[Page 67]

MR. CHAIRMAN: I would like to welcome everyone to day two of the Subcommittee on Supply in the debate of the estimates for the fiscal year 2002-03. Today's date is Tuesday, April 9, 2002. The time is now 1:57 p.m. We have four minutes remaining in the questions of the honourable member for Hants East, Mr. MacDonell, and then time will transfer over to the Liberal caucus. Mr. MacDonell, your time may begin.

MR. JOHN MACDONELL: And the time right now, Mr. Chairman?

MR. CHAIRMAN: The time is now 1:58 p.m.

MR. MACDONELL: Thank you. Mr. Minister, I want to come back to Page 3.5 on the Supplementary Detail of the Estimates. I have a question around the 2002-03 estimate, the $6,825,000. Looking back in 2000-01 and then comparing that to the 2001-02 that's on Page 3.5, in those two years there didn't seem to be any movement of dollars, or assumption that there were dollars unspent. You indicated that the estimate you have of the $6,825,000 that there were monies that had been given to the federal government that are evidenced in your 2001-02 forecast, the $10 million, that haven't been used if I understood you correctly. So I guess what I'm wondering is why is the difference this year in your budgeting? Is that something that hasn't occurred in any of the other years? Like what was the mechanism in other years that you didn't wind up with the dollars not used in 2001-02 or 2000-01?

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MR. CHAIRMAN: The honourable Minister of Agriculture and Fisheries.

HON. ERNEST FAGE: I think there are two relevant things there. First of all, as you're aware, we signed a new agreement a year ago July that increased the amount of funds, so there is that factor involved. Secondly, it was a three-year agreement where we would deposit funds through that period and be matched by 60 cent federal dollars. Those funds are deposited any time through the period, not any specific budgetary year, under the agreement, and the agreement contains that at the end of the three years our share must be 40 per cent of the total paid out.

MR. MACDONELL: So what you're saying is the federal government carried it until you put in your share, I mean they carried the whole cost until you put in your share is what you're saying?

MR. FAGE: It can work any of three ways under an agreement like that, as long as that at the end of the three-year period it's 60/40. We can be more than 40 per cent of the funds in a given period expended. They can be less or more than 60 per cent, but at the end of the three years the total dollars, 40 per cent must come . . .

MR. MACDONELL: It has to be 40/60?

MR. FAGE: You have to be 40/60 at the end of the three-year agreement. It's a three-year agreement and not a single budgetary year agreement.

MR. CHAIRMAN: You have one minute left, sir.

MR. MACDONELL: Are you saying that in other years then that you contributed over 40 per cent, but by the time the three years were up it worked out to 40/60?

[2:00 p.m.]

MR. FAGE: Again, the three-year agreement dates back to July 2000 and that goes forward for the three years and at the end of that period we're required to have expended, 40 per cent of the dollars would be provincial dollars in those programs and 60 per cent would be federal. The arrangements on dollars pre that 1999 agreement can be a different percentage, this is the three-year agreement starting July.

MR. MACDONELL: By looking at the 2001-02 and 2000-01 it certainly, from what you estimated and what your forecast, the numbers in both those years went up, so it would make me think that you put dollars in - and I will come back to this after the honourable member for the Liberal caucus.

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MR. CHAIRMAN: Your time has expired. Now to the Liberal caucus, the honourable member for Lunenburg West, you have the floor. Your time is now 2:02 p.m.

MR. DONALD DOWNE: Mr. Chairman, to the minister and staff, I have ordered a sandwich just so you know. It will be, hopefully, coming some time, and the last time I ate I think I was in here just before I did that last night.

Mr. Minister, I want to go back to what I brought up yesterday in regard to the funding formula with the federal government. I listened to the response you gave to the New Democrats and I went over in my mind the response you gave me last night. Question specific, can the department under the GAAP financing make more than a one-year payment for its 40 per cent of a 60/40 split on an agreement, on a sub-agreement in one year, or do they have to be spread out equally over three years? In other words, if the fund is $10 million, then the province's portion, either in kind or in cash or whatever formula that you worked out, has to be done on a third, third, third over a three-year period, the length of the agreement?

MR. FAGE: As far as the GAAP, I would direct you to talk to the Minister of Finance in regard to those specifics, but with this specific agreement that we have signed with the federal government on safety nets risk management, it's a three-year agreement. We have the right as a province to make payments any time during the three years.

MR. DOWNE: I have checked with some members of the federal government and, unless this is a special deal, I'm not aware of any other agreement whereby the federal government waives your responsibility to pay on an equal portion. In other words, you can have a three-year agreement and not pay until the third year and I've never heard of that before and I can't seem to find anybody in any department who tells me that that's the way it is. Can you check with your staff to verify that agreement, if that's the way it's written? You know you're the minister and you're here to tell the truth.

MR. FAGE: Yes. That's my understanding and I will have that verified.

MR. DOWNE: Well, you have your finance control officer right beside you. You could simply ask him because he has to deal with it.

MR. FAGE: I'm told that the payments made in the year 2001-02 represent program commitments for the year 2001-02 and therefore what you see there are GAAP-compliant. I would add in that agreement though it takes one year for the catch-up, for the producer portion to come in under your NISA for that realignment plus the six months to do the final figure adjustments.

[Page 70]

MR. DOWNE: So, Mr. Minister, your comment about paying either year one, year two, or year three is not accurate. It really has a formula that you have to pay within the fiscal year that the debt has occurred. That's how I understand it. I'm not an accountant, but that's how it has been explained to me.

MR. FAGE: My understanding is that we have that flexibility under the agreement, that it's a three-year agreement. The 40 per cent, we have minimum commitments that we calculate, but we can pay in that three-year agreement, if we haven't met them, we can increase. If we have made an overpayment or an overcontribution in any given period, after that year's producer catch-up, then we're credited for it.

MR. DOWNE: I understand there are prior years' adjustments made. That's the normal process, but you can't go a year without paying. You have to pay something each fiscal year, is that correct, yes or no? You can check with your finance staff there.

MR. FAGE: That's the common practice that we've always done.

MR. DOWNE: Is that the practice that's under this agreement you currently have?

MR. FAGE: That's the common practice we've always done.

MR. DOWNE: So you have to pay each and every year?

MR. FAGE: I don't know why we wouldn't.

MR. DOWNE: The answer is yes?

MR. FAGE: We're required to and we do make . . .

MR. DOWNE: No, no, no, I know, Mr. Minister, I'm just asking you a very simple question here. Your staff are telling you the answer, is it yes or no?

MR. FAGE: I think I've answered it several times. It's common practice.

MR. DOWNE: The answer is yes?

MR. FAGE: It's common practice that we pay each year.

MR. DOWNE: Is it yes or no, Mr. Minister?

MR. FAGE: We have paid each year, the Estimates Book proves that.

[Page 71]

MR. DOWNE: So the answer is yes? Why are you afraid to answer the question yes or no?

MR. FAGE: I think I've responded and answered three times now.

MR. DOWNE: Well, okay, if that's the case and you indicated to me personally the $1.7 million that is not currently on the books because it was prepaid last year for this year, how does that work? How were you able to prepay your contribution to the $1.7 million program?

MR. FAGE: Again, the program is a three-year program where we contribute the amount at any time during that three-year period to satisfy our 40 per cent for the entire agreement.

MR. DOWNE: Mr. Minister, you must have played a lot of hockey because you sure can slide around here on that issue. I think it's pretty straightforward. I've asked you - and I'm looking for my documents that I asked you yesterday and I'm trying to find my specific paper here if you will hang on a second - because I understood from your comments yesterday that the $1.7 million, there were two funds, right? The Loan Remission Program and the NISA Program . . .

MR. FAGE: Yes, correct.

MR. DOWNE: . . . and there was $1.7 million in that one program that didn't show up this year, which is part of the 10.9 per cent reduction in budget, and you said the reason it didn't show up this year is because you prepaid it last year going into this fiscal year? That's what you told me.

MR. FAGE: Yes. Yesterday, if I recollect the question, it was how much money went forward this year, that being the year 2001-02, and $10 million-some-odd went forward into the NISA account. The federal government is the one who, when the producer's contribution and form comes in, will authorize the payment of that cheque. Our responsibility is to ensure during that three-year period that the funds are there.

MR. DOWNE: I want to ask you one more time the question - and your answer yesterday was noted here - did you spend all the province's percentage of the safety net last year?

MR. FAGE: I apologize, I didn't hear the question.

MR. DOWNE: Did you spend all your provincial portion of the safety net money last year?

[Page 72]

MR. FAGE: Yes, we did.

MR. DOWNE: You spent it all. So the 5.3 loss, and that would have been how many dollars?

MR. FAGE: In the safety net?

MR. DOWNE: Yes.

MR. FAGE: The NISA component? That number's being calculated and will be provided.

MR. DOWNE: Roughly around $5.1 million.

MR. FAGE: I would rather see the exact figure.

MR. DOWNE: I'm not asking exactly, but roughly about $5 million; I think that's fairly general knowledge out in the community if I'm not mistaken - is that about right? So the other part of the reduction was a risk management of $1.7 million. I asked the question, that $1.7 million of risk management that you're going to provide those dollars this year, but you had a chance to prepay last year, your last year's portion and this fiscal year's portion - which is 2002-03 - last year, is that accurate, again?

MR. FAGE: As I said yesterday, the NISA Program commitment was calculated by NISA, not the province. We then allocated those dollars to NISA, they then over the next time period, some of it may or may not be expended. We don't do their calculation or we don't time farmers' year ends or their application date, but those numbers were calculated by NISA. We put forward the dollars that were required and that's how the expenditure number is calculated. We do not do their calculation for them. What we do is make a commitment of dollars, which was included in that $10 million there, and put that money forward and they will disburse it.

MR. DOWNE: I asked you yesterday about the research and development fund with Pork Nova Scotia and the pork producers of the Atlantic Provinces. Were you able to find out anything on that issue?

MR. FAGE: We haven't received that request yet, but we're looking for it and we will be contacting Pork Nova Scotia.

MR. DOWNE: You were going to check and see if the other provinces had committed and whether you would be able to . . .

[Page 73]

MR. FAGE: Yes and we will obtain that material, but we will certainly entertain a request from them when it comes forward. Obviously we're waiting for them to put a request in.

MR. DOWNE: Sure. I was of the opinion that you were informed about that prior. Where would you find the money for that in your budget if they were to come forward with research and development? Under what part of the budget would you be able to find those dollars, whatever they would be? I assume it's not a huge amount of money, but because it's shared amongst everybody, but what area?

MR. FAGE: I guess we would look at the request and then we would consider that. I certainly am not looking to deal in hypothesis or what if, when a request comes in then we will consider it.

[2:15 p.m.]

MR. DOWNE: No, no, minister, they made a motion at the pork producers' annual meeting to have producers contribute and every other province has agreed to contribute to that fund. It's not a hypothetical issue here, it's a factual issue. The question from me to you is where in the budget would you be able to find it or where would you take funding for your contribution for that? What discretionary funding do you have within the department or under what program would that qualify for funding?

MR. FAGE: Again, when we receive a request we can consider the request at that time. At this point we haven't received a request to my knowledge from that organization and really I'm not prepared to deal in hypothetical situations.

MR. DOWNE: Well, your staff were at the meeting; it's not hypothetical that they will ask you, and the question is quite simple, under what program, if you were to agree to it, would those funds be able to be allocated? That's all, it's not a tough question.

MR. FAGE: Again, as the honourable minister in a previous life as Finance Minister would appreciate, one deals with requests when they come forward in official form to the minister. Hypothetical situations reported is not how we can make a decision or how we make allocations, so I'm looking forward to the request and we will consider it when we get it.

MR. DOWNE: Well, I thought it would be under the industrial development program where you have funding for federal-provincial. You just mentioned the $4 million you're putting in it this year and that Ottawa would be contributing $6 million which makes $10 million, but anyway, that's fine minister, I will check that out with the industry.

[Page 74]

You were going to check out about ACA losing market share in turkeys, did you find out anything?

MR. FAGE: Last night when we finished testimony, it was reasonably late, approaching 9:00 p.m. Those requests are being worked on this morning and when we have that information back, we will be pleased to share it with you.

MR. DOWNE: In the event there's a drought this year - and none of us hope that there will be a drought, none of us want it and, in fact, there's probably a lot of people praying there will not be a drought this year - you obviously would have to come up with a program to assist producers, and your budget being what it is right now you would either have to go for an appropriation of funds or you would have to cancel a program. If there's another drought this year, minister, would you be willing to address that issue or that's too bad, the safety net should look after it?

MR. FAGE: I guess it's important to remind the honourable member that this government accelerated the loan Loss Provision Program in the absence of the previous government to negotiate a disaster and a reasonable NISA Program. That was negotiated by myself and the industry and came to a successful conclusion in July 2000, which more than doubled the amount of dollars going into income stabilization, risk management, and disaster programs in this province, which was a huge accomplishment that the agriculture industry was able to achieve. Those programs are in place, especially the CIFA program, a disaster program that is able to allocate dollars to try to help alleviate and deal with drought conditions or other disasters.

Certainly there are programs already in place that producers have, and that's why they were negotiated in that regard. The new program review looks to build on those types of partnership dollars, of 40/60 dollars that allow more dollars to flow to the producer industry and those types of unfortunate situations, which certainly provides more dollars in totality to the agriculture industry in those situations and provides a better arrangement for strapped provincial coffers at 40 per cent and 60 per cent from the federal government.

MR. DOWNE: So what you're saying is the previous minister, Mr. Lorraine, was a failure for agriculture and it was only your ability, three years after, you minister, able to secure some sort of agreement, even though you've used all the funding that he was able to provide for that one-year period and fast-track that funding for agriculture, is that what you're basically telling me? I worked on that program with the federation. I just want to know how insulting you want to be to anybody who worked on that program.

MR. FAGE: The honourable member is the one who is saying that. I obviously would never say anything and be disrespectful to former members of the Legislature. Honourable Minister Lorraine was certainly a close associate of mine and I was certainly pleased with the programs he was able to develop. It was unfortunate that the federal government would

[Page 75]

not, at that point, intercede in a drought situation, and I commend the former minister for being able to put together that program.

What I was commenting on was the agriculture industry and the federation that I work very closely with, and on their behalf finally we were able to negotiate an agreement that included the federal and provincial governments in disaster and income stabilization, and actually doubled the money to farmers. You're the only honourable member who appears to be saying those types of words.

MR. DOWNE: I don't understand, Mr. Minister, how you can come in here and speak the way you do. It's all in Hansard; it's all written down. It's obvious what you're saying; it's obvious to people in the room anyway. I take it the PFRA, Prairie Farm Rehabilitation body, from what I understand, it was through their intervention and their efforts with the federal minister that, in fact, they were actually encouraged to come down to deal with some of the crisis with regard to a water strategy. I'm sure that your department staff worked very closely with Ottawa to see if they would come down as well.

The meetings that took place - and you had a bit of a rocky relationship with the federation as I understand it from the farmers, that's what they're telling me - anyway, the Prairie Farm Rehabilitation group, from the meetings that took place in Coldbrook, are talking about developing management strategies, and that's important. My question to you is, you indicated in your opening comments that there's an internal committee of your department, and probably departments, to deal with this serious issue of water, access of water, water storage and things of that nature, are you at liberty to table any information with regard to the internal committee's activities, as to where they are and what their plans are relative to water access?

MR. FAGE: The federation has worked long and hard to encourage the federal government to supply expertise under the Prairie Farm Rehabilitation Program associated with the federal department, which deals with water management and water expertise and resource. Certainly the federation's hard efforts and the department's efforts and certainly this government, speaking directly to the federal minister, we were all extremely pleased as an industry and a government when the federal minister complied with the request and $300,000 worth of funding was made available in this year. Certainly, we all see that, collectively, the farming community and government, as a major achievement.

We continue in our discussions with the federal government to keep them engaged on a long-term basis, because obviously with four out of the last five years being extremely dry, and the drought situation in Nova Scotia, it's critical to our future that we have that support and expertise and really not reinvent the wheel here in Nova Scotia, but be able to move the situation forward quickly. Certainly our intention as a government is to continue to work closely with the industry, and look at effective ways and dollars that we can partnership to help alleviate that situation. As far as the internal group, certainly the first

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report from producer meetings and department consultation has been compiled, and it would be my pleasure to supply that to you, an update on what's taking place. We will have a copy of that for you very shortly.

MR. DOWNE: I've heard the minister say very shortly before and sometimes that took a year and a half. Can you give me a rough time frame for very shortly?

MR. FAGE: As soon as it can come over from the office.

MR. DOWNE: That's great.

MR. FAGE: We would love to supply that to you this afternoon.

MR. DOWNE: That's much appreciated. The reality is that you mentioned to provide funding for farmers who could experience the problem again this year. Is there any provision in your budget to deal with an emergency problem such as drought again this year? Is there anything allocated in your budget, realizing that four out of the last five we've had drought and we've had to have additional funding and you had to deal with it in all sorts of innovative ways? Four out of five is a fairly consistent trend, is there any area in your budget that is set up to deal with the drought issue this year?

MR. FAGE: I guess I would have to make two observations on the question. First of all, the new programs, with the double funds, there as disaster and as risk management, and secondly, we are working with our federal partners and the industry at this point on program development in regard to that water resource. If and when an agreement is achieved, then we would inform the industry of that agreement.

MR. DOWNE: You mentioned the issue of user fees. Are there any additional user fees in the Agriculture or Fisheries budget that I'm not aware of?

[2:30 p.m.]

MR. FAGE: The budget contains, in Fisheries, a processing fee increase I believe for a processor's licence for the inspection of a facility, previously it was $100, now it is $200, is the fee increase in the budget.

MR. DOWNE: You mentioned that before, but the issue - if you're a drug store and you sell milk you're now going to be a distributor of food, is that accurate?

MR. FAGE: Any establishment that sells perishable food products currently is required to have a permit to sell that product. Milk, fish, meat are all considered perishable food products. Anyone currently selling any of those products is currently required to have a permit. It's not a new permit.

[Page 77]

MR. DOWNE: No, no, I understand that, but I think it's new to drug stores if they sell pop and they sell milk, but that's basically the extent of what they sell. Would they be charged a fee for that?

MR. FAGE: They have always been on the system and require a permit to sell that product.

MR. DOWNE: So if you sell milk and pop but you don't sell any other food, you need a permit to do that, and that has always been the case?

MR. FAGE: That's my understanding. The pop part is not perishable, it's the milk part.

MR. DOWNE: Well, no, but I mean I'm just using the fact that they would sell juices and things of that nature. Even if it's UHT milk, which in non-perishable?

MR. FAGE: We can find out that exact detail, the UHT, I'm not aware of that circumstance but we'll find out if that one is classified as perishable.

MR. DOWNE: Can you explain what's happening between Farmers Dairy and the New Brunswick board. Is Farmers Dairy expanding their economic base to New Brunswick, and, if so, can you explain the jurisdictional border issues curtailing and/or enhancing that option?

MR. FAGE: My understanding of the current situation is that Farmers Dairy has applied for, I believe, a distribution licence in the Province of New Brunswick. It was initially rejected. Under the agreements of interprovincial trade we do not feel that they have the right to do that, and currently we are supporting farmers in that appeal process against the New Brunswick Government ruling.

MR. DOWNE: Did you say you are assisting Farmers Dairy?

MR. FAGE: Yes, we're supporting them.

MR. DOWNE: Baxters Dairy distributes here and has for a long time; it's a New Brunswick-based company, but they have shippers here. Is the argument based on the fact that no shipper, as such, is a Farmers Dairy shipper in New Brunswick? Is that the argument they're using?

MR. FAGE: No, it's Farmers Dairy challenge and they're basing their challenge the same as they did with P.E.I. We supported it and they were successful. It is based on fair trade practices and agreements between provincial governments. Baxters Dairy ownership is not a New Brunswick ownership, it's actually Quebec ownership, Saputo.

[Page 78]

MR. DOWNE: It was New Brunswick years ago, pardon me . . .

MR. FAGE: Under the old rules, when they distributed in Nova Scotia, the reason they had a plant or the reason they had a distribution licence, they purchased one in Springhill, Nova Scotia, and then built a new processing plant in Dartmouth, and that was the old system of entitlement.

MR. DOWNE: What's to stop an Ontario firm from coming down here and distributing fluid milk?

MR. FAGE: In theory, there would be nothing stopping them to my knowledge.

MR. DOWNE: So Quebec could come and ship fluid milk any time they wanted, they could sell Quebec milk in our grocery stores in Nova Scotia?

MR. FAGE: My understanding would be that they are eligible to apply. Obviously, they would have to receive a licence, but the general agreement between governments in Atlantic Canada specifically, in theory, allow for those processing plants or distribution licences to be set up. I can get you the exact terms and details for ones outside of the Atlantic Region but, to my knowledge, I would have to check with the national trade agreements among provincial governments, but the same type of rules obviously, I think, would apply.

MR. DOWNE: Obviously, if Quebec starts to ship milk down here and distribute it, it would be a huge problem for our dairy industry here. What would your position be, Mr. Minister? Would the provincial government oppose Quebec distribution of milk in the Province of Nova Scotia?

MR. FAGE: Again, there's no application before the Natural Products Marketing Council . . .

MR. DOWNE: If there was?

MR. FAGE: There's no company asking at this point. Theoretical discussions are always enjoyable, but I guess as a government we would deal with those situations if and when they arise, but there is no question . . .

MR. DOWNE: Well, I'm not ashamed to say that I would be fighting for Nova Scotia dairy producers and its industry. I wouldn't be out sticking up for Ontario or Quebec, quite frankly, but that's all. I want to ask a question in regard to . . .

MR. FAGE: Well, I guess the dairy industry here in Nova Scotia has always looked after and received strong support from the government, and for an honourable member to indicate otherwise would, I think, be a little misleading. The producers, as the honourable

[Page 79]

member probably would know, have signed a national agreement on marketing, where they share the gains in the market and the returns in the market across this entire country and that each and every province pool their resources to a varying extent of returns from the marketplace to protect themselves from such an event. I think it would be good if the honourable member had the opportunity to sit down with the dairy producers and know and realize that they've negotiated these national agreements over the last 10 years to protect themselves, and they work closely with government in those terms.

MR. DOWNE: Well, if the minister was aware of anything in agriculture, he would have realized that I have taken the advantage of talking to representatives on the national marketing program for dairy and have indicated support of that, and they are dealing with milk Canada promotion programs for which I understand a neighbour of mine is quite involved. So, you know, the minister wants to be a little silly about this, I'm talking specifically about if the challenge - but anyway he's obviously not going to answer it so it's past the point. Milk promotion is not about the fact that we are saying, as I understand it from the national level, Nova Scotia participation at the national marketing of milk program in Canada is not saying that we are saying that we want Quebec to come down and set up a distribution facility for Quebec milk or Ontario milk. I understand that that was not what was signed into, but you're the dairy farmer.

MR. CHAIRMAN: Order, please. I wish that each member would respect each other and not badger each other. I wish that a question be asked in its entirety before it's answered and I wish the answer be given in its entirety before the question is asked again or another question. So, please, Mr. Minister, let the honourable member finish his question and you will have ample time to answer him, and I'm sure the member will let you answer your question entirely before he asks his next one.

MR. DOWNE: I will move on because I don't think I'm going to get an answer anyway. I thought we were having some good dialogue last night, I don't know what happened last night to today to all of a sudden start portraying arrogance in this process. It's simple questions I'm asking.

The department has charged for the mink industry, the fur industry, an influenza testing cost. I'm not saying the terminology 100 per cent, but I believe if the minister doesn't know, his staff knows what I'm referring to. It was a cost recovery last year or it was just simply felt that the industry should cover some aspect of the blood testing. As I understand it, the industry collects the blood samples and they deliver them and they need to have certification by an independent body to indicate that there's no - and I forget the disease - problem with the mink and the testing of that blood so that they can be able to maintain the quality standard and the price structure internationally when they sell those pelts.

[Page 80]

I've tried to look for my notes specifically on this. I believe I asked you a question on it in the House last Fall. My question to the minister, has the minister reconsidered the position relative to the testing issue, in realizing the financial constraints you're under, and whether or not there's any provisions being made in this budget to work with the mink industry specifically with regards to the testing and the certification of those tests and the costs associated with it? The producers don't mind collecting, it's the issue of the testing that was in question, if I recall.

MR. FAGE: To your first question with regard to the dairy industry and an advertising regime, yes, that agreement was signed 15 years ago. The current one we're talking about is the five-year marketing agreement that was signed nationally between income support and market share across the country. That's the one that the dairy farmers have negotiated to protect their incomes and market share loss, the specific one that dairy farmers would refer to.

On the second issue you raise on Aleutian testing - I believe is the proper name for the disease that affects mink in Nova Scotia - the department works with producers very closely and does the required capacity of tests that we can accomplish and, last Fall, during the peak times, I believe it's 5,000 samples a day that we can process. We haven't negotiated price for our testing that we had budget dollars supporting. I believe the current cost is 31 cents is what they pay per test through the government lab. The demand out there is even higher than that and we physically don't have the facilities to do it, so there are private labs run by members of the industry and they would do their own testing, obviously, on those operations but also do custom testing for other mink ranchers in Nova Scotia.

We continue to work with the organization not only on the testing aspect, but urging the industry to look at situations where we can help them get into a more eradication-type mode with the industry because the Aleutian disease is the largest impediment to future expansion and growth of this industry. This industry is a real prize for Nova Scotia agriculture in the way it's performed and grown, they're No. 1 in the world, really.

MR. DOWNE: So they will be responsible for a certain amount of that testing cost then?

MR. FAGE: They currently are.

MR. DOWNE: I know they are. They didn't want to be, but they will continue to be part of that.

MR. FAGE: Yes, if they are sending in samples, they pay for them.

MR. CHAIRMAN: I believe the honourable member for Lunenburg West may have a 10-minute commitment he has to make, so if you wish to give up this 10 minute time.

[Page 81]

MR. DOWNE: If my colleague would be so kind to do that, I would appreciate that.

MR. CHAIRMAN: I will allow you to continue your 15 minutes when you come back.

MR. DOWNE: Thank you very much.

MR. FAGE: Thank you.

MR. CHAIRMAN: The honourable member for Hants East.

[2:45 p.m.]

MR. JOHN MACDONELL: Mr. Minister, I don't know if you had intention of trying to answer my question when the time ran out around the line item on programs and Risk Management, so I will just refresh your memory. For 2000-01 it went from almost $8 million, was the Estimate, to slightly over $9 million in the Forecast and then in 2001-02 it's $8.75 million up to $10.25 million in the Forecast, then this year, in the Estimate, it's almost $7 million. So every year since 2000 it's been underestimated, actually, and the forecast is always higher. In this case, your estimate is way down. So you're saying that's because it's a three-year program and you've put dollars into the fund from the previous year that were not used up in the program, is that what you're trying to tell me?

MR. FAGE: Again, it's a three-year agreement.

MR. MACDONELL: Three-year agreement.

MR. FAGE: At the end of the agreement, in totality, our requirement is 40 per cent, the federal requirement is 60 per cent. When we make payments to the NISA program we would have the commitment, they would do the calculation for us, we would forward the cheque. We have done that. We obviously would feel that at any given time, hopefully, we're not in a negative position on our payments, that we're in a positive position because, when you make a payment, again it's not like the cheque, the entire amount is written that day. It depends on producers' year ends, it depends on when they apply. Add on top of that, mind you, it's a complex issue, it takes up to a year after you've made the commitment for all those requests and the producers' contributions to the NISA programs to come in as payments would be made, then it takes six months after that. So you're talking 18 months after they've applied before you have finality in their payments on their end. They would calculate for us what's required, we would then cut a cheque and then it's an expense on our books. They administer, not us.

MR. MACDONELL: I'm assuming to go from $8,770,000 in your Estimate to $10,274,000 in your Forecast in 2001-02 that they did the calculation and you cut the cheque.

[Page 82]

MR. FAGE: Yes.

MR. MACDONELL: So what you're saying, if I'm to believe that the $6,825,000 that you have in your Estimate for 2002-03, which you tried to explain to me last night, I think, if I understood you, is that not all the dollars out of that $10,274,000 were used.

MR. FAGE: Obviously, once we cut the cheque, again it takes up to a year with year ends to disburse that money. They've calculated how much we should have in there.

MR. MACDONELL: How do they calculate it if it takes a year for them to figure out what they're going to disburse? What's the basis of their calculation?

MR. FAGE: I would not know the internal mechanism, I'm not an accountant, I wouldn't presume to do it. They worked in these types of programs for a large number of years. They would do that calculation.

MR. MACDONELL: But you're the minister writing the cheque. I mean, surely, a light must go on and say why isn't all that money used up, that's what they requested?

MR. FAGE: I guess the light does go on and we're there to support the farming community through some droughts and tough times. It would be my anticipation, with the number of meetings and requests I've had with the farming community, that after last year the requests would be up. The anticipation is that those numbers will be higher going through the winter and into this year and that's why we would think it reasonable we are sending a larger cheque instead of a smaller one.

MR. MACDONELL: Have you found in any of the previous years, like 2000-01, the difference between your estimate and your forecast, has there ever been a previous indicator that not all the dollars that you sent were used up? When you came to making your estimate for 2001-02, that $8,770,000, did you have any indicator that there were still dollars left in that fund when you came up with that number?

MR. FAGE: Again, I would go back to, the NISA program commitment is calculated by NISA. We do not do that projection, that calculation. We, as the 40 per cent partner, supply the funds.

MR. MACDONELL: Right.

MR. FAGE: They did the calculation, but we provide the funds.

[Page 83]

MR. MACDONELL: But you're telling me that this year you think there are dollars left that you spent the previous year. So now when I ask you the question related to the previous year before that, if you had any indication, you're saying we don't do that calculation, but you seem to be doing some kind of a calculation for this estimate?

MR. FAGE: I'm not following your question.

MR. MACDONELL: Well, look, you try to tell me that the reason that that Estimate for 2002-03 is $6,825,000 is because there were still dollars left in that $10,274,000 in the Forecast, it's the dollars you sent because the federal government requested them, that you cut the cheque. So what I'm saying is when you came up with your estimate for 2001-02, you had $8,770,000. Did you have any indication when you came up with that number, your estimate for that year, that there were still dollars left over from the previous 2000-01 year that weren't drawn down?

MR. FAGE: What this $6,825,000 represents is what we feel is the estimate of what will be needed in the coming year. That has not been expended yet. We're asking for sums of money in the estimate process of what we feel will be required to cover our commitment in the coming year. That's an estimate of it. When we get to this stage next year, I can give you the exact figure.

MR. MACDONELL: Very good, we're finally getting somewhere. So my question, I think, which was probably my question yesterday, is why is it that you think that this number should be almost $2 million less than your estimate was in 2001-02 because in 2001 it had gone up, but yet in 2002 you expect it to go down. So I'm just asking why do you think a much lower number, almost $2 million less, is going to be enough? What indicator do you have of that?

MR. FAGE: Our commitment by the NISA calculation of $10,274,700 is the commitment under a three-year program to fulfill our 40 per cent, okay.

MR. MACDONELL: Okay.

MR. FAGE: If we average those numbers out, as you're saying, that they will be all typical years again, we feel that that's a reasonable number to estimate that we will have to contribute to the NISA account to fulfill the obligations to our producers for the coming year.

MR. MACDONELL: Right, that's a prediction that you're making, but you're making that prediction because the federal government hasn't asked you to cut a cheque yet, obviously?

[Page 84]

MR. FAGE: Again, I think you have to be careful. You refer to the federal government. This is the NISA . . .

MR. MACDONELL: Well, whoever runs the program.

MR. FAGE: NISA runs the program under certain guidelines and they do the calculations. They receive the producers' contributions. They pay a percentage, too. The province pays a percentage. The federal government pays a percentage. NISA holds the money, does the calculation, does the payment.

MR. MACDONELL: Okay. You still haven't answered. Unless there's a top level, in other words, unless you're saying in three years we're going to spend $20 million and we've spent $13,200,000 or something and in order to fulfill our commitment we've got another $6 million to spend, which is not what you're saying if I understand you, right?

MR. FAGE: What I'm saying is it's a three-year agreement with absolute dollars that could or have to be paid.

MR. MACDONELL: Right.

MR. FAGE: We have the right as a province under NISA's calculations to make payments when they're required in sums that cover the 60/40 arrangement during that three year period.

MR. MACDONELL: Is there a limit? Let's say that next year when we come to look at the budget and we see the Forecast line beside this line that you have for the 2003 estimate, is there a limit that you can't go beyond in this agreement when you put dollars to make that forecast calculation?

MR. FAGE: The limit would be calculated on cash farm receipts and the number of people who chose - remember the program of crop and livestock insurance is voluntary. Remember the program that NISA, no one in supply and management, those commodities are not eligible.

MR. MACDONELL: Right, sure.

MR. FAGE: You have that portion of the industry and then they have to elect that they want to enroll in that program and then there is CIFA, the disaster relief portion of it, and plus the companion programs we have here in Nova Scotia like the red meat, NISA and all those other issues that address there. That is what limits the amount that would be eligible to the total eligibility and NISA would calculate that for us.

[Page 85]

MR. MACDONELL: Right. So I still don't have a clear answer then as to why this number is $2 million smaller than your estimate in 2001-02, I don't have a clear indication of why you estimate it at $2 million less than you did the previous year and it's obvious you had to put money into it. Your forecast is . . .

MR. FAGE: I think I've been very clear in that it's a three-year agreement. NISA does the calculation.

MR. MACDONELL: Right, and they did the calculation last year?

MR. FAGE: Yes, and they did the calculation last year, the year before, and they will do the calculation . . .

MR. MACDONELL: And you did your estimate last year before their calculation?

MR. FAGE: Their calculation showed that we would have paid, what, $10,274,000 . . .

MR. MACDONELL: Right, so you had to go above your estimate?

MR. FAGE: We look at it that it's a three-year agreement. We know that within the parameters of that three-year agreement roughly x amount of $1 million is our three-year commitment so we're not going to pay over that.

MR. MACDONELL: Well, I asked you that, if there was a limit that you couldn't go beyond and you didn't tell me there was. So what is your three-year limit then? What's your commitment to the program?

MR. FAGE: Again, it's based on farm cash receipts, okay, and we would get them to calculate that out. Just roughly looking at it - it would be what - in round rough terms about $24 million would be our requirement in three years in dollar terms, but the exact amount depends on the uptake of the program and the eligible cash receipts and those vary. So in ballpark figures, the upper end is around, $24 million is our commitment for three years.

[3:00 p.m.]

MR. MACDONELL: I think I'm going to move away from this. I'm chasing my tail here, as far as I can figure out. I wanted to go back just for a minute to the national action plan and the meeting that's going to be here in June. I think I asked you yesterday about whether or not you intended to spend dollars that this province tends to invest to ensure that they can meet the requirements of whatever the national action plan turns out to be. So can you tell me what your thoughts are on that again?

[Page 86]

MR. FAGE: When and if we reach an agreement, and the intention is to have an agreement, hopefully, to sign at about that approximate time period, then we would commit to programs that would be agreed upon at a percentage. As we said yesterday, the norm now is 60/40 and we would love to have 80/20, but I don't see that formula changing a lot. Then there would be the opportunity to sign on to that particular program package.

MR. MACDONELL: So, call me crazy, but should I understand that if you sign on to a new national action plan that we really will be looking at, as much as anything, a continuation actually of the risk management program that basically has come to an end?

MR. CHAIRMAN: Excuse me, sir. The other honourable member has arrived and would like to use up his last 17 minutes. You've used 15 minutes and we will come back with the other 45 minutes to complete your hour.

MR. MACDONELL: Can I get an answer for this?

MR. CHAIRMAN: Sure, I will get an answer and then we will conclude with Mr. Downe's 17 minutes.

MR. FAGE: Risk management would be one of those pillars, as I said in my opening remarks. There's the other one of life science renewal and there would be a framework for . . .

MR. MACDONELL: There are five points, I think, in that.

MR. FAGE: Yes, there would be a framework for an agreement on programs that would affect those issues as well. A new agreement would entail the risk management component that's already in dollar terms in this budget, in theory. There is also $4 million set aside in this budget for those new programs so that they could be implemented as well, once we had agreement.

MR. MACDONELL: Okay, I will come back. I want you to show me where that $4 million is, okay.

MR. CHAIRMAN: We will go back to the honourable member for Lunenburg West who has come back to conclude his 17 minutes. You have the floor now, sir.

MR. DONALD DOWNE: Mr. Chairman, my question to the minister is, last year, an all-Party Economic Development Committee made a unanimous resolution requesting the minister to have an all-Party committee work together on the issue of water strategy. There was, I believe, one or two letters sent to the minister requesting this all-Party committee. I will say that the Progressive Conservative Party unanimously supported that resolution and the Chair, at the time, who was a member of your own caucus, supported it as well. The

[Page 87]

minister has yet to agree to that. Can the minister explain to me as a member of that committee why your reluctance to work with all three Parties in developing, or at least trying to develop, a long-term strategy that would be of benefit to the farm community and by working together we could all try to find solutions in conjunction with that of the farm community in the Province of Nova Scotia?

MR. FAGE: I certainly appreciate the support of the members of the Economic Development Committee. As my letters would indicate on the request, the department and the government has a committee structure in place with the Nova Scotia Federation of Agriculture and the industry and have a number of committees working on those objectives now. We did not feel it would be in the best interest of the agriculture industry to divert to other areas, but to concentrate on the initiatives we have currently in place and make sure, to the best of our ability, that we're able to move that forward, rather than devoting precious resources to forming a new committee which would make it more difficult for the farming community to have direct interaction with government.

MR. DOWNE: Mr. Minister, you mentioned earlier that the only committee you had in place was an internal committee. I don't recall, do you have an absolute working committee now with the federation? Did you have, a year ago or six months ago, a working committee that was functioning with the Federation of Agriculture and you, yourself, at that time when the request was first made?

MR. FAGE: Again, I think there's a little misconception. The internal committee within government is dealing with the water resource issue. The request seemed to be much more encompassing than that and one of the LIP committees with the federation, like the federation president's overview committee, with government safety committees, farm planning committees, environment committees, those committees are all ones that the federation would have a committee of representation or government would be involved there. The single committee that was referred to earlier is the one dealing with the water strategy and the federation, as well, has a very strong component of producers who have a large working knowledge and the support of the industry on their behalf to continue to work with government.

MR. DOWNE: If I heard you correctly, you just contradicted yourself. The committee had requested to deal with the issue of the water strategy, the crisis around water in the Province of Nova Scotia because of the number of droughts. The Federation of Agriculture came to the committee and the representatives of the federation, Mr. Dillman, who you know very well, and other members, requested that we as politicians not get into our own political agenda as individual Parties, but to do what we're voted to do and that is to work together to find solutions in long-term sustainability of the agriculture industry in light of the fact that we do not have a current water strategy. They requested our Economic Development Committee to go forward with something.

[Page 88]

The motion was made with the direction of the Federation of Agriculture to work with you and you've refused that twice. Let's not get too confused here, Mr. Minister. I know it's tough for you, but the reality here is that you have an internal committee. That's fine. I support that. I have no problem with you doing that. It seems to me I'm not paid one cent more if I sit down and meet with you on trying to develop a strategy than if I sit with the Human Resources Committee or I sit with the Economic Development Committee or I sit in my caucus meetings. I don't get paid any different, so there's no extra cost to government. I will bring my own cup of coffee, if that's the case.

But the reality here is that the farm community is looking for leadership from elected officials to be non-partisan, but to fully work together, to work with you, not against you, work with you and work with your department in a co-operative manner to help find a solution. They requested that. I fail to understand why you are afraid to work with representatives around that table, many of whom are rural, and they care about agriculture, in conjunction with the Federation of Agriculture and department staff? I don't see anybody being there to undermine anything. It was a motion that was unanimously passed to do one thing and that is to help you and to help farmers in the Province of Nova Scotia.

That was the intent, that was the purpose, and that was the request made to us by the Federation of Agriculture. Mr. John Dillman spoke very passionately about it. You know Mr. Dillman very well, and he's not one to mix words and he's not one to get on a soapbox unless he believes very strongly in what he's saying, and he requested us to stop playing politics and get on with trying to find a solution.

That's why the motion was made, and that's why the request went to you. We have sent a second letter back to ask you to reconsider, and I ask you again today, would you reconsider that request, to work together? It doesn't cost your department one cent. If I'm there, or a member for your caucus is there or a member of the New Democratic caucus is there, it doesn't cost taxpayers one cent to be working together. My question again to you, Mr. Minister, is would you consider the ability for all of us to work together to try to find solutions for a long-term water strategy for the farm community in the Province of Nova Scotia?

MR. FAGE: I would reiterate that the government does have a close working relationship with the federation and all the numerous committees. Certainly I know honourable member, that I can count on your support at any moment - or I would hope I could - in speaking to Ottawa as the request went forward. I certainly know you are a strong supporter of the agricultural community and at any point I know I can count on your support in dealing with the federal government. Obviously you would know many of those members well, and certainly your support at that federal level would indeed be useful and, I'm sure able, to get agreement from federal ministers in resource-related issues and help move the situation forward. Certainly I will be counting on that support.

[Page 89]

MR. DOWNE: Mr. Minister, I don't know. It's like, knock, knock. I'm trying to say that we want to be a part of that. The committee motion stands. My question to you is, will you accept the motion by the Economic Development Committee to work together to find the solutions that the farm community have requested us to do? Yes or no.

MR. FAGE: Again, I would certainly reiterate that the government and I, as minister, have a strong working relationship with the farming community. We have our committee structure already established to address those issues. Certainly we are looking to push those initiatives forward. We look to you as members of the loyal Opposition and as good friends of ministers in Ottawa, that you will be there supporting us and we look forward to that support in the future.

MR. DOWNE: Mr. Minister, I have many friends in all Parties, and these friends in farming who requested that are friends, and were friends, of yours. They were not saying it for any other reason than that they felt that we should be doing what is honourable, and that is to work together. That's why they, and I, and members of our committee, feel that you have not understood the intent and the meaning behind that request to you.

Fine. I will do whatever I can to help agriculture in this province, as I have in the past, and as anybody has. That is not the issue; the issue is what's wrong with trying to find solutions together? It's not that I have an issue here, it's that the farm community requested us - they didn't request you - they requested our community. It was the Federation of Agriculture. I get along very well with the Federation of Agriculture, as I try to get along with everybody, including you. Sometimes you're taxing on me, I can tell you that.

It's frustrating. I've worked with agriculture for almost 30 years, and I can remember a Minister of Agriculture named Roger Bacon. I can remember clearly, when I was President of the Federation of Agriculture and on the Atlantic Farmers Council, we worked together. We worked together on issues in Ottawa and provincially, and we had a trust and a respect that goes beyond politics by far. He knew my politics and I knew his, but that never entered into it. It was always what was best for the farm community. If they asked for a committee to work together, he was receptive.

[3:15 p.m.]

All I'm saying to you, Mr. Minister, is go talk to people like him, who will tell you that there's nothing wrong with working together in this province to try to find solutions that will benefit the agricultural community. That's what the request was, and that is still the request that's on the books. I know you've rejected it. I don't know, maybe you're scared of the NDP; I don't know what it is. I can tell you, I think they are there to try to find a solution, and I believe this honourable member here would be a great asset to that committee.

[Page 90]

You're not the only one in this room who cares about agriculture; you're not the only one. You're the minister now, but you won't be there forever; I can assure you of that. Somebody else will be there. Your department staff care about agriculture, the same as anybody who is in that community. There's nothing wrong with allowing the people who have been elected to try to do a job to help instead of just ignoring them. Maybe you're an island unto yourself; maybe you have all the answers; maybe you will find out that everybody just adores everything you do, but quite frankly, I find it a little frustrating and I think some other people find it very frustrating, the inability to get a working relationship.

I don't know what you're scared of. There's nothing to be afraid of; nobody is trying to run an agenda. They're trying to find a solution. There's enough glory to go around to everybody. That's not why the committee wants to do it, they want to do it because it was the Federation of Agriculture that requested us to stop being political and work together. We've said yes, and you've said no. I ask you to think about that.

MR. FAGE: I certainly appreciate the federation as the voice of agriculture; I guess I do treasure the working relationship I have with the president of the Federation of Agriculture as well. That trust is there as well; we work very closely on a whole host of issues, with the president and with the Federation of Agriculture. I, too, am very proud of the hard work our department does, but I am even more proud of the time members of the farming community donate to each one of those committees we're in partnership with, and that bonded trust is there and continues forward, and the type of exciting program development we do do and the work with the federation. Certainly I would say that those relationships with presidents of agriculture, whether it's a national conference here as the CFA recently met - if you weren't aware of that - a couple of weeks ago, it was a pleasure to be there with the industry and to have my colleagues there, and working collectively, and we are going to continue on those initiatives.

MR. CHAIRMAN: Member, you have two minutes left in your time.

MR. DOWNE: There's no point in me even asking more questions; I don't think I'm going to get an answer anyway. Thank you very much. To the staff of the minister, thank you very much for your time, your effort and your energy, and your honesty and sincerity in working with the farm community.

Mr. Minister, I don't know what it is, the way you treat legitimate, fair questions. I hope your caucus gets better answers out of you than anybody else; my sense is that they don't. That's your call. At some point you will realize all too well, going in with an attitude like that is not very beneficial to anybody's cause in this Legislature. I find it very frustrating, trying to deal with you in a legitimate manner.

MR. FAGE: I want to thank the honourable member for his observations and his knowledge. Thank you for appearing.

[Page 91]

MR. CHAIRMAN: Your time has now expired.

The honourable member for Hants East, you have another 45 minutes left in your hour.

MR. JOHN MACDONELL: Mr. Chairman, I do want to say, for the honourable member for Lunenburg West, I certainly agree with the good things he said about me.

I guess I would like to ask the minister about the companion program - actually I guess my last point was about the $4 million, and you were going to tell me where you have that in the budget.

MR. FAGE: We will go to the budget item line, but it currently resides in the old Loss Provision Program. It would be listed under there, I believe.

MR. MACDONELL: But the Loss Provision Program is not listed as a program under the Estimates, Supplementary Detail, is it?

MR. FAGE: It would be listed under the operational part of the Agriculture and Fisheries Loan Boards on Page 3.6, part of that of Industry Development and Business Services. It would be part of that $5.650 million, and $4 million of that would be dollars eligible for new program commitments in the coming year.

MR. MACDONELL: Okay, so out of the $5.650 million, $4 million is new. I have a note there saying the $4 million is new, but the actual identification of it is for what you're hoping to sign on a national action plan.

MR. FAGE: Yes, that would be the new national agreement and that's what those are, new dollars eligible for that.

MR. MACDONELL: I wonder if you could tell me - it's been raised to me and I don't think it's clear to me about the difference - exactly what companion programs are and a difference in our companion programs compared to companion programs in Quebec. It seems to me that the ones in Quebec are more advantageous to them there than ours are, am I right?

MR. FAGE: Well I couldn't comment on Quebec's companion programs or what the arrangement would be. Companion programs here - probably the one that's most notable is the red meat NISA, where there's a doubling of the eligibility over other commodities and under the terms of equitable NISA because of how the ENS is derived, their eligible net sales, also as an opportunity to encourage growth in the red meat sector, and as well another benefit for offering it and doing that companion program would be to get more livestock producers to enrol because by doubling the contributions from the producer you double it from the two government levels and offer a benefit to that individual producer to become

[Page 92]

enrolled in the program so they can help stabilize their income when you've got your high period, but you also have your lows.

For that industry, which has been slow signing up over the last number of years, it was important. They felt, and certainly we concurred with them, to build those accounts as quickly as possible, then there's sufficient funds in those accounts for the next low trough in price cycle of the red meat industry.

MR. MACDONELL: Okay, so let's say that there are a 100 cattle producers here, beef producers, in the province and they all pay into this program and then 25 of them sell out, can they get the dollars they put into the program? Can they take those out with them when they go?

MR. FAGE: We will have to check that directly, but I do know when they leave the industry they can access the dollars. Whether that's in one budgetary year or two, I will have to check that detail for you.

MR. MACDONELL: Okay, thank you. I would appreciate that.

MR. FAGE: I'm just checking for you to see how long.

MR. MACDONELL: I will tell you this. It's only a thought and maybe it's something that you thought about as well, but I think it's a good thing probably to have the safety net programs, but my worry is that sometimes it looks like the only programs. I don't think that you can sustain an industry on the notion of supporting it during disaster. I would certainly like to see, if it's possible, for beef producers to have some marketing mechanism, something that can give them close to their cost of production, or give them their cost of production, evaluated into their price. I think the more you can secure a price for producers, and certainly supply management has shown us that, then the greater security they have and the less need they have for safety nets.

This is a real concern for me and I recognize that under international agreements, what I'm talking about is if it's not supply management, it is close, and whether it's just distant enough to still qualify is something that producers here can do. But I certainly would rather see a system whereby they could get their cost of production as close to insured when they sell their animals, rather than have to extract the difference out of safety net programs.

MR. FAGE: Obviously this is a larger context issue than beef production in Nova Scotia. I think we all accept the beef industry as a North American industry. When you look at the beef industry in total across this country, they are in an export mode south of the border primarily and do not want supply management, so for any major shift in marketing tactic that will include a cost production, obviously they've only ever been geared to internal production - you can't be internal and external very easy at once.

[Page 93]

Also, it would require agreement between all provinces, not one province, to be able to have the federal government implement those types of things. The reality of the industry is that they are not prepared to support that in this country, so I think that one is a very difficult one to implement with an industry that's not looking for those type of guidelines. So that makes it really difficult. I guess when you look at the safety net programs like a red meat NISA, what you're looking at there is an opportunity for two levels of government and the producers to build income stabilization insurance, which that is, for when market conditions or production problems put that particular operation in jeopardy.

Everybody contributes on the good years and then the producer, it is their individual fund - and remember once government contributes to the fund, all those dollars belong to the producer, and that's kept in their individual NISA accounts, the same as a bank account, and they are allowed to withdraw them on a year or circumstances when maybe the industry had problems, and can help address their individual situation. The discussions nationally, under these new programs that are taking place, are even at this point with industry and the federal government and provincial governments - a little more integrated than the traditional livestock insurance, NISA and disaster. That's what being looked at, one encompassing policy that would automatically cover all three areas of that arena is probably a fair way to turn up what's under discussion right now.

[3:30 p.m.]

MR. MACDONELL: Well, my view is if you don't aim high, you don't hit high, and I was telling you yesterday about talking to one of the people on the negotiating team for WTO for Canada, and I posed something to him in regard to pork production in the province. Actually he said, maybe that would work, and it seems to me that the argument about it being national doesn't fly because there's an Apple Marketing Board in New Brunswick and we don't have one here, so it's not national. The poultry producers in Canada can ship into the United States and there doesn't seem to be a limit on what they can, but it's supply managed here, so they have access to the American markets.

So for beef producers to try to get a better price domestically wouldn't necessarily have to impact on exports, and I think that maybe nationally, if I lived in Alberta, I may not want a supply managed system, but I think there are producers in Nova Scotia who watch millions of dollars of beef coming into the province who actually are, presently quite willing to look at some marketing strategy, a marketing board or a structure that would be more helpful to them, and aren't they also tossing around the notion of building their own abattoir? My thought would be that - I don't think I've completely finished reading their proposal - but it would seem to me that this is at least a step toward that direction, they want to try to take more control of the marketing of beef in the province.

[Page 94]

So I guess my thought is do you see a role for your department in holding these discussions with them? Have they indicated to you that this is something they would definitely not want to do or what?

MR. FAGE: Again, I certainly would say I've talked to producers who would like to see their income level rise and they have a number of scenarios that they question might work. Again, whether it's pork, whether it's beef, I would ask you to honestly look at the Canadian Federation of Agriculture, the cattlemen, the grain growers, they have all come to a consensus, and they have come to a consensus from all provincial territories and jurisdictions on behalf of their industry for a balanced approach to the next round of WTO. That balanced approach doesn't include supply management for hogs, or for beef, and those are the terms; if you're going to be working, that is where the real determination has to be made.

MR. MACDONELL: Sure.

MR. FAGE: It is extremely difficult and will require a huge amount of support to try to draw a line around beef production in a jurisdiction that produces less than 14 per cent of its entire needs and, with no legislative authority that could be generated provincially, would require national support to entertain a marketing system that handles that. I would want to be, myself, always open with realities to producers and not allow them to believe that I could support them in something that may not be achievable and they spend a huge amount of resources, money, effort and time to arrive at a no. I think you, as an elected official, have to be very careful that what's out there is achievable.

MR. MACDONELL: Sure.

MR. FAGE: It's very difficult when the national and provincial organization have come to one trade stance and a provincial government wouldn't support them in that, and work at another system. So I guess we're certainly willing to discuss and work at any of those options, but we have to face reality around them, too.

MR. MACDONELL: Well the reality is that beef producers in this province live in poverty; that's a reality. I think there may be a mechanism to work around our national position on WTO. I think that it's worth spending some resources to find out whether that's possible. It wouldn't take probably more than a couple of lawyers an hour or two to figure this thing out, and to me if we're producing 14 per cent of our beef, that means we're bringing in 86 per cent and it would seem that the cattle producers outside of Nova Scotia would think it wouldn't be in their best interests for Nova Scotia to be producing more of its own beef - I probably would agree that they wouldn't like that notion, but that doesn't mean that there isn't something that we may be able to do under existing rules that would be able to help cattle production here.

[Page 95]

Like I say, New Brunswick has an Apple Marketing Board, there isn't a national Apple Marketing Board, there's none in Nova Scotia, and nobody seems to be screaming at them that they can't do that because it's not national. So it would seem to me that there must be an avenue on which to work that cattle production here, beef production could be something, and it seems I was at the cattlemen's meeting, I will say January - I might be wrong - and I spoke to one of the producers and he said we should be going to single-desk selling, which is a form of marketing board, and it would seem that if beef producers are thinking this themselves, that maybe this is something that somebody should be examining if there are possible avenues to find out if it can work. It may not be exactly all they would like to have, but it might be something better than what they have, and that's all I'm advocating.

MR. FAGE: Yes, and I agree with you. We work with cattle producers to examine opportunities to lower their costs, and opportunities to create volume such as single-desk selling, but again I would come back to the principle that the industry has to agree to it. We examine various options that lower costs and increase revenues for them. Single-desk selling is an opportunity, but it requires the industry to come forward with that as their position.

MR. MACDONELL: Oh, yes, yes, sure.

MR. FAGE: We can help them examine, and certainly examining the legal options, those examinations have been incurred every year, especially since WTO started to look for an agreement on agriculture in the early 1990s, and certainly if you talk to any commodity group leader or their legal counsel, they can tell you exactly where they sit - and I understand you have a very close relative who may have some legal counsel experience.

MR. MACDONELL: Yes.

MR. FAGE: And you could maybe raise the subject with him as well, but that knowledge is out there and has been unbelievably well-researched by every commodity group, by each government department, as well as the trade departments, and certainly there is the book on it out there and, you know, it can be accessed very easily. Cattle producers in this province, when I'm in discussion with them, there are two things - how can we lower our expenses, and how can we achieve greater returns?

MR. MACDONELL: My point.

MR. FAGE: They're working with the department on everything from check-offs to be better organized. Last year the department contributed $50,000 to the Nova Scotia cattlemen to help them achieve those very things that you have suggested there, that they can look at the organizations, they can look at single-desk selling, so that they can make proper representation on behalf of the industry, and they continue to work with us very closely on

[Page 96]

a number of those issues, but when you look at also what can be done with forages, water quality, the beef industry is very closely linked there.

We are involved with the beef industry on the marketing side with the Tender Beef Classic Program, marketing strategies. We meet with them and we discuss opportunities related to the processing industry and where volumes need to be achieved so that we produce a sufficient volume in this province or the Atlantic Region in reality, to be able to supply to the consumer our number-one product on a continuous basis, because once you create the demand you have to have the volume to supply it, and those are some of the logistics that the industry and we, as a government department, and our counterparts in Atlantic Canada would discuss and deal with with that industry, because it's an industry that, with our grasslands and with our type of climate has an opportunity to grow, and we've identified that strongly as a government.

As you know, we have initiated a number of new government programs aimed specifically at that industry since this government assumed office. We have the loan programs for them so they can have access to capital to buy feeder programs - which is new - administered through the Farm Loan Board. As well, we've adopted equitable red meat NISA, which doubles the opportunity for support in that industry. We take their efforts very seriously. As I said earlier, in times when you're watching budgets, a $50,000 grant to help organize your commodity is very significant to them. We support them through regulation in their efforts to gain check-off and get that organization out there through their membership, and we will continue to do that. We've recently signed on for three years with the Maritime Beef Testing Society, once a management agreement is achieved, and $60,000 was just allocated for three years to that organization to be able to tie it in closer with the federal research station and to help improve genetic material and research for the beef industry.

I had the pleasure of attending, last Saturday, in Nappan, and the prices paid - the optimism is high in the beef industry. The average price was a record for the sale in its 29-year history. The top selling bull was a record price. As well, for the first time they had heifer production and evaluation this year, which we've been encouraging them to have an annual production sale. There was a huge amount of optimism there and the prices they paid reflected that. It's building on that and finding ways with research how we can lower the expenses here and how we can achieve greater returns. We're there to work with industry and try to provide them with the tools from lending agencies to support.

MR. MACDONELL: I don't know why producers would want to produce more beef if they can't get their price out of it. Those two things have to go hand-in-hand, and $20,000 a year, I think, for the beef testing station is not going to do it. I just can't see how they will be able to survive on that limited funding. I wonder if you can tell me what you may know or have heard, if it's just through the grapevine or if anything has specifically come to you

[Page 97]

around the possibility of Hub getting out - stopping their line for killing beef? Have you heard anything on that?

MR. FAGE: I've heard - they have not contacted myself to inform me that they're not going to be processing beef.

MR. MACDONELL: If they do stop, that is going to have a major impact on the industry. That would be a federal facility, I'm assuming.

MR. FAGE: Yes. Hub in Moncton is a federal facility.

MR. MACDONELL: Is there any federal facility in this province?

MR. FAGE: HUB also owns the federal facility of Larsens in the Valley. I believe the operation, the Antigonish abattoir, would be federally inspected in this province; I believe O.H. Armstrong, I think there's one other. We will get that complete list for you.

MR. MACDONELL: Okay. I wouldn't mind knowing that. I actually thought Larsens was the only federally-inspected facility. I thought everybody else was provincial.

MR. FAGE: I believe there are four facilities. We will verify that for you.

MR. MACDONELL: I think it was during the 1999 campaign, or actually prior to the 1999 campaign, when your Party was in Opposition with us, I think I can remember it being raised about wanting the government to use more local content in supplying its own facilities within the province. I'm curious as to whether that's actually happened. In the facilities that are Nova Scotian facilities, hospitals, correctional institutions, whatever, do you have any way of knowing that your Party has seen to it that there's more Nova Scotia content in the food supply that's used in those businesses?

MR. FAGE: Obviously I don't deal directly with that. Obviously the promoter of agriculture products and the public tendering office, when that estimate comes up, would be the one that deals directly and has made adjustments to procurement and dollar amounts and those types of things to help aid that. I would feel much more comfortable if you raised that question with them. They're the ones who could give you the details.

MR. MACDONELL: Which department would they come in under?

MR. FAGE: That would be Transportation and Public Works. They run the procurement and public tender office as well. That's the office that has made the adjustments and commitments there.

[Page 98]

MR. MACDONELL: Do you know whether any adjustment was ever made after your Party took power?

MR. FAGE: Yes, I know there have been a number of changes in those policies there, but the exact details, I think, it would be good ask on that estimate.

MR. MACDONELL: Okay. I will do that, thank you. I am wondering about something I read in the paper recently around limits on fishing, bag limits, for lack of a better term, catch limits. It seems to me that it applied to the gaspereau, there's at least one individual in my area who fishes gaspereau commercially, and I'm wondering as to how this will impact on him.

[3:45 p.m.]

MR. FAGE: Again, we can find out the details. It's a federal responsibility and they would set the limits on recreational gaspereau fishing. There are a number of commercial gaspereau licences, I know, issued in this province. We could find out that detail. The jurisdiction is the federal government in relation to that.

MR. MACDONELL: I would appreciate it if you could do that. I want to ask you, Mr. Minister, about this bill that you had given me a copy of, the Act respecting the administration of Agriculture. I just want to be clear on a couple of things. (Interruptions)

MR. FAGE: Mr. Chairman, the question is, a bill that has first reading, are we at liberty to be debating what's in an Act that hasn't gone through the House? You would know the procedural rules much better than I. I would raise the concern. This has only had first reading, and there's . . .

MR. MACDONELL: We can't do it in Question Period, if I remember.

MR. CHAIRMAN: I believe that if a question cannot be raised in the House during first reading, this being a committee of the House, I don't think you can do the same here at all.

MR. MACDONELL: I'm not sure if that's clear to me, but it doesn't matter, Mr. Minister, I will just question you sometime. They're not major issues. I will just get you at another point. Something you mentioned yesterday, I was looking at the line item, Agriculture and Fisheries Loan Boards, you corrected me on the administration, really, that line item had more to do with that. I'm curious, you said that actual loans would be another capital item in another book or account or whatever, I would like to know, do you have information as to . . .

[Page 99]

MR. FAGE: It's in the Estimates Book.

MR. MACDONELL: Can you tell me how many loans are delinquent, or did you have to write off - were there losses, I guess, in the farm loans?

MR. FAGE: We can supply that information. What we have here right now is in the previous year the total value of loans issued, 2001-02, the Forecast is $26 million, that's the best actual total we have right now, what was loaned the last year. What I will do for you is, the material related to the Farm Loan Board, the public amount of loans, we just can't violate privacy, but those issues on delinquent accounts, we will get as much of that information as is publicly available and put that on the list too.

MR. MACDONELL: That would be great. Not knowing the process really, I would just be interested in knowing. Certainly, in this booklet, I wouldn't find any number that would indicate what the province or the department would have paid out, adding to the debt, on delinquent loans.

MR. FAGE: Pardon.

MR. MACDONELL: In this booklet, I wouldn't find anything that would indicate to me what the province had paid out in delinquent loans.

MR. FAGE: Wrote off? No. That particular procedure I believe would end up in Finance at the end of the day. What I can tell you is the Farm Loan Board was more than self-sufficient last year in receiving all its payments and actually generating a positive balance on its loan portfolio.

MR. MACDONELL: I had mentioned earlier the Agricultural Institute. It seemed to me that last Spring there was an organic conference or a conference on organic agriculture in Prince Edward Island, I think it was Prince Edward Island. I think the Department of Agriculture in P.E.I. and the Department of Agriculture in New Brunswick both sent representatives to this but Nova Scotia didn't. I think there's another conference this year. I just wondered, do you have any intention to send staff to that?

MR. FAGE: I'm not aware of that particular conference, or if it would be a benefit to have somebody in attendance. What I would say is, here in Nova Scotia we are the chair for the organic research and the majority of the other provinces would apply to Nova Scotia for expertise. We will double-check with the AC to see if they had staff in attendance at that particular conference.

[Page 100]

MR. MACDONELL: I'm not at all underestimating your commitment to organic agriculture, I think the fact that the province contributed to the institute is certainly a sign of your commitment to it. I would like to know maybe in more general terms where you see this part of the industry going or what your expectations or hopes are in that regard.

MR. FAGE: Certainly government views taking every advantage of an opportunity, and organic agriculture not only from a nutrition or environment aspect but also from a market opportunity. There is no question, if you go to your local supermarket suddenly the organic sections are springing up over the entire area. I mean, when you look at food markets, Canada, U.S. and as well as E.U., it's growing at the rate of about 15 per cent to 20 per cent annually, the demand. So there's a huge market opportunity there as well, and that research and getting the industry established is a very important factor in being able to get it integrated into a marketing system that has that wide ability for retail . . .

MR. MACDONELL: Broad base.

MR. FAGE: . . . is key to being price-competitive and getting a return for those producers. So those type of avenues, I think, are the keys at this point, the research, getting growers certified so that they are producing, and then working on that market-access avenue is extremely important. Obviously, a lot of people, it just brings to mind the horticultural side of it - production, but certainly there's a big opportunity once you move into the grains and the livestock as well, and milk and fowl. So we will continue working with the industry plus research facilities like NSAC to see if we can move those projects forward for this province.

MR. CHAIRMAN: You have nine minutes left in your time.

MR. MACDONELL: I'm glad to hear you say that. Yes, definitely, if you were looking for an area that would have probably its greatest potential to bring new entrants into the industry this is probably it. I would say, we talk in this province of organic agriculture growing by 30 per cent per year, but that's 30 per cent of about 2 per cent of what our production is and, actually, in Europe organic agriculture makes up 18 per cent of their overall industry. If you were to consider 18 per cent of Canada's agricultural production, that would be a massive piece of the pie. So I would say that this is really an area that government should be looking to to help sustain rural communities, the growth potential, especially with us as close as we are to the Eastern Seaboard of the United States, it's just a massive market there. It is an area that I think has such wide-ranging potential that it's good to hear you say that you recognize it, that any efforts that can be made would be helpful.

I'm going to ask you this question. I know a couple of years ago I had asked about, if I can get this straight, free range poultry producers, turkey and chicken, and I think for turkeys there was about 45,000 kilograms allocated for organic production. I think at that time there were only three producers but each producer was only allowed 5,000 kilograms. Actually, they don't have a quota system, but they were actually trying to get a licence so

[Page 101]

they knew in advance that this year and next year and the next year you could produce this much because their licences were only allocated every year. So if they were going to go to the banks for funding and they wanted to plan their next year, when they went the bank would ask them, regarding security, well, what can you provide and they wouldn't even have the licence to say I have a licence from the government, or from the Natural Products Marketing Council or whoever, to produce this many kilograms? They would have to wait until those were allocated. So it really made it difficult for them to plan on any particular farm.

I don't know if I've raised this with you previously, I thought I had but maybe I hadn't. I'm just wondering do you know if there has been any movement in that regard that the free range turkey producers, actually that the licensing structure has been changed or improved so that, number one, they can access more than the 5,000 kilograms and, number two, they have something in place that's over a longer period of time that they can plan on?

MR. FAGE: Yes, you have raised that issue with me before, and allocations and access have been made available under those terms, but I can't identify to you today exactly where it sits. So I will get an update from that board as well as the Natural Products Marketing Council to see where that sits.

MR. MACDONELL: Okay.

MR. FAGE: The other comment on organic livestock, one of the projects we're currently carrying out because of our small population base, especially for the livestock sector there appears to be some strong potential for export, one of the studies that is currently underway, a study we're funding in conjunction with the pork industry here in the province is looking at the viability and the market opportunities in New England for organically-grown pork here in Nova Scotia. There's an interesting initiative because there's a mainline industry that is looking at ways we can value add the product that we produce here, and there's an entire industry looking at the market opportunity if we went to an organic regime that we could do better in an export situation than producing traditionally. That's a study that's ongoing right now that we're funding.

MR. MACDONELL: I will certainly encourage you, Mr. Minister, when you're talking with your federal counterparts, that in the positioning that's around the next range of talks and WTO, that this is something that somebody doesn't negotiate away. The roadblock is in place on access for organics into the American market I think is an important thing. I have one more thing I want to ask and that's around Northwest Cove and the aquaculture site there. Can you just give me, briefly, the conditions under which that was approved? I think an approval was made for a site there?

[Page 102]

[4:00 p.m.]

MR. FAGE: We can forward that to you. I'm in the precarious position that it's in court tomorrow on an appeal. So as soon as that is over, we can supply that information to you.

MR. MACDONELL: Sure, that would be great. Thank you, Mr. Minister and staff, I appreciate your time.

MR. FAGE: Mr. Chairman, could we request a five minute recess? I was going to say - no, I won't say that.

MR. CHAIRMAN: As long as it's only for the restroom and not a cigarette. We will recess for a very few minutes.

[4:02 p.m. The subcommittee recessed.]

[4:09 p.m. The subcommittee reconvened.]

MR. CHAIRMAN: We will reconvene . The time is now 4:09 p.m. We will now have questions from the Liberal caucus.

The honourable member for Cape Breton West.

MR. RUSSELL MACKINNON: Mr. Chairman, I will go right into questioning. Mr. Minister, aside from the appeal to the federal government to provide additional quota for Canso what other initiatives has your department undertaken to address the problem at Canso?

MR. FAGE: As the honourable member is well aware, the Canso issue certainly is not an easy one. We as a department and I as minister in the last two months on three occasions met with the federal minister. There was obviously a large amount of correspondence as well, and that's been one of the key issues that was there to address. We have met with the mayor, members of the union and other members in groups within Canso that are concerned about the situation. We've offered to the federal minister a number of opportunities that we felt had workable solutions. Obviously, one we were supporting was the 3,000 tons of redfish and the unallocated portion of that area that is subject to foreign fishing as a possible one. Unfortunately the federal minister couldn't support that one.

The other options we offered to suggestions and have had discussions on a lengthened season for snow crab to offer more opportunity for processing that particular species at the plant. With a longer season obviously they would have more opportunity not only in Canso, but to purchase it around Nova Scotia and process more of it here. As well, we supported

[Page 103]

them on exploratory licences to offer more volume to the Canso trawlermen who supply that plant as well. The other efforts we've been supporting and encouraging involve shrimp, and with the shrimp we have been supporting an initiative that would see the allowable catch limit support the temporary licence that is already there, again with the Canso Trawlermen's Co-op; as well as more exploratory licences in different areas that are currently not being fished for shrimp that could supply more volume to that particular plant.

MR. MACKINNON: Has there been any collaboration between your department and the Department of Economic Development, or any other government department in terms of working towards dealing with the issue of diversification into other economies?

MR. FAGE: We have had collaboration for a number of months with the civic government, primarily the mayor. One particular meeting we had last Fall there were a number of provincial government departments, I believe four, involved - the mayor, representatives from the union, the town council, the Economic Development officer, as well as Bill Barry himself, the owner of Seafreez. So those direct discussions have been held over the last number of months with those groups here in Halifax. As well, those departments continue to correspond and work with the community in a concerted effort.

MR. MACKINNON: The representatives from the Town of Canso and the trawlermen and so on who appeared before the Resources Committee several weeks back indicated the urgency of the situation because of the unemployment premiums expiring and so on. Is there a short-term contingency plan from a provincial perspective to do anything to address those immediate needs?

MR. FAGE: At this point it's difficult to answer on behalf of other departments but, certainly, as Minister of Fisheries, we're doing everything possible to lobby on their behalf, making the suggestions and working through discussions with the federal government to aid them on the fisheries parts, an overall plan with a number of departments of specific economic development-type things we've just discussed and are being explored. The issue of emergency or contingency, at this point I think would be better addressed at the estimates of other government departments.

[4:15 p.m.]

MR. MACKINNON: Which particular departments are you referring to that speak to this issue?

MR. FAGE: I think it would be prudent to, depending on whether it's economic opportunities in the general sense that could help alleviate that particular department may have some suggestions of what programs could work there. Obviously, if it's support payments of that nature that would be involved in social services, those departments. I think this particular issue is one that the federal government is intimately involved in, as well.

[Page 104]

Myself, with the federal minister, Robert Thibault, and the federal Minister of ACOA, Gerry Byrne, are involved on a number of file issues that would be ongoing in this process.

MR. MACKINNON: Okay, I hear what you're saying. Perhaps we could switch over to the Fisheries Loan Board. Do we have the same number of fisheries loan officers this year as we did last year; do we have more or less?

MR. FAGE: We will double check, but I believe it's identical.

MR. MACKINNON: Now are they what is referred to as field officers, as well?

MR. FAGE: We're just looking for the exact number. I understand there's no change but those, again, are separate entities from the fish representatives that would be in the communities.

MR. MACKINNON: I understand at one time these officers would report directly to the deputy minister. Am I correct on that?

MR. FAGE: The loan officers?

MR. MACKINNON: Yes.

MR. FAGE: No, my understanding is that they report to the CEO of the Fisheries Loan Board. We just checked, the exact number is nine of them; that's the total staff.

MR. MACKINNON: That's what they do now. Did they always report directly to the Fisheries Loan Board?

MR. FAGE: I'm informed they always reported to the director of the Fisheries Loan Board.

MR. MACKINNON: Directly?

MR. FAGE: Yes.

MR. MACKINNON: The value of loans to the inshore fishermen, are they up or down from the previous year?

MR. FAGE: The Actual for 2000-01 was $18.5 million. The Estimate for the current year and the Forecast is $20 million and we're estimating for the coming year $25 million.

MR. MACKINNON: Is that reflected in the increase in the number of loans or has the value of each loan gone up?

[Page 105]

MR. FAGE: I'm informed that there is a large increase in the number of loans. We can get the exact details and supply that to you.

MR. MACKINNON: Okay, perhaps for, let's say, 1999, 2000, 2001, 2002, that sort of thing.

MR. FAGE: Sure, from 1999 on, no problem at all.

MR. MACKINNON: Just develop a mini-profile, that's fine. The delinquency rate, is it up or down from previous years?

MR. FAGE: I'm informed that the delinquency rate is down. We can supply you with those numbers as well.

MR. MACKINNON: That's fine. I know there was a schedule of proposed user fees that the Minister of Finance put out, fees and recoveries; perhaps a week, maybe two weeks ago he did a Paul Martin-style budget. Some would say leaking it out . . .

MR. FAGE: You're very perceptive, honourable member.

MR. MACKINNON: It's good to see the Conservatives are learning something from the Liberals anyway. That aside, overall how much additional money do you expect to raise for the department?

MR. FAGE: The rate increase for fish processing has risen from $100 to $200 per licence and we expect to raise an additional $30,000 in total from that change for cost recovery.

MR. MACKINNON: Perhaps, just to save time, could I get a list of proposed fee schedules for this coming year. I believe it may have been outlined, but just in case there is something missed there.

MR. FAGE: For agriculture and fisheries or just the fisheries?

MR. MACKINNON: Just the fisheries would be fine. If you have agriculture handy and it's not too much difficulty I would certainly appreciate that as well.

MR. FAGE: We will get you scheduled fees for this year for fisheries and aquaculture.

MR. MACKINNON: Okay. That's fine. I'm going to shift the focus just slightly because we can go over to agriculture as well, can we not? I noticed in or near the Town of Oxford there's a large hog operation. I'm correct on that, am I not?

[Page 106]

MR. FAGE: Yes. The community of Leicester.

MR. MACKINNON: Yes. I understand that there's a proposal to expand the size of that hog operation. Am I correct?

MR. FAGE: My understanding is that there was an application 18 months ago for that expansion. That expansion was approved and that expansion occurred 10 months ago. The expansion has already occurred, is my understanding.

MR. MACKINNON: I understand the Town of Oxford is expressing considerable concern about the impact on their watershed. Is that correct?

MR. FAGE: There were a number of interventions during the process of that particular operation applying for their permit. The situation, as I understand it, local community residents, as well as the Town of Oxford raised concerns - if my memory is correct - that possible contamination, of the site where they're drawing the water, could occur.

MR. MACKINNON: Is there a proposal for the Town of Oxford to secure another water supply?

MR. FAGE: My understanding was that the proponent hired a consultant, as required, and that they were satisfied that it didn't pose a risk and the project proceeded.

MR. MACKINNON: Could you provide the detail on that?

MR. FAGE: Yes, I can find that out for you.

MR. MACKINNON: I understand another intervener perhaps was Oxford Frozen Foods. Is that correct?

MR. FAGE: I'm not aware of them being in any part of an intervention there.

MR. MACKINNON: In terms of the Town of Oxford, are they satisfied at this point?

MR. FAGE: I have had no correspondence in months that would indicate that they aren't satisfied.

MR. MACKINNON: Are you aware of any correspondence to any of your colleagues?

[Page 107]

MR. FAGE: I'm not aware if there's correspondence with the Department of Environment. Obviously, that may or may not be where - if there was correspondence, but as a member for the area those interventions were 12 or 18 months ago and the operation received all its permits provincially and municipally, and my understanding is that expansion went ahead. One of the things I might point out was that on that particular site there was no need for expanded lagoons or holding areas. One of the major expansion modifications that that proponent constructing did was, all the lagoons roofs were put on them and they were covered so that blocked all access to surface water getting in and precipitation coming from the sky. Actually, their volume, by doing that, was less than when the process began and a big part of the expansion was to actually cover the outside lagoons there.

MR. MACKINNON: I think perhaps maybe the consultants' report might answer a lot of my questions or questions that have been raised by me. I didn't mean to spring it on you here today, but it's something I've been questioned over the last several months and I felt rather than make a big to-do about it, I would just approach it on a detail perspective. So if you could provide that consultants' report and the approval permits, if there was anything coming from your department, that would be fine.

Maybe before I shift out of Cumberland County, a number of concerns have been raised about the Tantramar Marshes. I know that's an agricultural positive but there's a proponent there that has a 10-year contract with the greater Moncton commission, or maybe it's Saint John, I stand to be corrected, one of the two.

MR. FAGE: I think probably both.

MR. MACKINNON: Could be both. I understand from speaking with Environment officials that they're not accepting that sewage sludge now, but there is sewage sludge being transported from the Aerotech Park. Do you have any knowledge of that?

MR. FAGE: Only as a local MLA. The minister responsible would probably be better suited to answer those questions. When sludge was being moved last year from the Halifax treatment centre or repository there, I checked on behalf of constituents that proper permitting was in place and I was assured it was.

MR. MACKINNON: Did you happen to see the permits yourself?

MR. FAGE: No, I didn't.

MR. MACKINNON: Perhaps then you may want to take a second look, because the only permit that the department has been able to supply to me is one in its contract relationship between the proponent and the New Brunswick municipal agency. There is none, there is no provision in that permit to allow for the transport of sewage sludge from the Halifax international industrial park. I stand to be corrected, but I've asked for that detail and

[Page 108]

they have not been able to provide it, but the permit shows to the contrary. So I think that's something that may be creeping up in your bailiwick.

It raises another issue because it goes back to the issue of agriculture in the Valley; as you know, in recent years considerable concern in terms of water shortages and irrigation. What contingency plans does your department have or what do you anticipate will be the pressures on your department this year in terms of water requirements to meet the demands of the farmers in that general area?

MR. FAGE: Again, I would love to be able to predict the future so you would know the rainfall or water requirements . . .

MR. MACKINNON: Based on past experience.

MR. FAGE: In consultation with a number of members of the farming community that would be using water for irrigation and those types of purposes, at the present time, obviously, their concern is, hopefully, there is more rainfall before general planting season, or during and after the planting season, because some of the structures have been enlarged as in containments that they would use for irrigation and they would like to see some more water levels in them. But if they require withdrawals from rivers or other types of sources, then that permitting would be done under the Department of Environment.

[4:30 p.m.]

MR. MACKINNON: Based on the trend of the last two years, do you expect that there will be some tapping into some of those traditional water sources like the Annapolis Basin?

MR. FAGE: There's no question that the last number of years, there have been water permits issued on a number of the river systems or watercourse systems in the Valley for irrigation purposes. It would be my impression, unless there's a very large and timely rainfall through the Valley, that a number of those growers would want to make that request again.

MR. MACKINNON: Does your department receive any complaints about the impact of the usage of pesticides and alike on domestic water sources in areas of the province?

MR. FAGE: Yes, there is no question that consumers are concerned whether pesticides, insecticides and fungicides are properly applied and that the proper safety precautions are taken. In that regard, the department requires any applicator to be licensed and go through an improved training and upgrade program for the application of pesticides and insecticides for agricultural purposes in this province. But, certainly, we would receive as a normal course - the department, and myself, as well - inquiries from people if that's a

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proper agricultural practice and that proper calibration and safety is being followed. Yes, we would receive that regularly.

MR. MACKINNON: Have you received any complaints in the last year about improper application?

MR. FAGE: Of pesticides and insecticides?

MR. MACKINNON: Yes, that would possibly, for example, Joe Citizen would call up and say, I'm convinced that a farmer or some proponent has contaminated my water supply or the brook down the road. Have you received any specific complaints in the last year?

MR. FAGE: I can't speak for ones that would be addressed to department staff at this point - we could review - but to myself or that would be reported to me, more often than not it would be a concern raised, are they doing it right rather than I'm sure somebody is doing something wrong. In either case, if we receive a call, we do our best to investigate that it is not being done improperly. It's another one of the issues under the new Farm Practices Act that would fall under that category if someone's concerned that it isn't a normal farm practice, that it would be referred to that group to see if they could mediate it and bring some consensus between the person that is alarmed and the industry or the proponent that would be applying the application.

MR. MACKINNON: It may be a question more so for Environment and Labour, but does your department issue any permits for this agricultural spray?

MR. FAGE: We would license the person applying the application and require them to take training and regular upgrades. The actual licensing of the application rate and if the chemical is safe to use in Nova Scotia or Canada would be a federal responsibility under their regime.

MR. MACKINNON: How many licences were issued last year?

MR. FAGE: For application?

MR. MACKINNON: Yes.

MR. FAGE: We can find that information. We don't have it readily available here, but we will supply you with that.

MR. MACKINNON: Is there a fee attached to that, as well?

MR. FAGE: That's a good question.

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MR. MACKINNON: I am probably giving you another idea on how to go tax somebody. Perhaps while the deputy is looking for that detail, Mr. Minister, if you don't mind, just to switch back over to the Tantramar Marshes, are you aware of any federal or provincial hydrology reports that were conducted in that general area?

MR. FAGE: Recent?

MR. MACKINNON: Both in the short term and long term.

MR. FAGE: I'm not aware of any major ones conducted in the short term. Obviously, in the long term with the establishment of the Tyndall field that's up beyond the head of the marsh, there was a major effort about 10 or 12 years ago that did a complete . . . .

MR. MACKINNON: Was that federal-provincial?

MR. FAGE: Yes. A survey of all those areas, as well, a number of test wells were drilled throughout the county during that major survey.

MR. MACKINNON: Would you have access to that information?

MR. FAGE: I can check to see if we can acquire it.

MR. MACKINNON: Would you give an undertaking that you would provide that?

MR. FAGE: Yes, if it is available, we will. If it's okay, if we can check on that. It's not in this regular fee structure one and we will just check on it for you.

MR. MACKINNON: So you can come back tomorrow with a new schedule of fees. No problem. I will take that on notice, as well.

MR. FAGE: Do you want to take credit for that suggestion?

MR. MACKINNON: No. That's only good after an election, not before. As well, in the Valley, have there been any hydrology studies done on the water tables there in relation to the farming?

MR. FAGE: I'm aware that the Annapolis Valley Growers Water Group, and that's the group that's concerned about water in the Valley, they have compiled a lot of non-hydrology work in that particular area. I'm not aware that they did any drilling themselves. Part of the water management is correlating a number of those federal resources as well as the Geomatics Centre in Amherst. There's a lot of data there that we're correlating. Natural Resources has a large book of resource knowledge on a lot of areas as well as what we can get through the federal government and PFRA and a fair amount of that known research data

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is currently being looked at and correlated through those groups right now. Once that's put together, we would be pleased to supply you with it.

MR. MACKINNON: That would be fine, particularly in relation to the Valley one as well. I think you can sense where I'm going with this, just on a broad-based public position, to ensure that we do have some level of comfort, we have a sustainable water supply and particularly for the farmers in the Valley, you know, Hants County, and some of the richer agricultural belts in the province. In fact, as time progresses, because I'm not sure if you're aware, I believe there may have been a CBC report, or CNN report last week that indicated it's not all about global warming, the greenhouse gases and so on, but, in fact, the temperature from within the earth itself is rising.

MR. FAGE: I heard that report.

MR. MACKINNON: They put the 800 thermometers 150 metres down in 800 different locations around the globe, you know, a detailed analysis. That would be quite concerning, I would think, and, you know, at what point do we get into a crisis situation. I believe, I do stand to be corrected, that there has been a substantive amount more irrigation in the Valley area in the last 10 years than the previous 50 years. Am I correct on that?

MR. FAGE: No question, especially the last four to five years being as dry as they have been, the growers who need to ensure their crops certainly have used existing and expanding amounts of irrigation equipment and, obviously, that means volumes of