[Page 565]
MR. CHAIRMAN: Order, please. The Subcommittee on Supply, the debate of estimates for the year 2002-03, we're now upon day nine. At the time of adjournment the Liberal caucus had 39 minutes remaining in its time.
The honourable member for Lunenburg West.
MR. DONALD DOWNE: Thank you very much, Mr. Chairman, to the minister and to his staff, welcome back. I thought I would ask some questions pertinent to some of the other aspects of your portfolio. Can you hear me all right? (Interruption) One of the areas was mentioned with regard to the Nova Scotia Liquor Corporation and the increase of the liquor commission, we ran the numbers through. I guess it's a little more complicated than just saying it's so many cents a bottle of wine and so many cents a dozen beer, I guess it's calibrated by volumes and then you divide how many hectolitres go into it. Anyway, we did that and our number came up to around $12.5 million. Is that about right? (Interruption) I think the Minister of Finance at the time said it was only $4 million or $5 million.
MR. CHAIRMAN: The honourable Minister of Tourism and Culture.
HON. RODNEY MACDONALD: No.
MR. DOWNE: It was always $12.5 million and then there's HST on top of that, is that correct?
MR. RODNEY MACDONALD: Yes.
565
[Page 566]
[3:00 p.m.]
MR. DOWNE: And if I recall correctly, the logic behind it is that it hasn't had an increase for a long time so it should have an increase?
MR. RODNEY MACDONALD: Yes, it hasn't had an across-the-board increase in 10 years.
MR. DOWNE: And the across-the-board increase previously was done for what reason?
MR. RODNEY MACDONALD: As the Minister of Finance indicated to me during the budget process, giving direction with respect to the figure, the direction from the Cabinet what target they would like us to hit and in order to reach that target I asked the NSLC to go back and take a look at how to achieve that target. What came forward was one of the aspects with respect to pricing and in the price increase. As an example, a 12 case of beer in Nova Scotia would still be the cheapest in the country and another example would be, I believe it's Smirnoff - Smirnoff is the same price today as it was 10 years ago - and actually I don't know if it was yourself or one of the members who asked me to see how it changed over the years and we can provide that for you, each year.
MR. DOWNE: It seems to me we tried to lower the price of beer when we were in power. So the increase was not predicated on additional costs of running the system as much as a way to just increase the cost of alcohol across the board?
MR. RODNEY MACDONALD: I think that each and every year your costs are going to increase given whether it's with respect to the costs associated with doing the business, but as I indicated, the bottom line of NSLC, what was returned to the government, to the province, last year was quite substantial and then I think those at the NSLC did a very good job as well as the employees. Again, there was a target put forward that we were asked to achieve and the main component of that was with regard to price increases. Of course, as a minister, I wanted to see what effect that would have with respect to how we compared to other places - specifically Atlantic Canada - in different products and, as I indicated, a case of beer being the cheapest in Canada gave me certainly enough indication that we were well within the range that could be handled from the consumers and, of course, that's on the advice of the people who really know and that's those working at the NSLC.
MR. DOWNE: I had the pleasure of being Minister responsible for the Nova Scotia Liquor Commission and, you know, it seems to me that it was always based on volume, like the more volume you have through the operation, if you can keep your administrative costs in line, your staff in line and you're increasing volume throughput, then your cash flow is positive enough that you can keep your prices low. Well, at least in my business, that's how we've tried to run it. You can't just keep pushing your prices up because after awhile you
[Page 567]
become uncompetitive and there's always a resistence to purchase. So the bottom line, these price increases then were not a reflection of the need by the agency, the Nova Scotia Liquor Corporation, to recoup, that it was losing money in its business. It was simply that it felt the consumer could absorb the additional increased cost without causing any resistance to purchase.
MR. RODNEY MACDONALD: Yes, and as I mentioned, taking a look at each product and one of the things that the NSLC does on a frequent basis is take a look at what's happening in other jurisdictions. One of the first questions that I had when I went back to the NSLC is how we're going to be comparing with respect to, especially as you mentioned, the provinces which are closest to us, i.e. P.E.I. and New Brunswick, but of course across the country as well and from looking at our prices in the province, we're well within that range and I give the example of a case of beer being still the cheapest. I think that has to do a lot, not just the last couple of years, and I don't know what years you were minister responsible - the member for Victoria was also, I believe, minister responsible at one point as well - but the efficiencies that were arrived at during the last 10 years, I think some of those initiatives have worked out very well within the system.
MR. DOWNE: The agency stores and I can see how they do - we've seen examples when I had the pleasure of being the minister, you know. Have you gone to any of those special Taste of Nova Scotia when they had the wine-tasting events and they have the Nova Scotia wines?
MR. RODNEY MACDONALD: Like the Port of Wines?
MR. DOWNE: Yes.
MR. RODNEY MACDONALD: Yes, I had the opportunity of being at the Port of Wines the last couple of years.
MR. DOWNE: Mr. Minister, I guess one would have to say then that the increases were a tax measure because under the Auditor General's definition, if a fee goes up for a cost, then it's okay, but if it's a fee in excess of a cost, then really it's a form of a tax.
MR. RODNEY MACDONALD: No, I wouldn't agree with that assertion at all. I guess I look at it and it's no different than when you were the minister responsible, there's a certain target that you would hope to reach and put forward as a goal to reach as a corporate body and, of course, you have to find the balance between social responsibility as well as the revenue for the province, the bottom line. So from a business point of view I would suggest that you want to see your return coming back obviously to the best number possible for, I guess you could call the government the shareholder, and doing that within the mandate that's set for it and one of the most important mandates that we have is from a social perspective. You don't want to out-price yourself with your competitors, as you mentioned,
[Page 568]
whatever type of business you're in, as you know being in business, and I certainly feel we're well within the range for that and I have that comfort knowing, because that is the message which came back from the NSLC, that we felt that these targets were within our grasp and from a business point of view were certainly in line with our competitors.
MR. DOWNE: Mr. Minister, thank you very much and I can just say that the staff at the liquor commission in our area, there are two stores, I've been to both. I don't normally go to the little one in the other mall because I'm just never down there, but I can say that the staff are very professional. I really find that they really are there to - you know, I notice there are a lot more in-store promotions and it seems to me the attitude of the staff is very professional and I just want to let you know that that's what I've seen in my area.
MR. RODNEY MACDONALD: I hope you also enjoyed the product that's offered through the NSLC as well. (Laughter)
MR. DOWNE: Mr. Minister, one other question, there's always the Salvation Army and there are sports organizations, are they going to be allowed to continue to be there?
MR. RODNEY MACDONALD: Actually I was asked that question on Friday and we haven't changed that policy.
MR. DOWNE: Mr. Minister, I would like to ask you some questions on tourism.
MR. RODNEY MACDONALD: Sure, maybe one minute just to get a staff person to change.
MR. DOWNE: One thing we should be doing in here is making recommendations that we have ear plugs so we can hear better because the audio is so bad. I don't know about my colleagues, but I have a hearing impairment and I find it very hard to hear. (Interruption) This is where the chairman told me to sit. I want to ask you, I understand your budget in Tourism has declined.
MR. RODNEY MACDONALD: Yes.
MR. DOWNE: A statistic that I believe speaks volumes is for every dollar invested in tourism there is a rate of return of some $13 back to the province. I don't know what percentage that would be, but it's a few thousand per cent return on investment. Is that accurate?
MR. RODNEY MACDONALD: Yes, $1 to $13.
[Page 569]
MR. DOWNE: So when you're debating with your Minister of Finance that for every dollar invested by the province you get $13 back, it becomes a bit of a no-brainer, doesn't it?
MR. RODNEY MACDONALD: Well, of course, you have to look at it in the bigger context of the budget, as well. I'm sure Finance Ministers today and in the past have had to look to see just how much they could allocate towards it. If you take a look at what we're investing, it's certainly comparable to what's been invested during the past number of years. I guess one of the exceptions to what you see now is that over the past three years, we've been able to increase the percentage that we're able to partner on. So, in that respect, our partnering-dollars percentage has risen. So that is one positive aspect of the last few years, although I certainly agree with you that there has been a fluctuation, but it's very much comparable to what's been done in past years.
MR. DOWNE: There was a lot of fanfare when you were rolled out as the fresh new Minister of Tourism and Culture, the one stand-alone department that was going to do great things for tourism. Because of a number of events, I'm sure, we've had a decline in the value of tourism in the Province of Nova Scotia. Maybe we happen to have peaked at a good time. You can blame September 11th or whatever, but there has been a decline, not a large amount, but it is declining and part of that was the talk about infrastructure. Can you tell me, and we all would agree that infrastructure is a key one, what have you done to improve the infrastructure component within the Province of Nova Scotia?
MR. RODNEY MACDONALD: Well, I can use one example and I certainly agree with you that there are a number of elements that are affected. The revenues from last year, there was a 2 per cent drop provincially, which wasn't too bad if you look at September 11th, which was still significant. Certainly, it varied around the province, as well. So you may have seen a large gain in Kings County. You may have seen a drop in Cape Breton, but you may have seen a slight gain in the Pictou area, as well, given visitors and such and visitors' councils.
I guess a good example of one of the things with regard to infrastructure, an example I could point to would be our three resorts and the contract that we negotiated with Newcastle, recognizing the need in three of our most recognized resorts in the province, recognizing the need for infrastructure improvements at each resort within the arrangement. There is a $10 million capital investment that will be made and that's definitely needed. I think that's probably one of the best examples that I can use with respect to that.
I don't know if there are particular ones that you have a question about, but I think that's one example, and making sure that our Visitor Information Centres are constantly being improved. I know that the member, when they were in government, made improvements in places like Pictou and Amherst and, certainly, we've continued that in
[Page 570]
places, for example, like Port Hastings, just making sure that our customers, our clients who come in, visitors, are given the treatment they deserve and the atmosphere they deserve.
There are other examples I could point to in working with our federal partners. Certainly a program that has worked out - although it's not provincial - I've had discussions with groups like ECBC to talk about this very issue in Cape Breton and was able to meet with them, have discussions on what we are focusing on as a department and where they felt they should be focusing and working together to make sure that various aspects of the industry are being well served. One of the areas they did, which I was quite happy to see and had a lot of discussion about, was taking a look specifically at the dollars there for upgrades for accommodations, but a certain level of accommodations, and that has worked out extremely well, especially around the Cabot Trail area.
MR. DOWNE: The accommodation increases, I mean, with this air conditioning at the Pines and things of that nature and they've been wanting that for years, as I recall, and now we're doing the capital upgrade and then we're turning it over to the private sector. I hope that the minister has a plan or a contractual arrangement to the private sector, not that I oppose that, as such, but that we don't, at the end of the day, get an asset back that's actually depleting itself because they've just scalped dollars off the top and kept it to themselves and let the asset decline without putting capital money back in themselves. What we're doing now in capital is exactly what these resorts have been begging for for a long time and they need it. I remember the arguments, but the way you can address capital now, you could have done it and still retained the staff. So I will be watching with interest how the management of that process works out.
Visitor Information Centres are a huge disappointment by the tourism industry. The Provincial Employment Programs are cut in half, I believe.
[3:15 p.m.]
MR. RODNEY MACDONALD: Not for Visitor Information Centres. The Visitor Information Centre PEP allocation was maintained at the present level. So that was actually very positive news and something I was very happy about. I just want to mention, too, I forget to mention it, just 30 seconds or less, also, with regard to infrastructure, I certainly would want to mention the amount of dollars that were put into highways. Probably the question I get around the province is with regard to highways. As you know, being a former minister, whether it's tourism or whatever it is, it's the question that I get asked from an infrastructure point of view, the biggest question.
MR. DOWNE: I think there are four areas of infrastructure. Highways is a key one and I understand that there are larger amounts of capital being allocated again next year because there's a bigger plan for highway improvement next year, from what I understand, from the capital side, more infusion of dollars that are going into that.
[Page 571]
MR. RODNEY MACDONALD: The intention, as was done in the past few years, would be to continue that trend.
MR. DOWNE: The other issue of infrastructure is our airport and our port. We've had an increase in the number of visitors via cruise lines. That's very positive. DRL bus lines has done a great job of couriering those people back and that's good for the province. The port activity has picked up and I know your staff have done a very good job of trying to promote that and that is very positive. I am very concerned with regard to the airlines. We've lost a lot of carriers. I can't remember the exact number, but we're down somewhere in the vicinity of 40,000 to 50,000 passengers. Air Canada picked up somewhere close to 16,000 of those, but we're still in a deficiency level, or we're still below the level of passengers through the airport. But I think the number is in the vicinity of 20,000 to 30,000. So that means that our cost per passenger is increasing. So, ultimately, what it means is that if we don't find ways to get more volume through here, we're going to price ourselves out of the market and we are a hub airport. We are certainly the regional hub airport. We don't have pre-clearance. I've written the minister myself over a year or two years ago now on this issue. It's been an ongoing matter.
I would hope that you would be as vigilant on that issue. It's a transportation issue, but it's also your business, as well, because tourism is a key component. They've done a phenomenal job at refurbishing the international entrance. They've done a phenomenal job with the expansion of the airport. They've done a phenomenal job of how to make it faster and more efficient for baggage handling and so on and so forth. But without pre-clearance, we're not going to gain the access that we need. We can pick up American carriers. This pre-clearance doesn't mean just going south, but also north. It's coming north from the States to a safer air zone. So I would encourage you to fight that battle with your colleagues in the federal government. I can't believe we are the only regional airport that doesn't have pre-clearance. To me, it's unacceptable. I think it should be there.
MR. RODNEY MACDONALD: I couldn't agree with you more. It's an issue that myself and the Minister of Transportation, indeed the Premier, have raised. We've been raising this issue on a consistent basis with a consistent message and I'm glad to hear that you also have written a letter. I would hope that each caucus would. I think it's important. Certainly we see the benefit of that. In fact, I had an opportunity to meet with officials and unfortunately, as an example, the Minister of Transportation and I shortly after September 11th, it happened that we had a meeting scheduled with officials from Air Canada for some discussions and the discussion was fairly up in the air, not knowing what was going to happen with the airline industry.
You mentioned the international arrivals and certainly we had staff that played a role in making that more attractive for the visitor coming in. I had the opportunity of going to Iceland last year and had discussions with the Minister of Transport and Tourism in Iceland. At that time they were still flying into Nova Scotia, but we had some fears that they might
[Page 572]
pull out. We also sent deputy ministers following that and unfortunately they have pulled out and that has had an effect. We are still doing our best in hopes that they will return.
There was also a letter sent recently from the Premier to Robert Milton, President and CEO of Air Canada with regard to his recent trip to Russia and Germany and with respect to flights back and forth from Frankfurt to Halifax. So it's certainly on our radar screen and I know it will be an issue. It was an issue discussed last year during the federal-provincial ministers' meeting and it will be one of the major items this year as well.
MR. DOWNE: Well we've lost a lot of air service as you know and I hope you become more tenacious on these issues. I would like to see you stand out there and holler at them a little bit or go after the market, more importantly. It seems like the government's awful quiet when these airlines leave. We need to aggressively pursue that and I'm concerned about that.
Mr. Minister, I think the tourism organization in this province has been a great organization to work with, I would say. They're trying to make it work and they've done a lot on their own and I trust the relationship is as good as - well, I know your deputy is very well respected and the staff are extremely well respected. They are concerned about the reduction numbers on that side of the budget. It's like if you have a business and you're losing market share, what do you do? Do you tighten the belt somewhere and advertise more to try to bring customers in? Or do you shut down some of the advertising dollars and hope that people will come? Their concern, and I'm paraphrasing it, is that we should be doing more to market.
I realize that there are new dollars out there, because of September 11th, by other agencies and other bodies and they've been parallelling and partnering with them, but I understand that they are very concerned about that and I realize you have fiscal responsibilities and you have to do your part, but I will say that it is a concern to them.
Secondly, the issue of Quebec. Principally you went after Quebec as a market share and I understand that the advertising in Quebec will be curtailed or shut down? It is half as much as it was before - I can't remember the exact number.
MR. RODNEY MACDONALD: Just to go back, some of the fluctuations obviously have to deal with different issues. As an example, Celtic Colours was with the tourism division and switched over to the cultural division as one example why you would see a difference in the number. You're right, the Quebec market, in looking at which market we would make a change to, we went back to the tourism partnership council and the suggestion which came forward was with respect to the Quebec market. We're still in the market, the dollar change is about $400,000 this year. That's about half of what is spent in that market. What we've been able to do is - and it will not affect the 2002 year from a marketing point of view, but for next year, that's when we will start seeing the effect, so it shouldn't have any
[Page 573]
effect this year at all. Hopefully, we will see the results of the dollars that we are investing in the Quebec market this year.
MR. CHAIRMAN: You have 10 minutes remaining on your time.
MR. DOWNE: Can you tell me, minister, will there be any change in the staffing opportunities and the operational side of Fort Point Museum, Lunenburg County?
MR. RODNEY MACDONALD: That's a museum that receives funding through the Community Museums Assistance Program so it would depend on the local organization, they run the museum, we don't own it. But I can certainly give you a figure. They had $4,214 last year and this year they're getting $4,200. So, a $14 difference.
MR. DOWNE: And there's no problem getting staff? They will be able to access the PEP program for staff? Okay. The next one. LaHave Islands - can you tell me the budget for LaHave Islands?
MR. RODNEY MACDONALD: LaHave Islands last year was $3,822. This year they're receiving $3,800. A $22 difference.
MR. DOWNE: Okay. Those are very important museums. They're not big but they certainly play a vital role in our community. What about our main museum in Bridgewater? Is there any change in funding for that?
MR. RODNEY MACDONALD: Are you referring to the Fisheries Museum?
MR. DOWNE: No. That's in Lunenburg, Bridgewater has the . . .
MR. RODNEY MACDONALD: Oh. Sorry. Last year's budget was $54,684. It's going up slightly - $54,700, you're getting $16 more this year.
MR. DOWNE: It must have come out of LaHave Islands. (Laughter) New Ross Farm?
MR. RODNEY MACDONALD: Just one moment and we will find it here. New Ross Farm is one of the seven museums that took a 4 per cent reduction - I believe it was 4 per cent, if my math is correct here. Looking at those museums, we thought those would be the museums that would be able to have the best chance to gain additional revenue and to be able to partner on different items. Their budget is still significant - it went from $507,750 to $487,400. It's about a $20,000 difference.
MR. DOWNE: Two hundred thousand dollars?
[Page 574]
MR. RODNEY MACDONALD: No, $20,000. It's $507,750 last year, this year it's $487,400.
MR. DOWNE: Our Visitor Information Centres, are they going to be reduced in any way? Are we going to keep the same component and complement of facilities with the same budget for those?
MR. RODNEY MACDONALD: No, I was just talking to my deputy regarding the one in Halifax. The only change we had was we moved one on the waterfront and that was for access for the visitor. It's much greater access if it's on the waterfront, but the same number of VICs will be there.
MR. DOWNE: And where was that?
[3:30 p.m.]
MR. RODNEY MACDONALD: The ones on Barrington Street and Historic Properties, we consolidated them into the one on Sackville Street, Sackville Interpretive Centre. That was purely to draw the bottom line with respect to visitation because it's a much more sensible location, if you take a look at it, and it certainly should make a difference of the location in areas such as you mentioned earlier regarding the cruise ships and such. People who are walking along the boardwalk will have greater opportunity and we will be able to catch those visitors.
MR. DOWNE: The tourism industry has been a large supporter of Sunday shopping. It's more for their retail market. Mr. Minister, what's your position on Sunday shopping?
MR. RODNEY MACDONALD: My position on Sunday shopping, I know it's an issue within the industry and certainly as a government we made our position known with respect to, at that point in time, when the position was made, not revisiting the issue until 2004 or 2005, and I have to be corrected on the exact year. I know there are a lot of varying views on this even around the province and, I'm sure, even within each caucus. It's certainly a big issue and perhaps a bigger issue here in HRM than anywhere. But the position we have taken as a government is to revisit it at that point in time, subject to any change. That would be up to, obviously, my colleagues.
MR. DOWNE: The museum funding going down, why were some of those areas, the 4 per cent reduction in museums, what was predicated in that? What was the theory or the logic behind that?
MR. RODNEY MACDONALD: What was the logic in reducing the funding at those museums?
[Page 575]
MR. DOWNE: Yes.
MR. RODNEY MACDONALD: In taking a look at the overall budget for the department and trying to find a balance between each of the areas that we work with, we felt that within our budget framework that our best ability to handle any decrease would be within our seven major sites, so as to protect many of the smaller museums across the province, some of which you had asked me about earlier. Certainly, we feel quite confident that those particular museums can handle that within their given budget.
MR. DOWNE: Mr. Minister, I have about two or three minutes left?
MR. CHAIRMAN: Three and a half.
MR. DOWNE: We talked about tourism and its strategies and the partnership with the tourism industry partnership initiatives and things of that nature. We've got funding going down. We've got the market share going down. We've got staff trying to do the very best they can with limited resources. We're losing airlines. We're having all sorts of different challenges out there. Have you thought of coming up with a new strategy for tourism right now because of the fact that you're not going to advertise as much as you had before? We used to zero in on certain market areas. Can you give me your vision, your plan for this year, of how tourism numbers will increase in the Province of Nova Scotia, realizing that for every dollar we invest, we get $13 back in taxes and benefits in the economy?
MR. RODNEY MACDONALD: Well, certainly, one of the areas that is moving forward is with regard to the marketing plan that was put forward in the Fall. But the marketing plan was an integrated plan and it was also not just marketing this time. It was the first time we had an integrated plan with regard to product development and marketing. There is a strong feeling that simply to push on the marketing side, you're missing out on that other very important aspect in the planning.
One of the areas that I felt quite strongly about, and we're still maintaining our high-impact marketing campaigns in Ontario and New England and Atlantic Canada, in Quebec and Europe and such, but certainly one of the areas I thought we could capitalize to a greater extent was on the Bluenose. I know on the South Shore it's always seen as a great tourism icon, as it is around the province and nationally. That's why you see it on front of the Doers and Dreamers Guide. Another example is the CAP promotion, which I mentioned on Friday. I certainly think we will see benefits from that and that's certainly targeting our market in the New England States and really having a focus on getting people within Atlantic Canada, as well, to not have to travel a great distance, but to get here to Nova Scotia.
We have had large, very strategic marketing campaigns and getting literature in the hands of people from New Brunswick, specifically, and, also, Prince Edward Island, but really targeting that New Brunswick market. I think there's a real opportunity there and I
[Page 576]
always was a believer that you don't always have to get the visitor that's perhaps off in Europe or wherever the case may be. There are many potential visitors within the province and, also, our next-door neighbours. To that extent, we've really focused on getting the literature into people's hands. It's not always about the commercial that's shown. So, to a great extent, many of these visitors are making up their mind by seeing that literature in their hands, not just a 20 second clip.
MR. DOWNE: Mr. Minister, my time is almost up. I just want to say people like Lynne Perry and people at the South Shore Tourism Association just do a brilliant job. I want to compliment your staff in all the areas that you have for their professionalism. I will continue to fight the battle on the Arts Council. I just thought I would let you have a day to breathe and peel some onions or something, I don't know, but thank you, Mr. Minister, for your information.
MR. CHAIRMAN: The time for the Liberal caucus has now expired. Are there any further questions from the NDP caucus? Are there any questions from the government caucus? I hear none. Does the Liberal caucus wish to have any more time to ask of this minister?
MR. DOWNE: Can I have another hour?
MR. CHAIRMAN: If you wish.
MR. DOWNE: No, I think we're going to move on to Natural Resources.
MR. CHAIRMAN: I will now call upon the minister to make some closing remarks.
The honourable Minister of Tourism and Culture.
HON. RODNEY MACDONALD: I will keep this within two minutes. I just want to thank my Opposition critics for the questions on both today and Friday. I would like to thank my staff from Tourism and Culture, from Sport and Recreation, as well as the NSLC for coming out on both days. I would like to thank the members for their questions and perhaps, obviously, the main subject of debate the last couple of days was with respect to the Arts Council. It seemed to get most of the time that we had on Friday. I just want to reiterate that I certainly feel quite confident that the team that we have in place will serve us well in putting forward our new council. In fact, I was listening to the radio coming up today to a CBC interview and they were talking for about 10 minutes regarding the Arts Council. Everybody has different questions and different feelings on the changes, but I guess what I really want to emphasize is the process for our artists with regard to who will get what, as an example, creation grant. The integrity of that will be maintained through that process and I certainly want to leave the impression on the record that I, as a minister, do not want to be involved with respect to what individual artists get those grants. Many people are implying
[Page 577]
that with respect to the changes, but I certainly want to put on the record that that's not the case.
Again, from Tourism, I look forward to a very strong year. I feel that many of the areas such as the CAP promotion, such as our marketing integrated plan will be strong this year. Of course, given the events of September 11th, it's something that the industry, as well as myself as a minister, are watching quite closely not only here in Nova Scotia, but across the country, to see how the year progresses. So we will be monitoring that vigorously in the next few months.
Simply with that, Mr. Chairman, I would like to close my remarks and, once again, thank my critics and my staff and look forward to perhaps some questions in the House this week or next week. I'm sure there will be one or two with respect to my portfolio and I certainly thank my critics for bringing some of those questions to the forefront because it helps to increase the awareness of our cultural programs, our tourism programs and, certainly, the investments we're making as a government.
MR. CHAIRMAN: Thank you, Mr. Minister. I just want to remind you and your senior staff that any information or undertakings that were requested during your hearings here, that you provide a copy to myself as Chairman so I can file it with Hansard, as well as identical copies to the three caucus offices to be sent all at the same time, as quickly as possible, please and thank you.
I would like to call now for the vote on the resolutions.
Resolution E24 - Resolved, that a sum not exceeding $6,317,000 be granted to the Lieutenant Governor to defray expenses in respect of the Nova Scotia Sport and Recreation Commission, pursuant to the Estimate.
Resolution E41 - Resolved, that the business plan of the Nova Scotia Liquor Corporation be approved.
MR. CHAIRMAN: Shall the resolutions stand?
The resolutions are stood.
I call upon the Minister of Natural Resources, welcome back. You were here the other day on Thursday in day seven. We have the Liberal caucus with 39 minutes remaining in their time from the last time. Does the Liberal caucus have any further questions? Do you wish to defer it and I will have the NDP go first and we can come back to you?
The honourable member for Hants East.
[Page 578]
MR. JOHN MACDONELL: Mr. Minister, I've heard you say on occasion that the Crown and industrial lands are fine, but the small private woodlots were not being managed sustainably. I just want to know if you still stand by that.
MR. CHAIRMAN: The honourable Minister of Natural Resources.
HON. ERNEST FAGE: Yes, the last assessment that was commissioned by the department was the AGFOR report and the finding was that the Crown was in a sustainable situation, that the larger industrial holdings were sustainable, but the smaller private holdings needed improvements in silviculture reforestation and other avenues related to that sector to ensure that it would be sustainable in the future.
MR. MACDONELL: The purpose of the sustainability fund really was to address the lack of sustainability on small private woodlots.
MR. FAGE: The principle of the sustainability fund, I think it's extremely important to refer back to one of the principles agreed to by all participants and that is if funds or credits were generated from small private woodlots, that proportion would return to small private woodlots. If they're generated from Crown lands, they return to Crown and if they're generated from large industrial lots, they return the same proportion as the wood is harvested.
MR. MACDONELL: Okay. I guess one of my questions would be around the idea of large-industrial and if it's sustainable. Why would it be that Kimberly-Clark would be trying to get access to Ship Harbour Long Lake? That's Crown.
MR. FAGE: Kimberly-Clark is not trying to gain access. They've had the lease on that area of Nova Scotia since the formation of the industrial contracts. They have managed those lands for over 40 years. What we require from under that agreement is a harvest plan that we would approve and obviously those harvest plans have to respect that old growth stands are maintained in original form, watercourses, wetlands, are not to be harvested and wildlife corridors and other restrictions concerning that specific area or any harvest plan.
They're required to put forward to us their five-year harvest intentions and then we would have to approve every individual harvest and what is allowable and not allowable. They have been the leaseholder there for over 40 years and managed those lands.
MR. MACDONELL: So what is the timeline on that lease?
MR. FAGE: That particular lease is a 50-year lease, I believe, and renewable on a 10- year basis, that you would be guaranteed for a minimum of that time and renewable obligations every 10 years within it.
[Page 579]
MR. MACDONELL: Have they ever submitted a plan that the department never approved?
MR. FAGE: The normal practice is they would submit a harvest plan. If the department didn't approve of their intentions, which happens, probably modifications are made on many harvest plans with them and we would work it out with the goal of best forest practices and wildlife practices in mind. The majority of the harvest plans we would work on them or modify them.
[3:45 p.m.]
MR. MACDONELL: So on that Crown land, the department would allow them to go in and clear-cut then?
MR. FAGE: On any harvest plan through the years, depending on the age of the species, those types of things, clear-cuts would be one of the harvest techniques given what species or stage of growth it was. Again, it's important to remember as of January 14, 2002, the regulations with regard to watercourses, wetlands, as well as wildlife corridors and the size of any cut, there has to be not scattered trees but representative samples of those areas left. That is actually a regulation mandated as of January 14, 2002.
MR. MACDONELL: Have you ever approached Kimberly-Clark - they don't buy roundwood, so why would they want access to Crown land? It doesn't grow as chips, so what would be their purpose of accessing Crown land?
MR. FAGE: The original industrial agreement when they moved to the province there was a commitment made to them. When you look at the legal obligation since 1965 is access to that volume of fibre or tree growth. The normal practice of the pulp mills through the years, differing technologies and the opportunity to utilize more and more of what's in a piece of roundwood, has allowed them to move from the active use of consumption of a whole roundwood that may have lumber potential in it to where they are able to utilize chips to maintain their supply. Obviously, they would trade with sawmills for those chips and sawdust that is readily available to their organization. The important thing from their perspective to run their plant is the commitment on the volume, not the form it comes in.
MR. MACDONELL: Why not let the sawmills have access to Crown logs if they're just interested in the chips? What they're going to do is cut those stands and sell the logs, I assume, to sawmills. So why not let the sawmills have access?
MR. FAGE: That's exactly what they're doing. Sawmills would have access to the logs and in return they would receive chips and sawdust. It makes much sounder business sense for them to do that and then they have their guaranteed supply and that was the original reason that they signed the industrial contract to come to Nova Scotia.
[Page 580]
MR. MACDONELL: But the sawmills don't have any guarantee of supply so why not let the sawmills have access to the standing timber and let them do the chip deal with Kimberly-Clark? I guess, even further, if this agreement is up for renewal every 10 years, why not say, no, we're not approving it until you take roundwood from suppliers in this province?
MR. FAGE: In honouring commitments made to firms or businesses, the original contract is extremely important and a legal binding document. That is a legal binding document that the Province of Nova Scotia signed, I believe, in 1965 with Kimberly-Clark so that they would establish their processing facility in Nova Scotia. Altering a legal binding document requires negotiations and those are always ongoing and the opportunity of altering them requires both parties to consent, which is the two parties in the contract which, obviously, is English common law and that's what you're dealing with. It's not a situation where you would dictate their side of the contract. When we look at opportunities for sawmills on Crown land, obviously there are tenders out there and other arrangements for sawmills in Nova Scotia.
MR. MACDONELL: I think the role of government is to dictate their side of the contract. In other words, if they want access to the wood, here's what we want: (a)(b)(c) and (d). But you say it's a 50-year agreement or a 50-year lease and we're into 40-some years of it, so I would like to know if, at the end of the 50 years, which will be coming up in less than 10 years, whether or not the government would see this as a line they would want to pursue, that they want to ensure this mill buys roundwood.
MR. FAGE: It's awfully easy to make declarations on someone else's contract. Obviously, as the 50 years approach, those are some of the discussions that will be occurring. Again, it's a legally binding contract which brought Kimberly-Clark here with a guarantee of that volume supply. It's not one that the province can dictate away from them because there are repercussions to tearing up any contract and it's called a very large financial commitment when the courts usually are done with it. What we do is continually discuss and as conditions change, seek agreement to modify with Kimberly-Clark or other industrial users.
One of the recommendations out of the AGFOR report that we hope to be able to implement through those negotiations would be forms of subcontract or other contracts in areas or species that Kimberly-Clark are not, so to speak, the primary users in that area. Those are the things that are on the table for discussion and being discussed now, but a unilateral declaration over a contract that's been signed in good faith does have repercussions in court.
MR. MACDONELL: Yes and it depends on how deep your pockets are and how many lawyers you can afford and how many years you can drag it out, but sometimes how legal something is depends on what your chances are of winning it. From what you've
[Page 581]
indicated to me, this is a 50-year agreement and that it's soon going to be up if we're over 40 years now. So I'm not talking about ripping up an existing contract, I'm talking about the negotiation of another contract in the future. So I just want to know if having Kimberly-Clark buy roundwood - which seems to be the understanding that lots of small woodlot owners have - that was something in the agreement back in the 1960s which they have unilaterally seemed to have moved away from. They have no problem acting unilaterally so the government seems to have a fear of that. So, I want to know, do you have any intention if you're still in power, to stand up for small private woodlot owners and ensure that Kimberly-Clark will buy roundwood if they want access to wood?
MR. FAGE: Again, I'm trying not to be repetitious, Mr. Chairman, the agreement's in force, we're in discussions with Kimberly-Clark on those very issues. The AGFOR report recommends and we're negotiating with Kimberly-Clark and the other industrial user on subcontracts and that's where we're going in the intention. I think it's really important to be clear that the contracts are volumes and the technology is employed so that more jobs, more value for every piece of wood harvested in Nova Scotia, if it can be utilized to its fullest extent, certainly applies to sustainability, economic opportunity, and to getting the most value out of our natural resources, ensuring they are sustainable.
Going to a system that may make it very difficult to be cost competitive for anyone harvesting, anyone owning or getting the full value from that stick of wood they sell from their property by the form that legislation would put it in a mill, I think that even-minded- thinking Nova Scotians would be detrimental to their economic opportunity. I think we have to be extremely clear if that fibre source is there as a by-product, making it a primary source, that would reduce opportunities for Nova Scotians for sustainability in another sector.
This government is very conscientious and very pro sustainable in this situation. We're not looking to get ourselves - as the honourable member suggests - into a situation where we're going to use up more roundwood and round trees for a purpose that can be filled by the system anyway and cause a depletion of our forests in Nova Scotia.
MR. MACDONELL: I'm not sure how you get chips without cutting trees. If there's a way to do that, I would like to hear it. My impression is that they cut trees to get logs that sawmills use to make lumber and also, a by-product is chips which the pulp mill uses to make paper. I would say that if there's a way to do that otherwise, I would like to know.
[4:00 p.m.]
You talk quite well about sustainability and that these were volume agreements. Well, I have a concern about if volume is an issue and I mean if volume is an issue for them so they have access to Ship Harbour Long Lake, then here are some pictures from Chaswood woodlot, owned by Kimberly-Clark, of wood that was left. That's a man's or a woman's helmet there, that gives you some idea and these are all different trees. This is not the same
[Page 582]
one taken from five or six different angles, but we're looking at 20- to 24-inch ends here and this is a yellow birch tree, and about a 16-foot veneer log would come out of that. This will give you some idea. The friend who gave me these actually told me how much wood per acre he thought was left. The reason that wood was left is because contractors have to put so much wood per second through their machine and that wood slowed them down.
Beside this lot is this lot. This lot has been harvested. I see a major difference in the impact of those two woodlots, and this is a company that you want to have access to Crown land that belongs to the people of Nova Scotia? I want to know what you think of those practices as far as sustainability, volume, making use of the wood, making use of every stick when it's laying on the ground - those are not just tops - I want to hear what you think of that compared to that.
MR. CHAIRMAN: I trust the honourable member will be tabling a copy of that for the minister's benefit, as well as for Hansard.
MR. MACDONELL: Sure, I will.
MR. FAGE: First of all, it's unbelievably difficult to comment on selective pictures that are held up as representative examples.
MR. MACDONELL: Send someone out to investigate.
MR. FAGE: The reality of different harvest techniques, the second side of the page, is a nice example of selective cutting. The opposite side, if indeed those are recent case studies, then the sustainable forest practice would certainly have some problems with that type of harvest. If there are situations like that, then we would like them reported to the department so that we can investigate them.
MR. MACDONELL: Then consider this one reported. The neighbouring woodlot is the Seaboyer woodlot, that one right there.
MR. FAGE: If you can give a little more information on location and timelines and those types of things, that would be very helpful.
MR. MACDONELL: Yes, those pictures were taken in September 2001. It's not that I have a particular axe to grind with Kimberly-Clark, I do have an axe to grind with any company that I think flaunts the resource as far as I'm concerned, a company that has been very difficult for small private woodlot owners to deal with. In coming to a province to have access to the wood, I think the province made a big mistake by guaranteeing supply.
[Page 583]
What the province should have done was arrange for small private woodlot owners to be organized so that they could supply wood. In other words, at least let them supply wood first and then have the Crown or let the company acquire land, which it has done since it's been here, about a million acres. Any of these decisions that are made by government should be made in the best interests of Nova Scotians. I don't mean just for the sake of who might work for the company, but I mean that this resource, as far as access to Crown land, is all of the people's resource and therefore the companies have to be made to take that into consideration if you're going to allow them in there to harvest. I would say that Nova Scotians would not be impressed with that as a harvesting method. If you want to comment, that's not really a question.
MR. FAGE: Again, I think there are a number of factors that one has to remember and we're discussing the merits of a long-term industrial lease that we are getting toward the late years of it. I guess if I were to talk to private contractors who own trucks and the thousands of Nova Scotians who have raised their families on the benefits supplied to Pictou County, Hants County and many other areas of Nova Scotia, they would have some views too. I'm sure they welcomed the opportunity to work in their neighbourhood and raise their families there. I'm also very sure that they would want to have their concerns raised, as I try to do, as we move ahead with sustainability and enacting regulations that they want sustainable forest supply in Nova Scotia, they want proper cutting techniques, they want wildlife opportunities and watercourses protected. That's why this government has moved ahead and enacted those regulations because that's what protecting the environment and the industry and sustainability's all about.
They also know there is a lot more to be done and this is a beginning and it takes time to end up with that situation where sustainability is an even match and that the best is done for Nova Scotia's woodlands and wilderness. This is an issue that we have to constantly address and we have regulations in place now to deal with that on private and Crown land. It's been a long time coming and I think many people certainly would say to me around the province, it's about time our government has stood up and put these rules in place.
I would also comment on private woodlot opportunities. I and many members here from rural Nova Scotia and yourself, honourable member, own private woodlands. We have been party, if you've been active in woodlot affairs across this province, to situations where attempts have been made to organize the woodlot owners or associations. I encourage those efforts, because it's with organization that you improve your bargaining position and the principles that you espouse can be put forward collectively as a group. I encourage those organizations when I meet with them to get together and form a larger association so that you have greater influence.
I think it's also important to point out that the large industrial users here in the province have been presented major international certification from the American-Canadian ISO 9000, when we're dealing with Stora, and environmentally sound practices by the
[Page 584]
American Wood Preservers Association that allow them to sell into America. I think it's incumbent upon all of us who would claim that we represent some of the views or all of the views of the forest industry, that we keep that balance out there. We try to improve it, but we also have to be very cognizant that yes, there are situations that have to be corrected. When those are reported, we must address them and try to improve the situation. But let's celebrate and acknowledge that we also are moving forward with an industry that has by and large endorsed environmental concerns and sustainability and is being presented with awards that indicate that they are doing that and it's important that we do the positive side too.
MR. MACDONELL: Well, I want to say that I'm worried. I've looked at a document actually supplied by your department. I've looked at it many times. It has enough very clear information on it that I think that anybody would be concerned and it even shows a projected decrease in inventory to 2070, actually right there, and it actually . . .
MR. CHAIRMAN: Excuse me, what are you referring to? What document?
MR. MACDONELL: I can give you a photocopy of that, as well. This document, for the record, it's the Wood Supply Forecast for Nova Scotia, 1996-2070. This is a document put forth by the Department of Natural Resources. This document is very helpful. It shows the size of the operable forest; in other words, the forest we can harvest on. It gives the harvest levels, at least as we can know them from around 1996, around 6 million cubic metres and it actually gives some good indicators as to what the present wood supply is and what the prediction is for sustainability to 2070.
In the early 1980s - and I'm assuming your deputy would have been around the department in the early 1980s - there was a rural commission, I think, that did a report on forest - well, actually, I don't know under which department. I'm assuming Lands and Forests. I know the Department of Lands and Forests made a submission because I had a copy in my office. It seems to me that one of the models that they were advocating was an infusion of silviculture dollars so that the harvest by 2040 could be 3.7 million cords. Well, we are 40 years ahead of that. We're at 2002 and we're harvesting about 3.2 million and we haven't had that great infusion of dollars in consecutive years.
It seems to me that if the department feels that what we're doing now is sustainable, 40 years ahead of that target, then what has happened in the department in almost 20 years? In other words, what they were talking about as far as sustainability in the early 1980s was something completely different than what we're talking about in terms of sustainability now, I think, because we're harvesting way too much, according to what they seemed to indicate in the 1980s. So I would like to know what you as minister see as a sustainable harvest because if our inventory is going down, that means our annual allowable cut, which is my term - the department doesn't use that term, except maybe on Crown land - is going to have to go up. I would say that at 3.2 million cords, that's not sustainable. So I would like to know your view on that.
[Page 585]
MR. FAGE: I think there are two or three factors that one has to take into consideration. You always, I think, have to be really careful of drawing conclusions when three different reports are involved, but I would certainly say, as you know, if you were in a sawmill in the early 1980s and the output from a sawmill based on the technology of the early 1980s, which is employed versus now with band-sawing, was able to virtually saw around a corner in most operations, along with going to woodchips for fibre source for pulp companies versus a lot of burning, and those technologies have dramatically increased the amount of production per measure of harvested wood from the forest. That has had a dramatic effect, again, on utilizing that stick of wood to get the maximum yield. That has had a dramatic effect on those numbers.
[4:15 p.m.]
The other thing that it clearly indicates in the AGFOR report, the latest report, it demonstrates, as well, that if we are going to be sustainable into the future, everybody can pick the cycle that they like - 30, 40, 50, 60 years - but if we are going to be sustainable in the future, that comes back to the advances in tree breeding in the last few years on how rapid, with selective breeding, you can get growth with your reforestation. It also highlights why this government wants a sustainable forest industry out there, has continued the work of the previous government to ensure the sustainability fund, the Registry of Buyers and seeing the amount of silviculture work - thinnings, reforestation, those things - vastly improve, because those are the tools that ensure that you're able to maintain or exceed your targets and that's why we're going there.
MR. MACDONELL: Well, it sounds great what you say, I have to say. If anyone was listening, I think they would say, well, there's a minister who has the best interest of the industry at heart and I think that if we're going to talk about jobs, if anybody talks like I do sometimes with real fear that we can't sustain this - I believe we will have trees, I just don't believe we will have a forest - my impression of where we're going is that we will be cutting poles and fence posts for lumber, and I think that as far as some people are concerned, as long as they meet their volume needs, they don't really care what a tree is like and that's not really going to address all the other issues around habitat, water concerns, siltation, et cetera.
It would seem to me that one of the real flaws in trying to protect the fishery was you couldn't see the fish, but in Nova Scotia, as far as the forest is concerned, we can. We can see the trees. We have the acreage for the operable forest, which is 2.616 million hectares. So we know how big the piece of land is that we're cutting on. We know how much we're cutting. We have roughly 6 million cubic metres or 3 million cords annually and, actually, with no limit on that. So it would seem to me that if we know how big the piece of land is and how much we're cutting, that you can predict how long it would take to cut that and to try to do that without putting a limit. In other words, if it went up to 5 million cords, there's absolutely nothing the government has in place to say, look, we can't cut beyond x number of cords without missing our sustainability targets.
[Page 586]
It's really difficult for, I think, commonsensical, rational-thinking people to say there obviously is going to be a problem here unless we set some limit on how much we cut and we can do things that they couldn't do in the fishery simply because we can see the trees. So I would like to know from the minister, why is it that we've never been willing to impose an annual allowable cut, province-wide, not just on Crown land, and I want to know when the department talks about the AGFOR report, if they agree with it, that Crown is sustainable, large-industrial is sustainable, but small-private is not sustainable, why they don't look at this in a much bigger picture?
It's all one forest. If small-private is not sustainable, then it's all not sustainable. In other words, if those companies are going to private woodlots and harvesting those in an unsustainable fashion, that means the whole deal is not sustainable. I don't see anything really in place to address that. You're going to say, well, the sustainability fund will do that, but if you and I woke up tomorrow and all of the private woodland in the province was cut, it wouldn't matter how many trees you planted that day, you're not going to be harvesting any for, well, the way we do it, 60 years, probably. So I think that we're seriously overcutting and I don't think the sustainability fund will save the forest at the rate that we're cutting and I want to know what you think about that.
MR. FAGE: You raise some good points and I would like to raise some points, as well. First of all, I think you're making some assumptions in your argument that the forest stays static for the next 40 years. Well, a forest is a growing and living thing and you can enhance what the AGFOR report says, to me, anyway, which is that if you do nothing, then you will not be sustainable. That's why the increased effort in silviculture, the increased effort in tree breeding and the opportunities to improve that sustainable situation will occur by enhancing the growth rate of the forest. That takes work and effort in the beginning from natural regeneration and reforestation, then moving on to pre-commercial thinnings and then into commercial thinnings, which add to the wood supply as that forest is regenerating.
That's why it's so critical when you make the statement that you have nothing but young trees, that's true if you wait 20 years, but if you begin now, with legislation and the establishment of funds, you have jump-started that cycle of increased growth and production from the forest and, certainly, those are the things that get you back into the cycle of sustainability.
That's why we would enter into those agreements, why we would commit that much effort and that's why the industry is committing that much effort, and has agreed to, because they fully realize that to have a forest down the road in x number of years, if the work is not done now in all those categories to take stands that were cut 10 or 15 years ago - and you would see lots of them, as I do. The spacing is far too close. They're 15- or 20-feet high. You thin that out and, in 10 years, you've got a commercial thinning, and the next one you would do it. That's why it's so important that it's time to start that, not delay that. That's why the
[Page 587]
department and the government have been so supportive and working with the industry to jump-start that cycle and get that volume going again.
MR. MACDONELL: I agree with getting the cycle going. I agree with doing the work, but a couple of things you mentioned and one was the tree breeding. Actually, a friend of mine who gave me those pictures told me two or three years ago he couldn't buy red spruce to plant. He could buy Norway spruce, but he said he couldn't buy red spruce.
MR. FAGE: My understanding is that red spruce is available if it's ordered timely and it's been a number of years since Norway spruce was experimented with.
MR. MACDONELL: Okay, well, that's what he told me and it seems to me that I can remember someone else saying, do you know that you can't get red spruce in this province to plant? I know you cut funding two years ago to the Tree Breeding Centre.
MR. FAGE: Certainly, we're producing 8 million seedlings as a province in provincial nurseries and certainly would be willing to talk to anybody who would be interested in purchasing seedlings and then we have the entire private industry that is more than willing to discuss and take on new customers, as well.
MR. MACDONELL: So 8 million seedlings; who would be the major buyers of those from the province?
MR. FAGE: That would be any logging company or individual that would desire to buy them, we would supply many in the province.
MR. MACDONELL: Okay, I'm just wondering, say we consider the three large pulp mills and a couple of the large sawmills, will 8 million seedlings go any distance to filling the demand?
MR. FAGE: I'm not aware that there's any shortage. Eight million would be what the province supplies through their nurseries, but there is a very large private industry that supplies seedlings as well and, certainly, we were there to produce and have been stabilizing our base amount. But the private industry, where a huge amount of activity is centred, obviously, if they can attract customers and set up new sites in rural Nova Scotia, it's good for the economy and good for the forest. We're not aware that there's any shortage. There's always been an excess, which has been the problem in the last number of years and, certainly, privates would be wondering if the government would curtail production so they would have better opportunity. But, in rough figures, we would be about one-third of the supply on seedlings.
MR. MACDONELL: This individual has been in the industry for 30 years, probably. So it wasn't just somebody who thought they would want a few trees one year.
[Page 588]
MR. FAGE: Well, direct him toward the department and we will supply him with a list of suppliers.
MR. MACDONELL: But the province did cut funding to the Tree Breeding Centre though?
MR. FAGE: We did re designated services, but our production - I just wanted to verify the numbers, but we're actually supplying more seedlings from our nurseries the last several years than we were supplying previously. There's tree breeding and the operational and production of seedlings are two different line items and budget items.
MR. MACDONELL: That's what I'm thinking, but you were the one who mentioned tree breeding and how the enhancements in it were improving the forest of Nova Scotia. So, since you raised it, I want to know how cutting funding to it is going to enhance it.
MR. FAGE: I think there are a couple of areas to point out for clarity. What we've focused on is we've moved our resources out of the actual tree breeding area. We've reached the genetic goals that were proposed and we're into orchard production now with those to get the seedlings. The research is carried on by a co-operative within the industry and private enterprise; the actual research on the tree breeding is continued by the industry and private companies. We've moved our efforts into the orchard production of seeds from those increased vigorous strains.
[4:30 p.m.]
MR. MACDONELL: So you said you reached your goals. So what were the goals? What goals did you reach?
MR. FAGE: We can give you specific answers and I don't have the measurements of how much they would have wanted. Obviously, they would deal with increased or enhanced growth. They would deal with, in all probability, damage from pests and that would be insect or moulds or fungi and those types of things. We can get you a set of those parameters, but that was achieved through that process. Those strains that were developed are now in orchard production and that's where we put our efforts into growing those orchards to produce seed. The industry, as in the forest industry, is continuing with research, along with private companies.
MR. MACDONELL: So the 8 million seedlings, the province had never produced more? I mean that was the standard?
MR. FAGE: I'm told that in recent years the 8 million is a high. It was much higher than that a number of years ago when the budworm infestation was in the Highlands. I guess that would be 15 years ago now, probably, when that major infestation was on, but at that
[Page 589]
time, there would be levels of 20 million seedlings to seed the Highlands. Once that was achieved, of course, that rate of production wasn't needed.
MR. CHAIRMAN: You have 10 minutes remaining in your time.
MR. MACDONELL: Thank you, Mr. Chairman. Those seedlings used to replant the Highlands, were they white spruce or red?
MR. FAGE: My understanding is they were red spruce and there also were some mixtures of a number of other types of spruce from white, black and Norway that would have been involved in those plantings, as well.
MR. MACDONELL: Is there any information as to what has done best or if there's any correlation between sites and specific species?
MR. FAGE: We will have to supply that information to you.
MR. MACDONELL: But there is information?
MR. FAGE: There should be information. We can supply that to you.
MR. MACDONELL: Well, I'm just about ready to wind up, Mr. Chairman. I do want the minister to be aware that I have great concerns about how sustainable our forests are. As much as people may think that I raise these concerns and the impact of my concerns may be that by altering the way we harvest we would jeopardize jobs, I see not making some change is going to jeopardize jobs. We have a resource that's renewable and sustainable and has the potential to generate wealth in this province for many, many years to come. I think for as long as wood is a material that people can build with in a cost-effective way, that it won't be replaced by some other synthetic material. I would say that this industry really should have a very, very strong future and create jobs. It bothers me a bit to think that we risk that in the forest practices that we carry out in this province.
There are people, not just me, who make a living every day in this industry who are raising these concerns. I think that gives more credibility to the argument than hearing it from me. But they definitely believe that we can do it differently, but we can still maintain jobs and we can actually create more jobs. I think that we do have to move away, I think, as much as possible, from the industrial model of forest practices. That doesn't mean that we still won't make paper or whatever, but we definitely can do it, I think, in a much more sustainable fashion.
I will provide you with some information around those pictures that I showed because if that's any indication of harvesting practices in some parts of this province or by some companies in this province, then we should all be concerned because if volume is the issue,
[Page 590]
there's a big volume there that never got picked up off the ground. That, I think, should concern us. So, anyway, with that, I will end my comments, Mr. Minister, and if you have a response . . .
MR. FAGE: I want to thank you very much for your input and comments. Your concerns are very similar to my concerns and, certainly, many people in the forest industry and observers, and achieving a sustainable model is a priority of the government and, certainly, a priority, I think, of all people in Nova Scotia. We've begun those efforts very much in earnest the last two or three years and we have to continue with them now and, certainly, the opportunity for the forest industry to be one of the mainstays of rural Nova Scotia is our challenge, as you have raised, and we all have an obligation to put forward various alternatives that will help achieve that. I thank you for your comments and I think we all share similar views that the sustainability of our forest is the number one issue out there right now.
MR. CHAIRMAN: Thank you very much. Now we will go to the Liberal caucus.
The honourable member for Victoria.
MR. KENNETH MACASKILL: Mr. Chairman, there are just a few questions that I want to follow up on, some that we touched on last week, and over the weekend I tried to gather something up for today. I want to go back to what we talked about, harvesting practices and the monitoring of same.
I saw some piles of wood on the weekend and I saw an awful lot of small wood. I'm wondering, is this immature wood or is this wood that's mature but has not grown? I'm wondering, are we monitoring that or why do we see so much small wood? Are we sure that that's not immature stands that have just been slaughtered because there's no one monitoring? I know there's a market for that small wood today. Are those just immature stands that we're not protecting? I'm wondering if the minister could give some light on what's happening relative to immature stands or wood that's mature but has not reached maturity for whatever reasons. I wouldn't really know.
MR. FAGE: Thank you, honourable member. As you are aware, there is no minimum size limit in Nova Scotia or restriction on the size or maturity of wood cut in this province, whether it be for fibre or lumber use, or for firewood for that matter. Certainly, management plans or plans dealing with utilization, it's much easier to make those decisions on areas of Crown land and those types of things as a management practice, but in the realm of private land, those particular decisions of whether that smaller wood you see would come from thinnings or an area that had strangled growth because of over population for a long time or actually a tree that should or could have been left to make a merchantable sawlog when a crooked one around it or a small one could have come out through merchantable thinning.
[Page 591]
Those are all possible ways that smaller wood could end up in the wood pile, so to speak. There is no regulation dealing with the maturity or size of wood that I'm aware of.
MR. MACASKILL: I guess what makes it so obvious today is when they separate the wood, they put the good wood into logs - it's probably separated into three different lots. Therefore, you're able to see more small wood because they take out the good wood for sawlogs and whatever else and the pile is left and it's obvious there's a lot of small wood there.
When a contractor goes into a private woodlot that's going to be harvested, there's nobody tracking that piece of woodland to see that there's immature stands that should be left there - or is that up to the contractor to make that decision, what should be cut and what shouldn't be cut? Is he given the right to go in there and just cut everything out that's fit to be marketed?
MR. FAGE: I think your observation on wood that you would see on the roadside sometimes and on trucks is certainly virtually down to almost three and a half or three-inch stock now. There's merchantable lumber so that would get sorted and go in with larger stuff so you tend to see, unless it's infected with disease or rot or very crooked, then most of that roundwood that you would see going is maybe indeed going to a chipper because then it can be utilized.
On your second question, we encourage all woodlot owners in Nova Scotia to have a management plan and some of them belong to forestry co-ops and other organizations that would supply that or would do it on their own. The legality of any regulation that would deal with that private woodlot owner, as long as the harvesting regulations are respected, ultimately, at the end of the day that's a decision between the contractor and that landowner on size of material to be harvested.
MR. MACASKILL: I'm sure you understand where I'm coming from. If we're seeing immature stands that have been harvested before their time and we're at the level of maintaining sustainability, that would be a major factor in five or 10 years' time if we're not protecting our immature stands of timber at this point in time.
There are rumours circulating relative to the potential cutbacks at Stora and the closing down of the old pulp mill. I don't know if it's fact or just rumour. If it is a fact, what effect would that have on the seven eastern regions that supply a second grade of wood that old mill was using? Would that affect the harvesters in the eastern part of the province that have a lease with Stora? My understanding is that they bought the lower grade wood for that old mill and if that mill were to shut down, would that have an effect on wood cutters and harvesters in the eastern regions?
[Page 592]
MR. FAGE: I don't think there's any question if that particular line shuts down and because they can use a lower quality wood, that is going to affect the market for that wood. If the market's not there, the requirement for that type of wood obviously would decrease dramatically. I think it's an extremely serious issue for the government and for the people of the Port Hawkesbury-Strait area and a much larger area that they would acquire wood volumes from. Currently, my understanding is Stora is re-examining all their major cost factors and they've identified power rates, labour rates and raw material prices as areas where they would like to control their costs as much as possible. We are actually meeting this week - our department and Economic Development - to go through a number of those issues with them and work with them to see if we can overcome their difficulties.
[4:45 p.m.]
MR. MACASKILL: One last question relative to trees. Can you tell the committee the tree nursery in Strathlorne - what's the health of that nursery? You mentioned last week there was an additional market for seedlings - I think you said there was additional revenue accrued to the sale of trees. Does that put a bright outlook on the Strathlorne nursery? Do you expect the market to stay at that level?
MR. FAGE: In my view, I think that's very positive for Strathlorne. Certainly, getting back up to the $8 million tree level has the opportunity to generate significantly more income from the sale of trees and makes it much more economically viable to balance the bottom line at Strathlorne. I would see that as positive for Strathlorne.
MR. MACASKILL: That would certainly be good news to the workers at the tree nursery. A few years ago there was a program whereby we were mapping the abandoned mines or pits. Is that program still active?
MR. FAGE: Yes, it is.
MR. MACASKILL: And there's still a lot of effort made to detect these mines and where they are and flag them?
MR. FAGE: Yes, that program's still in place of identifying established priorities. As well, a year ago, we established a fund to help address the most critical ones and deal with them.
MR. MACASKILL: Last Thursday or Friday, there was an article in the Cape Breton Post with concerns from the Meat Cove area with potential development in the area. Can you tell the committee where that is at the present time?
[Page 593]
MR. FAGE: I apologize. I didn't see the article - if you could give me a little more detail on what development it is, what type of development was it in the Meat Cove area?
MR. MACASKILL: I thought I had the article with me today, but I just couldn't track it down, but there's a firm from Ontario that wants to mine a magnesium by-product there. Apparently, someone from your department was down there to a public meeting and there were concerns by the people. They were led to believe that this by-product of the magnesium or whatever potential is there, zinc or magnesium, that this was going to replace road salt. I'm just reading from the paper, I don't know. I was invited to go to the meeting but I chose not to because I'm in the House, but surely to goodness they're not going to mine something in Meat Cove to replace road salt. That doesn't make much sense to me. Surely to goodness Pugwash can compete with a new mine in Meat Cove. Also, this is in a protected area so probably you could get the information for us at some point in time and get it to us in the House and see if there is potential for development of product there.
MR. FAGE: I apologize. I'm not aware of the issue and I will get the details for you and supply them to you.
MR. MACASKILL: Those are all the questions I have. I will turn the floor over to my colleague, the member for Cape Breton The Lakes and I'm sure he will delight you for the remainder of the time.
MR. FAGE: Thank you very much, honourable member.
MR. CHAIRMAN: The honourable member for Cape Breton The Lakes.
MR. BRIAN BOUDREAU: Could you tell me how much time is left, sir, please?
MR. CHAIRMAN: As much as you like because the NDP finished with the questions for this minister, the Liberal caucus is finishing the original 39 minutes, plus you have time to add to that if you wish.
MR. BOUDREAU: Thank you. Good afternoon, minister. I would just like to ask you some local questions really pertaining to Cape Breton in particular, but that have impact right across Nova Scotia. I would like to ask, how many people have you laid off in the Coxheath depot this year?
MR. FAGE: In Coxheath depot there were two people laid off.
MR. BOUDREAU: Why?
[Page 594]
MR. FAGE: When we were meeting our budgetary considerations we examined a number of areas to ensure that we could provide our mandated services. One of the areas that we felt we could still meet our requirement was through the survey crews. By lowering the number of people on various crews we could still maintain our mandated role as far as Crown land surveying goes. That's why we looked to that division to achieve those reductions.
MR. BOUDREAU: Just so I'm clear, minister, Nova Scotia Crown or federal?
MR. FAGE: Nova Scotia - our obligations.
MR. BOUDREAU: Could you tell me the positions that were eliminated please?
MR. FAGE: In Coxheath, both individuals had the designation of drafting technicians.
MR. BOUDREAU: Are they on right of recall? Do you intend to recall them?
MR. FAGE: No, there will not be a recall.
MR. BOUDREAU: So they're permanent job losses?
MR. FAGE: That's right.
MR. BOUDREAU: Are there any other job losses in your department across Nova Scotia?
MR. FAGE: Just in dealing with the Surveys Division, there were nine across the province - and I apologize, there was one additional here in Halifax from the IT unit.
MR. BOUDREAU: The IT in Sydney?
MR. FAGE: No, here in Halifax.
MR. BOUDREAU: So is that 10 in total or 12 in total?
MR. FAGE: That's 10 in total - nine surveying technicians and one from Halifax here.
MR. BOUDREAU: So they're permanent layoffs and they will not be returning to work.
[Page 595]
MR. FAGE: Permanent layoffs from those jobs. They have the opportunity to fill other positions and for those desiring to do that, we're making every effort we can over the next time period and presently, if there are openings for them to have an opportunity to fill them.
MR. BOUDREAU: So the five-point action plan went into place there. The John Hamm famous five-point action plan, you put it into place and these workers were consulted prior to being laid off. Is that correct?
MR. FAGE: Yes. The consultation occurred with the union prior to budget.
MR. BOUDREAU: With the union locally or in Halifax, and when did the consultation meetings take place?
MR. FAGE: That would have occurred with the tech change committee which the union participates in. Those meetings would have taken place here in Halifax.
MR. BOUDREAU: Could I ask who the union representative was, please? The union representative whom you consulted with?
MR. FAGE: We would have to supply that name to you.
MR. BOUDREAU: Will this have an effect on the seasonal employment levels in these departments? Particularly in Coxheath where numerous individuals are hired on a seasonal basis.
MR. FAGE: No, this would affect only the survey crew, this particular layoff, they were survey technicians. I believe two of those layoffs were not permanent staff, they were temporary staff; the ones in Coxheath were permanent staff.
MR. BOUDREAU: So how many permanent staff did you lay off across the province? Is it still 10 or is it eight?
MR. FAGE: It's 10 people involved, but two of them were temporary positions. They wouldn't have been in a bargaining unit position.
MR. BOUDREAU: Did you provide the five-point plan to those individuals as well?
MR. FAGE: They were all informed on the same day through the tech committee and union.
[Page 596]
MR. BOUDREAU: Are you familiar with the five-point protection plan that the Premier provided assurances to the government employees that would be adhered to upon layoffs? You are aware of that, correct?
MR. FAGE: I don't have a copy with me, but yes, I'm aware of it.
MR. BOUDREAU: I want to ask you also, Coxheath, a couple of years ago when I questioned you during estimates with regard to the domestic water supply, one of the first things you did as minister was eliminate individuals from obtaining at the Coxheath depot. You did, at that time, put forth an undertaking that you would investigate this situation and report back and would put an effort into trying to have this program reinstated. So could you please indicate to me what progress you have to date on this issue?
MR. FAGE: I took that undertaking. I asked staff to assess the situation and if it was a safety issue within the work area, if there was an opportunity somehow to move access off- site. The second and more problematic situation as I undertook it was the volume of water that was available for use and the departmental recommendation was that there was insufficient capacity there to deal with the situation.
The primary concern there, although that was raised, was the safety issue of people accessing water in the work area of the Coxheath grounds. Certainly if there was a possible opportunity that some other source of funding could provide an outlet off-site there, maybe that could be looked at.
[5:00 p.m.]
MR. BOUDREAU: Mr. Minister, we spoke about this before and I provided a letter to you in writing in regard to the health and safety issue. I don't know where that came from because it was investigated under the previous minister from another government, I understand. Do you have documentation to support why the people that I represent now, have no domestic water supply? There's no drinking water in that area, Mr. Minister.
MR. FAGE: I have just been informed that, yes, that documentation is available and can be supplied to you on the health and safety issue.
MR. BOUDREAU: Would you be so kind as to provide a copy to me, please?
MR. FAGE: Yes, no problem. I will have that forwarded to you.
MR. BOUDREAU: I also want to get into a little bit about coal leases, particularly in Cape Breton as a whole. On the Northside, there are numerous coal leases that are available. Could you tell me how you plan on managing these leases?
[Page 597]
MR. FAGE: As you are aware, we are still in the final stages of our negotiations with the federal government on remediation and environment before we're willing to accept surrender of the coal leases and there are a number of surface opportunities for coal on Devco sites and on a number of other sites. Once we have those coal leases surrendered to us, we will enter into a public, open process that will look at tendering opportunities for people or firms, individuals or groups, whatever, that would be interested in developing those sites.
MR. BOUDREAU: Will this be an open, public process?
MR. FAGE: Yes, this will be public and it will be an open process.
MR. BOUDREAU: There are several remediation areas, particularly in the Northside. The Northside is not just compiled of Cape Breton North. A large chunk of Cape Breton The Lakes is in the Northside area. So I'm concerned about out in Alder Point and Point Aconi. There is one site at Millville. There are many abandoned strip mining sites in that community and I would appreciate your assurance that they will all be included in any remediation plan.
MR. FAGE: I guess that's exactly where we're at with the federal government right now, doing our best to ensure that since they are the legal property owner, that they honour their commitment on remediation and environment to reclaim those sites and have the resources set aside to accomplish that within a reasonable time frame. Those are the very points of discussion we're into right now with the federal government in the final phases.
MR. BOUDREAU: Do you intend, sir, to hold the federal government accountable on this issue?
MR. FAGE: Certainly, we intend to hold them accountable as the property owner for those sites. That's why we have not taken them back early in hopes that we can negotiate something later. That's why we're negotiating very directly and stiffly with the federal government up front that these are your obligations. We want you to set aside the resources to take care of that before we accept the surrender of the lease. That's what we're doing right now.
MR. BOUDREAU: Okay, I just have a couple of more questions with regard to your layoffs. How did you determine who would be layed off and in what areas?
MR. FAGE: The determination of who would receive layoff notices was determined by senior staff.
MR. BOUDREAU: Within your own department?
MR. FAGE: Within our own department.
[Page 598]
MR. BOUDREAU: Did the department of human resources have any input into this decision?
MR. FAGE: Once the decision was made, the process was conducted in conjunction with the Civil Service Commission.
MR. BOUDREAU: Did you have any consultants hired last year within your department? Did you hire any outside consulting companies?
MR. FAGE: In connection with this issue or any issue?
MR. BOUDREAU: No, any issue.
MR. FAGE: Yes, we do hire outside consultants.
MR. BOUDREAU: Could you tell me how much you spent on them this year, please?
MR. FAGE: If you will hold for a minute, we will try to identify that line item. It may not be total, it may be separate line items that we will need to put together for you. Do you have a specific issue or area?
MR. BOUDREAU: No, I would like to know how many consulting companies that your department actually did business with, the names of them and how much they cost.
MR. FAGE: We can't supply that to you this afternoon, but we will make an undertaking to supply that to you.
MR. BOUDREAU: That would be fine, Mr. Minister. Mr. Chairman, I would just like to acknowledge that that concludes the Liberal caucus questioning of this minister.
MR. CHAIRMAN: Thank you. Mr. Minister, you have an opportunity now to make some closing remarks. I just wish to remind you and your senior staff that any information or undertakings that were requested by any of the caucuses, that you provide that information to me, as chairman, as well as to the three caucuses all at the same time so I can file my copy with Hansard, and the other three caucuses can use the information to their perusal.
MR. FAGE: Mr. Chairman, first of all, I want to thank the honourable members from the Liberal Party and the honourable members from the NDP caucus for their questions. I especially want to thank them, and you, as well, for allowing me to have a split session on these estimates for Natural Resources. The questions, certainly, were well-put and discussed issues - especially around the forestry industry - that are important to all Nova Scotians and that's the matter of achieving sustainability and how we can go about protecting our
[Page 599]
resources in this province and there were very good questions and I certainly appreciate the input.
Certainly the mining industry, and specifically the coal industry, are extremely important and topical issues, again, to areas of the province and, in particular, communities that have a very strong vested interest in remediation and environment and opportunity and production in the future and thereof. So they were well-put questions, Mr. Chairman. I would like to thank the staff for their time and expertise in these two sessions and thank you for the opportunity to present the estimates for 2002-03 for the Department of Natural Resources.
MR. CHAIRMAN: Thank you, Mr. Minister. It is time now to call for the question on Resolution No. E11.
Shall Resolution E11 stand?
Resolution E11 is stood.
Resolution E40 - Resolved, that the business plan of Nova Scotia Harness Racing Incorporated be approved.
MR. CHAIRMAN: Shall Resolution E40 stand?
Resolution E40 is stood.
MR. CHAIRMAN: I would like to call the estimates of the Department of Transportation and Public Works. While the ministers are shifting their positions at the table, I will read the resolution into the record.
Resolution E33 - Resolved, that a sum not exceeding $239,411,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Transportation and Public Works, pursuant to the Estimate and the business plan of Sydney Environmental Resources Limited be approved.
MR. CHAIRMAN: I will call upon the honourable Minister of Transportation and Public Works and the Minister responsible for the Sydney Tar Ponds Agency and the Sydney Environmental Resource Limited to come forward to make his opening remarks. You have the floor, sir. I will ask you to make some introductions of your senior staff and whatever comments you wish to make.
The honourable Minister of Transportation and Public Works.
HON. RONALD RUSSELL: Mr. Chairman, I can't tell you what a delight it is to be here this afternoon to look at the Estimates of Transportation and Public Works. You think
[Page 600]
I'm kidding, but I'm not. This is the highlight of the year. I would like to tell you, first of all, that, unfortunately, Howard Windsor, the Deputy Minister of Transportation and Public Works is not here. There is a deputy ministers' meeting in Ottawa. They're meeting, in fact, this evening, probably not this early, but this evening with the Deputy Minister of Transport Canada and it was imperative that he be there because, as you well know, we are in an internal chase with the federal government to get federal funding. However, we still have with us today people who are absolutely capable of answering, I think, most of the questions that will be forthcoming from the floor.
We have Martin Delaney, who most of you, I believe, know, he is Executive Director of Highway Operations and Director of Finance; Greg Penny on my right and; in the back, we have Ted Keddy Director of Building Services; Greg Lusk, Executive Director of Government Services; Don Stonehouse, Manager, Transportation Policy Development; John O'Connor, Director of Engineering Design; and Richard Perry, Director of Public Affairs and Communications. We also have with us Bob Fowler, Chief Executive Officer of the Sydney Tar Ponds Agency, who will be with us during the examination of these estimates.
I have a fairly lengthy opening statement. The intention is not to rag the puck, Mr. Chairman, but it's to cover the waterfront of the Department of Transportation and Public Works because I don't think some people are cognizant of what else we do besides look after roads and bridges and those kinds of things directly connected with transportation issues. In order to answer any questions you might have, as I say, we have the staff here to do so, but I would like to read or ad lib, anyway, from this document that I have in front of me. We have three operating divisions within the Department of Transportation and Public Works: Highways; Public Works; and Government Services. I would like to speak to all of those three areas in my remarks and I want to share the direction my department will take in the year ahead and what our priorities will be as we provide services for Nova Scotians.
We are, as you are well aware, a very large department. We have more than 2,000 direct employees in the department and I believe that makes us the largest employer within government, as far as direct employees are concerned. As you know, we are talking about 2,000-plus FTEs. So we have a large number of employees, as I said, I think the largest number within the Civil Service. On top of that, although our total budgetary numbers are not as high as Health or Education or Community Services, the direct expenditures by the department on services provided directly by the department is the highest within the Civil Service. In other words, the Department of Health has $1.8 billion, which far surpasses the amount of money that we have within the Department of Transportation and Public Works, but most of that money goes out to DHAs and to other organizations to spend. The same with the Department of Education, which funnels money out to school boards to expend. We expend our own dollars and for that reason we do have, as I say, a large staff and we are a very active, hands-on type department. We do things that are the nuts and bolts of operations within government.
[Page 601]
The notes here go on to say that people who provide accommodation, property and procurement services are all within our purview. They repair our snowplows. They fix complicated mechanical and electrical problems. They clear our roads of ice and snow in the winter. They make it easier for small businesses across Nova Scotia to do business with government, as through procurement and tendering. They design and plan new schools. They manage industrial parks and it all adds up to service and, certainly, I, as minister, and I know within the management of the department, we surely appreciate their efforts.
[5:15 p.m.]
Transportation, I don't have to tell you, is very, very important. When you consider the size of our province, we have a very extensive transportation network. The province is only 55,000 square kilometres, which is not large as far as the provinces across Canada are concerned, but we have 23,000 kilometres of roads in Nova Scotia; about half of them, Mr. Chairman, are paved. We have our Trans-Canada and our 100-Series Highways, which make up a high-speed system that connects Nova Scotia with the other Atlantic Provinces, as well as with the northeastern United States. Every day, each day of the week, truckers can load their rigs - and they do - in Nova Scotia and head off to destinations across North America. Bus companies offer scheduled and charter services and, in recent years, we've seen the growing popularity of smaller shuttle vans operating within the region. We will be addressing safety issues related to that type of venture before too long and I'm sure we will be addressing some questions from other members with regard to the shuttle bus industry in Nova Scotia.
While we welcome all this activity on our roads, it's a double-edged sword because the more traffic we get, of course, the faster our roads wear out. We've been blessed with many advantages in this province and having a coastal location is certainly one of them. Our location near the great circle route makes us a natural gateway between North America and the rest of the world. Hundreds and millions of dollars worth of goods pass through our province on their way to markets around the world. As we all know, the ability to trade globally is no longer an option. It is a must if we want to remain competitive and create opportunities here at home.
The Port of Halifax and the Strait of Canso are known around the world as two of the finest natural harbours in the world. Their strategic locations will support the future economic growth of our province for generations to come. I don't think I can stress that too highly. Those two ports in particular - we have other ports as well, such as Sydney, Pictou, Digby, Shelburne and Yarmouth, but those two major ports - are a cornerstone, really, of the future of this province, whether we're talking about the offshore oil and gas industry, et cetera, or we're talking about commerce coming in by containers, et cetera.
[Page 602]
Those two ports are essential to the future well-being of the Province of Nova Scotia and too often we forget how lucky we are to have those two harbours, in particular, which are natural harbours. They don't require dredging. They are open year-round and accessible, as I say, by the largest ships under construction at the present time and probably in the foreseeable future. I'm told that this summer we will see a great many cruise ships in the harbour here. The figure that was written in the notes that I have was 87, but I was at a meeting the other night down at Pier 21 and some people down there were talking, I think, of almost 120 cruise ships this year expected in the port. Last year, passengers spent about $17 million once they came ashore and that's a good boost for Halifax, not so much, perhaps, for areas outside of the metro area, but, nevertheless, a great boost to our economy.
On the rail side, CN provides daily double-stack container rail service between the Port of Halifax and its inland markets in Montreal, Toronto and Chicago. CN, of course, is regulated by the federal government. Our regulatory responsibilities on the rail side govern the aspects of the two short-line provincial railroads that provide service to local shippers. That's the one running up through Cape Breton, and the one running, in my riding, to Hantsport, primarily for carrying gypsum.
The Nova Scotia ferry service is made up of four routes that connect us with New Brunswick, P.E.I. and Newfoundland. We are pleased to see issues in the Yarmouth area resolved, that will mean the Bay Ferries and the Prince of Fundy cruises will continue to link Yarmouth with Bar Harbor and Portland, Maine. As you know there were some difficulties in the Port of Yarmouth with respect to the two ferry services operating out of the one terminal down there. Fortunately those differences have been resolved, and both ferry services will be continuing as in the past during this coming tourist year.
Within the province, the Department of Transportation and Public Works was able to maintain services on its local ferry routes, thanks to cost-recovery measures announced just prior to the budget. That was, of course, fee increases on the ferries. The Tancook to Chester route, which is an island service, was exempt from the changes. There were no increases in ferry rates for those who prefer to buy annual passes. They still have the option of buying passes on a quarterly basis with post-dated cheques. There was an increase on the individual ticket from $1.75 to $2.25 when you buy a book of tickets. However, our ferries were running at a substantial loss and will continue to run at a substantial loss. We have to continue the ferry services, we have to continue buying new ferries. At the present time, we're looking at replacement of the Joshua Slocum in Digby. To replace it, a ferry costs somewhere in the neighbourhood of $4 million, so they're not cheap.
This year we're able to announce a significant increase in funding for roads, bridges and ferries in our budget. It is something in the order of 30 per cent, up to $85 million. That's a significant increase, but I want to put it into perspective because we have a $3.4 billion problem. You will find me repeating that often as we go through the next few hours of estimates because I want people to understand that $3.4 billion of work should be done over
[Page 603]
the next 10 years on our highways, work on our 100-Series Highways and on our secondary highways, our local roads and bridges. I don't think we should lose sight of the big picture that roads - transportation generally - is a very expensive project.
If you were to look at a chart showing the trend in capital spending for the past four years, you will see a very positive trend. It's an upward trend that reflects the commitment we made when we took office. What does it mean for the year ahead? Over the next several weeks, the department will be deciding and announcing which projects will qualify for the capital funding announced in our budget.
In fact you probably heard of our first announcement, the construction of a new $10 million bridge at Margaree Harbour in Inverness County. This is an important heavy-truck route in northern Cape Breton, and we are now in the position to fund the new bridge. It's a major investment in the community and for the future of tourism in Cape Breton. The people living in that area have been very patient. We have already indicated that this was a priority. The current bridge is 42 years old; it is a timber bridge, supported on timber piles, and it's simply too costly to keep making short-term repairs to that bridge. I believe, annually, we're spending something in the order of $0.5 million - it's a very high-maintenance bridge, an old wooden bridge that was a good bridge in its day but has seen its useful life. We expect to go to tender very shortly on that bridge, award the contract in June, and complete the bridge some time in 2003, probably December 2003.
When we talk about capital projects - I know that members certainly talk about capital projects quite often, they ask the obvious question, how do we decide where and when the work gets done? I would just like to reiterate the selection process that we have. Each of the four district directors is asked to submit a ranked list of the top priorities in their respective districts. The lists are divided into 100-Series and non-100-Series Highways. In ranking each road, safety is the department's first concern. The following objective factors are considered: one, traffic volume, which is based on the average annual daily traffic on the road; two, pavement condition rating, this is based on the amount and severity of cracking, wheel-track rutting and other surface defects; third, the riding comfort index, a measure of the roughness of the road surface, and that's measured by a specially equipped truck that travels our roads and gives us a number, that number or index number is a measure of the severity of the wear and tear on the road surface.
That isn't all that we look at within the department when we're deciding whether or not we're going to do major work on a road. We include the economic importance of the road; in other words, does this road service an industry that requires heavy transport, is there unexpected deterioration due to weather or type of traffic? In other words, if we have a very bad winter on some of our roads, particularly clay roads, we will get spiking and we will get road breakup in the spring that would not be originally anticipated when we made up the original list for road repair within the community. Also, whether or not a particular road is a major link for a community, in other words it links the community to the 100-Series
[Page 604]
Highways. For 100-Series Highways, the sections submitted by the four districts are combined into a single provincial list. These are again rated from highest to lowest priority, using a formula that considers traffic volumes, road comfort and pavement conditions.
For non-100-Series Highways, the method for defining the province-wide list is the same. For this grouping of roads, however, projects are subdivided into three categories before they are ranked. The categories are based on traffic volumes: less than 300 vehicles per day; 300 to 1,000 vehicles per day; and more than 1,000 vehicles a day.
Repaving projects to be included in the capital program are selected from the ranked lists. The number of projects in any given year depends on the amount of funding that the department received. The projects at the top of the priority list are placed on the capital programs. However, precedence is sometimes given to roads that may have seen extraordinary deterioration after the analysis was completed.
I should also mention - and I think it's important to mention - that what MLAs come forward with when they rate their priorities is also considered, because quite truthfully I believe that MLAs probably travel the roads of their constituency more than any other person on a fairly regular basis, and they are looking at the road, they're looking at shoulders, they're looking at pavement, breakup on the pavement edge, they're looking at such things as bushes that are growing out into the roads and what the ditches look like, et cetera. So when MLAs come forward with a list - and quite a few of them do, or more often than not what they do is they phone either the deputy or they phone the director of operations, the gentleman on my left and bend his ear - you are listened to. I mean that sincerely, we do take that into consideration.
Safety factors such as accident rates on roads are also given consideration. I think that's important because of the fact that some roads that were built back in the 1930s and 1940s have never changed their original routes, and they are probably the routes that the oxen followed when they opened up the province.
In recent years, with limited government spending, Transportation has focused on maintaining the existing paved network as opposed to laying down new asphalt. In other words, we have not been paving gravel roads of recent date. Our philosophy here is pretty straightforward, let's do a proper job of maintaining what's already built before running out to lay new pavement on roads that see very little traffic. Gravel roads are treated as part of the regular summer maintenance program; work includes gravelling, ditching, grading, dust control and surface treatment. Let me acknowledge right up front that we have far more problems with our roads than we have resources.
[Page 605]
[5:30 p.m.]
I would like to move on now to talk a little bit about the long-term strategy. As you know, we've been after the federal government for some time now to live up to its responsibilities. I'm not sure if committee members are aware, but Canada is the only G-7 country that does not have a dedicated national highway funding program. Whenever dollars are made available in Canada, they're made available on a piecemeal basis. In other words, the Transportation Minister goes up and sees the federal Transport Minister and argues the point for a particular road or a particular project, and argues for federal dollars to help with that project.
We, of course, are stuck with federal dollars only being available for the National Highway System. The National Highway System is the 100-Series Highways that were agreed to at the time that the program was set up. In other words, in Southwestern Nova Scotia we have Highway No. 101, which is funded or is capable of being funded by the federal government. Down on the South Shore we have a road that's equally important, but it's not a part of the National Highway System, so it does not receive federal funding. Highway No. 104 receives federal funding, but Highway No. 105 does not. Highway No. 104 receives federal funding.
When I say receives federal funding, don't misunderstand me, we don't get a paycheque from Ottawa every month or every year or perhaps even every three or four years, it comes in dollops. The federal government decides to give us some money to spend on the National Highway System, and we can take that and cost share it - 50/50 is the normal sharing relationship - to spend on the National Highway System. We have not done well in Nova Scotia with federal government sharing over the past - I think you can go back to about 1987 when we had the last decent program with the federal government. We've had little bits and pieces along the way since then. Last year we got a piece of the infrastructure program. It amounted to about $17 million for the province, and that's not a heck of a lot.
The federal government takes from Nova Scotia, every year, $140 million in motive fuel taxes. There's $140 million per year taken out from this province in motive fuel taxes. The concept was that the federal government, when the National Highway System was set up, would allocate so many dollars per year to each respective province, based on a combination of cost-sharing factors; based on population, on the number of, in those days, miles of road you had within the system, et cetera. But that all disappeared. That disappeared back, as I said, in the late 1980s, and from then you were on your own. Every provincial government had to go up and make their case to the federal Transport Minister, who would say, well, yes, we're looking at this, we're looking at that, but we haven't got any money for you.
[Page 606]
As a result of that, Mr. Chairman, we have come to this crunch that I was talking about a few moments ago, where our highway system has been going downhill. If you have a house and a few shingles blow off the roof, you don't wait until all the shingles have disappeared off the roof before you fix it, you do preventive maintenance. If you do preventive maintenance, then you spend so much each year and you're never stuck with a horrendous expense.
We have not been doing preventive maintenance in this province, not only because of the fact that we haven't been getting federal dollars, but also government after government, regardless of what kind of governments they were, when they've had a crunch in Health or Education or Community Services or somewhere else, they said, where can we get some money. Well, the obvious place where you can get money without it appearing that you're downgrading some service is to take it out of the maintenance and capital program of the Department of Transportation and Public Works. And they've done that year after year.
Finally, we have a road system that is crumbling, and that is a worry to me, and I'm sure it's a worry to all Nova Scotians; certainly they rattle my chain often enough to tell me, why don't you fix such and such a road, it's falling down. I tell them, look, there's a big club, there's about 400 or 500 roads, probably in the same state as your road. Unfortunately, we can't repair them all in one year. Gradually we will, gradually we will bring our system up to speed, but it's going to take time and it's going to take dollars.
That's why I'm glad that this year we've had a reasonably substantial increase in the capital budget for this department. When you take into consideration the total capital budget for the Department of Transportation and Public Works, it's around about $85 million, approximately. Remember, back in the 1990s and the 1980s, we were spending $120 million and $130 million a year on highways, and that was in a day when $130 million worth of paving, today it would probably cost you about $200 million, just through the increased costs of asphalt and labour, et cetera.
We're a long way from having sufficient dollars. Hopefully someday we will. At the moment, we get about 4 per cent or 5 per