. He followed that sentence with a weak laugh." In my view, and I think in the taxpayers' views, the people of Nova Scotia, this isn't a funny matter. This has been going on for three years - $650,000 of taxpayers' money goes towards the Bluenose II every year, plus there may be up to $1 million - I don't know if that's true or not, $500,000, $1 million.

When will this end? I think most people want to know. I think this has tarnished the image of the Bluenose to a certain extent. It has brought this cloud around the Bluenose II. Can you tell us today that this is going to be resolved by the sailing season, or by a week after your meeting in May, with the Preservation Trust?

MS. DEAN: I can't speculate about the outcome of a discussion that has to be held between all three parties. But I would certainly say that we are as anxious as everybody here to see this issue resolved once and for all.

MR. DAVID WILSON (Sackville-Cobequid): One of the things I found interesting, going through this, was some of the comments from Captain Walters, who is the captain

running the Bluenose II, on October 25, 2005 in the Halifax Herald. He said: It's a funny situation. Mr. Moore has done a lot for the town. He basically saved Bluenose, but I think he and the province don't get along so well, probably because they're different Parties. Mr. MacDonald is a Tory and Mr. Moore is a Liberal. I think I would probably have to agree with this. Do you feel that political Party affiliation has factored into why this has stretched on, this transition has stretched on for so long, and why we're in the situation we're in today?

MS. DEAN: I don't think it would be appropriate for me to make a comment on that. I think what I can tell you, though, is that it has been a difficult working relationship between staff and the trust by times, and what we're certainly really encouraged by now is the fact that with our new contract that we have with the Lunenburg Marine Museum Society, we have greater input, we have greater collaboration, we have greater accountability, and we all have a common goal to ensure the preservation of the Bluenose. We're very excited about the upcoming season, and we believe that we have tremendous opportunity to do even more with her under our current contract.

MADAM CHAIR: Mr. Wilson, you have one minute.

MR. DAVID WILSON (Sackville-Cobequid): I respect your answer to that, but I guess I can make some of those comments. Truly, I think political games have been played with the province's sailing ambassador, the Bluenose II. It's a shame. I've tried for the last two and a half years, almost three years just to get some simple answers to what has transpired and what has gone on. I have a few more questions, which will take a little bit more time so I guess I'll have to wait until my next round. It definitely concerns many Nova Scotians that this process has taken so long. In my view, the Minister of Tourism, Culture and Heritage at the time didn't take it as seriously as he should have with the amount of money that's involved with operating the Bluenose II. With that I'll give up my time.

MADAM CHAIR: Mr. McNeil. You have 20 minutes, until 9:49 a.m.

MR. STEPHEN MCNEIL: Madam Chair, I would like to welcome the deputy minister and her staff to the meeting. I've found it interesting. You and I have had many discussions about the numbers around tourism and, strangely enough, we're on opposite sides of the question. I found it interesting, in your opening remarks you referred to the industry as a $1 billion industry, and no one has been arguing that since 1999. What the argument has always been is whether or not there has been any growth since 1999. Short of one year, in the middle of a year ago, there was some growth, it actually has not grown any since 1999. In fact if you add in inflation, it has gone in the opposite direction.

I'm wondering, has there been a revelation in the department to recognize perhaps there has been a problem and you're just acknowledging it now?

[9:30 a.m.]

MADAM CHAIR: Ms. Dean.

MS. DEAN: I think what I would like to do is just share with the members a graph of tourism revenues since 1996, and really this supports the point that this is a stable billion-dollar industry. It does have ups and downs as you can see, but for the most part since 1996 - in 1997 we broke the billion-dollar barrier and tourism became a billion-dollar industry and it has varied from $1.04 billion to as high as $1.34 billion in 2002 and, in 2005, $1.29 billion.

Tourism, like any industry, has its ups and downs, but it is a solid industry and it will continue to grow. It is growing, the operators who make up this industry have a vision along with government for growth for the industry and there's a growth target there. The growth happens over time, as you can see here. The growth in this industry is happening over time, so to only look at it on a year-to-year basis is probably a little misleading in terms of speaking of the growth of the industry.

MADAM CHAIR: Could I ask you to make that available to the clerk, and it will be circulated.

MS. DEAN: I've brought copies.

MR. MCNEIL: I would agree wholeheartedly, and I think I challenged you on that at the committee, that the department was actually cherry-picking years. If you looked at the last six years, there's no way you can consider it to be a growth. In 2004 the Auditor General actually had talked about the way that things were reported, and one of the things he said was the tourism industry's impact on the economy may be quite antiquated the way we determine that. I'm wondering if there has been any movement on that at all, has the department looked at that?

MS. DEAN: Absolutely, and one of the Auditor General's recommendations was that we take a closer look at the economic impact model that we use to measure the economic impact of tourism and its growth, and we are actually in the process of doing just that. We are establishing a steering committee of experts from the tourism industry, as well as academics, to take a look at that model. It is an extensive process and it's a complicated model because what it does is take into account the variety of industry sectors that make up the tourism sector. So it captures revenues that are associated with accommodations, revenues associated with entertainment, with shopping, with gas, with restaurants, all of that, and it puts it into the economic impact model. So that process is definitely underway and we'll be compiling a steering committee very shortly actually to work on the RFP for the revision of the economic impact model.

MR. MCNEIL: Any time frame, or very soon?

MS. DEAN: Well, actually I would like to have Stephen Coyle speak to this point because he's in charge of this project.

MADAM CHAIR: Mr. Coyle.

MR. STEPHEN COYLE: As the deputy has said, we are moving ahead on that recommendation and we certainly welcome that recommendation. We have an economic impact model now that was developed by an independent consultant. We have a great deal of confidence in that model and the information that's being produced by that model. However, it is important to review the assumptions, as the Auditor General has indicated, and the underlying information that is in that model.

Since the model was developed there has been new visitor survey data, new expenditure data, both from our own department survey and Statistics Canada. So that expenditure data will be incorporated into the new economic impact model. There is a new model of the provincial economy that has been developed by the Department of Finance - the input/output model. So that, too, will be incorporated into the new model, so all the assumptions will be updated and we'll be using the best and most up-to-date information that is available to produce our economic estimates.

MR. MCNEIL: It's interesting that you mentioned you have confidence in the way the department is now determining their numbers. It has been interesting as we've talked to operators around the province, and I'll just quote a couple of them, their interpretation: I don't know how the government is coming up with these figures. I can't believe it. Everyone else I've talked to has been saying the same thing, that's a tourism operator of the Cape Cod Motel in Shelburne; it was not a good season, it's been a bad year. My numbers are down between 40 and 50 per cent. I can't imagine you're going to find too many people whose numbers match that. I've heard of some people whose numbers were down as much as 60 per cent, that's a Musquodoboit bed and breakfast. I'm curious how we can be that far apart on our interpretations of things. People on the ground are saying it has been a devastating year, yet the department is singing the song, let's be happy.

MS. DEAN: Well, I guess first of all we recognize the challenges that operators have had out there in the past season, and we acknowledge the fact that it was a difficult year. It was difficult in varying degrees throughout the province. I guess what I really need to do is try to explain to you a little bit more about how we gather our statistics, because we have great confidence in the methodology that we use. We are recognized as being leaders in the way we gather our statistics. We take this very seriously. I think one of the things to keep in mind is when we're talking about accommodation statistics or room nights sold throughout the province - because that's one measure of activity in the province in tourism season - we're reporting what the industry reports to us. So, accommodations throughout the

province, and there's 1,300 accommodation operators, on a monthly basis, send us information on how many room nights they've sold. That's the information that gets reported back. That's a compilation of all of the accommodation operators out there, and we have an accuracy rate of 99 per cent on that reporting.

Really, what we wind up with is a virtual census of room nights sold throughout the province. One thing to keep in mind when we're reporting those statistics back, they are an average of a county, so we can report them by county. So we know what's going on by a county-by-county basis. When we report overall, we're reporting the overall average for the province, so, obviously, that means there are some areas that do really well and some areas that do poorly. That's the accommodation piece.

The other piece we also talk about is visitation into the province. When you talk about visitation into the province, we have entry points, we can count people who come into the province, we know who they are. We look at their licence plates, we can tell you where they're from. We have a very, very good system for capturing that kind of information.

MR. MCNEIL: Deputy minister, you're cherry-picking a few numbers, but the reality of it is, how many times have you counted the former Premier when he's flown in and out of this province as a tourist? How many times are you going to count the new Premier?

MS. DEAN: Well, I'll let Stephen speak to the mechanics of how that works. There is a very sophisticated model that discounts people who are travelling back and forth.

MR. MCNEIL: Here's the discussion we've had on many occasions. We can all sit here in this Chamber and quote all these wonderful numbers, the reality of it is you're not paying attention. The people in this Chamber don't pay attention to the actual people who are putting that product on the line in every little community. There's not a part of this province that has not been hurt by the tourism industry, and to have the department sit around and say our numbers are accurate, we know what they are. Yet, almost every one of them will tell you, where are they coming from? Our business has been down considerably. Then they'll say, how can they fix the problem, they won't even acknowledge there is one that exists. Then they pull out a little number here or there and then they co-op the only organization that is supposed to defend us, TIANS, and they co-op them into promoting what has really been a devastating year. They co-oped them because they realize you're the one that funds them, you're the one that actually stands there with them. How is that defending the mom-and-pop operations around this province?

Until we begin to recognize there are two worlds out there - one for these large operators that sit in downtown Halifax, then there are the ones outside of HRM where, quite frankly, many people are not going anymore. They're not going. Those aren't counting cars, those are talking to business operators whose bottom line has been devastated over the last

couple of years. What do you say to them? What hope are you holding out to them for next year? What hope?

MS. DEAN: We work in close partnership with the industry and we understand and we listen to them. The industry works hand in hand with us, and I'm not just talking about TIANS, I'm talking about the Tourism Partnership Council that has input into the decision making and planning of our tourism efforts throughout the province. They are owners and operators, and they work directly in the industry. They report to us, on a monthly basis, the challenges that their counterparts are having in their areas. We hear them, we understand them, and together we try to work to respond to those challenges, and that is why we have developed a marketing campaign. That is what we're working on to encourage more visitation to the province, and to continue to be aggressive in our marketing efforts. That is one of the things we are doing to help operators. We are also listening to them through our Let's Talk tourism sessions in the province, so they can tell us what more we can do to help them. It's not just the province, it's the operators themselves who also need to look at their businesses, and the things they can do individually to grow their business.

MR. MCNEIL: You're talking to the operators who are promoting TIANS, that's who you are talking to. Has anybody in your department picked up the phone and said, let me call an operator in Shelburne Country, let me call an operator in Guysborough County, somebody I can talk to in a confidential manner and have them tell me the true story on how it is affecting them? Tell me, what is the advantage of them being a part of TIANS? Have you done that? Have you reached out beyond the talking heads of this organization? Have you reached out to the people on the ground?

MS. DEAN: I was at a Tourism Association meeting last Friday night and spoke with tourism operators in the Truro area. I was in Baddeck in January, speaking with operators there. It's not a rosy picture everywhere and there are people out there who are having challenges, but there is still a great level of optimism and they are going to continue to do whatever they can to grow their businesses and to grow tourism. I think that we're doing everything we can. We have our plan that is based on solid research. We have a plan that is based on input, and it's a collective effort.

MR. MCNEIL: I am curious about what has been taking place around the loss of the Scotia Prince, and I know you spoke of the CAT now going in and out of Portland and Bar Harbor. How many more landings in Nova Scotia will that mean?

MS. DEAN: I can't give you the specific number of landings. I know that the run will increase. We will not only have Bar Harbor-Yarmouth, we'll have Portland-Yarmouth, so that should increase the capacity to bring passengers in from New England.

MR. MCNEIL: But the CAT will not arrive in Nova Scotia any more this year than it did last year.

MS. DEAN: I don't have those specifics.

MR. MCNEIL: Well I can tell you no. What has basically happened is we've cut the trips in half coming out of one and moved them to the other. So I'm curious, how is that going to solve the issue in southwestern Nova Scotia?

MS. DEAN: Well, I think it's one thing that will certainly help the issue in southwestern Nova Scotia because of the differences in the runs. The Bar Harbor to Yarmouth run, because of the timing, didn't necessarily coincide with an overnight visit. The Portland-Yarmouth run, because of the timing, would encourage more overnight visits to the Yarmouth area. So I think that that definitely will make a difference. I think that having the two different routes will certainly help to encourage traffic from the Portland area that maybe didn't come last year, or that may have some of it come through Bar Harbor, or an alternate route to the province. So, we're hoping to see that that will definitely improve visitation from New England, in through the Yarmouth area.

MR. MCNEIL: I was in Boston last week for the purpose of going to Gloucester, Massachusetts, to speak to Senator BruceTarr around the ferry terminal that is being built there, which will be completed at the end of the year. There was lots of discussion about a terminal being built in Shelburne, and I'm wondering what your department has done to encourage that. Are you encouraging that? Where are we with that?

MS. DEAN: Well it's interesting because I actually had conversations with Senator Tarr myself in December and he was here actually in August and had discussions with the province around the Gloucester Terminal and, as you are probably aware, there is also another group, Shores Atlantic, that is looking at a potential route from Boston. The Shelburne discussion, I believe, has been ongoing for a number of years - perhaps 10 years - in terms of trying to look at a way to establish a ferry route. So, in terms of the involvement of the department, we've certainly listened to them. We're aware of their plans. We haven't specifically been provided with a viable business case or something that we can definitively react to, but certainly if a new route was opened up and that would provide increased access to Nova Scotia from another market, that would be a welcome addition.

[9:45 a.m.]

MR. MCNEIL: You know, anybody looking at that would say there's the exact problem with the tourism industry in Nova Scotia - well, if it happens, it happens. We don't really have a role to play. We'll help them if they get something in front of us.

MS. DEAN: Well, I don't think I was saying that we don't have a role to play. I think that we haven't been provided with a definitive ask or we haven't yet seen a business proposal for exactly what they intend to do.

MR. MCNEIL: You lost a ferry out of Yarmouth last year, so the province's solution was to take the ferry that has been coming to Nova Scotia and just cut its trips in half and send them out of different ports. So that was our solution. We now have a senator and a community in Gloucester, Massachusetts, that's building a terminal. It will be ready at the end of the year. We've made no contact? You've not gone and said, hey, perhaps, I don't know whether Shelburne will be ready, but maybe there's a terminal in Yarmouth or perhaps there's a terminal in Digby. Have you done anything, really?

MS. DEAN: I think I just expressed to you the point that I had discussions with the senator around the Gloucester project. Also, I would like to clarify that it is the Bay Ferries decision to do the run. It's not the province's decision to do the run in Yarmouth. We're very supportive that they were able to propose a different solution. With respect to ferries and capacity and that industry, it is a very challenging industry, and we recognize that. That's not to say that we wouldn't look at what potential areas of support could be out there or what potential areas there are within the existing infrastructure in the province.

MR. MCNEIL: It's Bay Ferries' business to run their own business? It's the province's business to promote this province. It's your department's business. If that operator doesn't want to do it, have you talked to any other operators? Have you gone out there and solicited somebody to come into this province?

MS. DEAN: We were very fortunate that Bay Ferries stepped up to the plate with a proposal.

MR. MCNEIL: This is not about Bay Ferries; this is not about Bay Ferries, quite frankly. This is about what your department has done about a community that wants to send a ferry into this province. Have you gone out and done anything?

MS. DEAN: Our department has had discussions, as well as other departments, the Department of Transportation and Public Works, and I think that it is absolutely our role to promote the province and to work with those who are interested in increasing travel to the province, and anything that does that is certainly positive for Nova Scotia.

MR. MCNEIL: So to this point, you're going to wait to see what happens? Is that our assessment of what you've said so far?

MS. DEAN: No, it isn't. I've had discussions, as I told you, with the senator.

MR. MCNEIL: So what's next?

MS. DEAN: What's next is to see exactly what they're proposing, to find out if they have an operator and to find out if there is a viable business case to be supported.

MR. MCNEIL: Well, I can tell you, I could give you studies that have been done, actually. I actually went and picked them up. So, obviously, your department hasn't done much.

MS. DEAN: I have a copy of a study, but it's not a business proposal with a specific ask for support. I would be interested in seeing exactly what it is that they would be looking for.

MR. MCNEIL: Do you not see that this relationship has two partners - you being one of them, or us being one of them, and them being another? Quite frankly, it looks like you're going to let them do all the heavy lifting and, if it happens, it happens. If it doesn't, well, so be it, we won't take any of the fall for it because, really, we didn't do anything.

MS. DEAN: I'm always willing to discuss the opportunities and to take a look at the business case, absolutely.

MR. MCNEIL: How about getting involved and saying ,we want that ferry to end up in this province, what is our role and what can we do to make it happen? What is the provincial government prepared to do to step up and make it happen? You know what happened last year when the Scotia Prince went down in southwestern Nova Scotia.

MADAM CHAIR: Your time has expired.

Mr. Christie.

MR. PETER CHRISTIE: Thank you very much. Welcome, deputy, to the committee, today, with your staff. It's nice to have a chance to chat about a few things. I think the area that I would like to explore today is just having you clarify for the committee what your mandate is in terms of tourism across this province. I would like you to talk to us a little bit about what your relationship is with the tourism associations and how you interact with them?

MS. DEAN: Certainly. Well, the role and the mandate of this department is to promote tourism. It's also to protect our heritage assets and to take care of the stewardship of those assets, and, really, we have an economic development role as well as a stewardship role in the Department of Tourism, Culture and Heritage. The relationship that we have with the industry is really one of a partnership. We don't always agree - I will give you that - there are times when the industry has a particular issue they feel very strongly about and we don't necessarily see eye to eye, but we work through that and I think we have a healthy tension there and a healthy working relationship.

The Tourism Industry Association of Nova Scotia - TIANS - is a member of the tourism vision committee. I guess the way I would describe that is a partnership of the

industry which is TIANS, as well as operators and as well as the province. Then we also have the Tourism Partnership Council. I was speaking about the Tourism Partnership Council earlier because they are really the group of operators that come together with the province to put together the plan, annually, for tourism. That's based on the research we've gathered, on the results, the trends, the feedback we're receiving from them that they receive from operators in their areas, and together we collaborate on marketing and other plans for tourism that we feel are going to help grow the tourism product and the economy.

MR. CHRISTIE: Over the last number of years, as you and the associations have met, have the associations expressed concern about the number of visits being down or the total dollars spent on tourism being down? If they have, what is it they've suggested to you to work in partnership to resolve some of those issues?

MS. DEAN: I think the regional tourism associations - if you wanted to talk specifically about those - they're representing operators in their areas, and they are very determined, they're very proactive in their areas. While they expressed concerns about the season last year, they weren't expressing concerns the previous year - of course the numbers were up slightly. So, again, that speaks to a bit of the cyclical nature of tourism and the fact that it does have its ups and downs.

There is some concern, but certainly tourism is not in a crisis and that's not what I'm hearing and that's not what the associations are telling me. A lot of them have come together to try to develop innovative ways to promote their areas - for example, South West Nova has come together to promote southern Nova Scotia. A lot of the associations are leading the development of destination areas around the province, so the operators and the attractions and everything a particular area has to offer, they're coming together to market their areas so that when visitors come they have more to do, they stay longer, and they spend more money. These associations are really, really collaborating to try to aggressively market their areas in the province.

MR. CHRISTIE: There has been a suggestion here earlier that small operators don't have the opportunity to express their voice, to have input into the plan and, indeed, it's just the larger ones that are involved in creating the plan. Is that a correct statement or do small operators have an opportunity for input and to be part of the process?

MS. DEAN: Small operators definitely do have an opportunity for their voice to be heard, and that can happen through a number of ways. If a smaller operator wants to speak with the tourism association in his or her area, they can do that; we get feedback through the regional tour industry association; again, through the members that are on the Tourism Partnership Council, if they have concerns, ideas or input they can speak through those members; we try to go to the communities and talk to people as well; and, again, we've launched Let's Talk Tourism sessions where we actually go and talk about the plan, about some of the challenges and get feedback from operators. So, there are opportunities.

MR. CHRISTIE: Is it fair to say that the tourism industries have an opportunity to be part of the development of your advertising strategy for each given year?

MS. DEAN: Absolutely. And also through their membership in TIANS - if they happen to be TIANS members, they would have some opportunity to provide some feedback.

MR. CHRISTIE: Can you just share with us some of the advertising campaigns and the strategies and, indeed, the areas that you targeted with your advertising - let's start with 2004-05 and then we'll deal with 2006 later.

MS. DEAN: Okay. The key markets that we target and that we actually continue to target, are Atlantic Canada, 55 per cent of our visitation comes from Atlantic Canada. We have Quebec, Ontario, New England and Europe. Those are the core markets for the province. We've been aggressively targeting those markets for the last number of years, and that is through an advertising campaign. When I'm talking about advertising, that is what people most likely see out in front, and that would be the ads, direct mail, billboards, Internet, electronic media, radio, TV. Those are the things you actually see. There is also another element of marketing that we do, and that is working with the travel trade. So we are out there in an aggressive business development forum talking with travel operators, talking with people who are packaging vacations. We're also speaking with tour operators, bus companies, those who bring people to the province. So, there is kind of two streams of promoting - direct to consumer and direct to the businesses who actually bring tourists here, as well.

So, what is new for 2006, because recognizing that we did have challenges in 2005, what we are doing in 2006, is taking a look at some other markets that we need to go aggressively into to see where there may be more opportunity. One of those markets that we've identified is Western Canada, because we believe that there is significant opportunity to do more domestically, to get more Canadians travelling here. So we are going to be aggressively promoting a ceilidh in Calgary, coming up, and some other tourism events, promotional events, and also the Internet. The explosive use of the Internet has not gone unnoticed and we are doing more right now to ensure that our presence on-line has been enhanced for this season. I can't ignore Europe. Europe is a strong, strong market for us. It always has been, and we know there is more potential there, related to lift, and the capacity that we can get through the airport, we're working with our partners there to do more to attract more Europeans.

Another new market that we have our eye on and that we're starting to look at is China. We know that will, in the future, offer some opportunities for us when China grants Canada approved destination status, and that will enable us to market directly to China. So we're starting to do our research in that market to identify opportunities so that we're ready to capitalize on that market when it becomes available to Canada.

MR. CHRISTIE: Just in terms of dollars in your budget last year, the advertising campaign that you just referred to, how many dollars would you have committed to that?

MS. DEAN: Last year's advertising campaign was about $7 million, because we had received a $10 million investment and were able to direct some of that right into the advertising campaign as well as the product development side of tourism, and that would have been the pure marketing piece. Overall, we probably spend about $13.5 million on our marketing and advertising and promotional activity.

MR. CHRISTIE: You and Mr. Coyle mentioned the model that you are looking at, some development. Can you relate that tourism advertising expenditure to some increase in visitations. Let me rephrase it, is there a way that you feel that marketing strategy is turning into people visits or dollars to the province?

MS. DEAN: Absolutely. We measure the return on investment that is associated with the money that we invest in advertising. So right now, we know that for every dollar that we spend in our advertising we generate seven in return. What I can tell you from our marketing last year, we generated about $70 million in revenue, specifically, that we can track to that campaign. So we do a detailed conversion analysis and ensure that the money that we are investing is delivering results.

MR. CHRISTIE: So, if you deduce through that logic then if that advertising hadn't been there, the year could have been worse last year? Is that a fair statement?

MS. DEAN: That is a fair statement because as we increased our investments, so did other jurisdictions and so did other competitors out there, and their investments to continue to increase. So without doing what we had done, perhaps the season could have been more difficult. Certainly I am confident in the results that we achieved through that campaign. It was an award-winning campaign.

MR. CHRISTIE: Let me just ask you this, does the department view that, in reality, there are two different kind of markets in Nova Scotia, one being the urban market and one being the rural? Do you have to differentiate in your plan of attack on either of those two markets?

MS. DEAN: I think what it speaks to is more experiences. When visitors come to Nova Scotia, they're looking for an experience, and they can look for an urban experience and a rural experience. Nova Scotia is known for its seacoast, it's known as a place where you can rejuvenate, where you can relax and, of course, different things appeal to different customers, there's no doubt about that, but I think Nova Scotia offers a unique mix, and when we market we try to show that diversity that we have here that appeals to a broad consumer base.

[10:00 a.m.]

MR. CHRISTIE: Now, I just want to come back, in the last few minutes here, to the Bluenose and you were referring to the Bluenose. What is the amount that your department has contributed to the operation of the Bluenose each year?

MS. DEAN: We provide an operating grant of $650,000 to operate Bluenose for the year.

MR. CHRISTIE: And within your agreement to do that, what is it required that the Bluenose do for that money? Let me put it that way.

MS. DEAN: David, would you like to speak to that one?

MADAM CHAIR: Mr. Ross.

MR. ROSS: Sure, thank you. The new contract with the Lunenburg Marine Museum Society is fairly comprehensive and it has really turned into more of a partnership than a contract. We have a partner with the society that has been wonderful to work with and the relationship has been very positive. The society operates the Fisheries Museum in Lunenburg and they've operated the museum there for 30 years. So they've got a long history of success. They've been very successful with the museum, and the 2005 season for Bluenose II was equally successful.

The new agreement with the society, given the nature of the new contract, allows the province to have some accountability and transparency built into the operations of Bluenose II. We continue to invest $650,000 per year, as per the contract. The sailing schedule is developed now jointly with the province and the museum society. The Bluenose II last year, for example, supported some tourism marketing efforts in its visit to Gloucester. The sailing schedule this year, again in 2006, which was released at the beginning of the year, strongly supports promotional efforts, but perhaps more importantly the boat now spends most of its time in home ports around Nova Scotia and does a lot of public sailings in ports around the province, particularly in its home port of Lunenburg. So the boat certainly is here. Visitors and Nova Scotians both have access to the boat now, which we believe through more opportunities than perhaps before certainly we have the ability to input into that greater than we were able to before. So we feel that the new contract certainly has many benefits to the province.

MR. CHRISTIE: Thank you. I'll turn the remaining time over to Mr. Parent.

MADAM CHAIR: Mr. Parent. You have until 10:09 a.m.

MR. MARK PARENT: Thank you very much. A quick question. Clearly the transition to the partnership with the Lunenburg Marine Museum Society has been a good one. The trademark dispute is in the process of being solved. The boat is seaworthy and in a good state of repair, I understand. So the outstanding questions really are, the money that the trust still has, when are we going to be able to transfer that over? Are we going to be able to transfer it over? What are the problems in that regard? Why aren't we making more progress?

MS. DEAN: Well, it has been a difficult process, there's no doubt about it, and I don't have a time frame on that. Like I indicated earlier, I'm hoping that the discussion that we're going to have in early May will give us the resolution that we're looking for to take next steps. There's no doubt about it that we believe that those assets should be transferred over either to the province or to the Lunenburg Marine Museum Society, or that some other alternative be found to create an independent entity that would be dedicated to do the fundraising and to look after the provision of assets, the provision of financing to the Bluenose for repairs and that type of thing.

We believe very strongly that, as I said earlier, these assets belong to the people of Nova Scotia, they belong to the Bluenose II and they need to be used for her, for her repair and upkeep and continued sailing.

MR. PARENT: So is it the members of the trust society who are the roadblock?

MS. DEAN: Pardon me?

MR. PARENT: Is it the members of the trust society who are the roadblock in this transition?

MS. DEAN: I think, to be perfectly fair, we haven't been able to sit down with them to have the frank and open discussion that we need to have around these assets. We have been asking for their point of view and asking them to tell us what it is they intend to do and we have not been able to secure a definitive answer from them on that.

MR. PARENT: So, really, they're stalling in terms of meeting with you.

MS. DEAN: Well, we have a date. We actually have a date in early May.

MR. PARENT: You actually have a date?

MS. DEAN: Yes, we do. As of yesterday, early May is what I have as a date - tentatively May 9^th - and I'm hoping at that meeting we will have the opportunity to discuss exactly what we need to do here.

MR. PARENT: Good. I commend your efforts - I know it must be frustrating and I hope that you will speak firmly to them on behalf of the people of Nova Scotia, because I think Nova Scotians overwhelmingly would support the position that you and the government have taken.

On tourism itself, a few questions that are going to be rather scattered but of interest either for my riding or for me personally. The marketing levy was a levy that in the Annapolis Valley they did not want. I guess the conditions of if you do a marketing levy on top that the region has to support it, the tourism people have to support it. I understand it was turned down now in Cape Breton. Where is the department on that? Are they still in the position that if an area wants it, the area has to be in agreement, it's not going to be forced on any area?

MS. DEAN: Yes, absolutely. The position of the province on marketing levies is that there has to be broad-based industry support. The province, in the instance of the other two marketing levies - the one in Halifax and the one in Yarmouth - passed enabling legislations for the municipalities to actually implement the levies. The province's position is that if there is sufficient support, it will not stand in the way of having levies implemented. But it's very important the industry be fully supportive in order to have these implemented and then it's up to the municipalities to enact that.

MR. PARENT: The number of room nights was down across Nova Scotia, but on a very uneven basis and this has been pointed out in discussion in terms of the rural areas versus the urban areas. The Annapolis Valley was down 8 per cent as opposed to HRM down 1 per cent. Are you doing any sort of analysis of why this is and what can be done to fix the problem?

MS. DEAN: Certainly we do track this very closely and look at it. I'm going to ask Stephen to speak a little bit to this point.

MR. COYLE: You mentioned the Annapolis Valley and, as the deputy mentioned earlier, Yarmouth had a challenging year last year - the Town of Yarmouth is included in the Annapolis Valley so that certainly affected the numbers in that area. There are other areas that did better. There are some areas that actually had increases last year.

MR. PARENT: In the Valley?

MR. COYLE: In the province.

So we collect statistics, we collect the information from operators throughout the province - there's over 1,000 of them - so we can report those numbers by county, and we can provide those to you if you like. In our monthly publication, we produce that information by tourism region and we can produce it by community if the interest is . . .

MR. PARENT: I wouldn't mind seeing . . .

MADAM CHAIR: The time has expired. We'll have a second round of questioning for 13 minutes.

Dave Wilson. You have until 10:22 a.m.

MR. DAVID WILSON (Sackville-Cobequid): We seem to never have enough time for questions here. I'll be quick - to continue on with the Bluenose II and some questions around that and then hopefully get into a couple of tourism questions that we have. Is the Preservation Trust Society holding money that belongs to the people of Nova Scotia?

MS. DEAN: I guess in the province's opinion, if money was raised in the name of Bluenose, and Bluenose is a provincial asset and she belongs to the people of Nova Scotia, then any funds that the trust has raised should be allocated for the preservation and continued maintenance and sailing of Bluenose.

MR. DAVID WILSON (Sackville-Cobequid): So when you meet with the society in May, will the government request that all assets be turned over to the Lunenburg Marine Museum Society or the province?

MS. DEAN: The government has already requested that all of the assets be turned over to the Lunenburg Marine Museum Society or the province. That request is still there as an option.

MR. DAVID WILSON (Sackville-Cobequid): I hope that there are some deadlines put in place in this May meeting, because as I said before, this has gone on for far too long. We know that the Lunenburg Marine Museum Society - they seem to have these big words for the societies - has the new contract to operate the Bluenose and I believe it is for the same amount, $650,000 a year. How long is the contract for?

MS. DEAN: I believe that it is a five-year contract that we signed with them with an annual review.

MR. DAVID WILSON (Sackville-Cobequid): It's a five-year contract. We just finished up, if I'm not mistaken, roughly around 10 or 11 years of the Preservation Trust Society running the Bluenose, and now we have a new identity running it. My worst fear is that we will end up down the road in a similar situation we have seen ourselves in the last three years. So my question is, when the government gave this contract to the Lunenburg Marine Museum Society was it done through an open tender process?

MS. DEAN: It's interesting. We did not have an open tender process for this. There were a number of reasons why. The trust had hoped that it would be able to just simply

extend the contract that it had and that we would agree to that and we would let them continue to operate the Bluenose, and that was not what the province wanted. We wanted an open and transparent contract with greater accountability. Those discussions we were having with the trust, I believe ended in perhaps January of last year.

So we were at the stage where we were trying to determine what the other options would be. One of them would have been to do an open tender, to go through the process and see whether there would be perhaps a private-sector operator out there or another society that would want to take the Bluenose. What we were concerned about, in going through that tendering process, is that it would take too long and we might not be able to have her sailing in the water, and we certainly didn't want that for the Summer.

As we were examining the different options that were available to us, we thought that it might be appropriate for the Lunenburg Marine Museum Society to have an involvement in Bluenose. They actually made a proposal to us that they felt would work for the province and for the society. They really wanted to ensure that Bluenose stayed in Lunenburg. That's her home. It's her home port, and the community felt very strongly that she stay there, and of course going to tender would open the possibility that perhaps she wouldn't stay in Lunenburg. So it was really important for them and, you know, it was important for the province to make sure that she stayed in Lunenburg.

The Marine Museum Society made a proposal to us. We took a look at it, and we also believe the society and the marine museum are part of our museum system, and when you take a step back and you look at it, the Bluenose is a heritage asset of this province too. The marine museum in Lunenburg has done interpretation on the Bluenose. There is an exhibit on the Bluenose. They understand her. They know her history and they were a perfect partner for us in all of this. So I really don't believe that we would be in the same boat that we were before.

MR. DAVID WILSON (Sackville-Cobequid): I would have to agree with you - I only have a couple of minutes here - but that is not the question. You said in your statement just a few minutes ago about transparency, open process. In my view and the taxpayers' view, this is not an open and transparent process when government hands an organization, a society, no matter what it is, it could be a company, like we've seen in the past, a $650,000 contract a year. We need to ensure the accountability is there, and for the record I think that the Lunenburg Marine Museum Society is probably the most appropriate society to run the Bluenose and I don't think anybody would question that. So why didn't the government give the opportunity for that society to win an open contract? I don't think anybody here in this committee would have said they shouldn't have gotten it, and so that they're not encompassed in this cloud of what I think has been patronage contracts that seem to go on and on year after year from government - not only this government, from the previous Liberal Government that gave a Liberal senator the $650,000 contract to run the Bluenose.

[10:15 a.m.]

So that's all I'm saying. In the taxpayers' view, and I think in their minds, to be more accountable and more transparent it should have been an open and transparent process, an open tender. I think the Lunenburg Marine Museum Society would have won it, and I don't think anybody in the province would have questioned it and nobody, definitely, would question that the Bluenose doesn't belong in Lunenburg - and that's not a question, it's more of a comment, you know, it's frustrating.

So the one quick question I have - and then I'll go on to tourism, hopefully, for a few minutes - is I know there were some concerns around the Doers & Dreamers Travel Guide and it containing an image of the Bluenose, will the new Doers & Dreamers magazine have a picture of the Bluenose in it?

MS. DEAN: Do you know what? I don't have a copy of the Doers & Dreamers with me, but I'll tell you she's in our ad, I think, and we have no hesitation whatsoever in using the image of the Bluenose in any of our promotions or in anything that we do.

MR. DAVID WILSON (Sackville-Cobequid): And a quick question to that, did you have to ask anybody's permission to do so?

MS. DEAN: I didn't ask anybody's permission.

MR. DAVID WILSON (Sackville-Cobequid): Good, that's good to see because I think in the past, in some of the Doers & Dreamers, you could see the little marking on the bottom "With permission from the Preservation Trust Society."

So going to tourism now and a few quick questions. The one I want to start with is the vision that the province has set forth in tourism in Nova Scotia about doubling the industry's revenues by 2012. With the recent fall in tourism numbers, do you feel that this is an achievable and realistic goal for the province to have in a short six years from now?

MS. DEAN: I guess, first of all, what I would like to do is clarify it. It's not the province's vision - it's the province's and the industry's vision. This was set several years ago in collaboration with the industry, and so that means that the industry believes in this goal and this target - and keep in mind it's a target, it's a motivation for growth. It's something that both individually, operators, and collectively, through associations and the industry at large, everybody is moving towards. So from an individual perspective it's designed to have operators take a look at their own operations to see how they can grow their own individual revenues, and that collectively will help grow the industry. So there are a whole series of recommendations that I won't get into that surround the vision and specific strategies to try to boost industry growth over the next several years, but it is a collaborative

goal and I think you have to have a goal if you want to achieve a growth and you don't want to settle for the status quo.

MR. DAVID WILSON (Sackville-Cobequid): No, I would agree. So a yes or no answer, do you, as Deputy Minister of Tourism, believe that that's an achievable goal?

MS. DEAN: Well, I believe it's achievable.

MR. DAVID WILSON (Sackville-Cobequid): So that's a yes.

MS. DEAN: Okay.

MR. DAVID WILSON (Sackville-Cobequid): Okay, all right. There are many factors. You stated in your opening statement about why tourism numbers are down - everything from energy costs to the Canadian dollar can impact, especially the market from the U.S. and the eastern States. Recently we know, it's well publicized, about the U.S. decision to impose identification requirements at the boarder. Where is the province's stance on this? Did you come out against this policy by the U.S. Government and how vocal have you been? How did you relate that or did you get that message out to the U.S., or did you go through the Canadian, the federal government?

MS. DEAN: That is an industry position and basically the Canadian Tourism Commission has been working with the Canadian Tourism Industry Association on positioning that. Of course we're concerned and there has been a lot of speculation around it, and only recently have we heard what the U.S. plans actually are and I think that there was a hope that perhaps that decision could be modified in some way through the efforts of the national tourism association.

MR. DAVID WILSON (Sackville-Cobequid): I think it's going to impact definitely, I think everybody would agree. Now, to another unrelated topic for the last couple minutes is around the concerns of many rural communities around the lighthouses in Nova Scotia and the jurisdictions around those lighthouses. I believe the Department of Fisheries and Oceans on the federal side has that jurisdiction and has been definitely divesting many of these historic buildings. What is the province's position on this and where do local communities, many of them rural communities, where do the groups fit in if they would like to protect these historical sites in the rural communities? What can they do? Is the provincial government going to be there to help them preserve this historic site, instead of seeing them go off and selling them to sometimes foreign investments or in the business side of things?

MS. DEAN: You're right, that is an issue of concern to many local communities that take great pride in their own lighthouses and the heritage of their areas. The province is working with the Department of Fisheries and Oceans collaboratively to identify a process for divestiture, because we understand that this is very important to communities. So what

the province's concern is around those is that some of these sites have proper environmental assessments done on them because some of them are contaminated, and if there is a desire for local groups to take them over, they need to understand what risks there may be associated with those. So I guess to reassure you, we're working with the Department of Fisheries and Oceans on a process to do just that, because we do understand that they want to divest these.

MR. DAVID WILSON (Sackville-Cobequid): So will the provincial government be there for some of these groups in the communities if they wish to maybe take one over? They're not going to have the funds available. Will the government be there to assist them to do that to ensure they protect these historical sites?

MS. DEAN: What we'll need to do is work with communities on an individual basis to assess the situations as they arise.

MADAM CHAIR: The time has now expired. The honourable member for Annapolis. You have until 10:35 a.m.

MR. MCNEIL: I just want to ask a question around the chart that you handed out. In 1999, you said the industry was $1.2 billion, and in 2000 it was $1.21 billion. You have a press release that came out from your department on November 7, 2000, which indicated that in 1999 it was $1.256 billion and they expected it in 2000 to be $1.25 billion. This really highlights the problem with your department, quite frankly. When it's to your advantage, you lowball numbers and then when you're trying to promote something, you go the other way. That's why people have absolutely no confidence in the numbers coming out of the department.

MS. DEAN: Well, again, I'll say I have complete confidence in the numbers coming out of my department and the expertise of the staff who produce them. What I will do is I will explain, and I will have Stephen help me explain, what the differences may have been. Keeping in mind that what we do is report estimates and then they are adjusted as we get the results from Statistics Canada. Stephen, perhaps you can elaborate on that process.

MADAM CHAIR: Mr. Coyle.

MR. MCNEIL: Madam Chair, if I may, in your press release it was an actual hard-fast number for 1999?

MS. DEAN: In 2000.

MR. MCNEIL: In 2000, you committed to that number of $1.256 billion. Today you've changed it to $1.2 billion, because actually it looks that the numbers following that

are better than they actually are in the beginning. So you can speak to the other one which is $1.25 billion, which was in 2000, which may have been just an estimate.

MR. COYLE: I'm pleased to have an opportunity to explain those numbers. The economic impact model that we operate depends heavily on information that the department collects, as well as information that is produced by the Department of Finance. We also are a partner with Statistics Canada and we rely on their survey information to estimate the value of spending by Nova Scotians within Nova Scotia, and we use their information as part of our economic impact process.

The information that we reported at the time was based on information that was available through Statistics Canada. They subsequently revised their numbers and, as it is our duty, I guess, to produce the best possible information on the tourism industry, we subsequently revised our numbers to adjust for their new information.

MR. MCNEIL: It's interesting, whenever there's a change in your department, no one is willing to stand up and take any responsibility. What you just did is turned around and blamed Statistics Canada for this one. A little while ago you turned around and blamed TIANS and the operators who send in the information because it has to be accurate because it comes from them. We wouldn't have done anything with it. That number doesn't get changed unless it's to your advantage. You promote it one way when it actually makes you look good, and you're promoting it another way to do the same thing. That's why operators in this province have absolutely no belief in what's coming out of your department in terms of numbers. Talk to them.

When you talk about doubling tourism in 10 years, in 2002, everybody laughs at that. Everybody, including the operators. They ask you for an attainable goal, a 10 per cent or 15 per cent increase. They would like to see that in 10 years. You are talking about doubling it. Get realistic. Don't put all the frills around it and make people think everything is going great. Be honest with the people in the industry. That's all they're asking for.

Madam Chair, I will pass the rest of my time on to my colleague, the member for Kings West.

MADAM CHAIR: Mr. Glavine. You have until 10:35 a.m.

MR. LEO GLAVINE: Thank you very much. Just really a couple of questions. You talked about the revamped organization of the associations with some collaborative approaches going on such as ETTA. I'm just wondering, are there other models like that around the province? ETTA now embraces three associations.

MS. DEAN: Right, and as well, in southwestern Nova Scotia that's happening. I think Destination Cape Breton is another example of an association being created to collaboratively market a particular area of the province and I think there is a trend.

MR. GLAVINE: Has that occurred in Cape Breton, or is it just ETTA so far?

MS. DEAN: I think perhaps it may just be ETTA formally so far, but I think that other areas of the province are recognizing the benefits of collaborating.

MR. GLAVINE: There is no question that there could be benefits; however, in my view, ETTA is kind of one of those last-gasp efforts to help rehabilitate tourism in southwestern Nova Scotia. It is going through a critical - and I wouldn't use the word a "crisis" stage, but very critical numbers now that are impacting and making private enterprises look at whether they will continue in the business.

Now, if ETTA is going to succeed, you have to give them support. I spoke with their organization yesterday, right now there are no administrative dollars and so on that will help them move forward. Are you going to announce something this Spring that will give them the necessary tools and resources to move the collaborative revamped organization forward?

MS. DEAN: Well, I'm not aware of anything specific that we are going to announce this Spring, but certainly we would be willing to have discussions with them to take a look at what it is they are trying to achieve and to see how the department could support them in their efforts. We are always open and willing to do that and we have supported regional tourism industry associations around this province. We supported them with significant investments last year, through our $10 million investment, and certainly we'll continue to work with them and see what we can do to help them through our existing programming.

MR. GLAVINE: I'll pass that on, but I think they need a lot more than a hopeful line, and that's basically what you delivered today.

MS. DEAN: I would be more than willing to chat with them about what their needs are.

MR. GLAVINE: The second area that I would like to bring up is becoming a very challenging area in our province, because I believe intra-provincial tourism has significant potential. Let me tell you one of the areas where we are in a deficiency and a scaled back and less concerned mode about from Natural Resources in particular, in associating it with small picnic sites. They are not renewing and redeveloping water in these parks. Let me give you an exact location - Clairmont Park in eastern Kingston, Kings County. The Ostomy Association would like to have their 20^th Anniversary picnic there this year. Guess what? Think about ostomy patients now, and there is no water to even wash their hands. All the department has said, oh, new water guidelines, we're not going to be keeping up water

supply to our picnic parks. Now what kind of a signal does that send to residents of Nova Scotia and those who come in from other areas?

[10:30 a.m.]

MS. DEAN: Well, I'm not aware of this specific issue. I guess from your comments that you've had discussions with the Department of Natural Resources on that?

MR. GLAVINE: Yes.

MS. DEAN: Certainly I can look into it to see what I can find out from my colleagues.

MR. GLAVINE: Thank you. My third area is, in Opposition we also need to be solution driven. Tourism, as you've noted this morning, is contingent upon how we sell our province, and our seacoast is certainly a very, very important aspect to deliver in our marketing, but yet only about 10 per cent of our seacoast is accessible because of 90 per cent private ownership. So we're working at odds, one department against another, if we don't come up with a plan to re-establish accessibility to our seacoast. Another area that we have to go forward with, which the minister said, we have to invest in our highway infrastructure which is critical for tourism.

So, you know, our numbers aren't going to go forward unless we address these bigger, more global issues which are central to tourism. Our infrastructure is in immensely poor shape. We don't have access to the coast like we should have, and we're not even protecting what we designate as our wilderness areas. We can go in and clear-cut. They're allowed to be accessed by ATVs, et cetera. So how much are you working at odds with other departments?

MS. DEAN: Well, actually I wouldn't put it as working at odds, I would say that we have a collaborative relationship with those other departments, because their work is absolutely critical to tourism. The Department of Transportation and Public Works, the Department of Natural Resources, ourselves, the Department of Economic Development, are all part of the minister's task force on tourism that was set up last year specifically to address these kinds of issues, because we recognize that coastal accessibility is something we need to be very careful about because that is our product, that's what makes Nova Scotia what it is and that's what attracts people to our province. So we have people designated to looking at solutions and opportunities to do just what you've mentioned.

As well, with regard to infrastructure and highways, road access is critical for us and infrastructure is critical. So we work collectively with our colleagues at the Department of Transportation and Public Works as they're developing their priorities for paving because we know that affects tourism. So I guess to give you some level of comfort, we are working

collaboratively with our colleagues in those departments where we know we have common issues that affect tourism.

MADAM CHAIR: Mr. Colwell. The time remaining is until 10:35 a.m.

MR. KEITH COLWELL: Thank you. Deputy, this is what Rick Young of your department said about Magic Valley back in 2003 in a briefing note to the minister, the minister now Premier Rodney MacDonald, "Based on the foregoing . . .", the existing loan, ". . . the long term financial sustainability of Magic Valley is in question. Visitation is stagnant and at an insufficient level for debt repayment or to provide a suitable return on the owners capital and time investment. Based on its financial history, Magic Valley will be unable to raise the necessary capital to add new experiences to the Park, to adjust to the highway by-pass or to prevent the existing facilities from deteriorating."

Clearly the Department of Tourism, Culture and Heritage realizes the unfortunate financial situation that Magic Valley has found itself in and realizes that provincial assistance would not help at all. Has the Department of Tourism, Culture and Heritage provided any funding of any type to Magic Valley in addition to anything we've already been told about?

MS. DEAN: No.

MR. COLWELL: The department has been involved in the file for quite some time and mostly everything was copied to Rodney MacDonald, the minister at the time. The $350,000 grant they received at that time, will that drastically change the potential for Magic Valley, in your opinion as the Tourism Deputy Minister?

MS. DEAN: Well, I think it's difficult for me to comment on that specific situation. Our department doesn't provide loans to companies. It provides grants for assistance for different projects. So I would find it difficult to make any kind of assessment on that.

MADAM CHAIR: The time has now expired. Mr. Parent, you have until 10:48 a.m.

MR. PARENT: Thank you very much. I want to pick up on the question of signage. I've pushed this, I guess Kings County has one of the more stringent signage policies in the province. I happen to agree with it. I happen to think that P.E.I., in terms of the uniform signage, is attractive to tourists. I find that the clutter of signs across the province, to me, is not attractive. Also, I have had complaints from people up in Guysborough that the fact that we don't have uniform signage means that those with more money can get bigger signs closer to the road than smaller operations. Has the department looked at signage as an issue in terms of promoting tourism?

MS. DEAN: I understand that the department did do some work several years ago around the issue of signage and it does continue to be an issue for some operators. I'm going to ask David Ross to elaborate on that.

MADAM CHAIR: David Ross.

MR. ROSS: Thank you for the question, it is a very relevant one. Actually a lot of work has been done, and consultation has happened throughout the province related to private advertising signs for primarily tourism-related businesses along provincial highways. Certainly back in the late 1990s and moving into 2000-01, there were committees in place involving municipalities, tourism interests, and, generally, the business community was part of that exercise as well. They looked at both advertising signs along secondary highways, as well as the 100-Series Highways.

There were certainly some observations and recommendations that came out of that exercise related to private advertising signs along secondary highways. There were some recommendations that would have moved, or suggested to move towards something like a Kings County example where there would be more of a standardized approach, but the consultation that was undertaken clearly showed that it was a very divisive issue on which there wasn't necessarily strong agreement within the business community and within communities around what the precise option should be.

The outcome of that process has been the introduction of some additional standardized signage along the 100-Series Highway system which, in some ways, is similar to Kings County but allows primarily tourism-related types of businesses and attractions to be identified on our major controlled access highways to promote not only those businesses in the communities, but to try to encourage traffic to leave the 100-Series Highway and visit the communities that those businesses are located in.

There hasn't been significant change to the actual advertising signs along the secondary roads which, I believe, is your primary interest. Primarily, the current rules allow businesses to develop their own unique signs to advertise their businesses. The pros of that, what we've heard during the consultation process, were that there were a lot of businesses out there that were reluctant to strongly support a standardized system, and were wanting to have the ability to have their own uniquely designed signs with their own unique messages.

There are many, many examples of signs that are actually very, very well done, but you pointed out quite correctly that there are also many signs that, unfortunately, can create a lot of problems if they're not well maintained or if there is an escalation in the number of signs, which has become a problem in some areas. So we continue to be concerned about that, but the most recent process that we led has simply primarily resulted in changes and improvements on the 100-Series Highway system without fully addressing the secondary highways, at this stage.

MR. PARENT: Well, thank you very much. I realize there's not only businesses. My colleagues have different views on this as well, but I guess I have the opportunity to state firmly here my position - I think the 100-Series Highways have been an improvement - and encourage you on the secondary roads, because although there are some attractive signs, when you get such a mishmash of signs, and then you get everyone running to get a sign and the location and the competition, it just looks ugly. I think businesses would benefit. I know they are worried about it. Some businesses are worried about it, the more regulation they see. When I compare the signage from P.E.I. to Nova Scotia, I know which, as a tourist, is far more attractive and far more effective. I think a universal signage is more attractive. It's clean, and that's one of the things we need to market in the province. I know I'm speaking to the converted here, so I'm not really asking a question. Also, it allows for equity between different tourism operations that work well.

I have promoted it in Kings County, very supportive of the Kings County model and I think it is well received, but even in Kings County, on our secondary roads, we get a mismatch of signs, some pointing this way, some pointing that way. They just don't look nice. They look like clutter. I know, ultimately, it's a political decision, but I would encourage the department to continue to look at this issue and look at the best practices - I was pointing to P.E.I. and Kings County - across North America, in terms of signage, so that it's fair to business people, but is attractive to the tourists. Ultimately, the more tourists we can lure into the province the happier the businesses will be in the long run. Even if in the short run they may think that sign was important for them, in the long run, if we can bring tourism up, everyone will benefit from that.

Before I turn it over to my colleague, I want to go back to the figures. I agree with the deputy minister that we have a plan, and sometimes you set your goals a bit higher than you think you will achieve because that will encourage everyone to work. The downside of that - and maybe I'm just speaking politically, maybe I've been too long in government - is that if you don't make those goals, the Opposition hammers you - you set a goal and you didn't reach it.

So I think that while it is important to plan, it is important to set realistic goals. When you showed us the chart here, it is clear that tourism rises gradually. I think the goals that were set with the government and the industry would not fit - if you drew a line, a straight line through - it would be far in excess of what that line would predict. So I guess the question I have, is the goal realistic? You said it was, you support it. What are we doing to get to that goal? I think if you draw a straight line, it is going to be higher than the straight line. So there has to be something different that is being done in order to achieve that goal.

MS. DEAN: Again, it is a goal. It is a target. You have to set ambitious goals if you want to achieve things, if you want to change, if you want to motivate people, if you want to increase. Status quo isn't going to work. I think that if we're to achieve part of that growth, it wouldn't be a failure. It would be growth. We would be achieving growth in tourism, no

matter what point we get to by 2012. Again, this goal was set with industry. I think there is a belief that it is achievable and there is a strategy in place that points to specific things that can be done. Significant events can certainly impact on that number, and you are right, some dramatic things would need to be done and things need to be done differently.

I think the impact of new flights coming in, that can start to see things move. For example, and I'm not supporting anything specific here, if there was a creation of a new facility or a new convention centre that can accommodate more people, you would see would increase visitation and provide an impetus for growth. So there are a number of things that could be done and could possibly contribute to this. So, again, I think that you set an ambitious target, you're aggressive and you pursue it. It becomes a rallying point for the industry and for everybody involved to think big.

MR. PARENT: Certainly gay tourism has been a growth industry across the world. There has been some suggestion that Halifax market itself in this regard. Are there any plans in the department in that regard?

MS. DEAN: Interestingly the CTC has definitely identified that as a market that they're aggressively marketing to and we're taking a look at it. We actually had some of our departmental staff attend a conference that was focused on marketing in the gay and lesbian market and so we're looking at it as a potential opportunity.

[10:45 a.m.]

MR. PARENT: Okay, thank you, I'll turn it over to my colleague.

MADAM CHAIR: Mr. DeWolfe. You have until 10:48 a.m.

MR. JAMES DEWOLFE: Thank you, Madam Chair, and good morning, welcome. I guess to set a goal that you mentioned with the previous speaker, my goal is that we need a sportsplex in Pictou County - two ice surfaces. So just keep that in the back of your mind.

MS. DEAN: Big hockey tournaments then.

MR. DEWOLFE: Exactly. We just went through a phenomenal weekend and, of course, I'm talking about the Juno Awards and hosting the Junos - a wonderful weekend. It created a lot of excitement across the province. Perhaps you can tell us what the department's role was in this weekend.

MS. DEAN: Sure, I would be pleased to and I have to echo your comments, it was an exciting, wonderful weekend. The Junos is an example of the kind of event that you can have in a community that gets you to that next level because the economic spinoff from the Junos is expected to be about $34 million. We did have involvement in the Junos. I can't take

credit for all of it, there are a number of people who were involved in bringing the Junos to Nova Scotia. The department supported the bid for the Junos to come to Halifax with an investment of about $200,000.

The other unique thing that we did was collaborate with the industry to support the promotion of Nova Scotia musicians around the Junos so that we could capitalize on the fact that we had national audiences and we had national players from the music industry right here, a captive audience to see our Nova Scotia musicians and see what kind of talent that we have here. We also supported the Play Hard initiative and that was basically a whole program that was designed around the Junos to draw attention to Nova Scotia music, and we supported that. We invested $150,000 into that as well. As a result, 13,000 people gathered in the Grand Parade on the Thursday night to celebrate Nova Scotia talent and to showcase that to some of our national industry folks.

Our department was aggressively involved behind the scenes as well, taking a look at opportunities to match booking agents with Nova Scotia music and to do business around the Junos because it's not just a music show, it's an opportunity to do business.

MR. DEWOLFE: That's right and I think Nova Scotia is a great place to showcase local talent because I think we're the leaders in all of Canada for our talent that we have right here in Nova Scotia - it's just amazing.

MS. DEAN: I would also like to add that we took the opportunity to advertise Nova Scotia during the Junos broadcast and so we saw a spike in calls - 600 people right away called and asked for a Doers & Dreamers Guide and more information and participated in the on-line contest. We also took the opportunity - I don't know if you noticed Ben Mulroney wearing a Nova Scotia tartan scarf, but that was the hot ticket item.

MR. DEWOLFE: Yes.

MS. DEAN: There were a lot of people who wanted that. We started by greeting people at the airport who were coming in for the Junos and gave them a scarf and the other promotional tool that we collaborated with Music Nova Scotia on was a CD that went to every single Juno delegate who came here - this is a celebration of Nova Scotia music on one CD - and the Doers & Dreamers Guide on the other. So we took every opportunity we could to extend that cultural event and to market it for tourism and that just goes to show that interconnection between culture and tourism. You can't really have one without the other. So we think the Junos was a fabulous opportunity to showcase Nova Scotia, to showcase Halifax, and to put Nova Scotia on the map as the music capital of Canada.

MADAM CHAIR: The time has now expired and I would invite the deputy to make a closing statement if she so wishes.

MS. DEAN: I would love to do that, thank you very much for the opportunity. I guess one of the things I would like to do is to reiterate our belief in our numbers. Our staff know what they're doing. They work very hard and everything we do is based on research and it's based on solid methodology. So any thoughts that perhaps we're manipulating numbers are absolutely unfounded. We're completely transparent. Those numbers are up there on a monthly basis for all to see. I think our staff are diligent in reporting those, and perhaps because we report them and because they are out there, it is really easy to notice the fluctuations. We are nothing but transparent in our numbers we put up there and we are quite confident in them. That is why we're doing a review of the economic impact model, as well, so we can ensure they are as accurate as possible and they take into account any changing conditions and that we have the experts at the table take a look at the model with us and to ensure that it continues to be effective and a solid representation of the economic impact here in the province.

The other point I want to make is marketing. Again, we're doing everything we can for this marketing season, and we're confident in the plan. We're confident in the efforts that we're making, and looking forward to our tourism season. With Bluenose, I would like to ensure everybody that the department and province is absolutely working hard to do what Nova Scotians expect, and to ensure that Bluenose II continues to be out there as our sailing ambassador promoting the province and is accessible to Nova Scotians and visitors alike.

Thank you very much for the opportunity to speak to you today.

MADAM CHAIR: Thank you very much, and on behalf of the committee, thank you for being here today. I want to make a very brief report from the subcommittee. We met this morning at 8:00 a.m. We agreed that the Department of Community Services, which is coming in front of us next Wednesday, that the deputy minister will be able to send a substitute due to some medical issues in her family that require her to be away. We also would like to recommend that the committee look at having the Industrial Expansion Fund placed back on our list of topics to explore at a future date. We haven't actually set the date, but we are going to seek some additional information from OED, and then we will proceed. I would like maybe to ask one of my colleagues to move that report.

MR. COLWELL: I so move.

MADAM CHAIR: Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

Is there any other item of business? Mr. Steele.

MR. GRAHAM STEELE: Madam Chair, as members of the committee will be aware, over the past month we've spent a considerable amount of time examining two Economic Development loans. On behalf of myself and my NDP colleagues on the committee, we wish to table with the committee our report on our findings and recommendations on those hearings. This by no means is to foreclose any further hearings, it is simply a statement of our conclusions so far. I would ask that this report be referred to the subcommittee because it contains three recommendations that the subcommittee may wish to examine and refine before it is brought back before the full committee. I think I am bringing that forward simply as an information item for the members of the committee.

MADAM CHAIR: Thank you. The report has been tabled. Mr. Colwell.

MR. COLWELL: Yes, I think it is good to refer this to the subcommittee. I'm a little bit disappointed this came today, because I don't think we finished our investigations into this whole matter. I am pleased to see that the NDP has come up with some ideas. That is always very positive, but I think it is a little bit premature, because we are not completely finished with this file. I look forward to discussing it in more detail at the subcommittee.

MADAM CHAIR: We will establish another subcommittee date as soon as possible so we can look at this and a couple of other matters, after we hear back from OED as well. Is there any other business? I would ask for a motion to adjourn.

MR. DEWOLFE: I so move.

MADAM CHAIR: The committee stands adjourned until next Wednesday.

[The committee adjourned at 10:54 a.m.]