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

Ms. Claude Carter

Deputy Auditor General

Mr. Gordon Hebb, Q.C.

Chief Legislative Counsel

Office of Economic Development

Mr. Paul Taylor

Chief Executive Officer

Mr. Marvyn Robar

Director of Development Initiatives

Mr. Chris Bryant

Director of Decision Support

HALIFAX, WEDNESDAY, MAY 10, 2006

STANDING COMMITTEE ON PUBLIC ACCOUNTS

9:00 A.M.

CHAIR

Ms. Maureen MacDonald

VICE-CHAIRMAN

Mr. James DeWolfe

MADAM CHAIR: Good Morning. I'd like to call the meeting to order. Today we have with us the Office of Economic Development. We will proceed in the usual manner. We'll have introductions by the members and the Auditor General and his staff, and the Office of Economic Development staff and a brief opening statement by the CEO of the Office of Economic Development. So we will begin with introductions.

[The committee members introduced themselves.]

MADAM CHAIR: Mr. Taylor, the floor is yours for introduction of your staff and opening remarks.

MR. PAUL TAYLOR: Thank you, Madam Chair, and good morning committee members. To my left is Chris Bryant, the Direct of Decision Support, and to my right is Marvyn Robar, Director of Development Initiatives, all with the Office of Economic Development.

I appreciate the opportunity to be here this morning. We have been invited to appear to discuss the Industrial Expansion Fund, or the IEF. This fund has existed since the 1950s, and has the capability to offer assistance in a form of loans, loan guarantees, shares, incentive agreements and royalties, to businesses in Nova Scotia. It is one of a number of instruments governments use to support economic development in the province.

The fund is very flexible. For example, $25 million was invested from the fund to establish the credit union loan guarantee program. This program provides access to financial capital for small businesses and is proving very successful. It has already leveraged more than $13 million in loans to more than 190 small businesses and has helped create or maintain more than 1,000 jobs in this province.

The fund is also used to help established industries expand. For example, it was used to provide a $10.8 million investment in Michelin's expansion to produce a new line of truck tires in its Waterville plant. This expansion will create 75 new jobs.

The fund is also used to help innovative industries grow. It was used to invest $13.5 million to help Ocean Nutrition build a new production facility in Dartmouth that will specialize in the innovative use of fish and seaweed extracts. That investment will help create 520 jobs.

These are but a few examples of the flexibility of this fund. As I said, it is but one of the tools government has at its disposal to effect economic outcomes. Obviously, our business climate and the components of that business climate are a very important part of that process.

Additionally, companies like NSBI, InNOVAcorp, the Film Development Corporation, Trade Centre Ltd., Departments of Fisheries and Aquaculture, Tourism Culture and Heritage, Natural Resources, and Energy all maintain programs to help in the attraction and expansion of businesses in this province.

We do have considerable flexibility to respond to economic opportunities as they present themselves. Sadly, as we were reminded by the Shaw Wood announcement yesterday, such capability is a requirement in the present global economy as it is a very competitive world. Nova Scotia manufacturers account for roughly three-quarters of our exports - a vital source of new money for this province. These businesses are under growing pressures daily - higher energy costs, looming shortages of skilled labour and a very strong Canadian dollar are but a few examples of those pressures.

Competition from other jurisdictions is fierce. To not only lure away companies which might otherwise choose Nova Scotia as a place to locate, but to lure our existing

businesses to other locations, as we have seen in the Shaw Wood announcement yesterday. If Nova Scotia wants to maintain a manufacturing sector, it has to be willing to fight for it. The IEF is one of those most important instruments the government has in this regard.

Attraction and retention of businesses, particularly manufacturers in today's global economy inevitably involve the assumption of risk. The IEF is a tool that has been in existence for 50 years to do just that. Properly resourced it is a tool that will continue to serve this province well into the future. Thank you.

MADAM CHAIR: Thank you. We will now proceed with a round of questioning, 20 minutes each caucus, beginning with the NDP caucus. Mr. Steele will begin and you will have until 9:26 a.m.

MR. GRAHAM STEELE: Thank you. It is probably appropriate the Office of Economic Development should be the last witnesses appearing before this committee before we are launched into an election campaign. Since the last election, as you know, the Public Accounts Committee has taken a great deal of interest in your office and its work. That, I think, all by itself is a signal about the concern many members of this committee have with the accountability framework within which the office operates, and in particular, the Industrial Expansion Fund.

It appears to me that the government has discovered within the last couple of years just how weak the accountability framework is around the IEF. It is now, for want of a better term, the government's last remaining slush fund, the one where they can spend whatever they want, whenever they want, without putting it in their budget, without notifying the Legislature.

You, Mr. Taylor, and your colleagues, were here a year and a half ago, where this committee tried to explore the relationship the office has with Nova Scotia Business Inc. You were here only about six months ago where we expressed concerns about the lack of accountability and controls over the office. Then after that, of course, the public spotlight shone on two particular transactions and you were back again, not once, but twice and were the subject of the very unusual step that this committee took of issuing subpoenas to you and your office, to produce documentation. So needless to say, all of these things showed the very, very great concern that members of this committee have over the Industrial Expansion Fund.

I want to say right up front, nothing that I have said or that we have ever said, should be taken as a slight against you personally, against your colleagues. You are all, every one of you, experienced, well qualified, senior civil servants, with a great deal of experience and integrity. Nobody should ever take anything that I say as questioning

those things. The difficulty is not with any of you personally, it's with the control structure within which you operate.

I want to start by going back to the subpoenas that this committee issued to you. There has been a considerable amount of correspondence back and forth on those topics. The majority of the committee is not satisfied that you have responded to those subpoenas adequately. We have an opinion from the Office of the Legislative Counsel, which, if I can summarize, I hope not incorrectly, is that the subpoenas have not been properly responded to and the essence of the difficulty is that your office has taken upon itself the task of deciding what it will and will not allow this committee to see. It is this committee's right to see those documents. It is our decision, not yours, about what to do with those documents. So what I would like to ask you, Mr. Taylor is, when it came to the manner and form in which you responded to the subpoenas, from whom did you take direction?

MR. PAUL TAYLOR: The process by which we did respond to the request for documents, would have been as follows. I would have consulted with my minister, directly, as the representative of Executive Council, for our department. We would have consulted with the Executive Council Office of the Province of Nova Scotia, and the reasons for those consultations is to ask a simple question. I have been requested to divulge the contents of documents which are owned by the Executive Council Office. Do I have the authority to release these documents, i.e., is the claim of Executive Council privilege going to be waived with respect to these documents? The answer I received was, no, we will not waive those privileges. So the test we subject those documents to, before they are released to the committee is the same test we would have used as if the request had come through the FOIPOP process. So we would have subjected those documents to that same process.

MR. STEELE: The difficulty of course is that according to the Office of Legislative Counsel, the claim of executive privilege is fundamentally misconceived. It is taking a principle and misapplying it, applying it in circumstances where it does not belong. What I would like to ask you is, at any time, did you or your office, in responding to the subpoena, seek advice from anyone outside of government? In other words, anyone without a political axe to grind, about the proper way to respond to those subpoenas?

MR. PAUL TAYLOR: With respect to the legal opinion provided by the Legislative Counsel's Office, the legal counsel to Executive Council is the Attorney General, in this province. As part of this process, we have sought the advice of the Attorney General, as the lawyer to Executive Council, for their legal opinion on the provision of those documents. I think that advice was communicated to the committee, through the letters by the Deputy Attorney General, taking a different view of whether the claim of Executive Council privilege applies in this case. It is that legal advice that

would have been relied on by both the Executive Council and my office in the way we responded to the request.

The short answer to your question, we did not seek outside legal advice because the legal services to the Executive Council are provided by the Attorney General.

MR. STEELE: In your dealings with the Executive Council Office, who specifically was your contact there?

MR. PAUL TAYLOR: The specific request would have been made to the Clerk of the Executive Council, Bob Abbott.

MR. STEELE: Oh, Bob Abbott, and Paul LaFleche is the Secretary to the Executive Council and Bob is the Clerk to the Executive Council. So when you call the Executive Council Office, your communication would be with Bob Abbott?

MR. PAUL TAYLOR: Right. The question would be posed quite simply to Bob - is there going to be a waiver of the claim of executive privilege?

MR. STEELE: Okay, which is fine but, as I said, the opinion of our lawyer, the committee's lawyer, the House lawyer, is that request is fundamentally misconceived, it's asking the wrong question.

At any time, did you take direction on how to respond to the subpoenas from a member of this House?

MR. PAUL TAYLOR: No. The advice on how to respond - well, first of all, some of the responses came directly from the Deputy Attorney General's office, but to the best of my recollection, the advice I received in my responses came from the Deputy Attorney General's office and his staff.

MR. STEELE: Did you take that advice as a direction as to what to do or simply advice for you to consider?

MR. PAUL TAYLOR: The documents in question here - and this has been an issue that I personally have struggled with because I have seen my name personally attached to the warrants, that have been served in my office, as being the holder and keeper of these documents, as somehow the decision maker with respect to what of these documents can be disclosed - the documents are the property of the Executive Council. They are the holder of these documents, they are the ones they are submitted to when decisions are being made.

[9:15 a.m.]

It has been somewhat troubling to me personally why these requests continue to come to me as the CEO in possession of a copy of those documents, because obviously they originated in our office. This debate over the release, the content of these documents, in my mind it's an issue for the subject of the House of Assembly and probably the courts. The people who are talking about access to the documents and the people who have those documents are not the two people having those debates - the debate is being held with me personally, and I am not the owner or possessor of those documents.

MR. STEELE: Thank you very much for that. We're all in relatively new territory, it has been a long time - or maybe never - since this committee has actually dealt with these kinds of issues where the government has resisted so strongly and, in our view, incorrectly, the production of documents, and so I do grant you that. We're all in new territory, we don't have any precedents to turn to as to how exactly to do this.

But at the end of the day, the advice this committee is receiving from its lawyer is that those warrants have not been properly responded to. We expect an election call this Friday or Saturday and so the matter is going to be put on the shelf for awhile, but certainly if I'm returned to this House and if I have anything to do with it, it will be taken off the shelf and we will revisit this issue at some future date.

Turning now to the Industrial Expansion Fund specifically. Back in January, the Executive Council granted an increase in the limit available to the Industrial Expansion Fund in the amount of $50 million. It's this fund, this extra capacity that has been used to fund a variety of projects, of course all in the lead up to an election, which inevitably leads to charges and countercharges of political influence. It's because of the lack of inadequate accountability structure that it's fertile soil for these charges and countercharges to flourish.

There's one thing, a technical point, that I haven't been able to clarify even for myself. I need you to help me with this. The whole question about this extra $50 million has been premised on the idea that there is a legal limit to how much money can be spent from the fund and, try as I might, I haven't been able to find where that limit is stated. Where is it stated that the Industrial Expansion Fund has a particular limit?

MADAM CHAIR: Mr. Robar.

MR. MARVYN ROBAR: I don't believe it's stated anywhere as to what the particular limit of the fund can be.

MR. STEELE: But the whole thing started, Mr. Robar, with an e-mail from you saying I only have $8 million left, I need more. In terms of capacity, if there's no legal limit to how much money the fund spends, why was it necessary for the Executive Council to approve an additional $50 million?

MR. ROBAR: Well, there is a limit.

MR. STEELE: But why don't they do it sort of project by project, rather than having this theoretical limit?

MR. ROBAR: I believe that to do it project by project you would need an additional report and recommendation to increase the capacity of the fund by the amount of that transaction.

MR. STEELE: But you only need an Order in Council to increase the limit if there's somewhere else a legal limit to how much can be spent. What happens here is the Executive Council approves $50 million without any statement, publicly or otherwise, about what that money is to be used for, and then, that's part of the lack of accountability, the government does whatever it wants whenever it wants; whereas if it had to seek approval project by project, then at least there would be some accountability.

If you said, I only have $8 million left, I need more, we're running into our ceiling, all I'm asking - and maybe this is my lawyer training kicking into play, but if somebody says there's a ceiling, I say, okay, where is it, in the law? I'm a bit taken aback that you can't identify where that ceiling is.

MR. ROBAR: Maybe we're confusing a theoretical ceiling with a ceiling that's in existence. If you look at the financial statements of the Industrial Expansion Fund, stated in the financial statements there is the limit of the fund, which is, as of March 31, 2005, $258 million.

MR. STEELE: I understand there's a limit, but what I'm saying is that must be in the law somewhere. I'm not going to pursue that, but if a limit is stated, it must be somewhere. It must be in a law or an Order in Council or somewhere. We don't just pull these numbers out of the air. This whole foofaraw over the $50 million started because of the idea of a ceiling, which had to be increased. I'm just wondering where in the law that is. But it appears that you're not sure so I'm not going to pursue that now.

I note in passing that according to the documentation, the last two times the ceiling was raised were 1993 and 1999. Now I don't know if those years ring any bells with you but they certainly do with me. Those were both election years. It appears that we're in a pattern where every second election year, the limit of the Industrial Expansion Fund goes up. Is that a coincidence? I don't know, I ask that rhetorically.

Let's suppose then that there is a ceiling to the Industrial Expansion Fund, the only reason we would need a ceiling is because not enough is getting paid back. As new projects come on stream, you need to pay for them, but you wouldn't need to increase the ceiling if old projects were having the money paid back. So it's apparent that the rate of new expenditure far exceeds the rate by which old expenditures are getting paid back. Do you have any comment on that? If these are truly loans, why are we not getting money back from old projects to create room for new projects?

MR. ROBAR: There are a number of different transactions in the fund, as Mr. Taylor indicated. There are loans, there are shares, there are guarantees that are issued, there are incentive agreements that are provided. If an incentive agreement is provided, there would obviously not be a payback from the incentive, in terms of cash returning to the fund.

MR. STEELE: Now, Mr. Taylor, in yesterday's Budget Speech it was announced that the Office of Economic Development is being given an additional budget of $15 million. I'm going to take some liberties here, Madam Chair. Normally this question I would save for the estimates debate, but the government told us yesterday that they don't want the estimates debate to start until Monday - and there's only one reason for that and that's because they're going to call an election on Friday or Saturday, so it appears I'm not going to have an opportunity to ask you this in estimates. So I'm going to ask you now, what is that additional $15 million for?

MR. PAUL TAYLOR: That money is to be used whenever a transaction in the fund triggers an expenditure against the operating budget of the Office of Economic Development.

MR. STEELE: Do you think it would be wise to have a policy that there will be no announcement of spending from the fund during the course of an election campaign?

MR. PAUL TAYLOR: That obviously is a decision for the government to make, as opposed to myself as a civil servant, setting that policy.

MR. STEELE: But as a civil servant you understand that, when the government has what I call a slush fund and payments can be made from that fund and announced in the course of an election campaign, it's very difficult for those of us in Opposition not to draw the conclusion that it is still a thoroughly political fund. You do understand that that's the way it looks.

MR. PAUL TAYLOR: As I understand it, there are a number of rules, traditions, whatever you call them, with respect to the behaviour of a government between the time when an election is called, between the time an election has been held and a government change is going to take place, that governs the behaviour of the government, and I would

have no comment on whether the existing government intends to follow those traditions or is not going to.

MR. STEELE: One of the other questions that comes to my mind after reviewing again the Act that creates the Industrial Expansion Fund is, indeed, whether some of these expenditures are lawful, because the Act itself states the purposes for which the fund can be used and, although fairly broadly stated, it doesn't encompass absolutely everything, but the policy adopted by the Office of Economic Development really includes just about anything - that it doesn't have to be for an economic development purpose, it doesn't have to be for an industrial expansion purpose. I wonder, for example, the purchase of the Lunenburg waterfront lands, which is something that is a good thing and that we support, was funded, as I understand it, out of the Industrial Expansion Fund. Is that correct?

MR. PAUL TAYLOR: No.

MR. STEELE: Where did that money come from?

MR. PAUL TAYLOR: It was an appropriation to the budget of the Office of Economic Development. It was an appropriation made to our budget which was then flowed to the Waterfront Development Corporation.

MR. STEELE: And so it was used as a convenient vehicle even though, strictly speaking, it really wasn't an economic development project, it was a purchase of land with many possible future uses?

MR. PAUL TAYLOR: As I understand it, the money had no association with the Industrial Expansion Fund at all.

MADAM CHAIR: Order, please. The time has expired for the NDP caucus.

I recognize Mr. Samson for the Liberal caucus. You have until 9:46 a.m.

MR. MICHEL SAMSON: Thank you, Madam Chair. Mr. Taylor, I've asked this question before and I've received different answers each time I've asked it, but I'm wondering if you could briefly tell me, in your opinion, what type of projects should go to NSBI?

MR. PAUL TAYLOR: We try to ensure that all projects go to NSBI. The NSBI board sets limits of its own as to the type of projects they are prepared to consider. They have some blanket prohibitions in areas of the economy that they will not operate in.

MR. MICHEL SAMSON: Such as?

MR. PAUL TAYLOR: For example, I think they have a policy that says they don't issue payroll rebates for employment of less than 50 people.

MR. MICHEL SAMSON: Do they do expansions of existing businesses?

MR. PAUL TAYLOR: Yes, they do.

MR. MICHEL SAMSON: Do they do expansions of existing businesses looking to establish a new product line?

MR. PAUL TAYLOR: As I understand it, yes, they do.

MR. MICHEL SAMSON: Now, see, here's where I'm confused. That was my understanding of what NSBI did, as well. So my question to you is why is the Industrial Expansion Fund and Cabinet approving money to Michelin, and not NSBI, under the answer you've just given me? What is it about Michelin, one of the province's largest employers, looking to expand a plant to put a new tire line in, that doesn't meet the criteria established by NSBI?

MR. PAUL TAYLOR: The principal reason that file continues to exist in the Office of Economic Development is because it has been there for an awful long time. The transition of that file to a new organization was deemed to not be an appropriate thing to do. In fact, a great deal of the credit for the existence of Michelin in its present form in this province exists in the man sitting immediately to my right. He has had a relationship with that company, and a positive working relationship with that company that well, well predates NSBI. To disrupt that relationship and to change those parties didn't seem to serve a useful purpose for the province as long as the outcomes the province was looking for in that relationship were being achieved.

MR. MICHEL SAMSON: I'm certainly not doubting Mr. Robar's involvement with Michelin and any of the great work, but you do understand, Mr. Taylor, the government established NSBI to take out the politics and bureaucracy of giving away taxpayers' money, yet you're here telling us that it's your little pet project that you had in Economic Development, you didn't want it subjected to the now independence of NSBI.

Do you not see how that's troubling for us, when we have a message from the government saying take the politics and bureaucracy out of giving away taxpayers' dollars, put it in front of an independent board for their approval, and yet you're here telling us that you've decided to choose which projects you're going to keep, not because they don't meet the criteria of NSBI, but you've just chosen to keep the bureaucracy and government's hands, through Cabinet, still on these files. Do you not see where that causes us some concern and causes Nova Scotians concern?

MR. PAUL TAYLOR: One thing I'd like to add, which Mr. Robar has just indicated to me, the type of assistance, as well, that's being provided, in some cases, to Michelin, is not available through NSBI.

[9:30 a.m.]

MR. MICHEL SAMSON: What about the last assistance they had?

MR. ROBAR: No, the last assistance provided to Michelin was in the form of a rebate on capital expansion, and NSBI doesn't have that vehicle that it can provide to industry.

MR. MICHEL SAMSON: So they don't do rebates on capital expansion either. So no payroll rebates.

MR. ROBAR: Not on capital.

MR. MICHEL SAMSON: No payroll rebates and no capital expansion rebates. Is that the case? Or do they do payroll rebates, just not to companies with under 50 employees?

MR. ROBAR: Yes.

MR. MICHEL SAMSON: Okay. Ocean Nutrition, what is it about Ocean Nutrition that doesn't meet the criteria of NSBI? Why was that put through the Industrial Expansion Fund?

MR. PAUL TAYLOR: Ocean Nutrition was actually put through the vehicles of three of the organizations - the Office of Economic Development, NSBI was also part of that arrangement, as was InNOVAcorp. In fact, given the sector that's in and the opportunity it presents for the province, we look at that opportunity as a classic example of how you bring the right tools to the right opportunity to get the deal done.

MR. MICHEL SAMSON: I don't disagree at all. I'm certainly very familiar with Ocean Nutrition and the plant it has in Mulgrave and the many people it employs. It's one of those companies that - when I look at what NSBI was set up for, Michelin and Ocean Nutrition scream out NSBI; it screams out no need for bureaucracy, no need for Cabinet, these companies stand on their own. You can put this in front of an independent board of directors and they're going to approve it because these are outstanding Nova Scotian companies.

By putting them through the Industrial Expansion Fund, and putting them through Cabinet, somehow you're leaving the impression to Nova Scotians that they didn't meet

the smell test of NSBI and they have to go through Cabinet, instead, and this Industrial Expansion Fund, which has been referred to, under many different ways, the type of fund it is. Again, why would you not put Ocean Nutrition through NSBI so that Nova Scotians can clearly see the funding that they are getting is based on a sound business plan that did not need the intervention of Cabinet to give them money and to make that investment?

MR. PAUL TAYLOR: Just before I hand that on to Mr. Robar to give you the details, there may be a misconception here that somehow the approvals that NSBI issues to don't go near the Cabinet of this province, almost all of them do.

MR. MICHEL SAMSON: But they go through an independent board of directors beforehand don't they?

MR. PAUL TAYLOR: Still it. . .

MR. MICHEL SAMSON: No, no but do they go through an independent board of directors first?

MR. PAUL TAYLOR: They actually go through an investment committee then the board and then they go to Cabinet.

MR. MICHEL SAMSON: Does the Industrial Expansion Fund have an independent board of directors that gives approval prior to going to Cabinet?

MR. PAUL TAYLOR: The Industrial Expansion Fund has the staff that have been working with that fund for more than 20 years.

MR. MICHEL SAMSON: Does it have an independent board of directors that are not part of the bureaucracy and that are independent of government?

MR. PAUL TAYLOR: The investment committee, if you will, inside the Office of Economic Development are all civil servants.

MR. MICHEL SAMSON: Does it have an independent board such as NSBI?

MR. PAUL TAYLOR: It does not have an outside board, no.

MR. MICHEL SAMSON: Then again, why did Ocean Nutrition, with its reputation and one of our growing companies, not go through NSBI and avoid having to go through Cabinet without an independent board looking at it?

MADAM CHAIR: Mr. Robar.

MR. ROBAR: I'd like to point out that the Ocean Nutrition transaction, as Mr. Taylor has stated, was a result of a partnership with three organizations; the Office of Economic Development, Nova Scotia Business Inc., and InNOVAcorp. The role that the Office of Economic Development played in the Ocean Nutrition transaction was through the provision of a forgivable loan, which NSBI is prohibited from doing, I believe.

MR. MICHEL SAMSON: Is that $13.5 million totality of it a forgivable loan?

MR. ROBAR: It is a forgivable loan of $7 million, and $6.5 million are guarantees.

MR. MICHEL SAMSON: Any payroll rebate involved in that?

MR. ROBAR: No, the forgivable loan is based on job creation but there is no payroll rebate. The forgiveness of the loan is based on job creation.

MR. MICHEL SAMSON: But it's not a payroll rebate?

MR. ROBAR: No.

MR. MICHEL SAMSON: Why not a payroll rebate?

MR. ROBAR: Well, in a company like Ocean Nutrition and a company like Michelin these are very capital-intensive organizations when they undertake an expansion as opposed to a contact centre where you have low up-front capital costs and a very large wage bill. Therefore, to provide effective assistance to a company like that the company is looking for capital up front.

MR. MICHEL SAMSON: That's interesting that you refer to call centres as an example where they don't need capital which brings me to yesterday's announcement; Acrobat Research to create jobs in Cheticamp. So naturally, we saw they are getting a payroll rebate - no surprise, NSBI is giving a payroll rebate but lo and behold they're also getting $350,000 from the Office of Economic Development. Is this money from the Industrial Expansion Fund?

MR. ROBAR: Yes.

MR. MICHEL SAMSON: Based on your previous answer why do they need $350,000 from the Industrial Expansion Fund, based on the response you gave earlier that payroll rebates are better suited for call centres because there isn't a need for the capital costs as a company such as Ocean Nutrition might need?

MR. ROBAR: It really depends on the scale of the call centre. Many of the contact centres that NSBI has attracted are very large companies that can have the ability to supply their own capital for the infrastructure whereas Acrobat is a smaller contact centre. It's beneficial to them to have some assistance with the provision of capital to put in the infrastructure.

MR. MICHEL SAMSON: Can you indicate to me when Cabinet would have approved the $350,000 loan through the Industrial Expansion Fund for Acrobat?

MR. ROBAR: I'm not exactly sure of the date. That loan was provided in conjunction with Nova Scotia Business Inc. so they would have been done pretty well simultaneously. We've worked in partnership on that project.

MR. MICHEL SAMSON: When did it get approved by Cabinet? Last week? Two weeks? A month? Before Christmas?

MADAM CHAIR: Mr. Taylor.

MR. PAUL TAYLOR: Here we go again. We're not at liberty to disclose the Cabinet agenda.

MR. MICHEL SAMSON: Hold on now. The decision has obviously been approved by Cabinet. That's obviously posted somewhere which shows the Executive Council minutes and what has been approved, so that's public knowledge. So there is no need for more secrecy here than necessary. That is public knowledge now. That would say what date that approval was given. My question simply to you is, on what date did Cabinet approve this specific money to Acrobat?

MR. PAUL TAYLOR: I don't know what the date is specified in the Order in Council, but that's the date that is public, the date that's specified in the Order in Council.

MR. MICHEL SAMSON: Do you have the Order in Council?

MR. PAUL TAYLOR: No, I don't. I don't have a copy of it with me.

MR. MICHEL SAMSON: Mr. Taylor, I know you've been around a long time now. Was it a couple of weeks ago? Was it a month ago? I know you're not sure of the actual date, that's fine, but was it six months ago, last year, or was it last week? As deputy minister, I'm assuming you have an idea of when this went to Cabinet.

MR. PAUL TAYLOR: It would have been recently, yes.

MR. MICHEL SAMSON: Okay. As recently as last week?

MR. PAUL TAYLOR: I would prefer not to go any further.

MR. MICHEL SAMSON: Okay, Madam Chair, I guess at that point this is where I'm going to ask you, as Chair, to intervene and order this witness to answer based on the legal opinion we've received. I don't think there is any more need for us to play around here. We've gotten a legal opinion. It's quite clear, either this committee is going to enforce that legal opinion or we're not. I would hereby ask that you, as Chair, instruct Mr. Taylor to answer that question, or he is clearly in violation and in contempt of this committee, to not respond to that question.

MADAM CHAIR: Mr. Taylor, it is the case that this committee is well within our rights to seek and receive that information, so I would ask you to respond to that question please, put by the member.

MR. PAUL TAYLOR: Madam Chair, perhaps you could give me some advice then, when I'm sitting here as a witness to this committee, faced with a legal opinion to this committee that says A, and I'm also faced with a legal opinion to my minister and the Executive Council of this province that says B, and both of these parties are telling me, as an individual, to proceed in their direction. When I'm sitting here as a witness to the Public Accounts Committee, I'm obviously under your jurisdiction. When I'm sitting in my office as the CEO of the Office of Economic Development, I'm under Executive Council's. That's why in answer to a previous question, this is a question that needs to be resolved on the floor of the Legislature of this province. It needs to be resolved, if necessary, in the courts, but it doesn't need to be resolved by me, and that's the difficulty I have when I come before this committee and these types of questions repeat themselves. I think we've made it very clear in our testimony here, and in our written advice from the Attorney General, and answers to this committee, the difficulty that puts witnesses, civil servants in, when the legislative branch and the executive branch have a fundamental disagreement and they trap civil servants in the middle of that debate.

MADAM CHAIR: We have the option of going in camera at this stage, to have a further discussion with the witnesses, in an attempt to secure that information, and I would ask the members of the committee if it is their wish that we do so, briefly.

Mr. Steele.

MR. STEELE: It's a very good question. Just before I feel that we're in a position to answer that, we do have the Legislative Counsel here. I wonder if we could just seek any advice from him. He has heard the question. He has heard the response from the witness. I am interested in finding out his advice.

MADAM CHAIR: Mr. Parent and then Mr. Samson.

MR. PARENT: The question was asked as to when the advice was given. The answer was given, it was fairly recently . . .

MR. MICHEL SAMSON: No, no, when was approval. What was the date of Cabinet approval.

MADAM CHAIR: Order, please. Let's hear what Mr. Parent says and then there will be opportunity to debate or rebut.

MR. PARENT: The answer that was given was twofold. One that there is a public Order in Council which would give that date that Mr. Taylor doesn't have and secondly, that the advice that his department gave was done fairly recently. I don't know what further answer one needs at this stage. Do you want time, date, place to the minute and second? I mean, it was recent and the Order in Council will have the date. We could get a copy of that Order in Council, if anyone wanted that.

MADAM CHAIR: Mr. Samson.

MR. MICHEL SAMSON: Madam Chair, if I can suggest - and this is eating into our time, but let me say - I have other questions to which I believe Mr. Taylor may give the same response, so I would suggest maybe at the end of the questioning that we have Mr. Hebb give his opinion and then I'm certainly prepared to go in camera, to put the questions to the witness, but if I could continue with a few more questions.

MADAM CHAIR: Certainly. Is that agreeable? I think that's a sensible way to proceed. Mr. Samson.

MR. MICHEL SAMSON: Thank you, Madam Chair. If I were to call your office, Mr. Taylor and ask for a copy of a report and recommendation in regard to the Industrial Expansion Fund, what would your response be?

MR. PAUL TAYLOR: The response would be we would provide that document to you subject to the limits of the Freedom of Information and Protection of Privacy Act.

MR. MICHEL SAMSON: So I wouldn't get an unedited copy, would I?

MR. PAUL TAYLOR: No.

MR. MICHEL SAMSON: Do you have any sort of safeguards to make sure that that would not take place?

MR. PAUL TAYLOR: We do now.

MR. MICHEL SAMSON: When was now?

MR. PAUL TAYLOR: Two of our documents were erroneously provided - I think, well, I won't go any further, and we have taken steps since those documents were provided to the public to ensure that that doesn't happen again.

MR. MICHEL SAMSON: And what date was that? When were documents given that shouldn't have been given?

MR. PAUL TAYLOR: Probably three months ago.

MR. MICHEL SAMSON: Three months ago, okay. So you're indicating you now have safeguards in place?

MR. PAUL TAYLOR: Yes, I do.

MR. MICHEL SAMSON: You're indicating that you require an additional $50 million. That report and recommendation says that you actually needed an additional $11 million in order to be able to meet the projects that were already in the queue. Where did the $50 million figure come from if you only needed $11 million?

MADAM CHAIR: Mr. Robar.

MR. ROBAR: The $50 million figure came as a result of, I believe if we go back to what Mr. Steele was saying, that we try whenever there is an increase in the fund, in the capacity of the fund, to provide for a number of years.

MR. MICHEL SAMSON: Why not $75 million, why not $25 million? Who sets this arbitrary figure?

MR. ROBAR: The figure is set based on experience and looking at transactions. So $50 million is in the range of previous approvals. I believe in 1993 it was in the range of $50 million and in 1999 in the range of $90 million.

[9:45 a.m.]

MR. MICHEL SAMSON: In the last year your Industrial Expansion Fund has doled out just under about $30 million. Why did you think that $50 million is going to last very long based on that? You know, your R& R says $18.8 million plus you have the Clearwater, the Ocean Nutrition money on top of that. So you're well over $25 million.

Why did you think $50 million would last very long based on the amount of monies that are being doled out?

MR. ROBAR: I think in the last year we had three very large transactions which aren't in the normal course of business in the fund, one being $19 million for the credit union, $10 million for Michelin, and Ocean Nutrition for $13.5 million. So that would come up to about $30 million or $40 million which most transactions aren't that large.

MR. MICHEL SAMSON: Do I have extra time from the interventions?

MADAM CHAIR: I'm sorry, no. The time has expired for the Liberal caucus. Actually I was advised by the Legislative Counsel that he has to leave around 10:15 a.m. He can come back later on, but this might mean extending our time and I would like to ask that we be able to do that if necessary.

MR. PARENT: Extend our time beyond 11:00 a.m.?

MADAM CHAIR: Yes, that's right.

MR. PARENT: That makes it difficult for us because we have our caucus on right at the time and it starts at 10:30 a.m. We're already missing half an hour of it and I find that it's important I be there.

MADAM CHAIR: Well, these are the options I think we have. We could actually go in camera right now and the time that you have will then start for questioning at the end of the in camera session, or we can extend the committee's time. Mr. Colwell.

MR. KEITH COLWELL: Our caucus, too, meets right around 11:00 a.m. So we will miss some of caucus. We don't mind at all. I think this is too important a topic to let go and I think it's really important that we extend the time. If the Progressive Conservatives aren't interested in hearing the answers that the witness is going to give, I'm afraid I'm even more interested in hearing the answers.

MADAM CHAIR: Mr. Steele.

MR. STEELE: I'm certainly willing to give up some of the NDP caucus' time for the second round in order to get this done and get it done right away. However, I am very, very reluctant, always, to go in camera, because every member of the committee has to understand that whatever answers we receive can never be revealed publicly. It has always been a mystery to me why committee members would want to ask questions and get answers that they can never refer to publicly or in their work. Therefore, I think it's really important to get an opinion from Legislative Counsel about whether, indeed, it is

necessary to go in camera or whether the witness has a duty to answer the question as asked in public. That should always be our first preference.

MADAM CHAIR: Mr. DeWolfe.

MR. JAMES DEWOLFE: Madam Chair, first of all, our caucus is starting at 10:30 a.m. I'm not prepared to be here a moment after 11:00 a.m., because it's very important that we attend caucus. To spring this possible extension on us is entirely unfair. We've already chewed up a great deal of time that our caucus could have had to ask our witnesses questions. It would have been more fair to let us continue down this road at least for a short time, and then give Legislative Counsel five minutes, following that, before he had to leave, but now the window has closed on that opportunity. We're getting nowhere; we're going in circles.

MADAM CHAIR: Order. I, as the Chair, have decided that what we will do is we will have the questioning from the PC caucus, we will then have the legal opinion from Mr. Hebb before he leaves, and we will proceed from there. The remaining time will be adjusted. The PC caucus now has until 10:09 a.m.

Mr. DeWolfe.

MR. DEWOLFE: Good morning, gentlemen. The member of the Opposition, Mr. Samson, was talking about the $50 million injection into the Industrial Expansion Fund by my government. Now, the Industrial Expansion Fund needs sufficient funds to meet economic opportunities in the province as those opportunities are growing - and they have been growing in this province - would you agree?

MADAM CHAIR: Mr. Taylor.

MR. PAUL TAYLOR: Yes, we've seen opportunities appearing to the province which are - in some ways we're seeing a transition of our economy, and I think it reflects the modern world in which we live. What we've seen is the traditional lifeblood of rural Nova Scotia, as in small towns. The big manufacturers, the people who put things together and export them, they are really, as I tried to infer in my opening statement, under significant pressure. The opportunities that are flowing in to replace them are increasingly in what we would call the knowledge economy, the information technology sector, the biotechnology sector. We're seeing them in the service side of the economy, the retail, the legal, the banking. That's where the economy is showing strength.

I think it's fair to say that the province is seeing increased opportunities, and I think that's reflected in our unemployment rates, but in the economic development world there is always a cloud on the horizon. We hope someday that there will never be, but there always is a cloud on the horizon. That cloud, the sector of our economy that is

under pressure, is rural based and it's generally known to pay wages and benefits that exceed the provincial average.

MR. DEWOLFE: This is the first time our government has injected funds into this Industrial Expansion Fund, and for good reason, as you've indicated. My colleague, the member for Richmond perhaps doesn't know that the Liberal Government increased the fund twice by $59 million in 1993 and by $80 million in 1999. This is not a new trend. I mean if the fund needs injection of money then we do what we can to make that happen because as was already indicated, the results speak for themselves. I myself was totally amazed at the return. We're returning $3 on every $1 invested and creating and maintaining 2,500 jobs in the past year.

The fund supports small businesses in every part of the province through loan guarantees and partnership with provincial credit unions for instance. That's very successful and where else can you get that kind of return on an investment? I think it's absolutely astounding.

MR. PAUL TAYLOR: One thing, to follow up on your question. I think it bears repeating that the $50 million once again represents the capacity of the fund to be used. In each and every case when the fund is actually accessed it requires a Cabinet decision and it requires an Order in Council and we make a public statement with respect to the use of that fund. I guess the due diligence around the expenditures of the fund still have to follow behind any approval to increase the capacity of the fund to be used.

MR. DEWOLFE: Does that figure represent the department's expectations?

MR. PAUL TAYLOR: As Mr. Robar indicated, the number is a result of looking at the business that's coming to the department, our relationship with the business that we're doing with NSBI, what the history has been for the use of the fund and what we're seeing in the economy and what kind of opportunities we think are likely to flow in over the next while and as well to look at the cash flows back into the fund from previous transactions. All that is distilled down into a number. As one would expect, it's art, it's not science. One has to achieve a limit in the fund and we put that kind of thought process into it.

MR. DEWOLFE: Thank you, Mr. Taylor. I'd like to pass to my colleague.

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

MR. PARENT: Very quickly, I just want to reaffirm your comments in terms of the difficult position this committee has put you in as a civil servant. I guess I've always found it bothersome when civil servants are used as pawns in sort of political battles, that that's not appropriate.

MADAM CHAIR: Order, please. Mr. Parent, that's an improper impugning of motive that I think I would caution you around.

MR. PARENT: Then I'll just simply reaffirm, Madam Chair, the statement that you made that the questions and the subpoenas really should perhaps be directed elsewhere. I think you stated it very well and I want to reaffirm what you stated and I think that we should all be in agreement with that regardless of what Party background we are.

I want to get now to the fund itself because the question that has been put forward is that you have NSBI and you have IEF and the Opposition is saying that the IEF is not an adequate fund and shouldn't be using it for anything, should be using entirely NSBI, but from my understanding the two have very different operating principles and can handle different types of loans. Is that fair that the two have different vehicles for use - you've responded to some of that already - and that what may be appropriate for NSBI is not appropriate for IEF and vice versa, that having the two allows you a fuller gamut of being able to support various industrial retentions and expansions?

MR. PAUL TAYLOR: Yes, I think that's a fair statement. NSBI has a more limited range in its application and in the tools it uses to try to grow the economy. The IEF has a broader set of tools and a wider set of criteria in its use and it has been that way for decades now. It's often used to apply to a wide variety of opportunities that aren't necessarily strictly based on a business case, if you will. The IEF is, as I tried to indicate in my opening statement, a much more flexible instrument to respond to policy challenges, opportunities that come to the province that aren't easily attained with existing instruments in other organizations.

MR. PARENT: So is there benefit in having the two organizations, or should we all just be doing IEF? I presume before NSBI was created by this government, all were done through IEF, weren't they?

MR. ROBAR: No. Prior to Nova Scotia Business Inc. being created, there was the Nova Scotia Business Development Corporation.

MR. PARENT: So you always had two organizations to try to offer a full gamut of support for business attraction or retention?

MR. ROBAR: Yes, that's right.

MR. PARENT: So really, there's nothing different, it's just a question of trying to use whatever tools we have to help grow the economy of Nova Scotia.

MR. ROBAR: That's correct.

MR. PARENT: Mr. Taylor, I'm particularly interested in agricultural products. I know the IEF supported - I was at the announcements - Frito-Lay, Greatvalley Juices, Apple Valley Foods and Michelin. Michelin, of course, is a different category, we have discussed why that went through the IEF, but the agricultural sector, which is so important for my riding, was supported by the IEF. Frito-Lay, Greatvalley Juices, Apple Valley Foods, all of them were well received, all of them are very important investments in the area, all of them investments that could be defended anywhere.

[10:00 a.m.]

Can you tell us a little bit more about each of those - Frito-Lay, Greatvalley Juices and Apple Valley Foods? Then I'll turn it over to my colleague. I guess the point I'm trying to understand here is, the IEF is able to meet some of those challenges in the agricultural sector that NSBI can't. I have, as an MLA, sometimes frustration with NSBI because it does a good job, but the agricultural sector doesn't seem to fit into it quite as well. Sometimes it does, but a lot of times it doesn't.

MR. ROBAR: I know in all of those cases, we did work in partnership with NSBI. In fact, some of those transactions were referred to the Office of Economic Development by Nova Scotia Business Inc. and actually developed in conjunction with them.

Again, I believe most of these relate back to the fact that businesses that have heavy capital requirements really need any assistance the government is willing to provide to be provided in advance. Again, these are, I believe in most cases, forgivable assistance. Having the capital provided up front is of great benefit to an industrial company and allows the project to proceed rather than having capital come in at the end of the project based on wages. Basically I believe these are forgivable transactions based on subsequent employment, but the capital is provided up front.

MR. PARENT: Because of the rules of how things are set up, that then is done through the IEF?

MR. ROBAR: Correct.

MR. PARENT: Okay. Anyway, I know they're well received and have been a great economic boon to the Valley area. I will turn the remaining time over to my colleague, the member for Bedford.

MADAM CHAIR: Mr. Christie, you have until 10:09 a.m.

MR. PETER CHRISTIE: I guess what I'd like to explore now is some of the comments we've heard from committee members about accountability in terms of the

Industrial Expansion Fund. I wonder if you would clarify for us the accountability steps and processes that go through any decision that's taken for the Industrial Expansion Fund.

MADAM CHAIR: Mr. Robar.

MR. ROBAR: Basically projects come to the department from a number of sources and staff perform their due diligence and arrive at their comments and conclusions. Those are reviewed with senior management in the department and then the report and recommendation is prepared. That goes to Executive Council and Executive Council deliberates on the transaction and either approves it or rejects it. Then after that there is an Order in Council that is made public if it is approved.

MR. CHRISTIE: So the process that happens there is not significantly different than something that happens in NSBI?

MR. ROBAR: No.

MR. CHRISTIE: It's going through a review, the due diligence process, it's going through analysis and it's moving on for final decision making and reporting, and I think Mr. Taylor indicated that earlier. So the process is somewhat similar?

MR. ROBAR: Yes.

MR. CHRISTIE: As you start in terms of looking at the due diligence that you're doing in the Industrial Expansion Fund, at some point in time do yourselves and Nova Scotia Business Inc. determine that the type of request that's being asked of you is better served by the IEF or by Nova Scotia Business Inc.? Do you determine that at some point in the early stages that one of the agencies is better than the other?

MR. ROBAR: As Mr. Taylor said, we try to refer all transactions to Nova Scotia Business Inc. and the staff at Nova Scotia Business Inc. will review the transactions. As I've said, often they may refer the transaction to us or say they would like to partner with us because they're prohibited to provide some component that they feel is necessary. But the review process would be the same, I believe, pretty well in any organization that's making financial decisions.

MR. CHRISTIE: Now, when you take a company and you're starting to look at something, an analysis in the Industrial Expansion Fund, and let's for sake of argument say that you're talking about payroll rebates, as you cost that out for cash requirements in future years, you have to make certain assumptions as to whether they're going to meet their employment targets, et cetera and so on, and I guess where I'm going with that is

that the reason you call this a fund as opposed to just a straight line item in the budget is that you pay out in one year?

MR. ROBAR: I'm not exactly sure how to respond to that question.

MR. CHRISTIE: Well, let me rephrase it then. In a lot of these examples and a lot of the arrangements that you make with companies, are there impacts in years other than year one?

MR. ROBAR: Yes, depending on the terms and conditions and the cash flow.

MR. CHRISTIE: So obviously then you have to account for that as if something was going to happen in year five, which you perhaps don't know just exactly what's going to happen in year five in terms of say payroll levels, or whatever it might be?

MR. ROBAR: Yes, but you would make your best estimate and then adjust it yearly as the facts became known.

MR. CHRISTIE: Yes, for example, might I suggest that you might have anticipated something was going to happen with a particular fund requirement, that in year three their employment is up, they require more money which means that you have to draw more out of the fund than perhaps you had anticipated?

MR. ROBAR: Yes.

MR. CHRISTIE: What I'm trying to establish here is the reason why you need a fund balance as opposed to just saying this person is coming through so I need to get $1 million to give that person. There are elements of the agreement to meet their needs that need to be provided for?

MR. ROBAR: Well, most of the government funds are set up to provide capital and it's like the Farm Loan Board, Nova Scotia Business Inc., the Industrial Expansion Fund, and a fund is, as you know, simply a mechanism to hold and account for investments. So it has been traditional that that's the way it has been operated.

MADAM CHAIR: Order, please. There's a bit too much chatter in the Chamber. Mr. Christie, you have the floor.

MR. CHRISTIE: You were mentioning one in terms of Ocean Nutrition. You mentioned there were a number of partners and a number of people. In some cases I think what you were suggesting is that there are a lot of partners that you have to bring all of their needs and requirements together and it requires a unique approach to it. Is that what I heard you saying in terms of Ocean Nutrition?

MR. ROBAR: Yes, that's correct.

MR. CHRISTIE: Could that be considered to be the case in a lot of the arrangements that are made together? There's a uniqueness and there are differences and to try to meet their needs you have to find creative solutions. Am I hearing you correctly?

MR. ROBAR: Yes, very much so. Most transactions would involve either NSBI, InNOVAcorp, ACOA, a bank and the proponent of the business. Every situation is different, it's not a case of routine lending like providing a mortgage or a car loan. Every situation is quite unique. That is the advantage of the Industrial Expansion Fund, that it does have that flexibility to step in where there's a gap and to fill that gap.

MR. CHRISTIE: Would you say that the loan to the credit union was one of those creative solutions where money would be levered through small companies throughout the province? Was that the objective?

MR. ROBAR: Yes, it is and I really think that it's proving to be an excellent program, a very good response.

MADAM CHAIR: Order. The time has now expired for the PC caucus. We'll now hear from Mr. Hebb, Legislative Counsel. Mr. Hebb, you've heard the question put earlier to Mr. Taylor by Mr. Samson. If I could summarize it I believe it was the approximate time when Executive Council approved the $350,000 expenditure from the Industrial Expansion Fund for the call centre that has just been announced for the Cheticamp area. I guess the question to you is, is it the right and the privilege of this committee to have this information and is it not for us to decide what is in the public interest versus what is in the political interest of the government?

MR. GORDON HEBB: Madam Chair, as I understand the question . . .

MR. PARENT: Madam Chair, on a point of order. When I mentioned that the civil servants were caught in a political football you just ruled me out of order and you just did the same thing.

MADAM CHAIR: That's not a point of order. I'm just repeating, if you've read the legal opinion from Legislative Counsel to this committee, these are the tests we've been asked to apply and this is the arena in which these decisions get made.

Mr. Hebb.

MR. HEBB: As I understand the question, I'm not sure that there's an issue or even a point of disagreement. As I understand the question, it is for Mr. Taylor's answer to information that may be public. If I'm misunderstanding the question and it's a little

deeper than that, and perhaps when Cabinet made the decision as opposed to when the decision was formalized, if that's his point then I have an answer.

As I set out in my opinion on February 27^th to this committee, which I believe I have a copy in the rose-coloured binder, then it's my opinion that the witness does have an obligation to answer the question. The witness is free to object to answering the question if the witness feels it's inappropriate and can certainly appeal to the Chair as to whether the witness ought to answer the question and the Chair can rule on that. If the committee wishes it can then make the ultimate decision if the committee disagrees with the Chair. In putting options to the committee, the witness may not object to answering the question but may ask to answer the question in camera. Those are a couple of options the committee can take.

One point I want to make about the in camera, because Mr. Steele made a point earlier which I don't think I agree with, and that is if the committee were to go in camera and the witness were to answer the question, it is open to the committee to subsequently decide that it is appropriate for the in camera discussions to be publicly disclosed. That's a decision for the committee to make afterwards, depending on what the information is and whether the committee decides that's in the public interest.

Having said that, I do point out, as I've said before, and I believe I pointed out in my later opinion, that although I believe it's a decision for the committee to make, the committee doesn't have the power to enforce the answer.

A couple of other points I'd like to make. While we're sitting here and since the question was raised, I have reviewed Mr. Keefe's three opinions and there's nothing really that addresses the point that Mr. Taylor has raised or disagrees on those points. I don't know, of course, whether Mr. Taylor has received other advice that he cannot answer the question or whether he has received any direction not to answer the question from his minister. If he has received such advice or direction, then Mr. Taylor is on the horns of a dilemma and I can't resolve that for him.

Unless the committee has questions, I think that's all I have to say.

MADAM CHAIR: Thank you.

MR. CHRISTIE: Madam Chair, on a point of order. As a member of this committee, I did receive and was available to read Mr. Hebb's opinion. I was also provided with an opinion from the Attorney General's office and I think in terms of this instance, we have now heard from one, I believe it's incumbent on us to hear from the other one so we can balance those two opinions. It has been clearly said that to get an argument you need two lawyers and we just have heard from one on this case. I would suggest we need to hear from the other one before we proceed.

MADAM CHAIR: That's not a point of order. The committee has essentially taken the position that the advice to this committee comes from our Legislative Counsel. This is not to say that we don't look at - nor does our Legislative Counsel look at - what is being said by the Attorney General. I don't know, Mr. Christie, if you have an additional - are you saying you have an additional opinion from the Attorney General to the opinions that have already been provided to members of this committee by the Deputy Minister of Justice in three written statements to us?

[10:15 a.m.]

MR. CHRISTIE: No, the point I was making is that you offered Mr. Hebb the opportunity to clarify his opinion and to rephrase it. I'm suggesting to you that if we're going to continue on that route, we should allow the Attorney General's office the same opportunity to rephrase and restate their position.

MADAM CHAIR: Is there any other discussion on this matter?

Mr. Steele.

MR. STEELE: Madam Chair, you have very eloquently stated before about the inappropriateness of the course being suggested by Mr. Christie. We, as a committee, have a legal adviser and we're not a court where we bring parties before us to argue. We've heard the Deputy Attorney General's opinion on behalf of the government and we have received objective advice from the legal adviser to the committee. It would be utterly inappropriate to invite the Deputy Attorney General to appear before this committee, essentially like a litigant before a court, to argue his case.

MR. COLWELL: I would just like to concur with Mr. Steele's opinion on that, totally, and yours as well.

MADAM CHAIR: Having heard from Mr. Hebb, I think there are two things. First of all, some clarity around the question of whether or not Mr. Taylor is acting here today with additional advice from the Attorney General with respect to what it is you can and cannot answer would be helpful. Further advice, I'll give you an opportunity to read what has just arrived on your desk.

Mr. Samson.

MR. MICHEL SAMSON: Madam Chair, I guess the question is, if we are going to go in camera, I would ask that the question be put to Mr. Taylor, by you, as to whether he intends on giving different answers in camera than he has given to this committee. I think we've seen the experience with Mr. Fage when he came here and it was just a waste of time to go in camera because his answers didn't change. So if Mr. Taylor's

position is that he would be more comfortable responding in camera and giving us the information, that's fine. If not, I see no need to take the time to go in camera if his response won't be any different.

MADAM CHAIR: Mr. Parent.

MR. PARENT: I have a subsequent question about going in camera. If one goes in camera and then the committee can declare that anything that is declared in camera is public, what is the use of going in camera, in that sense? So really I guess I'm agreeing with the member for Richmond and the member for Halifax Fairview, that we should not go in camera.

MADAM CHAIR: I think we would go in camera at the request of Mr. Taylor, if he felt more comfortable responding to the questions in camera, but if he is not prepared to answer questions and doesn't have that option as something that he would prefer, then we won't go in camera, we'll continue to proceed in this venue. Mr. Taylor.

MR. PAUL TAYLOR: Just a couple of points I need clarified because I think I can probably provide the information the member is looking for, with respect to the opinion of the Legislative Counsel. Is the date you're asking for the date that Cabinet debated this issue, or the date that the order was released?

MR. MICHEL SAMSON: The date that order was released, which would give the date that it was approved in Cabinet.

MR. PAUL TAYLOR: Then I can give you those answers, now that I have a copy of the order.

MADAM CHAIR: Thank you. Thank you, Mr. Hebb.

MR. PAUL TAYLOR: Would you prefer I just read the order, or I can provide you with a copy of it?

MR. MICHEL SAMSON: If you provide a copy, that would be fine.

MADAM CHAIR: Mr. Taylor.

MR. PAUL TAYLOR: The Order in Council is dated May 4^th. The Executive Council on the R&R of the Minister of Economic Development, dated April 28^th.

MADAM CHAIR: Thank you very much. We will now have a round of very short snappers, starting with the NDP caucus - 10 minutes. Mr. Steele, that will take you until 10:30 a.m.

MR. STEELE: Thank you very much, Madam Chair. I want to go back to the answering of the warrants, or subpoenas as I like to call them. There was one aspect of this that I forgot to put to you, Mr. Taylor. Of course you weren't the only person who received these subpoenas. Nova Scotia Business Incorporated and Stephen Lund also received them, but they took a very different approach to the way they responded to them. They gave the committee an edited file, and they gave the committee an unedited file and laid out their position as to how the committee should handle that.

The committee did look at the unedited file, looked at it in camera, and decided what could be released publicly and what should not. I think with compliments to the Chair and the other members of the subcommittee, they dealt with it very responsibly and professionally. That underlined that no one has anything to fear from the committee, that we will listen and respond to legitimate concerns about confidentiality. Why can't the Office of Economic Development follow the same course as Nova Scotia Business Incorporated?

MR. PAUL TAYLOR: I think the answer is as simple as, that's not the advice we have received from the Attorney General of this province.

MR. STEELE: Does it cause you any concern that your sister agency, if I can call it that, came to a very different conclusion, and dealt with the matter, the same warrant, looking for essentially the same information, in a way that was completely satisfactory to the committee? No confidential information has been released and yet the committee is satisfied that it has seen all relevant documents from NSBI. Does that not cause you any concern?

MR. PAUL TAYLOR: NSBI is arm's length to this government, behind an independent board. They will follow their course based on the advice that board receives. I will follow the course based on the advice my office receives. That's the course we took.

MR. STEELE: I note for the record, simply, Madam Chair, before I move on, that we had two agencies that responded in two very different ways, one of which I think it's fair to say we all found satisfactory, and one which we did not. The one that is independent of the government is the one that responded satisfactorily; the one that ultimately is under the control of politicians sitting in this Legislature is the one that did not respond satisfactorily.

Mr. Taylor, in the few minutes available to me, I want to return to two words that you probably wish you had never heard and probably hope you never hear again, and that's Magic Valley. Since you were last here, the Order in Council has gone through approving - I shouldn't say the Order in Council has gone through. Magic Valley submitted a plan for how it was going to use that money, and that plan was approved by

your office, and the money, as I understand it, has been disbursed. When you were last here, the money had not yet been disbursed. Can you make that plan available to this committee?

MR. PAUL TAYLOR: I believe, yes, we could make the majority - or a lot - of that plan available, but again, we would have to subject that plan to at least the courtesy of asking the owner of that plan as to what confidential business information he doesn't want released.

MR. STEELE: Mr. Taylor, that would be appropriate if I were submitting a freedom of information application, but I'm not. This is the Public Accounts Committee of the Legislature, and I'm asking you - I'm not submitting a FOIPOP request - if you will table that document with this committee. Now, if the Office of Economic Development has some confidentiality concerns which it wishes to identify, and if you want to consult with the business owners so be it, and you want to write to this committee and identify those concerns so that we can deal with that document in the same way we dealt with the NSBI documents, that would be fine. But my question to you is, will you table that document with this committee?

MR. PAUL TAYLOR: Yes, I'll provide you with that document. I'll provide it to you in the unedited form, but it will contain, shall we say, our advice on the damage that could be done to that company.

MR. STEELE: I appreciate that, because that's exactly what NSBI did, they expressed, in very strong terms, the damage they felt could result. I think at the end of the day, however, they were very pleased with the way the committee handled that.

Madam Chair, I would ask that when that document is received that it be kept in confidence until the subcommittee has had an opportunity to examine it, together with the concerns raised by the Office of Economic Development. No doubt we'll be able to schedule a subcommittee meeting for sometime next week, unless the House is sooner dissolved.

MR. PAUL TAYLOR: Mr. Steele, there's just one thing I would like to add to your previous question, in the difference between our approach and NSBI's approach, and the response and the way it was handled. It is my understanding that there were no Cabinet documents subject to that request to NSBI. This debate, I think, centres entirely around, I do believe we provided unedited third-party documents when we first appeared before this committee a couple of months ago. This debate has existed entirely around Cabinet and solicitor/client privilege. It's my understanding that NSBI's records that were requested contained no Cabinet documents that weren't at least 15 years old, and hence there would be a much less sense of concern, I would assume, inside that organization as to the full disclosure of those documents.

MR. STEELE: Thank you for that, Mr. Taylor. I would like to spend the three minutes I have left discussing Shaw Wood. The closure of Shaw Wood was announced yesterday, a real blow to the Cornwallis area; 200 employees is a very large number in an area like Cornwallis. I wonder if you could explain to the committee whether there is any prospect, with or without the assistance of the Office of Economic Development, for that plant remaining open, in any form, with any number of employees. In brief, has the Office of Economic Development been asked to engage itself in that file?

MR. PAUL TAYLOR: I guess in partnership with NSBI, as they are an NSBI client, NSBI will take the lead on behalf of the province with respect to the future of that company to the extent that it can be extended and any other opportunities for the site if it can't be extended. My understanding in having discussed this with NSBI and the company is that the competitive pressures which that company has been subject to in its only line of business exceed the capacity of the government to provide the type of assistance that would see that company stay open.

MR. STEELE: What is your understanding of the amount of money involved - even a ballpark figure?

MR. PAUL TAYLOR: With respect to the loss of the only contract for the goods, I do believe the decision point for the company became pretty black and white when they received the rejection from the Ikea people that they were not going to renew the contract, and at that point any kind of discussions around the type of assistance the province could provide to the company would have been moot.

MR. STEELE: Did you have advance notice that this was coming or did you hear about it for the first time yesterday?

MR. PAUL TAYLOR: I know that the minister was advised subject to, I think, the Industry Closing Act. There is a three-month provision for notice, I think it's in excess of 50 employees of a facility closing in this province, and the minister was advised in writing that this closure was coming.

MR. STEELE: And do you know when he received that notice in writing?

MR. PAUL TAYLOR: The actual date escapes me, but I do believe it was towards the end of April.

MR. STEELE: Thank you very much. I do have some other questions, but none that I could pursue in the few seconds available to me, so that concludes my questioning.

MADAM CHAIR: Thank you very much. I now recognize Mr. Samson. You have until 10:40 a.m.

MR. MICHEL SAMSON: Thank you, Madam Chair. Mr. Taylor, did the Office of Economic Development approve any money for Shaw Wood Industries under the Industrial Expansion Fund?

[10:30 a.m.]

MR. PAUL TAYLOR: I'm told no.

MR. MICHEL SAMSON: Did you make a recommendation to Cabinet that monies be approved for Shaw Wood Industries through the Industrial Expansion Fund?

MR. PAUL TAYLOR: No.

MR. MICHEL SAMSON: It was not contained in any R&R that would have been sent to Cabinet recommending a set amount of money be sent to Shaw Wood Industries for the cost to offset the Annapolis plant?

MR. PAUL TAYLOR: No.

MR. MICHEL SAMSON: Are you familiar with the R&Rs that have been sent to Cabinet?

MR. PAUL TAYLOR: Yes.

MR. MICHEL SAMSON: Did the Industrial Expansion Fund approve any money for Rocky Lake Developments?

MR. PAUL TAYLOR: Pardon?

MR. MICHEL SAMSON: Did the Industrial Expansion Fund in a Report & Recommendation to the Cabinet of Nova Scotia recommend a certain amount of funds be provided to Rocky Lake Developments, a loan for a Bedford centre?

MR. PAUL TAYLOR: No, it has not.

MR. MICHEL SAMSON: It did not recommend any money?

MR. PAUL TAYLOR: Your question was has the Cabinet . . .

MR. MICHEL SAMSON: No, my question was did the Industrial Expansion Fund, through your department - was there a recommendation that Cabinet approve funding for either Shaw Wood Industries or Rocky Lake Developments?

MR. PAUL TAYLOR: Any recommendations that the office makes to the Executive Council become public only when the Cabinet has made a decision on any one of those.

MR. MICHEL SAMSON: Well, now, I'm going to have to - I'm sure you know what situation we're in here with these questions, Mr. Taylor.

MR. PAUL TAYLOR: I do.

MR. MICHEL SAMSON: And it will become readily apparent. I'm going to ask you one more time, did you through an R&R recommend monies for Shaw Wood Industries to be taken from the Industrial Expansion Fund?

MR. PAUL TAYLOR: The answer is no.

MR. MICHEL SAMSON: Did you recommend a sum of $2.5 million from the Industrial Expansion Fund for a loan for a Bedford centre?

MR. PAUL TAYLOR: The answer is no.

MR. MICHEL SAMSON: Were monies approved by the Cabinet for Rocky Lake Developments?

MR. PAUL TAYLOR: No.

MR. MICHEL SAMSON: Did your department, through an R&R, recommend monies to Michelin Project Blomidon in the amount of $13.2 million?

MADAM CHAIR: Mr. Taylor.

MR. PAUL TAYLOR: Before I hand this over to Mr. Robar, the details of what you're asking, I would repeat any time the department makes a submission to Cabinet that they approve for the use of the Industrial Expansion Fund, an Order in Council is released and a press release is made stating that a decision has been made and those funds have been advanced. I know where these questions are going, but I think the answers are pretty obvious if no announcement has been made and no OIC has been issued.

MR. MICHEL SAMSON: You're saying no OIC has been issued for Rocky Lake Developments?

MR. PAUL TAYLOR: That's right.

MR. MICHEL SAMSON: My understanding was that they were approved $500,000. Is that incorrect?

MADAM CHAIR: Mr. Robar.

MR. ROBAR: There has been no approval for Rocky Lake Developments under the Industrial Expansion Fund.

MR. MICHEL SAMSON: Has Rocky Lake Developments received any money from the government to your knowledge?

MR. ROBAR: No.

MR. MICHEL SAMSON: Were Composites Atlantic given any money under the Industrial Expansion Fund?

MR. ROBAR: Yes, they have had, I believe, three transactions.

MR. MICHEL SAMSON: Okay, what about Atlantic Fastfrate?

MR. ROBAR: Yes, that was approved - not Atlantic Fastfrate, Consolidated Fastfrate was approved and announced this winter sometime.

MR. MICHEL SAMSON: What about Stenek?

MR. ROBAR: Yes, that was approved.

MR. MICHEL SAMSON: What about Maritime Pride?

MR. ROBAR: Yes.

MR. MICHEL SAMSON: I think there's one here that may not have been approved yet but I'm going to ask you one more time, you're saying that at no point did an R&R go to Cabinet recommending money for Shaw Wood or Rocky Lake Developments? Is that your answer, deputy minister?

MADAM CHAIR: Mr. Taylor.

MR. PAUL TAYLOR: No approvals for Shaw Wood or Rocky Lake . . .

MR. MICHEL SAMSON: I didn't ask you that, I asked you has an R&R been sent to Cabinet from your department with your signature, in fact, prepared by Mr. Marvyn Robar, that would have recommended the monies to both Shaw Wood and

Rocky Lake Developments that I've mentioned to you? I'm not asking if it was approved, I'm asking you if it was submitted. I'm sure I can imagine what answer you'd like to give but knowing what I have, for credibility sake, you really have no other choice. Was this R&R sent to Cabinet?

MR. PAUL TAYLOR: For Shaw Wood?

MR. MICHEL SAMSON: An R&R that would have included monies from the Industrial Expansion Fund for Shaw Wood and Rocky Lake Developments that also asked for an increase of $50 million for the Industrial Expansion Fund.

MR. PAUL TAYLOR: We're in that position again, Madam Chair, where I'm being asked to disclose the deliberations of Executive Council before those deliberations have resulted in a decision of that body.

MR. MICHEL SAMSON: Not at all. Mr. Taylor, I am asking you not for the decision, not for the deliberation, I'm asking you if the recommendation was made by your department to Executive Council. Now you've provided this committee with a copy of the R&R, you've blanked it out; I have the copy that is not blanked out, you know what I'm referring to. They are listed on here, I'm simply asking you to acknowledge that they are listed on here and that they are in fact part of the blanked out information that you've provided to this committee. I ask you again, was a loan for $600,000 for Shaw Wood Industries and Rocky Lake Developments in the amount of $2.5 million contained in the R&R that you submitted to this committee with the blanked out information?

MR. PAUL TAYLOR: Yes, they are contained in that R&R.

MR. MICHEL SAMSON: Thank you. Could you indicate to me - Acrobat, that's going to Cheticamp, great announcements and everything, how did they end up in Cheticamp? That's quite an interesting area for them to locate when one looks at where other call centres have been. I'm just curious how it came to Cheticamp being that we've got a big Acadian population in Isle Madame - I'm just wondering if we can expect to see call centres in Isle Madame, Clare, or Argyle. Could you just give me an idea of how they made it to Cheticamp?

MADAM CHAIR: Mr. Robar.

MR. ROBAR: I can provide an overview from what I know because Nova Scotia Business Inc. was really the lead on this file.

MR. MICHEL SAMSON: Okay, with my limited time for questions I will put that question to NSBI if that's the case. Just quickly, S&J Potato Farms, has the money been disbursed to them yet that was approved?

MR. ROBAR: No.

MR. MICHEL SAMSON: I'm curious if the deputy or Mr. Robar could indicate as to whether the Department of Economic Development is currently under any negotiations with Stora Enso in regard to the concerns they have brought to government over power rates, taxation and other issues?

MR. PAUL TAYLOR: Yes, we continue discussions with Stora Enso.

MR. MICHEL SAMSON: The announcement made by the government for $65 million over some woodlot commitments, could you indicate at what point the decision was made to provide $65 million? When were discussions taking place for this?

MR. PAUL TAYLOR: We've been in discussions with Stora Enso at least two years.

MR. MICHEL SAMSON: On that issue?

MR. PAUL TAYLOR: On their difficulties in the Province of Nova Scotia and their bottom line and what the government could do to assist that bottom line.

MR. MICHEL SAMSON: On the woodlot issue, could you indicate at what point Stora raised that as a concern, that they would need the government to give them cash because it didn't feel that the government would be able to meet the commitments it had until 2013? At what point was that raised and who raised it?

MR. PAUL TAYLOR: Stora has raised a long list of possible solutions to their competitive pressures.

MR. MICHEL SAMSON: I've been pretty specific in my question, Mr. Deputy. On the woodlot issue - which is what this deal is based on - it does nothing for power, it does nothing for taxation or competitiveness. On the woodlot issue, when was this raised and who raised it?

MR. PAUL TAYLOR: That issue has been the subject of discussions for at least a two-year period.

MR. MICHEL SAMSON: Okay, why did it take two years to get them that money then, on the eve of the House going into session?

MR. PAUL TAYLOR: The 200,000 hectare or acre obligation of the province has been subject to the discussions with that company for a long time because the 2013

deadline is approaching. That was obviously a liability the province wanted to deal with and, as I said, it has been subject to those discussions all along.

I think before your time expires, I might want to clarify that document you are reading from is not the request to the Executive Council to approve that project list that you have listed. That list in that document was simply an indication to the Executive Council of the possible demands of the use of that fund that were coming and hence why the need for the ceiling to be increased. I think it would be really incorrect to infer that those are requests for the money to be approved as listed in that table in that document.

MR. MICHEL SAMSON: Madam Chair, I guess just on a point of order in case my time does run out, I think we'll leave it to Nova Scotians to determine that. Unfortunately, with our request for documentation, as you know the R&R that was given to us from the Office of Economic Development was blocked out. The information wasn't contained and I believe there's one company that still hasn't received its funding that may be in negotiations which we have left out, but other than that I see no reason why the rest of these could not become public knowledge and at that point I would table this document for the committee to see. It's unfortunate that the government didn't come forward with this information to start off with and we'll let the people of Annapolis make their own judgment on Cornwallis once they see this document. Thank you.

MADAM CHAIR: Thank you very much. The time has now expired for the Liberal caucus.

Mr. Parent for the PC caucus. You have until 10:51 a.m.

MR. PARENT: I want to educate myself on when a document becomes property of Cabinet. So clearly you do work on, say take company A, whatever, and at that point there are two concerns here with release of documents. The main concern at that point I assume would be that you don't want to release anything that would jeopardize that company's ability to be profitable or would, on a larger scale, cause other companies to be afraid if they come forward to government that their confidential information could become public. So there are those concerns that I think are important concerns that have been reiterated, and need to be reiterated, that companies deserve confidentiality individually and that overall, businesses, unless they feel there is some measure of confidentiality, are going to find it very hard to come forward for help.

So I think that that's a concern at the early stages when you're working with a company. At what point do the documents, if you decide to proceed, or even give advice to Cabinet not to proceed, at what point does that then become a Cabinet document? Is an R&R a Cabinet document or a department document? I'm not clear.

MR. PAUL TAYLOR: It's my understanding the R&R is the minister's document. The R&R contains the minister's report to his Cabinet colleagues, as a member of Executive Council. At that point, it is the minister's document and hence, it is Executive Council's document.

MR. PARENT: So the R&R becomes a Cabinet document that is under the purview of the Executive Council and yet here we are as a committee asking you again to release a document that you don't have ownership over. Is that a fair statement?

MR. PAUL TAYLOR: As the authoring body of the document, yes, we do have copies of the documents, but the original document resides in the Executive Council office. It is the property of the Executive Council and as I referred in my earlier statements, the difficult position that it puts myself as a civil servant in is that I'm being requested to provide copies of documents to which the owner claims privilege. I liken it to when my lawyer provides advice to me, I own that advice. If someone asks the lawyer to provide it to the public, the lawyer is bound to not provide it to the public because I own it. I paid for it.

MR. PARENT: The lawyer would be disbarred if the lawyer presented it to the public.

MR. PAUL TAYLOR: The Executive Council has received advice from the minister and we are being asked as civil servants who have prepared that document to release the document when it's really not under our control. We're in possession of copies.

MR. PARENT: Okay, so they're not your documents and therefore they are documents that really are owned by another body, advice you've given, but the advice becomes owned by the other body at that stage and it's up to them to make the decision on releasing or nor releasing those documents.

MR. PAUL TAYLOR: Certainly in the way I have viewed this issue since it first started, I will recognize the member for Fairview's comments that yes, the Legislature and this committee are headed into uncharted territory in this regard and recognize there are not many precedents and there are not many rules to go by, but we are headed into uncharted waters on the issue of Cabinet privilege.

[10:45 a.m.]

MR. PARENT: I mean, that's really not for you to make any decisions on in terms of Cabinet privilege. I guess there are really three concerns here. One is that individual companies deserve a measure of confidentiality and that's a principle that we all agree to. Number two, we don't want to freeze the business climate in the area by

causing companies to feel that their details will be spread across the papers, which is something that I think all committee members would be in support of. Number three is that documents that you've been asked to produce are really not your documents. The appeal should really go to a different party. That's all I'm trying to establish in my questioning. I think that it has been established quite clearly.

I want to come back to the IEF and the fact that $3 is returned to the province for every $1 invested. How does that fit with other provinces? Is that a sort of similar ratio?

MR. ROBAR: I believe it is. It's very similar to the Province of Quebec and the ratio varies year to year, based on the type of projects.

MR. PARENT: Is there a similar ratio for NSBI that you're aware of?

MR. ROBAR: I'm not aware of that.

MR. PARENT: Okay, but the IEF ratio is for every $1 we invest we receive $3 back.

MR. ROBAR: Yes.

MR. PARENT: Is there a difference in investing money for retention versus a business attraction? Do you have an emphasis upon one over the other? I guess I'm just drawing parallels with immigration, it's fairly easy for us to attract immigrants, but to retain immigrants is sometimes harder. Is retention harder than attraction or do you use the same strategy for both?

MR. ROBAR: In my opinion, attraction is a very difficult game. We always pay particular attention to helping the businesses we have here presently and in trying to improve their prospects, especially on the side of capital-intensive industries because there's such great competition for them. It's always easier to work with what you have right on the ground and to promote and foster that than to track new industries to the province.

MR. PARENT: And the IEF clearly is a success story then if $3 is coming back for every $1. Are there ways that we could make it even more successful?

MR. ROBAR: Well, I don't believe so. I mean it is a very flexible instrument and we can respond to just about any type of situation and working in conjunction with other agencies. I believe that's what history has shown.

MR. PARENT: What happens when a loan that the IEF advances is not able to be paid back? Does that happen often? Clearly not if we're getting $3 back for every $1

invested, but how do you handle the failures? I'm sure we all have successes, we all have failures.

MR. ROBAR: It's handled in the usual manner. If there's an indication that an investment is in jeopardy, then there will be an allowance for doubtful accounts placed against the investment and that's a charge to the budget. Then the account is reviewed and monitored and whatever happens, happens, but we identify all losses as soon as they become known to us.

MR. PARENT: Is business attraction becoming harder or easier, because it seems like everybody is competing with themselves to try to attract businesses. So is your job becoming harder or easier in light of the global sort of situation, the global market we're playing on?

MR. ROBAR: I believe the world is becoming very much more competitive and jurisdictions everywhere in the world are competing against one another. So when we look at an investment opportunity for Nova Scotia, especially a multinational company, we'll have possibilities around the world. We could be competing against a plant in Spain or in Thailand, or Brazil, not only North America. So all jurisdictions are competing very vigorously to attract and retain industries.

MR. PARENT: Well, thank you, I figured that would be the answer I got. In light of that I want to commend you on the work your department does and offer you our congratulations on the successes that you do have, and particularly as one who represents an agricultural riding, I always wave that flag and appreciate any help that you can provide in that regard.

MADAM CHAIR: The time has now expired for questions. I would like to extend an opportunity to Mr. Taylor to make some closing remarks if you wish and just before you do that, I think there were some documents that arrived that you made reference to, perhaps the Order in Council. I would ask that that be tabled with the clerk, please. So the floor is now yours for some concluding comments.

MR. PAUL TAYLOR: Thank you, Madam Chair, I will be brief. I would like to once again reiterate the caution around third-party documents. I think we've had the issue described at length by both myself and by Stephen Lund in this committee Chamber, the very real impact that disclosure of confidential business information has in the reputation of this province to conduct future business. We do have challenges attracting companies to this province. We are not the centre of the economic universe. We're working hard to make the most of the opportunities we can attract, and a reputation for not keeping confidential third-party information will certainly not assist us in being able to achieve those outcomes. So I, once again, ask for the committee's good judgment in deciding which parts of those documents do find their way into the public.

I would like to reflect once again on the very competitive nature, and again the message that was sent to us all yesterday by the Shaw Wood announcement was that we are going to have manufacturers in this province close. We know that. As we sit here there will be manufacturers who will not survive in this province with the pressures that I referred to earlier in my opening statement. We have to redouble our efforts inside the Office of Economic Development, inside NSBI and inside all those other agencies that I referred to to help ensure that as many of our existing manufacturers continue to exist, hopefully expand and to try to repeat the success stories of the RIMs in attracting new organizations to this province that will serve us well in the long run.

I would reiterate once again, the Industrial Expansion Fund is one of the principal tools we have available to us to be able to engage in those kinds of discussions, to try to advance the economy of this province. Properly funded, it has the opportunity to produce solid economic gains for this province well into the future. With that, I'll thank the committee for their attention.

MADAM CHAIR: Thank you very much. I would like to thank you for being here today. I would like to say that throughout this process I think it's fair to say this committee has really bent over backwards to be sensitive to the needs and concerns that have been expressed by Nova Scotia Business Inc. and yourselves with respect to protecting the private interests of the various businesses that are doing business with government. We've tried to do that as responsibly as we can, given our role in terms of balancing the public interests when public funds are involved. I assure you it will be our intention to continue to act responsibly and in that fashion.

At this time, I would like to make a brief report of the subcommittee. The subcommittee met last Thursday. First, in camera, we discussed with Legislative Counsel the written legal opinion we had from Mr. Hebb. At the conclusion of our in camera session, we continued to meet with the media present, and at that time we released to the media and the public the legal opinion that we had from Legislative Counsel.

I had agreed to draft a report to circulate yesterday, which we would have discussed today with respect to this matter, but in light of the fact that on Friday, three members of the committee and myself all raised with the Speaker the issue of privilege. I reviewed the Hansard and I was satisfied that that issue is now properly in front of the Speaker for a decision and I did not develop a report because I felt, frankly, it would be redundant at this time.

So we will await the ruling from the Speaker on this matter and at this point I would ask that the subcommittee report be moved.

MR. COLWELL: I so move.

MADAM CHAIR: Any further discussion?

The committee now will stand adjourned until we meet again next Wednesday. Thank you.

[The committee adjourned at 10:56 a.m.]