MR. CHAIRMAN: Good morning, I would like to call the Subcommittee on Supply back to order. It's Tuesday, April 10, 2001. We are continuing debate on Acadian Affairs.
The honourable member for Lunenburg West has seven minutes remaining in his time. Your time is now 1:54 p.m., please continue your questions for seven more minutes.
The honourable member for Lunenburg West.
MR. DONALD DOWNE: My question to the Minister of Finance is, can he explain to me, can he inform the members here what their government's position is on the celebrations that will take place in the year 2004 by the Acadian community? Do they have any specific amount of money allocated for that major and, hopefully, very successful event for not only Nova Scotia but the Acadian community across North America?
MR. CHAIRMAN: The honourable Minister of Finance.
HON. NEIL LEBLANC: Mr. Chairman, that is a very good question. We have been working along with Heritage Canada in the planning process. There is a committee that has been put in place. They have elected a CEO, Vaughan Madden has taken that position. There is also a committee that has been appointed throughout the process, and a gentleman I think you know very well has been elected President, Allister Surette, whom you served in Cabinet, has graciously agreed to Chair that. I am not sure how many terms he will - it's for one year, hopefully, he will stay on. I know he has an interest both as an Acadian, but also in his capacity as President of the Collège de l'Acadie. Things are moving along relatively well in the planning process. There have been public hearings held throughout the province since the new year, especially in trying to encourage families to become involved and we, as a government, are working with them to put in place a process for funding that will be submitted to the federal government in this fiscal year.
There has been assistance offered to the committee to do its planning but, obviously, this is a major initiative. It was started by the previous administration, and I want to thank the honourable member and his government for first of all putting it in. I remember when I first joined Cabinet, actually, even before we took office, that the decision was going to be announced in Louisiana. I was unable to attend because we were basically in a transition of office and trying to put together a budget so I was unable to go to it. I think I would have liked the experience. It means we, as a government, will have to make contributions. We are committed to this initiative and we continue to plan to work with the committee.
In regard to specific numbers, a lot of that is still in negotiation with Heritage Canada. I have spoken with the Honourable Sheila Copps on two different occasions about this initiative. She has indicated that she has very much an interest in this and they look at it as being tied in with other events. I refer the honourable member to the anniversary of Quebec which is coming up. Nationally, they want to tie these events together whereby there is a national trend rather than having just local.
MR. DOWNE: I know you sincerely, and members of the Acadian community who are part of the Legislative Assembly will be doing all in their power to make it a success. There is a lot of commitment in kind and supportive. Fiscally, they are going to need money from the provincial government, that's the bottom line. I would hope that the provincial government, in your capacity as Minister of Finance, would allocate the proper resources to making this a success.
It's a huge opportunity and the mosaic culture of the Province of Nova Scotia, the Acadian community are a major part of our history and a major part of our future. They in turn, deserve the respect of this government and all governments, especially with regard to financial contributions to this celebration in the year 2004.
Notwithstanding the fact that Champlain spent some period of time in my riding. Little did I know that he was there at the time but, anyway, he came and plotted off the areas, LaHave, Petit Rivière, many of the areas that have been named after his involvement there. Some of the early maps show his tremendous ability. I would encourage the minister to put a figure on the paper within the next budget so there is some indication what financial contribution is there. It is great to hear that the federal government is going to be helping in some capacity. I know that the new federal minister of ACOA will be very supportive, Robert Thibault. We can't rely on Ottawa doing it all. I think it is incumbent upon this province to do its part in showing respect and support for the Acadians in our community, and that we cherish their rich culture, identity and language and we want to support them in their endeavours to showcase the world in this very special time in 2004.
Mr. Minister, I only have a few minutes left so I won't go into any real major issue but I will ask the question regarding the Department of Finance spending $3.8 million more than the year previous. I thought of all sorts of reasons of how to do that. There are 29 staff
leaving your department, some going to other departments. It seems as though your staff numbers are going to be going down, yet $3.8 million more. You are losing the procurement side, the pension regulation, the corporate expenditure control. How do you explain such a large increase in your budget with losing in so many other areas?
[2:00 p.m.]
MR. LEBLANC: First of all, the member is bringing up good points whereby there has been some change. He mentioned procurement moving out, also internal audit is moving in. We also have changes with some staff moving over to the Treasury and Policy Board. The major change that we have in the budget is regarding the Controller's division and his office, along with the corporate information system, SAP. This year, we have made some changes to that and we have taken all the amortization in regard to that and centralized it in Finance. That has added $1.949 million into the Department of Finance.
There's another issue that we have talked about with regard to extending this to the MASH sector, we have made an investment whereby we would be buying the licenses. So we have done that and we have extended that to different municipalities. I know some of them have responded to it very favourably, thanking us for the efficiencies of scale by buying bulk rather than doing it individually; a lot of the municipalities are able to take advantage of this. We think it is a good reporting tool and I know this had actually started before my taking over the department and we're continuing that work here. I think it's important to mention that.
The other thing that happened is that the annual operating costs to support SAP has also increased by $1.579 million. So if you add that up, the majority of the costs that we have in the department is directly related to the Controller's Division, and it isn't that Kevin Malloy has lost control of his department, it's that we, as a government, have made a conscious decision to do that. I don't know if Kevin is here or not? Too bad, I would have liked to have said that and made him turn red, however he's not here. But I guess Suzanne Wile will feed him that information.
There is a multitude of much smaller items that we could go through. I don't know if you want me to go into them (Interruptions) Thank you.
MR. CHAIRMAN: The time has expired for the Liberal caucus for questioning. I trust the Liberal caucus will be back for future questions for this minister?
The honourable member for Cole Harbour-Eastern Passage. Your time is now 2:02 p.m. You have one hour.
MR. KEVIN DEVEAUX: Thank you, Mr. Chairman. I want to go back to federal transfers to the provincial government. I want to talk about the CHST. I wanted to give Liz a chance to come up to the table. We missed her from last time.
MR. LEBLANC: She's very photogenic, too.
MR. DEVEAUX: I have been trying to get my head around the whole social accord back in, I think September 11th of last year, and a breakdown of what type of numbers you're expecting to get over, I think it's a five year period - I am trying to remember now - and how much that breaks down to for this province on an annual basis with regard to, I think the areas specifically, primary health, early childhood, general health and then just general increases in CHST. Is there any way you can tell me on a yearly basis what those numbers will come to? Remember, a couple of years ago the CHST, they said over two years you could bring down the money and you could pull it all in the first year . . .
MR. LEBLANC: I think it was over four years, if I recall correctly.
MR. DEVEAUX: Could have been. I am not sure whether these are locked-in numbers for each year or whether you're able to pull down more or less in any given year, so if you could explain that as well that would be great.
MR. LEBLANC: First of all I would like to point out, if you look, some time ago the federal government made an investment in CHST and it turned out to be $75 million over a four year period. At that time we had discussions with the Auditor General in regard to how we would show that. There was no predetermined implementation or schedule as to how you could draw down that $75 million. The Auditor General informed us that since it was available for us to draw it all down in the first year, that is the way that we should do it.
Looking at a four year balancing provision, we would have liked to have looked at it over a longer period, however the Auditor General said that's the way it should be reported. We respected his decision and it came down all in the first year, which meant, basically, out of that fund, there would be nothing left to apportion to years two, three and four. Subsequent to that, and then last fall, I think it was in September, the Premier, along with the other Premiers of Canada, along with the Prime Minister, had more discussions whereby the Prime Minister said that everyone agreed. I don't really think that is altogether accurate that everyone agreed. I think that the Prime Minister put an offer on the table and I think the people went home - even though the Premier indicated that we have a different makeup of people in Nova Scotia whereby our people are perhaps a little older, we have different ailments which make us a little unique and the CHST factor doesn't take that into consideration. We received another $75 million, which was to be used. Over and above that, there are some specific issues, and I think that is what you are referring to, which refer to early childhood intervention, the increase this year - staff is telling me, I am trying to go through the accounting, if you could just bear with me - based on the budget of 1999, Mr.
Martin's budget, there was an increase of $2 billion for the year 2001-02. Nova Scotia's share of that would have been an increase for our revenues of $61 million. That is the provision that went into this budget.
There was another one, the announcement that the First Minister made on September 11th, I have the date here, that refers to another $75.6 million, that is included in this year's revenues; so those two different components. There is the childhood intervention which this year is $9.1 million. Then there was an offset, a reduction of $30 million, and that is moving to an equal per capita. Nova Scotia has had some concerns some of the larger more populous, affluent provinces have been pushing for, they want to do it on a per capita basis. We felt that didn't take into consideration some of the issues that I mentioned before, such as the level of seriousness of disease, age of population and so forth. If you add those up, the difference is $109 million.
MR. DEVEAUX: Okay. Maybe I am going to go through these one at a time. I understand the numbers can get confusing, so I am trying to clarify this. Early childhood intervention this year, $9.1 million; next year, 2002-03, how much are you expecting to get from that?
MR. LEBLANC: I think it is $12 million. I don't have it here. That is readily available. I do believe it is in the $12 million range.
MR. DEVEAUX: But you don't have it for the year after that. How many years is that one?
MR. LEBLANC: It is outlined, I think, for three years. Those are predetermined ahead of time. We know what the numbers are and those will not change.
MR. DEVEAUX: There was another component in regard specifically to Health. I think part of it was equipment and part of it was other things. Can you give me how much that amount was for this year that was specifically designated for Health?
MR. LEBLANC: That isn't part of the CHST, it is another separate component that is coming in. That funding went directly to the Department of Health, they showed that as a recovery. They can draw from that to make investments. I think this is in regard to equipment, I believe it is along those lines. That is not part and parcel of this, it came out of Health - I am just being informed - but it was jointly with the federal Department of Health, the Health Minister.
MR. DEVEAUX: Do you know how much that was this year?
MR. LEBLANC: It is $30 million, whereby you can draw it down over two years.
MR. DEVEAUX: It is $30 million over two years, and you drew it all down this year based on the Auditor General's recommendations?
MR. LEBLANC: No, this is different because it isn't for operating, it's for capital, they have the latitude for doing it differently.
MR. DEVEAUX: So, how much was drawn down this year?
MR. LEBLANC: It was $15 million.
MR. DEVEAUX: And there will probably be $15 million next year.
MR. LEBLANC: That's right.
MR. DEVEAUX: There is another section, I believe, in the accord last September that talked about primary health. I think that's separate, and I am just trying to clarify whether that is also something given directly to the Health Department or whether that was money that was allocated through CHST and, if so, how much?
MR. LEBLANC: Obviously it is not coming through CHST, we are not aware of it.
MR. DEVEAUX: I just remember reading that in the accord, and I was just trying to clarify, there was a specific amount of money, maybe somewhere in here I have it.
MR. LEBLANC: I vaguely remember something about that. It didn't come through these negotiations, so I am not privy.
MR. DEVEAUX: Just based on Nova Scotia being 3 per cent of the population, I worked it out to probably about $6 million that was going to be given out this year to Nova Scotia from primary health. I was just curious if that was an accurate number. So you are saying that generally there was a $61 million increase this year in general CHST increase?
MR. LEBLANC: This is a per capita increase that was announced in the 1999 budget. When you looked at it this year, there was $61 million plus the $75 million that was announced last fall, plus the $9.1 million, which is basically coming in but it is predetermined, that is spent and you are aware of that, less the $30 million which is a decrease because we moved to an equal per capita.
MR. DEVEAUX: So $61 million plus $75.6 million plus $9.1 million minus $30 million.
MR. LEBLANC: That is correct.
MR. DEVEAUX: The $75.6 million you are talking about, is that designated, obviously within the limits of CHST, is it allocated for Health, is it allocated for early childhood or can it just generally be spent?
MR. LEBLANC: Those were just increasing the CHST funding which comes globally, in a sense, it isn't coming into the childhood intervention, whereby $9.1 million comes in, but it is targeted specifically to an initiative.
MR. DEVEAUX: No strings attached.
MR. LEBLANC: No.
MR. DEVEAUX: I understand that CHST is done for periods of time and then they are sort of renegotiated, I presume . . .
MR. LEBLANC: No. The CHST has some indexing that things will move forward from them. We are having some discussion as to which factor we will use for the indexing, I don't know if that has been resolved yet. (Interruptions) No, that hasn't yet been resolved. Obviously, we look at different indicators such as the GDP, that would be a good one, but even though health care increases are going beyond GDP, for ourselves it leaves basically all the rest to the provinces, and we are trying to deal with that, but we haven't had a resolution to that yet. It will be indexed, we just haven't resolved it as to how.
MR. DEVEAUX: What I am getting from you is based on the $61 million in 1999 that was going to increase, plus the $75.6 million minus $30 million for offsetting per capita, it comes out to $106.6 million for general use within CHST, roughly.
MR. LEBLANC: I am being told here it is $109 million, but I haven't done the addition. You may be right.
MR. DEVEAUX: Is that number supposed to go up next year, is it going to stay, is it something that will always be there as an increase, or in three years do you have to renegotiate it again, or next year will it go up $20 million, for example? Do we know?
MR. LEBLANC: Since we don't have an agreement on the indexing - I stand corrected on that, there is no guarantee that indexing that will happen. Part of the problem that we have, a lot of times is more going to Ottawa, a lot of these issues, we deal with them year after year. Of course, the other issue we are dealing with now is the cap. A few years ago they talked about the cap on equalization - I am getting off CHST - they said, you will never meet it. Now we are going to be meeting it and Ottawa is saying that is where the cap is. Obviously, for us, that is a concern because if we exceed the cap, that will have an impact on our revenues here in Nova Scotia.
MR. DEVEAUX: The cap was removed on equalization, wasn't it?
MR. LEBLANC: For one year.
MR. DEVEAUX: Just for one year, so it is not ongoing.
MR. LEBLANC: That is correct, unless it has changed, we will have to do it every year or they will have to change the legislation.
MR. DEVEAUX: Are you guys going back to negotiate something in the future?
MR. LEBLANC: I find it is difficult to negotiate with Ottawa. I think what we are trying to do is make our case. Obviously, they have the purse strings and they are allocating funds to the provinces. Nova Scotia is not alone. I will be working very closely with our Atlantic Provinces here, also with our members from out West, I have been working closely with the minister for Manitoba, Greg Selinger - very proactive. We have been trying to work on these issues, such as the cap and so forth, because it will have an impact on us and we are trying to make the best case forward. I believe there are some people listening, but we want more than just listening, we want to change the actual agreement.
MR. DEVEAUX: If you look at the federal Web site - I find this interesting because I was looking at this before the budget, now this is their propaganda - they claim that in 2000-01 they gave Nova Scotia $2.2 billion. Then I look at that number, and that includes something which they call, under CHST, cash portion and tax portion, which doesn't show up, necessarily, in the budget unless it comes under revenue somehow. I am not sure how it works. I asked this without knowing the answer. I am not clear on what they mean by the tax portion that then allows them to claim they are getting $2.2 billion.
MR. LEBLANC: Some time ago what happened was the federal government said to the provinces, in regard to certain formulae, certain programs, we will give part of our taxing power to the provinces. They made an agreement whereby they taxed less and provinces taxed more. Every year, we do not get those funds sent to us because they are part of our provincial revenues, but when the federal government speaks about their contribution to CHST and so forth, they always include the cash portion or the portion of taxation that they gave to the provinces - actually your question is a very good one, because I kept trying to find out myself what was going on, but in a nutshell that is what is.
MR. DEVEAUX: Which taxes did they reduce to allow us to step into?
MR. LEBLANC: The 13.5 per cent personal, and - we are having a discussion here, every time I had been briefed on this before I have forgotten it, because it is technical. They gave us 13 points on the personal income tax and 1 point on the corporate income tax. Maybe if you want to get the staff to explain this to you after, we can do it rather than take the time
of the committee. I am prepared to do so if you want, but I am sure that Liz is more than prepared to do that for you.
It occurred in 1977, so we are talking about 24 years ago, the bottom line is that Ottawa always insists on mentioning that in their contributions. I don't have a problem with that. Obviously, they made a conscious decision at that time that they would give some of their taxation powers to the province, and we took it. So, in a sense, there should be some recognition of it.
MR. DEVEAUX: The fact that we have moved to a TONI system or a tax on income system and we have decoupled, has that impacted that at all?
MR. LEBLANC: Impact on that, no, that doesn't have any change on that.
MR. DEVEAUX: I want to talk about that, the fact that we have our own income tax system now. We haven't really tinkered with much, other than the fact we have moved to our own percentages as compared to being a percentage of the federal tax. Is your department in any way considering any major changes in our income tax system notwithstanding your promise of a tax cut, but major changes like Alberta moving to a flat rate or moving to a different basic personal exemption and so on, things that would adjust it quite differently than the federal system?
MR. LEBLANC: At this point in time I am not prepared to say we are. But since you are coming to the tax cut, I just want to clarify something I said yesterday. It may have been your colleague who asked the question in regard to the tax cut. We emphasized that in the year 2003-04, our revenues would be approximately $1.3 billion in personal income tax. We indicated that would give a tax reduction of $136 million. I am not sure which of your colleagues asked me the question as to whether or not everyone would receive 10 per cent across the board. I may have indicated yes; I want to clarify that. First of all, I want to make sure that I didn't misspeak.
There are many complexities to the taxation system. We have talked about the brackets and we have talked about the different rates of those brackets, we also talked about the non-refundable tax credits which are other issues of it. It will have a different impact on different individuals, especially if people are located toward the lower part. I will just use an example, if someone is just barely paying taxes, if you were to change the bracket they may pay no tax whatsoever. I just wanted to clarify that. I think it is important that I do so, because if I misspoke yesterday, I wanted to make sure that I clarified it.
As to how that will all unfold, that will be happening in our budget year 2003-04. The details will be there. I know I was also asked some questions as to how that would all unfold and, as I indicated yesterday, it will happen in that year. Since you got into the tax situation, I felt it was important that I clarify that.
To go back to the issue you talked about, and to tell you the truth I forget the question. You were talking about taxation, can you just repeat that please? I am getting older Kevin.
MR. DEVEAUX: What was the question? Now I have forgotten it.
MR. LEBLANC: You were asking whether there were any major changes . . .
MR. DEVEAUX: Yes, are you planning any major changes to make our system more customized to Nova Scotia?
MR. LEBLANC: We are looking at some different initiatives. I will say, without getting into specifics, if you look through our blue book you will notice some initiatives where we talked about trying to focus on certain parts of our population. The thing about the TONI that allows us to do it, if we want to focus, it's much easier than it was in the past where we were tailored, basically, to work in concert with the federal government.
There is an issue here that I would like to perhaps point out. There are some arguments about how you define taxable income. This has been a national issue. We have some provinces that would like to change how they define taxable income, and I will just point out a specific issue that is a concern. If you lived alongside Alberta you would have a lot of problems, people looking at selling a major farm sometimes maybe saying I should move to Alberta because that is where I will reside.
Those are issues that some of those people have. Fortunately, we are not in the same situation here, but these are some national issues I think are important. Nova Scotia has been adamant that we should have a national definition of taxable income. I have been adamant about this, I have been forceful in my presentations to my colleagues that I think it is important as a country that we don't start tinkering too much with the taxation system whereby people will move to areas because of the fact of huge tax discrepancies.
That is one of the major points when we talk about equalization, that it is a serious issue. For us, it is meant to bring about equal services at relatively equal levels of taxation. We have not increased our, I guess, stead versus the other have-provinces over the last 10 years. That is an issue for us, which is a concern and why we are making some presentations, especially in regard to trying to deal with it, both on equalization but more so in the Campaign for Fairness.
The Campaign for Fairness is not going to help me in my budget balancing situation. We won't receive enough royalties in the next two or three years to make an impact, but down the road it will have a huge impact. If we can make some changes to that, it will have some positive impact for my kids and for yours too, and the one that is coming. When is that one due, is it pretty close now?
MR. DEVEAUX: Five weeks.
MR. LEBLANC: Maybe you will get some tax relief on that. (Laughter). Anyway, I don't know if I answered your question or not, but those are some of the examples.
MR. DEVEAUX: Now that we have a system based on TONI, we still have things like basic personal exemptions, equivalent-to-spouse and so on, percentage rates, just like the federal, what is the basic personal exemption in Nova Scotia?
MR. LEBLANC: You have asked me a good question, I don't know if the number is in front of me here. Actually it would be almost easier to get your tax form, I can get you the numbers. But I do want to point out . . .
MR. DEVEAUX: I do mine by computer.
MR. LEBLANC: . . . in 2000, basically, in that year, we did move in concert with the federal government. I hear some pages shredding, ripping, probably they are going to give it to me. In that year, we did move some indexing because it was relatively small, and we did match it. For 2001, we have not - and we are talking about those changes only after we would find ourselves in a situation to give a tax cut. I will get that information, it is readily available everywhere.
MR. DEVEAUX: So, in October when Paul Martin, as part of his pre-election goody package, announced the basic personal exemption would go up, I believe, you guys didn't match it, is that correct?
MR. LEBLANC: That is correct.
MR. DEVEAUX: All right. You can't tell me the difference. I am just trying to get a sense of what the difference is. I don't even remember what the basic personal exemption is, federally, right now.
MR. LEBLANC: Just for your information, in 2000, the change that we move, and that wasn't a major movement for the federal government, this year is a bigger one, I think it cost us about $14 million, just last year over and above some of the other issues that we talked about, like capital gains, which is another, because they have changed the definition of that, we use their definition of capital, taxable income, so all those changes are being felt throughout our province, whether or not we make changes to the brackets.
MR. DEVEAUX: So, let me ask a question, if you can't answer it, I hope you can, but if you can't, maybe you can undertake to provide me with it. Because we did not move up, we didn't match the basic personal exemption that the federal government raised in late 2000 for this fiscal year, how much money are we bringing in - I am just trying to word this
properly. You must be able to answer this, if we had increased our basic personal exemption to match the federal increase of the basic personal exemption last year, how much money would we have lost?
MR. LEBLANC: We would have given another approximately $25 million.
MR. DEVEAUX: Just on the basic personal exemption?
MR. LEBLANC: We are having a discussion mostly about timing, because there were two different issues last year, there was a spring budget and there was also the mini budget. You are asking me a question about what impact the fall budget had and I don't have that information available. Just to clarify the personal exemption for 2001, it is $7,231. The federal one has changed in this year, so that will be different than that number. We haven't indexed it.
MR. DEVEAUX: Okay, for 2001, the province's basic personal exemption, if I am filing my taxes now that we have our own tax system, for my provincial share of the taxes, my basic personal exemption is $7,231. Do you know what the federal basic personal exemption is for the same period?
MR. LEBLANC: For this year, I don't have a tax return in front of me so I don't. For 2000, it was the same. For 2001, I don't have it.
MR. DEVEAUX: I understand that now it's higher.
MR. LEBLANC: That's correct.
MR. DEVEAUX: Where it used to be that we were tied to the federal tax system, and at that time then all my taxes would have the same level of basic personal exemption, now that we have decoupled, and we have our own tax system, when the federal government imposed their basic personal exemption increase in the late 2000 budget, we didn't do it here for our provincial taxes.
MR. LEBLANC: That is correct.
MR. DEVEAUX: We don't know how much that is bringing in, or how much we would have lost if we had matched it. You can't answer that question?
MR. LEBLANC: We have some information here, I just want to make sure that it is correct. It is not a difficult number to get, it appears that it would be $12 million, but I am going to verify that.
MR. DEVEAUX: Can we do that by the end of today?
MR. LEBLANC: It shouldn't be a problem. I will get Liz to make a note.
MR. DEVEAUX: Thank you. Equivalent-to-spouse, I am not sure what happened, since my wife works, at least works part-time, it is not something I have to deal with in filing. Did that go up in the federal budget in the fall of 2000, the equivalent-to-spouse deduction you can make for dependents?
MR. LEBLANC: I will check it out. I didn't get into the federal numbers there. (Interruptions) These aren't difficult things to find out, I just don't have them at my fingertips.
MR. DEVEAUX: I am just trying to clarify whether we matched. If it did go up, did we match it, that is what I am trying to clarify.
[2:30 p.m.]
MR. LEBLANC: We didn't index.
MR. DEVEAUX: The percentage levels, that is the bracket creep to some extent, the federal levels went down in the fall of 2000, I believe they went down from 27 per cent to 26 per cent for some, I am trying to remember the exact numbers. We didn't match those decreases either.
MR. LEBLANC: We kept ours where they were. Basically, we changed ours as a percentage of income rather than as a percentage of the federal tax.
MR. DEVEAUX: Which, technically, isn't bracket creep, just so I am clear. Bracket creep was the indexing of the percentages so that the actual numbers of 27 per cent at $44,000 would continue to increase on an annual basis. What are our percentage levels for income tax in Nova Scotia, what are the rates?
MR. LEBLANC: The low rate would be 9.77 per cent, the middle rate is 14.95 per cent, and the high rate is 16.67 per cent.
MR. DEVEAUX: At what rate does 9.77 per cent kick in (Interruptions)
MR. LEBLANC: It is in our tax returns, it is not a problem. I can make sure I can get that to you.
MR. DEVEAUX: Just for purposes of comparing it, I want to get a sense of where those numbers come in. I have a couple of specific questions I wanted to draw upon.
MR. LEBLANC: We have the deputy getting his tax return out to see what the rates are, so we will get that out.
MR. DEVEAUX: Does the deputy want to table that?
MR. LEBLANC: We will probably all know how much money he is making, I don't think he wants to table it. I will ask for his assistance. (Interruptions) It is too low to show. (Laughter)
MR. DEVEAUX: I am sure. Then you have to move over to Health, I think the deputy needs a transfer. (Laughter)
Back in, I think it was the Auditor General's Report, I am just looking at Section 3.8, I think it is this year's Auditor General's Report. I am just going to read from this, it is talking about user fees. "Government has made efforts to achieve balanced budgets by reducing expenditures and containing rising costs. Government has also been considering initiatives for increased revenue generation and we were informed that attention is being given to this matter in individual government departments. The government's Business Plan Guidelines for 2000-01 requested that suggestions for new revenue raising opportunities be included as part of the department business plans."
I guess I want to know, is it possible for you to table the 2001-02 Business Plan Guidelines so that we have an opportunity to see whether that is also being done for this year?
MR. LEBLANC: I just want to make sure I understand the question, you want to have the guidelines on how the reports will be prepared?
MR. DEVEAUX: According to the Auditor General, in 2000-01 your Business Plan Guidelines for the department told them to seriously look at ways of increasing revenue. I want to know whether, in the Business Plan Guidelines for 2001-02, you make that same suggestion?
MR. LEBLANC: I am listening to staff, the guidelines didn't change. I think we are looking within government, and we have said this before, whether there are some opportunities for imposing cost recovery or whether people like to use the other terminology, user fees, whereby a recovery is justified when you look at fairness; the fairness of the person paying it and the fairness to the taxation to people, the taxpayers.
I will use a good example. When I was Minister of Business and Consumer Services there was an indication that people wanted to have electronic transcripts. We have a lot of insurance companies that want to insure people, but they also want to know, first of all, before they insure an individual, that they know where he has been, in other words what is
going on. They were making requests for information based upon approvals by the individual that they could get access to their transcripts, their driving records. The situation was that some of the major companies were batching them together, sending a batch over to the department and it was being run. The information was compiled and it was sent back.
I am giving you a long spiel just to give you an example. We came up with an on-line system with security provided whereby people could get that information instantaneously, and we increased the fee. We paid more to do it, but we also increased the fees. The industry basically felt it was well served.
Other things are not so much improving the service, it may be the fact that we are providing a service basically at no charge and we are saying, how much does it cost? The Auditor General says that we haven't looked at - I think some of the comments were - what the costs of the provision were. I can only speak from my experience. We have looked at it within the departments that I had, mostly in Business and Consumer Services, because it doesn't apply very much to Finance. We don't deal that much with the public.
We looked at what the cost of the service was when we determined what the fee would be. I would use the example of the handbook. People were picking up handbooks. To be candid, we were providing more handbooks than there were people writing the exams. I think a lot of people didn't treat them very seriously, it didn't cost them anything. So, we put in place a fee. I am giving a long answer to a simple question by giving some examples.
MR. DEVEAUX: My question was, can I get a copy of the business plan guidelines for 2001-02?
MR. LEBLANC: I will ask the question. Unless there is a reason for not disclosing it, which I can't anticipate, I will provide that to you. I just want to go to the ranges. Why don't you mark these down? I finally have them, we have a very competent staff. They got this out of the deputy's income tax.
MR. DEVEAUX: Very competent. Everyone has copies, right?
MR. LEBLANC: The low rate goes up to $29,500, and that is 9.77 per cent; the middle rate goes from $29,591 to $59,180 . . .
MR. DEVEAUX: $59,180?
MR. LEBLANC: Yes. And over that would be the higher rate. (Interruptions)
MR. DEVEAUX: Program review. One of the programs that was reviewed and cut that was considered critical was in your department. I believe it is the only program that was considered critical and was cut, Strategic Research Group. I have a copy of what we fought
for under freedom of information that identifies what the program does, the Strategic Research Group. It identifies medium and long-term initiatives to improve the province's fiscal position and leads inter-departmental implementation teams for these projects. It was eliminated. It was the only one that was considered critical. Can you explain why, in the end, if it was critical, this program was cut?
MR. LEBLANC: Mr. Chairman, this was a group of people who were brought together by the previous administration specifically for one initiative. It was in line with the port, in regard of the port proposal for the Maersk Sealand proposal. There was a group of people brought together in the Department of Finance to spearhead this initiative. Most of the people who were there were seconded, as a matter of fact I think they were all seconded, brought in and basically put into this one specific proposal. When we did the review for ourselves, a lot of the initiatives that are there, we felt would be better served, I would use the example of Economic Development or even Transportation, and as such, though I don't disagree that the work they did was critical, it also comes in as to whether or not this workload could be done in other parts of government by staff already in place. For ourselves, it is a matter of making choices. I don't argue that the work they do is critical, that doesn't mean the work doesn't get done. The answer is no, it still does, but it didn't get done within Finance in this category.
MR. DEVEAUX: I find it interesting, though, I appreciate that explanation. Under the category, Comments, you can check a box. It is actually quite an interesting sort of bureaucratic process of sort of checking boxes with regard to categorization of things. Anyway, (1.c) says, if this particular program was not in place at present, would it be created in its present form now? The box is checked, so I presume that means yes. I am not clear on why you would disband a program that if it wasn't in place you would create. Or, are you trying to tell me it is an ad hoc thing that was no longer needed, and if tomorrow there was another port proposal you may put it back together?
MR. LEBLANC: Well, I think that for ourselves if you look at the circumstances of where it was created, the bid process began. I think if you look at it there was almost a rush to make sure that the bid would be prepared for Halifax, because we did want to be considered for the new post-Panamax proposal. Obviously, yourself being a metro MLA, you know how important the container business is to the city. For ourselves, it was created specifically for that.
I am not arguing the suggestions you put forward, but for us as Ministers of the Crown, it still comes down, a lot of times, to making decisions. The recommendations that come forward, sometimes we agree with them and there will be times we won't agree with them. But for ourselves, within the infrastructure of other departments, and I go back to either Economic Development or Transportation, who were basically, to a great extent, the leads following the decision not to award the post-Panamax contract to Halifax, it still comes into the long-term plan for what we are going to do with the port, and that is more
appropriately located in those two other departments. It was felt that, for ourselves, it was time to disband the group.
MR. DEVEAUX: I want to take you to restructuring costs. The forecast for last year was $74.6 million; this year $53.7 million; 2002-03, $53.7 million again; 2003-04, you are expecting to go up to $73.1 million; and then in 2004-05, $117.2 million. Obviously those increased numbers two and three years from now must be based on something. Can you tell me why you expect those numbers to go up at that time?
MR. LEBLANC: Restructuring is one line in the budget that I don't talk about, because, obviously, there are provisions in here not only for restructuring and reorganization of government but the majority, of course, is in regard to contract negotiations. We are making provisions here, but we also talk about the compounding effects that happen. When you are looking forward, the increases in salaries will be shown in this rather than in the departments because we haven't apportioned them to the departments.
MR. DEVEAUX: This year's $53.7 million, I believe, any increases with regard to salaries when you negotiate them with the NSGEU or the Nurses' Union or any of the other public sector is to be covered in that $53.7 million, isn't that correct?
MR. LEBLANC: That is correct.
MR. DEVEAUX: Do you have any inclination as to how much 1 per cent increase in salaries across the board for unionized workers would come to, with regard to millions of dollars?
MR. LEBLANC: It is $22 million, $23 million, that is what I recall that refers to.
MR. DEVEAUX: For a 1 per cent increase.
MR. LEBLANC: That is correct.
MR. DEVEAUX: That is based on, what, a $2.2 billion salary, and that being a 1 per cent increase. That being the case, is that the only cost that is really in the restructuring, or are there other things that you expect out of that line item to have to be covered, other than salary increases?
MR. LEBLANC: The other things that are encompassed within restructuring are some severance costs that would be in there. There would be some workforce adjustments, and also some restructuring costs, if those types of events take place.
MR. DEVEAUX: How much is that costed at?
MR. LEBLANC: I am not going to divulge that. Those components can't be divulged because of the fact that there are negotiations in this. The department received an opinion, because of the fact that this part of the budget involves monies that are held in negotiations and if you start divulging components of it, it leaves the money behind that you are talking about negotiating with, which puts the government in the position of basically having everything on the table.
MR. DEVEAUX: I respect that. I want to talk about debt servicing a little. Given the state of the economy in North America, and now even more on a global level, is it your sense that your department expects interest rates to go down in the next year, go up, or stay relatively the same? I know you have a number in your assumptions, but that is the number as of the day, relatively close to the day that you produced your budget. Do you expect the number to go down or up?
MR. LEBLANC: Our indication is that we made our projections as of the time of the budget, and your point is well taken, you have to make assumptions because otherwise you will never prepare a budget. If the changes go on in the year, they will reflect in our forecast. I will just see whether or not there have been changes, I will talk to my expert on my right here to see whether there is. No, they are still comfortable with that. I should point out that within our debt we have approximately 15 per cent which is floating, which is basically more on two- to three-month terms.
Most of our debt is in the long term, so basically even if there are fluctuations it doesn't affect us now, it is more over a long trend. The changes that have happened over the last year is that interest rates in the short term have decreased, which has been positive. Some of those things, obviously, are from Greenspan in the United States trying to stimulate the economy. There have been reductions in interest rates, which has also had a positive impact for the province; the U.S. exchange is another issue for another day.
MR. DEVEAUX: You have actually been fairly conservative in your estimate of the Canadian dollar. I think you have it at 63.6 cents or something like that, which is much lower than the estimate that you were assuming last year, closer to 68 cents or 69 cents I think, right?
MR. LEBLANC: What we had last year, I think, was 66.57 cents - no, I am sorry, it was 68.4 cents last year. The actual turned out to be, in the end, somewhere around 63.55 cents. The average is about 66 cents, somewhere in between; obviously, our forecast on the U.S. dollar last year wasn't that accurate.
MR. DEVEAUX: Unless the dollar collapses through the floor, then your numbers are much safer this time.
MR. LEBLANC: This is anybody's guess.
MR. DEVEAUX: I know.
MR. LEBLANC: Obviously, hopefully the situation will change. The other thing I should point out, as a province, often a lower Canadian dollar has helped our exports, so it is a Catch-22. When it goes down it hurts us in certain areas, but it also stimulates the economy quite a bit.
MR. DEVEAUX: I want to go back to the income tax system. Now that we are based on our own tax on income, is it possible to have - and I am not expecting this right now - your department provide me with some form of detailed provision with regard to personal income tax, the differences between the federal system, both rates, basic tax credits, exemptions, and how they compare between the two?
MR. LEBLANC: I wouldn't have any problem, actually I think we prepared one last year when we brought in TONI, that was adjusted a bit at that time.
MR. DEVEAUX: But now that we have our federal budget . . .
MR. LEBLANC: . . . we would have to update it again, that shouldn't be a problem.
MR. DEVEAUX: I want to go on to Acadian Affairs; I have a few minutes left before I am going to hand it over to my friend from Halifax Fairview.
We had an opportunity today to meet - I don't know if you did as well, and you were very kind to the Acadian Federation with the use of the board room. My only question is with regard to, having talked to them they were bringing up the whole issue of Nova Scotia being the only Maritime Province that doesn't have legislation protecting linguistic rights or helping the French communities in Nova Scotia provide services in French. I guess I was wondering, as the Acadian Affairs Minister is that something that is being debated, is it even on the radar screen in your government, is it something you expect to see happening, are there reasons why your government is or is not interested in moving in that direction?
MR. LEBLANC: Two things. First of all, we have to look at the makeup of the Maritime Provinces. You did mention Maritime because Atlantic, Newfoundland, has not moved on this issue very much.
MR. DEVEAUX: They have a very small French population.
MR. LEBLANC: And in New Brunswick, of course, being a bilingual province, this is not an issue. In Prince Edward Island, they have brought in legislation which brings about certain aspects of government in delivering services in certain areas of the province that they would designate as, I don't know if it is Acadian regions or francophone regions. They have brought that in in conjunction with Heritage Canada and have received a considerable
amount of funding, I think it is 75 per cent. Most every other province in Canada, outside of Quebec of course, receives funding from Heritage Canada. My understanding is that it is usually always 50-cent dollars.
Prince Edward Island went a little further. Prince Edward Island also has an advantage, it is a relatively small province. They have a relatively concentrated Acadian population in the Acadian region that you are aware of, and also it is in close proximity, most of that, between Charlottetown and Summerside. It affords efficiencies that we have problems with here in Nova Scotia.
I just want to point out for the member's edification that if you look at Cheticamp, Isle Madame, Pomquet, Clare, Argyle, the metropolitan area here, and we have pockets outside, we are as far-stretched as this province can be. Really, as much as it gives us a lot of that identity, because people from Cheticamp are different than the people I represent and they are similar in many other aspects, but also separating us has hurt us. It has hurt us in the fact that assimilation has taken hold much quicker, because the bigger the population is the more interaction there is with more francophones; and the more divided you are, the more you are going to have to do business outside of your community, which means in most cases that you are going to have to do that in English. It happens in my community, and I am not alone, Clare is the same area.
We have talked about looking at the legislation that is present in P.E.I. We have talked about, and we will take a look at it to see whether or not it could have some application here. We are not prepared to make a commitment. We did indicate that the other issue we would look at is whether or not we can expand services into regions or make services available in French to areas that would be predominantly French.
I will give you a good example. I have a committee that I meet with that is across this province. They come in and have very good ideas. The gentleman who represents the area of Isle Madame was talking about the speech pathologist. In his region, they are not available in French, and he brings up the point that they were available - up to the time they go to school - from the Health system, then they go into the CSAP, which is the Acadian School Board, and then we get into a situation. Well they want to hire a speech pathologist, but they can't find one. So should the Public Health speech pathologist be made available, traditionally that is given through the school boards. In those discussions we are trying to see how we can expand it. Those are the types of issues we are trying to work on, and whether or not it will take legislation, I can't commit.
I should point out one thing - you are a lawyer and so is your associate to your right, as you reminded me yesterday in questioning - the French lawyers are trying to increase access to services in French. We have indicated to them, and I have spoke to my colleague, the Minister of Justice, to see whether or not we can start to make some movement in this category. Heritage Canada is very interested in doing this. We have said, if we can start it,
maybe we can start off in Family Court, because that is probably the one aspect of the justice system that would perhaps be best served for those who are in need, those ones perhaps have more difficulty speaking outside of their mother tongue.
We think we are making some progress. Even this year, in some of the things that we fund with the federal government, we have made some movement in making more and more information available in both languages, which is a positive. As a government, one of the things I would like to do is designate positions in areas, whether we could consider French, even if they are not designated bilingual, can we designate that French would be asset, whereby we would have more people available for it, and whether we can go beyond that I can't speak on behalf of government here today, because obviously that is something they would have to weigh.
MR. DEVEAUX: I will just finish with a comment and then pass it over to my colleague. I guess one of the things I perceive about the Acadian community in Nova Scotia is that compared to New Brunswick the language is much more thriving because you have an urban centre in Moncton where they can go and still have their language. The places you have named, Pomquet, Cheticamp, Isle Madame, Clare, Pubnico, Wedgeport or any of those, what you have are places where they are smaller communities. It is always the big lights and the big city that will draw many people to an urban centre.
In Halifax we don't have the ability to provide the French services that can ensure - I see it in my own community, I see it in various places, I see people who have Acadian roots but the next generation, because they have moved here for work, have lost it. If there is a way in which the services can be maintained or promoted, you may even be able to reverse assimilation to a great extent, that would allow for people in metro to be able to maintain their language. I look at something like Carrefour, it is a great example of what you can build a community around, but it is only a start and there is so much more that can be done. I will leave it there, and I will pass it over to my colleague, the member for Halifax Fairview with our remaining five minutes or so.
MR. CHAIRMAN: The honourable member for Halifax Fairview.
MR. GRAHAM STEELE: Mr. Minister, I just wanted to pursue a purely factual line of questioning in the few minutes we have left. I was wondering if the department has a breakdown of any kind as to how much Nova Scotia tax is paid by Nova Scotians. For example, there would be x number, x percentage who pay none, x number, x percentage who pay 0 to $1,000. Is there any kind of breakdown along those lines that the department has or could generate?
MR. LEBLANC: Staff tells me that is available, I am not sure if they have it here, but it is something that could be provided.
MR. STEELE: Is it something that you are prepared to make available?
MR. LEBLANC: It should be okay, I wouldn't see that being confidential, as long as we talk in categories.
MR. STEELE: Exactly, I see it as just a factual thing. Do you know offhand, Mr. Minister, or do any staff know how many Nova Scotians file tax returns but pay zero Nova Scotia tax?
MR. LEBLANC: That shouldn't be difficult to ascertain either.
MR. STEELE: That is all I wanted to ask. I know we have a few minutes left, but I would never be one to fill time for the sake of filling time.
Mr. Chairman, if you are finished with your phone call (Laughter) I am prepared to pass it over . . .
MR. CHAIRMAN: You do have 5 minutes left.
MR. STEELE: I know.
MR. LEBLANC: He indicated that, Mr. Chairman.
MR. STEELE: The minister was so helpful with his answers that I have nothing left to ask.
MR. CHAIRMAN: Thank you very much for your generosity. Time now for more questions from Mr. Don Downe, the honourable member for Lunenburg West. You now have the floor, and the time is 2:58 p.m.
MR. DONALD DOWNE: Mr. Chairman, I would like to say that I would like to cover a couple of areas. One I want to start off with is on this restructuring. I know there were some questions, but I wasn't really paying a lot of attention and I was out of the room so I missed some of the discussion.
Out of the $55 million, first I think it was last year that you projected the restructuring would be about $107 million or over $100 million allocated for this year, last year in your budget numbers. This year you have gone down to $55 million, and your rationale is that while we are not going to be letting as many people go in the Civil Service and the restructuring process would be taken up by attrition and moving staff from one department to another department, things of that nature, is there anything else in that some $50 million differential that you had from last year to this year?
MR. LEBLANC: The issue that also comes in here is that there is compounding when you are projecting out; the number that we included for this year for restructuring, since we couldn't apportion them to the departments it went into restructuring. This year, when we prepared our budgets, the wage increases that were given last year go into the line departments rather than restructuring, so that would account for part of the difference that is there from the ones that we presented last year and the one that we tabled this year. I don't know if I have made myself clear or not, but hopefully I have.
MR. DOWNE: Are you saying to me that you have given the departments' budgets enough to handle those changes internally?
MR. LEBLANC: As we are projecting forward with wage increments, if you look forward you would have the line departments, you would have the revenues, you would have the service costs, you would have the restructuring going across. The restructuring would go for negotiations that are going to happen. As they happen and we get into the next year, if they are apportioned to the department they would be taken out of restructuring and put into the department, but when we are giving more than one year's projection we have to include the compound effects in the same account. As we move forward, it would be removed from restructuring and put into the line department, because we know the number and that is where it should be.
[3:00 p.m.]
MR. DOWNE: Last year's numbers were not accurate then? Obviously they weren't, they were $50 million out.
MR. LEBLANC: I go back to what we were saying. First of all you will estimate them every year when you start, because some of the contracts that you have settled, some of the provisions that you made in the years to come would be for contracts that you estimate that you will be able to reach with unions, have not yet taken place. As we get into that year, as we move forward, whatever has been settled this year will show in the line department rather than that. The numbers are still accurate, but it is shown differently as we move forward because it is moving off the restructuring line and into the department. I go back to what I am saying, and I am not sure if I can be clearer than what I am saying here. That is, in essence, what has happened.
MR. DOWNE: Last year, Mr. Minister, you had restructuring costs going out over a five-year period. This year the number would have been over $100 million in restructuring, where in fact the number this year is $55 million in restructuring. There have been some changes somewhere to the tune of some $50 million compared to what you projected 12 months ago to what you are now stating, and subsequent years out are reduced as well.
MR. LEBLANC: I just got a note here from the deputy, trying to see if I can make it clearer. He points out, again, once the contract is signed the restructuring expense is reduced and the department increases. As we project for the next year we have to look at how many unions and people and contracts we have to renew, and the estimates that we will put in there for what we expect to reach agreements. There are other issues that we referred to before, issues such as severance, workforce adjustments and also restructuring costs, that if you wanted to change some departments, that we would put in place. This is basically why the numbers will keep changing in that account, because of the fact that the costs are being realigned.
MR. DOWNE: You are saying then that the $55 million in the budget this year, and using your term, you do the calibrations based on what you feel you will be required for negotiations each and every year, so out of the $55 million, how much have you allocated for the negotiations that are currently underway in the Province of Nova Scotia?
MR. LEBLANC: I indicated that before. Actually I am surprised you asked the question, this is something we are not in a position to divulge because if you do that, if you put it on the table, your unions would know how much you have allocated for negotiations, which would be their starting point. That is why we had an opinion received in Finance that this information would not have to be divulged because it would put the province's bargaining position in peril.
MR. DOWNE: So the maximum it would be is $55 million? Obviously, because that is what is in the restructuring. What else is in the restructuring, what else does it do besides the pay raises? It has to do with severance and then studies, is that accurate?
MR. LEBLANC: No, there would be workforce adjustments, some severances, and there would be some provisions in there for some small restructuring costs, but as to the breakdown of that, as I indicated to a previous member, the member for Dartmouth-Cole Harbour, even those provisions I am not prepared to release because, if you do that, it also leaves the number behind that you are dealing with for negotiations.
MR. DOWNE: Let's just say that those particular costs, maybe they cost nothing, and just leave it at $55 million, does the minister feel that $55 million would cover the wage settlements in the district health authorities this year alone?
MR. LEBLANC: You are asking me to speculate as to whether or not the provisions are going to be accurate. Obviously we have put forward estimates that we feel will bear fruit in the negotiations. That is still ongoing, but we feel that the provisions that we have made here will be adequate in dealing with those negotiations.
MR. DOWNE: In the event, Mr. Minister, that they aren't enough, because you have a number of union negotiations underway, if they are not enough then how are you going to pay for it? What is the process that you will follow then?
MR. LEBLANC: I go back to your comments that we have to live within our means. We are determined that we will do so. We think that people deserve an increment, and we have done that consistently since we have taken office. We have signed some contracts with some of our unions. It doesn't mean that there is basically an open chequebook in order to meet every demand; at the same time we think there has to be room here for increases.
MR. DOWNE: Mr. Minister, how many people will be retiring from government this year?
MR. LEBLANC: I don't know, Human Resources could provide that. I don't have it here, how many people are actually retiring. Staff tells me that the average age is 44. That is a very good age, by the way, that is when people are at their exact prime. I can tell you, I have about four months left to go, then I am over the hill. However, that is an indication that probably the number will be sizeable. I can get that information, but actually it would probably be best to ask the Human Resources Department, they will probably have it at their disposal, more than I would here in Finance.
MR. DOWNE: Would it suffice to say that there is a severance rate somewhere between 5 per cent and 6 per cent of the population of the workforce?
MR. LEBLANC: I would be guessing here, I would be speculating. I am sure Human Resources would have that information for you.
MR. DOWNE: Well, if it is about 5 per cent, it doesn't leave an awful lot for union negotiations, and you basically capped yourself off somewhere around $35 million to $40 million maximum for negotiations. If, in the event, you are not going to have enough to deal with nurses and teachers and everybody else in this system, what does that do for the budget?
MR. LEBLANC: I should point out that people who leave don't get a severance, they would get Public Service awards, which is not the same situation.
MR. DOWNE: In your severances for those who are leaving without retirement, there is no . . .
MR. LEBLANC: No, you referred to all the people who would be leaving because of the fact that they are retiring. That would not come under this category, that would come under the Public Service awards.
MR. DOWNE: The severance dollars that are going to be paid out for severance, what would that be?
MR. LEBLANC: What would that be? Again, I am not prepared to divulge components of the restructuring fund. I have been told not to and I am going to respect that advice.
MR. DOWNE: Can you answer the question then, Mr. Minister, if the $55 million, if there is nothing going out for anything else, isn't enough for all the negotiations that are currently going on, and this number is about $50 million less than what you projected last year, where are you going to find the money? What is your process for getting the money to cover the negotiations, unless you are saying that, no matter what, this is the maximum amount of money they are going to get no matter who is negotiating, is that what you are saying?
MR. LEBLANC: What you are asking me is to speculate as to what is going to occur. I do know that we are having negotiations. Your point is well taken that we have to live within our means and that we have to come up with negotiations which respect both the ability to pay and also have some increments for public servants, because of the fact that over a long period of time they have had very few of those increases. That is why, basically, we are in negotiations today.
MR. DOWNE: So you are saying that it is not a matter of absorbing a higher deficit or debt, and you are not going to put it to the debt, you are going to say that no matter what you have a number that the government has as the maxed-out number with the negotiations and no matter what happens that is just the way it is going to be with the negotiating process.
MR. LEBLANC: We have provisions in here for negotiations with our unions . . .
MR. DOWNE: But you have no provisions in here for over and above the $55 million.
MR. LEBLANC: We have provisions in here for what we expect will be honoured. Obviously, the only way we will find out is through negotiations, but we expect them to be sufficient. I realize that the member would like for me to speculate as to what will happen if it doesn't, but I remain confident that it will.
MR. DOWNE: We will soon find that out, Mr. Minister. We will watch to see exactly if $55 million will be enough or if it is too much, and see where you go. I do hope that we do find solutions in our negotiations that will be fair for all participants and that we aren't forced into a strike position, especially when it comes to health care workers and district health authorities this year.
There are a couple of other key areas that I want to get into, one of which is the issue of Atlantic Lottery Corporation. We haven't talked about that for awhile. The other provinces, I understand we now have a $4.9 million agreement per year. I understand that the so-called better deal has never had the detail released to the media, as to the agreement, is that accurate?
MR. LEBLANC: My understanding is that information is available. I am not sure whether or not anyone has made any request for that information. Two things I said: I said once we had the deal signed we would make it public; and the other thing we said is that if people would request the previous studies that we would also make that public. That information is available from the Gaming Corporation.
MR. DOWNE: As I understand it - I could be corrected, Mr. Minister - there hasn't been a detailed media release outlining the details of the agreement, more or less the 30,000-foot elevated view of the agreement, but not the details of the agreement.
MR. LEBLANC: No, I disagree. I think the details were put in place; I am pretty sure about that. I am being informed that actually your caucus has received a copy of the agreement. Maybe I stand to be corrected, but you could just check that. If you haven't, we will provide one.
MR. DOWNE: We have that, but I understand that there wasn't a detailed discussion on the ALC. The Alcohol and Gaming Authority annual report indicated Nova Scotians, in 1999, had bought $22.2 million more in lottery tickets than in 1996, yet the province collected $2.5 million less in revenue. I understand, under the agreement you have, there is no retroactivity to that agreement. Is that accurate?
MR. LEBLANC: No, I think there was some provision for some retroactivity. I used to know this like the back of my hand, but I have forgotten some of it over time.
MR. DOWNE: That is what happens when you turn 44 I guess.
MR. LEBLANC: It went back as far as April 1999. It was $500,000 a year that was received from the Province of New Brunswick, so that was $1.5 million that we received over and above the changes in the operating results of the Gaming Corporation, which is approximately a $5 million improvement that we had from the previous deal. Of course that was due to the fact that the arrangement that had been negotiated had some oversights in it and was penalizing Nova Scotia because we were paying a disproportionate amount of the costs.
MR. DOWNE: Do you agree, Mr. Minister, that we were not getting a fair deal from ALC?
MR. LEBLANC: No one disagreed with that, we didn't disagree with that before.
MR. DOWNE: Now the Auditor General was very specific in his review of ALC and indicated a number years previous to 1999, I think it was probably back in 1996, 1997 . . .
MR. LEBLANC: I think 1997 rings a bell.
MR. DOWNE: If I recall correctly the AG did a very detailed analysis of ALC and indicated then that we were not getting our fair share in 1997, nor in previous years, to the pay out. The retroactivity was based on the disclosure by the AG that from 1997 forward we were not getting our fair share, although we could have argued back further. You are telling me now that the retroactivity that you ended up getting was really one year, 1999, retroactivity, even though the AG indicated in 1997 or 1996, whenever that came out, that we were not getting our fair share to the tune of $2.5-plus million a year, and that had been going on for some time.
MR. LEBLANC: Actually, I think it was going on prior to 1977. If you look at the comments, the Auditor General said that - I re-emphasize again - Nova Scotia was paying a disproportionate amount of the cost of ALC based on the business we were generating and, as such, we were losing revenues, because obviously we are paying more of the cost and we were receiving less money than we should. I go back to the point that the decision from the previous administration was to remove itself from the Atlantic Lottery Corporation and to set up a stand-alone lottery. The reason you did that is that you could not negotiate a new deal with the proponents who were there.
Subsequent to the change and subsequent to the change in the makeup of the board, because I think the faces changed at the board level especially for New Brunswick, there was a change in the Government of New Brunswick - I think there was a little more co-operation. I am not arguing that it was difficult to move this agenda forward. I think the people who were there before were very adamant that it shouldn't change, and the negotiations were difficult. I know I spoke to the acting chair, Dara Gordon, who was saying how difficult it was to move this forward, and they were adamant that it wouldn't.
I don't for a second argue that the negotiations were difficult to get moving. Our big concern was that moving forward with a stand-alone corporation had sizeable risk that we would have to assume. A lot of these assumptions that were put forward, in our opinion, were very risky, and if they didn't occur then we would basically be putting ourselves in a very difficult position.
What we negotiated is an increase and a change in that formula, which basically gives us approximately $4 million to $5 million annually increased net revenues. We have put in place a dispute resolution process whereby if we get in the same situation there is a way to resolve it. Before we couldn't, because it took unanimity amongst all the partners in order
to do it and we could never do that. There was always one province that wouldn't agree to it. We talked about putting forward an agency agreement. This was one of the major concerns of the former chairman, that Nova Scotia should have more input in how it deals with its gaming activities because of the fact that we had built up expertise here and we felt that by doing that we would be more efficient and we would be more focused. So overall, for us, it was the other aspect of the regional co-operation that if we could stay together in this and have those advantages it was an advantage to do so.
Now we were fortunate that the acting chairman continued in her role in negotiating for that, and I want to thank her publicly for her efforts, she did an excellent job and I want to go on record as saying that. But we brought about some of these changes that were not there before when you made the previous decision. For us, this was a much better deal for all the points that I just emphasized overall.
MR. DOWNE: Mr. Minister, if it was just a matter of going back one year and after what we have been presenting to the other partners, I dare say that you probably would have said we failed if we collapsed to only going back one year. Would the minister request the Auditor General to conduct a follow-up analysis and audit of Atlantic Lottery Corporation so Nova Scotians will know if in fact we got a fair deal? That is really the issue here. We were working under the basis of what the AG had recommended to us. Since that agreement was signed, the Auditor General has not done an overall audit of Atlantic Lottery Corporation to know whether or not the benefits have been, in fact, fair for Nova Scotia and I am requesting, based on your recommendations that you are getting a good deal, that the Auditor General follow up so all the shareholders and the shareholders of Nova Scotia, which is the public of Nova Scotia, will know if we got a good deal. If we got a good deal, I will be the first one to congratulate you.
MR. LEBLANC: Mr. Chairman, I guess, in a sense, I have to look at, first of all if I make the request, I know the Auditor General has been asked to do a lot of work. The issues that he was concerned with regarding the Atlantic Lottery Corporation were the ones that we dealt with. One of the provisions that was a problem, if I remember correctly, is that under the old system of the Atlantic Lottery Corporation the Auditor General didn't have the permission or didn't have the latitude to do an audit of an agency, didn't have the permission to even examine the books of the Atlantic Lottery Corporation to see whether or not we are getting a good deal.
Now, my understanding is that changed and that changed during your administration, I think due to pressure not only from Nova Scotia, but some of the other provinces saying look, it is our money, why can't we at least look at the books? I think that that change was very good. I can say here today that for us, if the Auditor General wants to look at the books, that is fine, but I don't think I am prepared to ask him to do the audit because, right now, I know from the work that he is doing, and we are asking him at the same time to do the financial statements of the province, that if he has the latitude and he has the time to do it,
I have no problem, but I don't think I am prepared to make a recommendation that he do it now and, then again, it would actually be binding on him to do it, taking into consideration that we have made these changes already. But if he wants to make that audit, then I would be supportive of it, but I don't think I am prepared to make a request that he do so.
MR. DOWNE: Mr. Minister, I appreciate where you are coming from to a degree, but notwithstanding the fact that the Auditor General did an audit and said that we were not getting our share, you went back to the table and negotiated, hopefully, a very good deal for Nova Scotia, yet we, as Nova Scotians, still don't know if we have a good deal. If you feel that confident in the decision that you have gotten, and the players around the table have changed to the degree that there is the ability to be able to find a solution - and I compliment you for getting that far - my question is why wouldn't you ask the Auditor General to consider doing an audit on ALC so that all Nova Scotians would be able to turn to you and thank you for doing a great job?
MR. LEBLANC: Mr. Chairman, I guess, more than one thing, the big problem with the Auditor General was not only how the costs are being shared, but the structure, a lot of different issues that have been addressed here. If you go back to the concerns that the Auditor General outlined in his report, I think if you look at what has transpired, it addressed most of those concerns, if not more, because we actually brought some things over and above that I think, even in regards to the agency agreement, which is not something that the Auditor General was talking about at that time. I will relate to the Auditor General that you wish for this to be examined. It will be at his discretion as to whether or not he has the resources and the time to do it, but I will make the commitment that I will write a letter saying that you would like to have it examined and it will be for his discretion as to whether or not he has the staff and the time to do it. I will endeavour to do that and I will draft that letter shortly.
MR. DOWNE: Mr. Minister, I have written the Auditor General requesting that myself, but it would be appreciated if you would put in that letter that you would support my request to do the audit and, that way, you are not demanding him to do anything. It is up to him to make that choice, but don't you agree that it would be great to do that audit so that that particular piece of information would be, to 900,000-some shareholders we have in Nova Scotia in our partnership agreement within ALC, that we got a good deal. I am sure that you have worked hard at it, as I know my predecessors, the Minister of Finance and myself had worked extremely hard trying to negotiate a better deal. So I am really out here trying to make you look good, Mr. Minister.
MR. LEBLANC: I know you have my best interests at heart. I know that. I just want to say that . . .
MR. DOWNE: Unless you are scared that he might find something you are not going to be happy with, which I doubt if he would do that.
MR. LEBLANC: Mr. Chairman, I am not scared whatsoever, but I do want to indicate that we have now made the Auditor General the auditor of record for the province and that is a lot of work for him to do. The more tasks we direct him to do, the more staff he requires, the more resources he requires, and that is my concern in this regard, whether or not the Auditor General has the time and resources or whether he feels that it is appropriate. But if he wants to do the audit, I am more than prepared to do it, but I leave it to his discretion as to what staff time and workload that he has. I do know that he has a huge workload and especially because of the fact he is now auditor of record.
MR. DOWNE: I know he has a workload and I know he has, I think, additional staff now and things of that nature. I am sure he would love to turn back to the day of reviewing it, back in 1996-97 - or whenever that review was - to be able to five years later do another evaluation and audit to make sure that, in fact, everything has been done. There are benefits and everything else that are part of that process and the jobs are in New Brunswick. Premier Lord was able to secure those jobs for the province and, of course, P.E.I. basically goes for the ride because they are so small they need the co-operation of each other and I prefer to have co-operation. So, anyway, Mr. Minister, obviously, your negotiating ability is pretty tough because I can't even get you to agree to something that is going to supposedly make you look good.
MR. LEBLANC: I think I learned from Dara Gordon.
MR. DOWNE: We will let it go at that, Mr. Minister. I think we have realized that you are nervous to do it, but I appreciate the letter going in support of my letter and I would appreciate it if you could possibly put on the bottom that you would support that initiative, because there is nothing wrong with that.
I would like to move to tobacco, Mr. Minister. I know that Mike Rainer told me that I can't be too late here today because they all want to go home and relax.
MR. LEBLANC: Mike, did you say that?
MR. DOWNE: No, he never said that.
Turning to tobacco. Now that we know that the letter is going to go the AG and there is a request for an audit of ALC to make sure that we have value for money, I would like to move to tobacco. Mr. Minister, you are going to receive $20 million in tobacco tax. The budget came down on March 29th and the tax at that time was projected to be $5.7 million or $5.9 million. We didn't know how much it was going to be; we knew roughly how much it was going to be, but we didn't know when everybody would agree to it. There was an agreement, I think it was last week, that announced that there was an agreement by all the participants in the tobacco tax. The date of that agreement was what, Mr. Minister?
MR. LEBLANC: The agreement was announced on Thursday of last week. That would have been April 3rd, or something like that, if I remember correctly.
MR. DOWNE: So on April 3, 2001, and a local corner store down in Pubnico had a shelf full of tobacco that day, or is it the next day that they charge the increased cost of tobacco?
MR. LEBLANC: It would have been effective midnight of that day.
MR. DOWNE: So any inventory they had bought prior to the tax increase they would have had to retroactively pay back to the government the tax increase on that tobacco?
MR. LEBLANC: That's correct.
MR. DOWNE: So all tobacco sales, whether they purchased the tobacco after the announcement or prior to the announcement, that is their responsibility to pay the provincial government the additional tax?
MR. LEBLANC: That is correct.
MR. DOWNE: Mr. Minister, the $20 million, it's a nice round number and I am sure that there are lots of people who want their roads - $20 million would help with the potholes and the bushes along the side of the road. Gosh, you know, agriculture could use it. So, you got that a year or so ago with a 20 per cent reduction. The list goes on, health care workers, education.
Mr. Minister, can you tell me what you're going to do with this $20 million tax, which I might say our caucus has been very supportive of that initiative of the $20 million tax on the tobacco because it is the right work, if it can be a deterrent to stop people from smoking, albeit your caving in to the interests of the smugglers is beyond me, but besides that this $20 million is a deterrent, hopefully, to stop people from smoking. What are you going to do specifically with the $20 million, Mr. Minister?
MR. LEBLANC: Well, I will answer two questions because you really had two questions. One was a comment, which I think I should deal with. The other one is with regard to the funds. The funds will go into the revenues of the province under the tobacco tax revenues. The indication from Health is that they are planning a smoking cessation strategy that will unfold in the fall. The details of that have not yet been finalized, and so that amount will be finalized at that point in time.
I should point out two things, one of which is I have heard it said, well, why didn't you include this in the budget. I indicated before that this has been ongoing since January of last year, there has been talk for a long period of time. We felt that during last year the
discussions were moving on. We felt that it would happen perhaps early in the fall. The federal government, I believe at that time, had other things on its mind, other focuses on its mind, and it held off. We kept waiting for it to happen and you have a lot of people who want to get together and do this in unanimity. Even the day I tabled the budget, I can honestly say that I didn't know when this announcement would happen. I was very pleasantly surprised that it happened so soon after because, with all the delays that happened, I was beginning to wonder whether it ever would. So that's one issue.
In regard to the enforcement of the tobacco side of it, I should say first of all that I made some enquiries as to how this came up and the recommendations are coming from Service Nova Scotia and Municipal Relations, and the collection agency there is saying that they have been in Provincial Court and that they have ruled them out of order. These are the provisions whereby there was a minimum fine. If I could say, the judge basically refused to put in place the fine and these recommendations came out of that tobacco enforcement section, and that's where the recommendations come from. They were not prepared by my staff in Finance. They were prepared by Service Nova Scotia and Municipal Relations, and I guess it's outlined in how they were structured. They are basically to ensure that there are progressively worse fines and also, if you look at the quantities that were in there, there were fines for less than 50 cartons, over 50 cartons; the severity increases with the quantity.
You mention the fact that there is a $250 minimum fine and, I go back again, that is for where something is not specifically prescribed in the bill. So, in other words, if there is something that would not have been outlined specifically, it gives the latitude of a judge to go from I think $250 to $5,000. So, some latitude that a judge would have that he did not have before.
[3:30 p.m.]
MR. DOWNE: The latitude he had before was from $10,000 to $50,000. What you have done now is said to the smugglers, we're not going to take it to you too hard, we're only going to charge you $250 to $5,000. I knew you didn't write that piece of legislation. I mean nobody in the department would write that unless it was directed by - I mean it is under another group. Here's the old Act.
MR. LEBLANC: I know.
MR. DOWNE: Here's the new Act and it is very clear, Mr. Minister, when you read it, you have gone from $10,000 to $50,000, to $250 to $5,000 and that's how I see it. Here are the old regulations. Here are the new regulations.
MR. LEBLANC: I go back to the point, the $250 is for things which are not prescribed in the bill, things that may not have been contemplated coming forward. That gives the judge the latitude of doing it, at least placing some fine from a range of $250 to, I
think there's $2,500 on that, my note is in front of me. The other issues in regard to smuggling related to smuggling of tobacco products under 50 cartons and over 50 cartons is very specific as to what the fines are and they are higher than the $250 you talked about.
MR. DOWNE: The minimum fine of $250 to a maximum of $5,000. I guess the only concern I have is that you're telling me that the Department of Justice people, or the actual judges themselves are the ones who are saying to you that we refuse to implement this legislative Act, this directive by legislation to impose a penalty on smugglers to that tune, that's what you're telling me, and so the way around it is to reduce the fine. That's what the judges in the province are referring to. Is that accurate?
MR. LEBLANC: I would say that's relatively accurate, because what has happened is that the judges in this country, whether you agree with it or not, a lot of times are deeming the provisions for fines to be without any latitude and, as such, are refusing to enforce them. I don't speak for the judiciary of this province. However, that is the case and I would much rather have a progressive penalty whereby we can deal with that, plus the tax they should have paid; I think it is three times the tax they are going to pay plus the fines if you look into the specifics that we talk about, the under 50 cartons and over 50 cartons. The increment of this would add up to considerable amounts. It gives, I believe, the judge some latitude in sentencing and I think that is part of the problem that was not present there before, actually having these things with no punitive provisions whatsoever.
I don't think the honourable member, himself, or anyone in the House would like to have someone go to court and have basically no fine imposed on people who smuggle. I don't think that serves the interest of the Province of Nova Scotia.
MR. DOWNE: Anyway, I am not going to get into a debate on that. I am more interested in what you are going to do with the $20 million. Can you tell me, you talk about smoking cessation, how much are you allocating for smoking cessations?
MR. LEBLANC: Mr. Chairman, first of all, we're talking $15 million because there were provisions already in the budget for 5.7 per cent of this. So I want to clarify.
MR. DOWNE: It is $20 million overall?
MR. LEBLANC: No. Its increase overall is $20.7 million. Within the provisions of our estimates, we had estimated 5.7 per cent. So we are talking an increment here of $15 million, just to make sure that everyone understands that. So, even in this budget, one of the issues that we've put in place for a deterrent in regard to smoking, giving monies to community health boards, part of those funds will be used in smoking cessation programs they will be putting in place. I just want to point out that issue.
In regard to the $15 million, that is something that exceeds our expectations, and I am pleased with that because I believe that the price increase will have some effect especially on our young smokers because they seem to be the most problematic thing that we face, and for some strange reason it seems to be more problematic with young females. I don't know, I can't explain that. However, that seems to be the truth. The Department of Health has indicated, already, that they will be putting forward a smoking cessation policy that will be unfolded in the fall, and as for the final details of the cost of it, I am not privy to it, and the Department of Health will have that and will be prepared to announce that in the fall.
MR. DOWNE: Mr. Minister, my concern is that the additional $15 million of the $20.7 million that is going to be part of the revenue stream of the Province of Nova Scotia, doesn't go into the consolidated revenue stream, it just doesn't go into that general slush fund for you to be able to do a row here or there, or whatever you're going to do with it. I mean, unless, of course, it is Lunenburg West, but I doubt very much if that will happen. I have been told that it probably won't, so I don't know. We supported the $20.7 million overall, that you are going to collect this year from tobacco, over and above, with the increased fee. We supported that for the purpose of health and education, and I want to know, Mr. Minister, are you going to commit it 100 per cent to the benefit of those people trying to quit smoking, with programs, with assistance in cost of buying the different pills that they take and patches or something like that. Is it there to help people or are you going to just take the $5.7 million that was in the budget and the other $15 million and throw it into general revenue? Because, if you wait for the Department of Health to come out with a plan, you could very well be 11 months and 28 days from now before that gets rolled out.
MR. LEBLANC: Mr. Chairman, the funds received from the price increase in tobacco will go into the general revenues. That is where it will be. There will be a smoking cessation program put forward by the Department of Health in the fall. I do not know the degree or the latitude or the size of the program that is there. But I do want to point out the number of e-mails and letters that I have received from many Nova Scotians supporting the increase in smoking, especially dealing with youth, and we have brought that forward. We did that in conjunction with a strategy to not have smuggling increase. That is a real concern that we have.
If you look at the mid 1990's and the problem that we had and why prices were reduced at that point in time, there were many different factors which had an impact on that and, obviously, one was that a lot of the tobacco products were being exported out of the country and also reintroduced through different means. Some of that has changed and that is very positive. Our problem is doing this in conjunction with other provinces whereby we don't get interprovincial leakage. That is why we felt it was very important that we do that along with, basically, our Atlantic Provinces.
I know that I speak for the minister in New Brunswick. He was concerned that it be done in conjunction because, obviously, he borders on Quebec, which has lower prices already, and if New Brunswick were to have made a move prior to Quebec signing on, the differential would have been even greater, which would have caused some real problems for them.
MR. DOWNE: I know all that stuff, Mr. Minister, and I appreciate that and I support that. The bottom line here is you are going to take $15 million, or a percentage of that $15 million, and put it in general revenues. Is that true or false?
MR. LEBLANC: The answer is true.
MR. DOWNE: You have no problem doing that?
MR. LEBLANC: No, I don't.
MR. DOWNE: Well, I have a problem with that but we will look at it later on. There was a colleague who was going to share some time with you, Mr. Minister. Everyone is lining up to want to talk to you.
MR. LEBLANC: I am a pretty popular guy sometimes.
MR. CHAIRMAN: You still have 20 minutes remaining in your time.
MR. DOWNE: I am fully aware that I have 20 minutes left in my time.
MR. LEBLANC: Maybe we can ask the Page to have your colleague sent in?
MR. DOWNE: Mr. Chairman, I have already done that. Is there any other helpful advice you want to give me? Do you want to throw a question my way to ask the minister or something?
MR. CHAIRMAN: Carry on with the next question then.
MR. LEBLANC: It has gone very smoothly this year. Let's see if we can finish it this way.
MR. DOWNE: I am not going to give up any time. I want to move on to the issue of your pension investments and how we are doing. I realize the staff, the high calibre of individuals we have with the money that we have invested, can you, Mr. Minister, give us an idea how we were doing last year with the funds as a percentage of growth? I understand we had phenomenal years, the last two years, actually.
MR. LEBLANC: The last actuarial report we had the Public Service Superannuation Fund at 106 per cent as of March 31, 2000. That is very positive. My information shows that the Nova Scotia Teachers Union, at the same time, was in the range of 90 per cent. So we made remarkable improvements, especially in the Nova Scotia Teachers Union. However, I am being cautioned by staff that people should not make assumptions that things will continue as they have been. Obviously, a lot of it is subject to earnings going forward and being prudent and careful in making projections.
MR. DOWNE: Mr. Minister, when we took over in 1993 from a previous administration, the unfunded liability in the teachers' fund was somewhere in the vicinity of $1 billion.
MR. LEBLANC: It could be.
MR. DOWNE: Well, it was. Because of the good, solid work and prudence of previous administrations and great staff we are now at 90 per cent. This fund will be actuarially sound in a very short period of time. Is that correct? Are we in a good position on the teachers' fund, at this point looking out for the largest percentage of retirement in the next five years, do we look like we are in fine shape on that or have we still got some concern?
MR. LEBLANC: Obviously, we are always concerned when we are still underfunded. I think the provisions that were put in place by the previous administration, I think it was $30 million - but they go back to 1994. The provisions that have been put in place, basically, we feel will achieve that. We are being, I guess, cautious as to whether that will happen ahead of time or on schedule, but I can say the progress is considerable, it's ongoing. I want to say that the Investment Committee, which is made up of a lot of different people, have done an excellent job. It has worked very closely with Doug Stratton and his staff and we feel there is a good line of communication. So, basically, we are very optimistic about it, but we are also being cautious.
MR. DOWNE: The 106 per cent in the other programs, Mr. Minister, and you were very complimentary of myself and staff and I appreciate that. I hope that is noted in the minutes here. I am sure it will be. It's not very often that happens with you. But 106 per cent, at some point I think it is 120 per cent where you are actually in penalty, around 120 per cent . . .
MR. LEBLANC: Once you get over 110 per cent, you are supposed to come up with a plan. Once you get over 120 per cent, then you are going to get into the penalty provisions whereby you would not be registered with the federal government. So then it would be like the emergency plan. So, obviously, we have to start planning at 110 per cent, but at 120 per cent, we have to take immediate action.
MR. DOWNE: At 106 per cent, you are soon there. Would the minister, in the event that we get to the 120 per cent, or near that 120 per cent be receptive to a holiday?
MR. LEBLANC: Well, obviously, we will have to look at some options as to whether or not it is a holiday or other options, but we will have to act on that. I guess where this is a speculative question, hopefully, we will continue to do well but that will depend on the performance of the fund itself.
MR. DOWNE: Mr. Minister, on transportation, your blue book talks about the fact that total revenues from fuel tax should be allocated to highway activity. When do you foresee that being a reality?
MR. LEBLANC: If I recall correctly, the commitment that was made, not only the blue book but also the Premier indicated an additional $31 million at that time. From the time we took office we have increased it $11 million this year and, in another two years we would see ourselves meeting that commitment.
MR. DOWNE: So when?
MR. LEBLANC: Two more years.
MR. DOWNE: Two more years and 100 per cent. That will be provincial money or federal-provincial money?
MR. LEBLANC: It could be provincial.
MR. DOWNE: Provincial money, and that will be strictly for paving and repaving or all transportation activity.
MR. LEBLANC: No, that would also be for transportation activity. You can't set aside the other work that Transportation does in maintaining our work because, basically, that is what those funds are for, maintaining our highways. A lot of that happens in the maintenance of it. Some of it also involves the paving that you are referring to. We also have bridges that we have to maintain. I know you being a previous Transportation Minister know we have a huge number of bridges which really cause a lot of problems here for the province.
MR. DOWNE: At least 26,000 kilometres of highways . . .
MR. LEBLANC: And 3,000 bridges.
MR. DOWNE: . . . and we have almost 3,000 - yes, we have the largest number of bridges in Atlantic Canada. If you add Newfoundland and Labrador, and New Brunswick together, we have almost as many kilometres as those two areas. We have a lot of work. We
have bridges going nowhere and everything else. So we have all sorts of things that we have to (Interruptions)
MR. LEBLANC: Not going there.
MR. DOWNE: Don't go there. Mr. Minister, on the overall numbers that you have for the debt in the Province of Nova Scotia, and we have kicked this around before, the term low balling, I think I have used it, I think the Official Opposition have used it and I know the analysis that I have, done by the branch, the modelling numbers that are used, are conservative numbers, are safe numbers, but there is a tolerance in there. When you are doing that modelling, you can take the low end of the tolerance scale or you can take the upper end of the tolerance scale but either one of them are conservative, they are prudent numbers. Have you directed staff to go to the lower level of the modelling formula in regard to revenue stream for the Province of Nova Scotia?
MR. LEBLANC: No, I haven't.
MR. DOWNE: Have you asked staff in that branch or any branch to be more conservative than they currently or previously were?
MR. LEBLANC: No, I haven't. This is a very serious question because to try to have an impact on revenues and direct staff to go one way or another, I think, is highly inappropriate. I know, speaking as a minister, and yourself as a previous minister, to do that would be inappropriate, a very weak work in comparison to this because we have to have their professional advice in projecting those numbers. I just want to clearly emphasize that I have not given direction to staff to be either optimistic or low on some of their estimates to make the numbers come out the way they would like to.
MR. DOWNE: I appreciate that, Mr. Minister, and I was happy to hear that response because that is what I would expect from a Minister of Finance to answer that way, and I appreciate the fact that you have taken that position seriously because it is an important one. I want to make sure that previously, when you were in another administration, there used to be all sorts of fooling around with revenue expectations. I am glad to hear there has been a born-again attitude toward reasonable expectations as what we have tried to live under. The professional staff you have working with you have always impressed upon me that if we have a surprise, we want it to be a good surprise, so just leave the modelling alone. That is the way it should be and it is a good program. So I am happy to hear that, Mr. Minister.
My colleague has arrived. He is itching to ask you a few questions, so with the few minutes left, Mr. Chairman, I will turn it over to my colleague, the honourable member for Richmond.
MR. CHAIRMAN: The honourable member for Richmond. Mr. Samson, the time is now 3:48 p.m. You have 10 minutes remaining in this allotment.
MR. MICHEL SAMSON: Thank you, Mr. Chairman. Mr. Minister, I wanted to ask you a few questions about the Acadian Affairs part of your portfolio. What is left of the Acadian Affairs Secretariat right now?
MR. LEBLANC: Are you speaking about staff or are you speaking about the funding?
MR. SAMSON: Both.
MR. LEBLANC: The staff today, we have not filled a position for the director general - I am trying to remember exactly his position - executive director, and that was Mr. Paul Gaudet, who was previously in that position. We are in the start of a process to bring about a full-time position to fill that capacity, and that probably will happen within a short period of time, I would say three to four months, something like that.
MR. SAMSON: What is your budget for the secretariat?
MR. LEBLANC: It is $110,000.
MR. SAMSON: And you have that budget again this year?
MR. LEBLANC: Yes, we do.
MR. SAMSON: Last year, you did not have an executive director, so I am assuming that . . .
MR. LEBLANC: For part of the year we did, not the full year.
MR. SAMSON: The money remaining in that budget from last year, where is that money gone?
MR. LEBLANC: That money stayed in the department and we used that money for many different things. But I would say some of the issues we wanted to trigger through l'Entente Canada, with Heritage Canada, we used that to fund some programs that people had made submissions for. That is information that I would be more than pleased to share with you.
MR. SAMSON: If you could. When you say that it stayed within the department, you mean Acadian Affairs, not Finance?
MR. LEBLANC: That is correct.
MR. SAMSON: Other than the executive director, there is no other staff in that department?
MR. LEBLANC: No, there is not.
MR. SAMSON: You appointed an advisory committee and, as you are well aware, I raised the concerns on that because of the process. I thought it was a very dangerous precedent to be setting, that a minister would hand-pick an advisory committee without allowing Nova Scotians from one end of this province to submit applications and to be able to be considered through the normal process. As you know, there is an advisory council to the minister on the Status of Women and there is an advisory council to the Minister of Community Services; those all go through the Human Resources process. Why did you not see fit to give every Nova Scotian, especially every Acadian, an opportunity to apply to be a member on this advisory committee?
MR. LEBLANC: Well, there are differences between the structures that you have talked about because they are legally constituted organizations. I think if you look at the Status of Women, it is set up by legislation; it has a very formal structure. This is an informal structure. When you speak about the people that we have chosen, I look at the people that were nominated. We took the individual who was president of la FANE, the Federation of Acadians of Nova Scotia. We took Mr. Allister Surette, who was a former colleague of many of your colleagues in the House, who is now the President of Collège de l'Acadie.
We had an individual called Monsieur Delphis Comeau, who is the Clerk for the Municipality of Clare. We took a student from the Université Sainte-Anne, who I got a suggestion from la FANE, I asked them for a submission of someone who would be interested in doing it and they submitted a name, Joline Larade, who happens to be from the constituency of Cheticamp; Yvette Aucoin, who is a representative of the Conseil scolaire acadien provinciale; and an individual from your riding who is an educator, Ben Samsom. There are another couple of individuals and my mind has gone blank. But I look at the suggestions that we have chosen, I think it was people who I felt first of all were from throughout Nova Scotia, representing regions that you represent, regions of Cheticamp, regions of Clare, Argyle, which are the major Acadian population areas we have here. We have representation also from the core, metropolitan city. Another individual who sits on the board is Vaughn Madden, who is the Executive Director of the program Congres mondial acadien.
So I look at the choices that I have made. I think all of them speak of the fact that many different organizations that are represented that Acadians serve on, or are represented by, think it was a good, diverse group we chose.
MR. SAMSON: How many times have you met with this advisory committee?
MR. LEBLANC: I have met with them two or three different times. I have to go back through my notes, but I believe it was at least two or three times.
MR. SAMSON: What action has been taken as a result of those meetings?
MR. LEBLANC: Well, two things have happened. One of the things we are asking for is local concerns they would bring in from the different regions that they represent and I think there has been a good dialogue. The other dialogue, I guess, is what they would expect from the Bureau des Affaires acadiennes, what kind of structure would they like to see in place, asking them their suggestions, asking them what they would like to see government deliver in services. So I guess those are the types of discussions that we have had. It was a sounding board. It was always meant to be a sounding board. This is not a group that will make decisions for government. It is a group that I can talk to on an ongoing basis, at least to hear what they have to say. People would say, well, why don't you just meet with la FANE? We could also do that. But I felt that this group was a good cross section of Nova Scotians across the province and, as such, allows me to have maybe an open and frank discussion, hear what they have to say.
Other issues they brought up were issues in your riding whereby people were talking and referring to the fact that speech pathologists is something that is required and that the CSAP is having difficulty recruiting, even though they are even offering to do training for people to go and take the course, they are unable to find someone to go take the training and provide that service. So I found there was a good exchange of views and a lot of those views have been forwarded on to my colleagues when I hear them.
MR. SAMSON: I appreciate hearing it from the minister. I guess one of the big frustrations, Mr. Minister, is that it is good to get information and it is good to hear these concerns about speech pathologists, about the need to discuss with Patrimoine canada different issues. The unfortunate thing is you have no executive director to do this work and to carry out the concerns that have been raised. We all know you are a very busy man, and I think the Acadian population in this province recognizes that. That is why in having an executive director you had someone who could be full-time addressing these concerns, making the necessary contacts and pursuing this. I guess it is safe to say now, that you gone one year or very near a year without an executive director.
MR. LEBLANC: About nine months, I think, in that range.
MR. SAMSON: Well, back where I come from, nine months is very near to a year, as I said.
MR. LEBLANC: I am just trying to be exact.
MR. SAMSON: I appreciate that, and I guess my curiosity begs the question, what are you waiting for? You have met with this group twice, they have made it clear there are issues out there, it is good that you are getting consultation. The problem is, there is no one acting on a full-time basis on these concerns. This morning, we did have the opportunity to meet with representatives of la FANE, l'èquipe l'acadie who are trying to pursue the different issues that they have. Unfortunately, right now, they do not have a full-time person in your government to address and to pursue these issues on their behalf, so, again, I beg the question, what are you waiting for?
MR. LEBLANC: As I indicated before, we will be moving and filling the position in the short term of this one here. As to exactly how quickly that will happen, I will probably have a better idea within the next two to three weeks. Some of the same things you are hearing from l'èquipe l'acadie and la FANE, today has been said to me, and we felt there