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HALIFAX, TUESDAY, APRIL 27, 2004
SUBCOMMITTEE OF THE WHOLE HOUSE ON SUPPLY
1:40 P.M.
CHAIRMAN
Mr. William Dooks
MR. CHAIRMAN: Good afternoon members of the committee and members of the audience. My name is Bill Dooks and I'm chairing just for a short time and then I'm going to turn the Chair over to Mr. Hines. We are exploring the estimates of the Department of Agriculture and Fisheries this afternoon and we left yesterday afternoon with the Liberal caucus and you folks have 25 minutes left in your turn, so I guess we're ready to go, ready for questioning.
The honourable member for Richmond.
MR. MICHEL SAMSON: Mr. Minister, just as we were finishing off Acadian Affairs, your office staff, I was asking you about where the funding is coming from for that and you were answering, but if you could just give me the details again.
MR. CHAIRMAN: The honourable Minister of Agriculture and Fisheries.
HON. CHRISTOPHER D'ENTREMONT: Okay, part of that funding was coming via the entente cadre, the federal agreement, and part of it was coming from that budget estimate that's showing in the book. It's about a 50/50 payment from the federal government.
MR. MICHEL SAMSON: So there has been additional funding put into Acadian Affairs from the province?
MR. D'ENTREMONT: That's right.
MR. MICHEL SAMSON: Now, the funding that's coming from the federal government, is that through the official languages?
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MR. D'ENTREMONT: Correct.
MR. MICHEL SAMSON: So that money that used to be given out to community organizations is now going toward office staff?
MR. D'ENTREMONT: No, there was a renegotiation in our conversations with Heritage Canada, so we were able to get more money through the entente cadre, in order to pay for these positions.
MR. MICHEL SAMSON: Offhand, how much money do you get per year under the agreement for official languages that can be given out to community organizations?
MR. D'ENTREMONT: I don't know the exact number and Real is not with me at this point to answer that question, but I can get back to you on that one.
MR. MICHEL SAMSON: Who makes the determination as to who gets that money?
MR. D'ENTREMONT: There's a negotiation process that goes on between the provincial government and Heritage Canada and basically those are set up during those negotiations. The agreement tends to go for about a five years, so that agreement came due at the end of March.
MR. MICHEL SAMSON: Okay, so if I have a community group that's looking for funding for a project that could fall under official languages, who do they contact?
MR. D'ENTREMONT: They would probably contact the Office of Acadian Affairs first, but it depends on where the actual entente or agreement is for government services in French. Basically, each department that would have a community group or whatever that's looking to do some kind of project would have to sell the idea to a provincial government department first, then come back to Acadian Affairs to find those matching dollars. There is some discretionary piece in there for smaller projects but, as I said, I don't know the exact amount in there. That process is basically working with guys from Economic Development and other departments that can access those funds.
MR. MICHEL SAMSON: Back to the issue of crab, has your department been keeping statistics as to how much crab is being landed in Nova Scotia?
[1:45 p.m.]
MR. D'ENTREMONT: Yes.
MR. MICHEL SAMSON: What is that statistic?
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MR. D'ENTREMONT: We don't have that right with us, but I can get that to you.
MR. MICHEL SAMSON: Okay, how much is landed and how much is processed in Nova Scotia?
MR. D'ENTREMONT: Again, those numbers aren't with us at this point, but I can get them for you.
MR. MICHEL SAMSON: The reason I ask that is because I'm sure the minister and his staff are aware there's quite a significant amount of crab landed in Nova Scotia that's not processed in Nova Scotia. While we've put those restrictions to deal with the problem with Newfoundland, we still are having a disproportionate amount of crab leaving this province. What is your department doing to try to make sure as much as possible, the majority of crab landed in Nova Scotia gets processed in Nova Scotia, that Nova Scotians get jobs, and this province benefits from our own raw resources?
MR. D'ENTREMONT: Well there's been a lot of discussion around that issue. When we sit down at the ministers' conference every six months, with the industry, our line on it is definitely to try to produce as much of the product in Nova Scotia as we possibly can. We also need to remember that there are a number of interprovincial trade agreements, that we can't restrict the flow of that product. Newfoundland is probably the only province in Canada, with a little bit in Quebec, that has regulation restricting the amount of product that has to be produced within Newfoundland. We don't have that type of legislation because we feel the free flow of product is beneficial to Nova Scotia.
MR. MICHEL SAMSON: It's beneficial in a way, but it's a detriment in another way and I guess it leads me to one of the other concerns. One of the main issues in the industry - and I'm sure for fishermen it's an issue of trying to get the best price - is if you're looking at trying to maximize the amount of employment created by this industry, one of the concerns is what's commonly known as suitcase buyers. Basically the only thing they own is a suitcase and an 18-wheeler and that's their only attachment to the province because they buy the product, put it in the 18-wheeler and off it goes, never to be seen again in Nova Scotia. What is your department doing to deal with that issue, if anything, or are we going to allow the suitcase buyers to continue to buy on the wharfs of Nova Scotia and ship the product out of province?
MR. D'ENTREMONT: In the new process that we're setting up for the buyers and the processing licenses, there will be some restrictions in what you need to have as a buyer, and I'm not too positive on those, so I would like to get that information for you as soon as I can get it, on those new regulations, which will stipulate a little bit of our processing capabilities for those buyers. So it will restrict those suitcase buyers as you talk about.
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Just to go back to your previous question, 13 plants equipped for snow crab processing, 11 active in 2003. In the mid-1990s, that's not exactly what I was looking for, I apologize I will get the most up-to-date numbers for you.
MR. MICHEL SAMSON: So if I understand correctly, you're saying that the new regulations say that if someone is coming to apply for a fish-buying permit, especially with crab, that they would need to have a processing licence at the same time, in order for them to qualify to get a buying permit, is that correct?
MR. D'ENTREMONT: That's what we're looking into.
MR. MICHEL SAMSON: I can't encourage that enough and I imagine you're probably going to put a grandfather clause on that which is unfortunate because suitcase buyers do not benefit the Province of Nova Scotia, and it's jobs being lost, it's raw product leaving this province that cannot be processed. Knowing that I have a crab-processing facility in my riding, and the jobs it creates, and the spinoffs to the economy, and to think of the millions of pounds that are leaving this province to go to New Brunswick, which they're benefiting from - we fortunately put an end to the Newfoundland practice because that was just atrocious what was going on there - I'm certainly pleased that your predecessor finally decided to take that action.
What have you been doing, considering since the restrictions on the U.S. border were after last year's crab season during the Winter months, what impact, if any, should we fear to the crab industry with the new restrictions at the border?
MR. D'ENTREMONT: The new restrictions were put in place in December of this year, there were some new border restrictions, which did talk about notification and the likes. The original plan talked about giving almost 12-to-24-hours notice before crossing the U.S. border. Through the federal government and ourselves, and those who stood up and said this wasn't acceptable, that has gone down to two-hours notice. So there are a number of things that we've been able to do successfully in those border crossings, so we foresee no problem when that crab season opens.
MR. MICHEL SAMSON: I just want to take you back to the Estimates Book, a couple of line items here that seem to stick out. On Page 11, you have here, Clarica Life Insurance Company, $353,000 was paid out to them. I'm curious as to what the purpose of that payment is?
MR. D'ENTREMONT: It represents an amount of insurance premium payments for the Nova Scotia Loan Board.
MR. MICHEL SAMSON: So Nova Scotia Loan Board is required to actually have insurance itself?
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MR. D'ENTREMONT: Correct.
MR. MICHEL SAMSON: A little bit further down you have Communications Nova Scotia Support Services, $112,000.
MR. D'ENTREMONT: That is the amount that represents the billing charges for communications support for the Nova Scotia Department of Agriculture and Fisheries. Basically, this is two communications officers that we have in the department who are actually employees of Communications Nova Scotia. We have to transfer money from our department into Communications Nova Scotia to pay for those individuals.
MR. MICHEL SAMSON: The very next one, Compass Group Canada Ltd., $774,000?
MR. D'ENTREMONT: Payment for food services as tendered agreement for the operation of the cafeteria at the NSAC. That's to feed the students at the NSAC.
MR. MICHEL SAMSON: It costs $774,000 to feed the students at the NSAC?
MR. D'ENTREMONT: Yes.
MR. MICHEL SAMSON: Do they not pay for their meals?
MR. D'ENTREMONT: I'm sure there's a recovery on that. If you look at the estimates in the book there is a recovery for that, but the total we pay out for that service is $774,000. There would be a recovery showing in the estimates as well for the NSAC. We could find it for you, just hold on one moment.
MR. MICHEL SAMSON: So the Province of Nova Scotia is paying $0.75 million to provide food to the NSAC, yet they must be charging for the food themselves - is it subsidized? Is that part of their tuition, that they get subsidized meals?
MR. D'ENTREMONT: I would imagine their room and board is paid for. I don't have the total, but each student would pay for a 19-meal plan - 19 meals per week - $993 for the year. If you were on a 14-meal plan you would pay $948 per year for that meal card, just as Dalhousie, you would buy a meal plan and that's our meal plan for NSAC, which would generate, I'm sure, the $774,000, but I'm not positive on that.
MR. MICHEL SAMSON: So this is a cost to the department. What revenue are you receiving in return for this cost that's being paid out by the department?
MR. D'ENTREMONT: We're charging the students $993 per student.
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MR. MICHEL SAMSON: So, is this being made up? You're completely recovering this expense?
MR. D'ENTREMONT: Correct.
MR. MICHEL SAMSON: Where's the line item that would show us that you're recovering the $774,000?
MR. D'ENTREMONT: If you go to the Estimates Book, Page 3.9, which is the Nova Scotia Agricultural College, if you look to the Gross Expenses, just below there's less, less, less. So, the second less, which is Fees and Other Charges is $7.4 million, that includes tuition and meal plans recovery and room recovery for the NSAC.
MR. MICHEL SAMSON: What's your recovery from that?
MR. D'ENTREMONT: It's $7.4 million.
MR. MICHEL SAMSON: So this entire cost is picked up through that?
MR. D'ENTREMONT: Correct.
MR. MICHEL SAMSON: You have just below that, Corporate Communications Ltd., $28,000.
MR. D'ENTREMONT: That's the amount that represents payments for the exhibit rentals at the Boston 2002 Seafood Trade Show.
MR. MICHEL SAMSON: So it cost $28,000 for the seafood show?
MR. D'ENTREMONT: There's also advertising for the Industry Development Business branch of the department.
MR. MICHEL SAMSON: A little further down, you have $292,000 going to Robert Pasquet and Associates "In Trust". I'm curious as to what that represents.
MR. D'ENTREMONT: Robert Pasquet and Associates?
MR. MICHEL SAMSON: That's what's here in the estimates. It's right after Remote Access Technology and after that is Rod Lynk's Auto Clinic.
MR. D'ENTREMONT: It's the amount that represents the yearly lease payments for the office space at the Bank of Montreal building for the department.
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MR. MICHEL SAMSON: So it costs $292,000. Isn't this paid for by Public Works? Why is this coming from your department budget? I thought Public Works picked up the rent?
MR. D'ENTREMONT: We have to budget for that payment.
MR. MICHEL SAMSON: So you basically transfer this over to Public Works.
MR. D'ENTREMONT: I think it's negotiated through Public Works, but we still have to pay.
MR. MICHEL SAMSON: You have another one here, it's North Lumberland Resources Limited, $353,000.
MR. D'ENTREMONT: That amount represents the payment for wood chips used for heating buildings at the Nova Scotia Agricultural College campus. That's fuel.
MR. MICHEL SAMSON: Is that contracted out? Is that tendered or . . .
MR. D'ENTREMONT: I would imagine the regular procurement would be employed there.
MR. MICHEL SAMSON: You would imagine or you're confident as minister that that is what is taking place?
MR. D'ENTREMONT: I'm sure it would be.
MR. MICHEL SAMSON: You also have one here for Fisher Scientific Ltd., $113,000. I'm curious what that is.
MR. D'ENTREMONT: That's $113,000? It represents payments for the purchase of laboratory equipment and supplies for various branches of the department and the Agricultural College.
MR. MICHEL SAMSON: Further above that there's one for $127,000 to Divine. I'm not sure if it's for divine intervention or what it is, but it's just under the heading of Divine and it's $127,000.
MR. D'ENTREMONT: That would indicate the annual renewals of journal subscriptions for the library of the Nova Scotia Agricultural College.
MR. MICHEL SAMSON: The journals are costing $127,000?
MR. D'ENTREMONT: Correct.
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MR. MICHEL SAMSON: Just above that, you have Department of Transportation and Public Works, $273,000. What is that for?
MR. D'ENTREMONT: It represents payments for various items such as renovations, insurance, sand for the Agricultural College and the department offices that we maintain.
MR. MICHEL SAMSON: You have another figure here for Nova Scotia Power of $869,000. I'm curious as to what that all adds up to.
MR. D'ENTREMONT: Electricity for the various facilities of the department, the Agricultural College, including the various field offices, and the farm that we maintain on the Agricultural College site.
MR. MICHEL SAMSON: You have another one here, Datatel Incorporated for $286,000.
MR. D'ENTREMONT: That was a new Datatel Student Information computer system to replace the current system to be compatible with new computer technology for the Nova Scotia Agricultural College.
MR. MICHEL SAMSON: And that company is from where?
MR. D'ENTREMONT: Fairfax, Virginia.
MR. MICHEL SAMSON: So it's a Virginia company that upgraded your system here in Nova Scotia.
MR. D'ENTREMONT: Correct.
MR. MICHEL SAMSON: Just above that you have CTV television for $36,000.
MR. D'ENTREMONT: That was for advertising the Agriculture Awareness branch of the Nova Scotia Department of Agriculture and Fisheries as well as recruitment, administration branches of the Agricultural College. That's TV advertising for the college and other things that we promote.
MR. MICHEL SAMSON: So it's promotion of the college?
MR. D'ENTREMONT: Of the college and the department.
MR. MICHEL SAMSON: Wouldn't the college pay such costs rather than the department?
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MR. D'ENTREMONT: My department does include the Nova Scotia Agricultural College.
MR. MICHEL SAMSON: So when it comes to administration, you're doing it at a department level rather than an institution.
MR. D'ENTREMONT: Correct.
MR. MICHEL SAMSON: Okay, that's all I have. I'll pass on to my colleague for Annapolis.
MR. CHAIRMAN: The honourable member for Annapolis.
MR. STEPHEN MCNEIL: Yesterday when the member for Digby-Annapolis was asking about the clam fishery and the beaches, who has jurisdiction over the beaches?
MR. D'ENTREMONT: That would be DFO.
MR. MCNEIL: Your department is not granting permits or anything?
MR. D'ENTREMONT: We lease sites as in our aquaculture policy for leasing the bottom of the ocean. So, basically, I think there are two beaches that are leased under the aquaculture division, one of them is at the head of St. Mary's Bay and the other one is in Belliveau's Cove that is leased by Innovative Fisheries Ltd.
[2:00 p.m.]
MR. MCNEIL: Only the two?
MR. D'ENTREMONT: As far as I understand. There might be more and I can get further information on that one.
MR. MCNEIL: Okay, great. Just to go back to the Estimates Book on Page 3.2, I'll just make an observation and then ask a few questions around it. As I was looking at this, many of these costs are fixed, when you look at senior management policy planning, legislative client services and so on down to the end, the one that obviously is not fixed is agricultural services. I'm wondering what went into coming up with that number or was it a fact that you just added up your fixed costs and took the $40 million that the minister says and said, that's the number I'm plunking in there? That number is alarming to me, really.
MR. D'ENTREMONT: In the estimate itself, look at Page 3.5, it'll show you how those costs are broken down. There is a formula on how to come up with those numbers in the budgetary process.
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MR. MCNEIL: I noticed that and it says Grants and Contributions. The Grants and Contributions were for regional office, 4H and rural organization work. Is the 4H grant the same as it was last year or has it increased?
MR. D'ENTREMONT: There is no change in the 4H grant.
MR. MCNEIL: So the 4H grant stays the same?
MR. D'ENTREMONT: Correct.
MR. MCNEIL: What is that? How much is that?
MR. D'ENTREMONT: It's $13,900.
MR. MCNEIL: For the good work they do, that's a small investment.
MR. D'ENTREMONT: I can give you the breakdown on total 4H contribution because there are some salaries and benefits for the people that work for 4H that are included, the number of students that we hire for the Summer and the extra grants that we do provide to the individual 4H organizations. I'll get the full accounting of that for you.
MR. MCNEIL: What about your regional offices?
MR. D'ENTREMONT: The total 4H budget - that's for 4H field services and the 4H rural organizations - you're looking at $846,100, with an FTE of 14.9 people.
MR. MCNEIL: Is that all?
MR. D'ENTREMONT: That would include all the things we do for 4H. The estimate from 2003-04 was $841,000, so it actually shows an increase.
MR. MCNEIL: Good minister. Good job.
MR. D'ENTREMONT: It's a very good organization.
MR. MCNEIL: What about the regional offices?
MR. D'ENTREMONT: That would be included in that. But, regional offices for 4H?
MR. MCNEIL: We've taken $4 million out of Grants and Contributions. Something has to give here. What's given out of the net program expenses? Is it all coming out of . . .
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MR. D'ENTREMONT: Just one moment. This really goes back to the question that you did ask yesterday, as well. I have the documents for you that shows the difference in the pay down for the loan loss provisions on the Fisheries Loan Board. I can table that and give you the explanation.
That number in Grants and Contributions also includes some of the things that we do in the Farm Loan Board in this case. But, just to give you an idea here, the estimates for 2002-03 include funding for $4 million for the loan loss revision for the Loan Loss Provision program, but the funding was transferred to agricultural services programs for APF. The 2002 actual is the LLP program, the Loan Loss Provision program, funding was transferred to agricultural services in the APF which is the amount of $4 million. Bad debt expenses for the Fisheries Loan Board was $904 . . .
MR. MCNEIL: That's okay. I can just get that from you when you table that. I'd also like to, if possible, get a list of the actual grants that you do. I noticed yesterday you had mentioned that exhibitions were included in the grants on Page 3.3. Could I get a list of the grant contributions you make across the province?
MR. D'ENTREMONT: Yes.
MR. MCNEIL: Thanks. I also noticed that in the Public Accounts there was a payment to AgraPoint. What was that for?
MR. D'ENTREMONT: Which book is that?
MR. MCNEIL: Supplement to the Public Accounts, Page 11.
MR. D'ENTREMONT: What's the amount?
MR. MCNEIL: Almost $8,000.
MR. D'ENTREMONT: Okay, this amount represents payments of the instructional services for the Atlantic Crop Advisory course offered through continuing education of the Nova Scotia Agricultural College and certified nursery inspections for the nurseries of the Resource Stewardship branch of the Nova Scotia Department of Agriculture and Fisheries for $7,944.
MR. MCNEIL: AgraPoint provided that program?
MR. D'ENTREMONT: Yes.
MR. MCNEIL: On the same page, over in the next column, there was an $11,000 contribution to the Council of Maritime Premiers' Trust Fund. What's that for?
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MR. D'ENTREMONT: That was $11,000 for the Council of Maritime Premiers - the annual membership dues for the Gulf of Maine Council for the Marine and Coastal Advisors Services of the department.
There is a Council of Maine group which represents Nova Scotia, New Brunswick, Maine, and New Hampshire. They all get together to talk about the stewardship of the Gulf of Maine and we are a member of that.
MR. MCNEIL: It's $11,000 to be a member?
MR. D'ENTREMONT: There's a fair amount of work being done by that organization, a relatively good organization that I wouldn't mind letting you see some of their work.
MR. MCNEIL: Great. I'll take you up on that.
MR. D'ENTREMONT: Absolutely.
MR. MCNEIL: There's another expenditure for Howard E. Little Excavating, $119,000.
MR. D'ENTREMONT: Howard?
MR. MCNEIL: Yes, Howard E. Little.
MR. D'ENTREMONT: That's a payment for quarried rock to be delivered to various locations for the department, including Grand Pre and Port Williams. I would say that would be dyke land restoration and the like.
MR. MCNEIL: That was obviously tendered?
MR. D'ENTREMONT: That was tendered.
MR. MCNEIL: On the next page, there's the Accounts Under $5,000, there's $0.5 million there.
MR. D'ENTREMONT: Which one's that?
MR. MCNEIL: On Page 13, Accounts Under $5,000. There's $0.5 million as the number.
MR. D'ENTREMONT: I can get you a listing of those.
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MR. MCNEIL: It's very near the end.
MR. D'ENTREMONT: It just represents various for those under $5,000 for the department.
MR. MCNEIL: I can get a list of those, can I?
MR. D'ENTREMONT: We'll give you some listing of those.
MR. CHAIRMAN: Thank you. Time is up. A member of the PC Party will now address questions.
The honourable member for Kings North.
MR. MARK PARENT: Thank you. Just a very quick question, Mr. Minister, since we have a chance to ask you questions all the time and don't have to take this forum, but I did want to ask about the future of the grain centre just north of Kentville, if you have any update on that.
MR. D'ENTREMONT: The Steen mill plant is owned right now by the government through the Farm Loan Board. We are currently looking for new users of that site or somebody that would be interested in purchasing that facility. It's a very modern grain handling facility and right now, I think, there are a couple of offers on the table that we are looking at.
MR. PARENT: Thank you.
MR. CHAIRMAN: Does that conclude your questions?
MR. PARENT: Yes.
MR. CHAIRMAN: We will now go to the NDP starting at 2:11 p.m. and you have one hour.
The honourable member for Hants East.
MR. JOHN MACDONELL: I don't remember if I got a clear answer yesterday around AgraPoint when I said it was in the book for agencies. So I was curious, since you indicated it was a limited company, I'm assuming that wouldn't be the case if it were an agency.
I guess I have a couple of questions - what made you believe it was a limited company and what's the difference between it being set up as an agency as opposed to a corporation?
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MR. D'ENTREMONT: I'm trying to get a clear, good feeling on this one. Basically, when the company was set up, it was set up as a numbered company, a limited company, but because the sole shareholder is myself, through the department, it would show as an agency to government. So, that's the best explanation I can give right now, but I could get more information on that one - it's just how it was set up.
MR. MACDONELL: I would appreciate that. I'd like to know more, only because of the fact that when it was set up - and I have some memory of that - when I knew the minister was the only shareholder and also that it got $2.2 million of taxpayers' dollars, it never struck me that it could be a limited company. So, the fact that it's now, for whatever reason, seems to be listed as an agency, I would like to know any history you can give me on that. I guess I'm a bit baffled that the minister wouldn't know that.
MR. D'ENTREMONT: To be quite honest, it was quite a surprise to see it there. We thought it was a limited company and therefore we give it the grant every year so it wouldn't show in there. We are trying to get the clear definition of what's happening. There are a number of issues that we're trying to address with AgraPoint and hope to come up with some of that information for you folks.
MR. MACDONELL: I'm curious then as to your role or your power in this regard because my impression is that AgraPoint conducted itself as though it were a limited company and even talks as though it considers itself to be a private company. I'm wondering about the government's role - since this is a Crown agency - and what your powers are to request anything. The fact that you're the sole shareholder - or actually, the people of Nova Scotia are the owners, really, of that. You have 100 per cent of the shares, or the government does - would make me believe that you should be able to get anything you request. So, I'll push for trying to get an itemized list of services and fees and whatever, as soon as you possibly could, but if you could tell me what you think your powers are in this regard.
MR. D'ENTREMONT: The power of the minister, in this case, is to appoint the board of directors, to get information and the financial and the business plan from that organization, and to provide suggestions on how it should be run and what kind of services it should be offering.
[2:15 p.m.]
MR. MACDONELL: Can you demand?
MR. D'ENTREMONT: I'm not too sure of my legal right there, if I can demand or not, but I can definitely suggest.
MR. MACDONELL: I would say that when you can dangle $2.2 million once or twice a year, I would say that would give you a fair bit of power.
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In the Supplement to the Public Accounts, a couple of things took my attention. On Page 9, I see for travel it has Fage, Honourable Ernest, $9,659. Any notion of what that was?
MR. D'ENTREMONT: I do know most of those would be travel in the normal run of his ministerial duties, whether it be fed-prov meetings or other industry meetings, but we can get back to you on what that travel was.
MR. MACDONELL: On Page 10, I see Agricultural Development Institute under Grants and Contributions, I guess the third one down. It indicates the $2.2 million there. If you go to Page 11, under Other, there's Agricultural Development Institute $5,062. Above it is AgraPoint, that the member for Annapolis raised, so we have Agriculture Development Institute and AgraPoint a line apart there. I'm assuming that we're talking about the same thing. If anybody can explain why we went by both names, was it just that when the money was given out the name hadn't changed?
MR. D'ENTREMONT: Apparently there was a name change done during that course of items. It would probably show the vendor codes are a little different, so I would suggest that it does represent the same company, because the name change happened in mid-stream.
MR. MACDONELL: Okay, that's fine.
MR. D'ENTREMONT: There was a concern because the acronym "ADI" was actually a computer company so it didn't quite flow.
MR. MACDONELL: I know a little history around that so I'm just wondering about the timing, and that would explain it.
I guess the other thing I want to raise is, I look at two items here, $7,000 and the $5,000 basically for AgraPoint. These are - if I understand your explanation for the one the member for Annapolis had raised - it was a payment for a program that they had put on. It would seem to me that if the taxpayers are giving them $2.2 million, we shouldn't have to pay for additional programs, so, why are we?
MR. D'ENTREMONT: Well, ADI or AgraPoint has the opportunity to do things, since it is an arm's-length organization, it does have the opportunity to run programs that would not be necessarily core. That goes back to my answer yesterday where we were trying to work with AgraPoint to get a listing of what should be core items and what should be outside those core items. I would suggest that the ones that we're seeing here are outside what we would necessarily qualify as core items for the $2.2 million.
MR. MACDONELL: I would suggest that when taxpayers are contributing $2.2 million, that anything we want until the $2.2 million is spent, would be considered core, that would be my thinking. Somehow the $2.2 million covers some things that the taxpayers are
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getting and doesn't cover other things that supposedly the taxpayers are getting. If the taxpayers are paying the $7,000 and paying $2.2 million.
I see on Page 10, three-quarters of the way down, Oderkirk Poultry Consultant Service, $9,000 and I'm assuming that's Alex Oderkirk?
MR. D'ENTREMONT: What was the name again?
MR. MACDONELL: Oderkirk Poultry Consultant Service. It's on the right-hand side of the page, fourteen or fifteen lines up from the bottom.
MR. D'ENTREMONT: Yes. Professional fees to vaccinate poultry within Nova Scotia.
MR. MACDONELL: It was my understanding that Alex was one of the specialists that had gone to work for AgraPoint. Is that true or is he hired on a consulting basis by them?
MR. D'ENTREMONT: This would represent a payment directly from the department. Exactly his arrangement with AgraPoint I would not be aware of.
MR. MACDONELL: I guess where I'm going with this, and you might see it as that, Alex works for the department and it was my understanding that he now worked for AgraPoint. So here we have a former employee who now works for AgraPoint who we give $2.2 million that we're hiring him for consulting services, I guess, outside of AgraPoint, so it still makes me wonder what we're getting for our $2.2 million, because I'm assuming that didn't come out of the $2.2 million, that was additional money.
I'm going to share my time with my colleague, the Critic for Fisheries, so I will kind of pick up the tempo here. On Page 12, Ovid Technologies Inc., $31,514. Can you tell me what that is? I know it's obviously something to do with sheep or I think it is.
MR. D'ENTREMONT: No, the amount represents payments for purchase of electronics reference periodicals for the MacRae Library of the college. It's actually a periodical company.
MR. MACDONELL: Well, no, it would be too general a question, I'm just curious as to how many other periodical companies we . . .
MR. D'ENTREMONT: The services for periodicals are tendered and it is our understanding that there are one or two companies that provide those periodicals and reference things to the library.
[Page 97]
MR. MACDONELL: I see on Page 10, Semple Veterinary Services. I'm curious about what they do for the department or for the college?
MR. D'ENTREMONT: Payments for two veterinarians to visit the farm sites to ensure registered producers regardless of location in the province will have access to large vet services. So we do some payments for large vet services.
MR. MACDONELL: That's fine. I'm glad that you do that. My last question is around looking at the Estimates for Province of Nova Scotia 2004-05, on Pages 3.2 to 3.4, when I compare the estimates under 2002-03 to the 2002-03 estimates that was in 2003-04, I can see that the estimates have changed, in other words, the numbers in the estimates for 2002-03 have changed. When I look for an explanation - because there is an explanation earlier - a figure shown for 2003-04 estimates restated, but I couldn't find an explanation. It says Nova Scotia Gaming Corporation, Nova Scotia Liquor Corporation and so on, but I didn't find any explanation in the Department of Agriculture for the restatement of the estimates. So I see it on Page 3.2 and actually I see a change in the value of the Policy and Planning number and the Legislation and Compliance Services under Net Program Expenses on Page 3.2, where the values of the numbers appear to be switched from the previous estimates by $227,000, I think, that would be. Also, on Pages 3.4 and 3.6, under Legislation and Compliance Services, on Page 3.4, it's Policy and Planning and in the 2003-04 booklet here, it's Policy, Planning and Communication. So communication has been dropped under Net Program Expenses, it has just become Policy and Planning. I'm throwing a lot at you, I realize . . .
MR. D'ENTREMONT: We're trying to follow it.
MR. MACDONELL: So my question is, I didn't see an explanation for the change in the estimates figure, which I have to say, when I looked at it - and it's obvious that it's something that happens because the government does try to explain it. It seems to me that when you estimate a number, I don't see the point in changing that estimate, I can see a change in the actual, the actual might be different from the estimate, but can you give me an explanation as to the change in the estimate?
MR. D'ENTREMONT: Basically, there was a little bit of restructuring within the department that Legislative Services and went over to Legislation and Compliance, they went to Policy. I can get the exact rationale why some changes happened within the department. So that's why they would have to be restated because they were in different lines in some cases on the previous budget.
MR. MACDONELL: Is there a reason why that's not explained or did I miss it? Is it explained in here?
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MR. D'ENTREMONT: Apparently restatements are only done when they're cross-departmental. So if I gave something away to another department then that would show that change but since it is done within the department that it would not show in that appendix or in that note.
MR. MACDONELL: It seems like a strange explanation because it has Estimates not Restated, so it has Estimates Restated and then Estimates Not Restated. If they're not restated, you think why would they bother stating they are not restated? So if it occurs within a department compared to a cross-department, you would think there would be a reason to explain that. I would be interested in what you can give me. I think I've gone over my time. I want to thank you, Mr. Minister, and to your staff, and I wish you well in your department. This is the department that I see so much potential for rural Nova Scotia. I hope you take advantage of your position to try to do something there.
MR. D'ENTREMONT: Thank you, but your job is to keep me on my toes and we will be waiting for that.
MR. MACDONELL: I'll try my best.
MR. CHAIRMAN: The honourable member for Pictou West.
MR. CHARLES PARKER: Mr. Chairman, I, too, welcome this opportunity to ask some questions here of the minister and his staff. I guess my colleague was into the detail on the various Public Accounts and I would like to, Mr. Minister, maybe to turn to the Supplement to the Public Accounts and ask a few specific questions there on some of the things I see contained within your budget lines.
On Page 10 of that book, I just wanted to ask, in particular, under Innovation Program, which is $186,970.97, what would be included in that particular program?
MR. D'ENTREMONT: That amount represents funding to assist in projects involved in new technology for the fishing and/or aquaculture industries. I don't have the actual breakdown in the amounts there.
MR. PARKER: So it looks at new programs or new ideas or new mechanical innovations that might be helpful in the industries?
MR. D'ENTREMONT: Correct.
MR. PARKER: Could you give me an example of just one new innovation?
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MR. D'ENTREMONT: Apparently there are a number of programs that are done every year through this Innovation Program. I can get the listing of what those would be for you afterwards.
MR. PARKER: Okay, that sounds good, I will wait for that. On that same page, it mentions there is a grant of $20,000 to the Fisheries Council of Canada. What is the Fisheries Council of Canada?
[2:30 p.m.]
MR. D'ENTREMONT: I will get that exactly for you. I'm getting a little mixed up between what SEC is and FRCC. There's the Fisheries Resource Council of Canada and the Fisheries Council of Canada. So I just don't know what the mandate is on each one.
MR. PARKER: Well, I will appreciate your answer.
MR. D'ENTREMONT: I apologize.
MR. PARKER: On the same page it mentions the Sable Island Preservation Trust, a $25,000 grant. We all know what Sable Island is all about, but I'm just curious what is the purpose of that? Is it to maintain the ponies or just what is it?
MR. D'ENTREMONT: It's the payment of the cost-shared maintenance programs for the operation of the facilities on Sable Island in support of the Sable Island Preservation Trust. I do know they have some buildings and some stuff on site that we help them pay for to the amount of $25,000. Apparently there are four departments and other federal departments that also fund that initiative.
MR. PARKER: So this is related though, in particular, to your Department of Fisheries, like any ongoing monitoring, or what is the relationship to the department in particular?
MR. D'ENTREMONT: There is a trust and I do believe there's a board and they do research on Sable Island and things that happen there and that is our contribution for that support.
MR. PARKER: On the next page it mentions the Taste of Nova Scotia Program as well as the Taste of Nova Scotia Society, well over $200,000 there that was funded for that program and the society. Can you give us a little bit of detail on just what that is all about and why the difference, or why is it broken down into two separate components?
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MR. D'ENTREMONT: The Taste of Nova Scotia Program shows, in accordance with the marketing accord program, to market Nova Scotia as a world-class food destination and supplier of superior food products. There is a team from Department of Tourism, I believe, with the Department of Agriculture and Fisheries that works towards the development of products and the promotion of those products world-wide.
The second one shows the Taste of Nova Scotia Society and they are intertwined, but that shows different offices. So that shows the Halifax office, which is the Taste of Nova Scotia Society, the payment for the marketing development of those projects for those food products. So you basically have the interdepartmental program that is working in combination with the society which includes all those producers who belong to the Taste of Nova Scotia Society and their products.
MR. PARKER: One line here then is for the actual group and the other one is more for the programs that they administer?
MR. D'ENTREMONT: Correct.
MR. PARKER: Just three or four lines further down, it says Accounts Under $5,000, $233,000 and change. I guess if it's under $5,000 it doesn't have to be tendered, but would that include everything right down to the last pen and pencil or what would be included in that line?
MR. D'ENTREMONT: The amount represents grants and assistance administered by all branches of the department. They include assistance payments under the Livestock Health Services; the swine improvement herd health, and the quality evaluation branch to assist farmers with livestock production; they also include payments for dead-stock pickup; fencing; and artificial insemination of veterinary services. Also, various payments under $5,000 were paid to individual vendors for grants to promote plan and crop production, wheat control and fertilizer and under the administration branch, students were awarded scholarships through those grants to the Atlantic Winter Fair and various community fairs throughout the province, so they're bursaries, scholarships, young farmers, discretionary grants, programs, Taste of Nova Scotia, again, 4-H, and exhibitions. There's also the loss of provision program; breed promotion, and the farm investment program. So there's a lot of small bills in there.
MR. PARKER: So there's a whole gamut of programs . . .
MR. D'ENTREMONT: Correct.
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MR. PARKER: . . . all lumped into one, I guess. You mentioned exhibitions in there. What amount is given to exhibitions? There's a number around Nova Scotia, there are 15 or 18, I think, in the province, in that range, but what amount of grant would go to each exhibition?
MR. D'ENTREMONT: The exhibition grant estimate this year would be $176,000 for the exhibitions in this province.
MR. PARKER: And is that broken down per exhibition in the province?
MR. D'ENTREMONT: I believe the grant is actually sent to the Exhibition Association and then doled out from that organization.
MR. PARKER: I'm going to turn the page, just an item that caught my eye, and I'm just curious what it was, on Page 12, North Lumberland Resources Limited, $353,000. Could you tell me what that item is for?
MR. D'ENTREMONT: I believe we had covered that one before. That is the wood chips, I believe, for heating the buildings at the Agricultural College. They have a wood-chip burner there.
MR. PARKER: On the next page, on Page 13, again, it mentions Accounts under $5,000, over $1.5 million. What types of items would be included in that?
MR. D'ENTREMONT: The member for Annapolis had mentioned that one as well. Various amounts are charged to all branches of the department, maintenance, service and materials. I had committed to get a further listing of that for the member so I will do the same for you.
MR. PARKER: Well, I guess I want to ask a more general question. I come from Pictou County and the fishery is very important, certainly along the Northumberland Shore, as it is throughout Nova Scotia and, as you know, we are the largest fish harvester in Canada. So all the coastal communities in this province are benefiting from an active and, at times, lucrative fishery. In the Town of Pictou is our Nova Scotia Fisheries School and I understand now that's associated with the Nova Scotia Community College. Could you give us an update on the Fisheries School or what is your department's role still with the Fisheries School?
MR. D'ENTREMONT: Yes, the school itself does reside with the Nova Scotia Community College, but we also have our division of inland fisheries housed in that area, as well. I can give you a further rundown of exactly the programs and services that are offered there but, again, they're through NSCC so I would have to ask them for that information.
[Page 102]
MR. PARKER: So your Inland Fisheries Department is there, but does your department have any association now with the Fisheries School?
MR. D'ENTREMONT: All I know is there's a bit of an advisory role that our division of Fisheries does maintain contact with, but the exact relationship I'm not too certain on.
MR. PARKER: And what would you say then is the main role of the Nova Scotia Department of Fisheries with the Fisheries School?
MR. D'ENTREMONT: Fisheries training, working on your MED, doing training for your Masters certificates and the like.
MR. PARKER: Okay, but really it's out of your department's hands now and it has gone into the community college system?
MR. D'ENTREMONT: That training component did get transferred to the community college.
MR. PARKER: I know in the past it has been very useful to the local fishermen, getting a course, whether it's a day or a week, or whatever they need, plus it has brought in fishermen from all over, even including the Caribbean, to train them there, to give them skills that they need, for a fee basis, but it's an important component to the fishing industry in this province and, hopefully, it will continue. I guess maybe it's the Minister of Education I should be talking to about that, but I think it's a valuable resource that we should maintain.
MR. D'ENTREMONT: Well, one comment that I can pass along, with more personal experience than departmental, I know my father has attended that facility on a number of occasions for upgrading to his Masters certificate and found the teaching there to be quite good and the facility to be top-notch.
MR. PARKER: Maybe I will just ask one further question and then I guess I'm going to share our time here with the Liberal caucus. Yesterday it was mentioned around the importance of looking after our coastal communities and making sure that they remain viable and strong in the years to come. The concern has been over the ever increasing trust agreements that are out there and if we maintain strong fishing families, then we'll have strong fishing communities and a strong rural Nova Scotia. That problem seems to be increasing, maybe not so much in my area, but certainly in South West Nova it's a bigger factor. Again, what is your department doing to ensure that our fishery remains in the hands of families and not in large corporations?
MR. D'ENTREMONT: As I said before, that issue is being addressed in the fisheries policy review being conducted at this point by the federal government. There has been a discussion document, I guess is what you would call it, presented by them. We're a little
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discouraged in the amount of text that was put around it and I think the member for Digby-Annapolis can agree with me there, that there wasn't a lot of commitment in addressing the situation.
We made sure previously that that issue would be looked at because we see it as being a concern when we talk about fleet separation in our coastal communities and trying to keep vessels in those areas, but it does link back to a bigger issue of access to capital and new entrants to the fishery and, the humongous price that fishermen are paying to get into the fishery. So there are a number of issues surrounding this that need to be addressed that we're working closely with the federal government for that. Every conversation that I have with the federal minister starts with trust agreements and most times it ends with trust agreements of how to address this issue in our communities.
MR. PARKER: Well, it's certainly an ongoing problem that, hopefully, a handle can be obtained and, continue to work towards sustainability of our families in the communities. So, I guess, Mr. Minister, I want to thank you for your pertinent answers and, again, wish you lots of luck with the department and also your staff.
MR. CHAIRMAN: The honourable member for Digby-Annapolis.
MR. HAROLD THERIAULT: Mr. Chairman, I just have one question to follow up with yesterday, and I will be sharing my time with my two other colleagues here. As we know, agriculture certainly is dominion over the fishery in this department, and aquaculture. We can see that in the figures here of $18 million into agriculture and $3 million into fisheries and aquaculture, but we also know that the fisheries in this province is taken care of more by the Department of Fisheries and Oceans than it is the province.
I touched on aquaculture a little yesterday and I've been kind of involved in some aquaculture over my time and testing growing fish and I believe it's the future for this province, I believe it's the future everywhere. I'm just wondering, and I don't know if I asked this yesterday, has the department got a vision or a plan to give the same service to aquaculture as to agriculture in this province?
MR. D'ENTREMONT: If you look at our business plan and what we see, all our industries that we represent, we definitely want to take a fostering role in making sure that these industries grow and be as strong as they possibly can be. In the aquaculture industry I think we need to spend a little more time on development, which my department does; work on new systems, which my department does; but we need to look at new species that have better possibilities in growing growth, more possibilities for market and market acceptance. If you look at halibut and, unfortunately, you represent a group in our fisheries that did lose a lot of their stock previously, but if we look at where the industry is going, halibut seems to be a really good growth factor. Our department is there to help in trying to develop these new
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species, to try to provide the technology and the fish veterinary services that are required in growing these animals. So my department is there to aid the industry as best it can.
MR. CHAIRMAN: The honourable member for Annapolis.
[2:45 p.m.]
MR. STEPHEN MCNEIL: Yesterday we mentioned negative margins and you had said to me that you have an Order in Council, I think it's called. There's obviously going to be an expense to that Order in Council. Is it added in anywhere?
MR. D'ENTREMONT: That amount I think ranges between $500,000 and $600,000. That is included in that number under business risk services. (Interruption) Which line? Business Risk Management.
MR. MCNEIL: But it has been accounted for?
MR. D'ENTREMONT: It has been accounted for.
MR. MCNEIL: Just a couple of general things. One of the issues that has been brought to my attention in my own riding has been the fact that we have two major retailers in this province. It has been brought to my attention more by the fruit growers to be honest with you, the fact that for years, for generations quite frankly, they would go to the store, whether it be in Annapolis Royal or Bridgetown, and be able to sell produce to those retailers and life went on as normal, but there are lots of rumours that much of that is going to have to start going through a central distribution centre. I'm just wanting a sense of where the department is on this and your feelings on this?
MR. D'ENTREMONT: Well, if we look at how that industry has changed, even in my short time on this earth, you know, Sobeys sort of showed up in Yarmouth in the latter part of the 1970s and look at what it is today as a company. And, you're quite right, farmers were able to bring it to the loading dock at each store, or bring it in through the front door in some cases, to get their product sold at those stores. I know, for instance, Sobeys has gone to the single-access point. In Debert they have built themselves a phenomenal facility there for the handling of their products.
So the industry has definitely changed and I think a lot of this has to do with consumer expectations where consumers expect a quality, safe product at a low price - I don't know if some of that can happen because as we go down the road of safe and quality products, they tend to cost our farmers a little more in order to produce that, but what has happened, I think our retailers have gone and tried to be the best that they can be in providing that quality product to the consumer.
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The single desk buying, which we do have in Debert, I think is a fairly good way to access all of our stores, yet it does create a bit of a problem for our local producers. So I know that we've had conversations with the Retailers Association to try to address that local farm need and I know those talks are ongoing, but it is a very big issue that this department is definitely taking on.
MR. MCNEIL: I agree from a business perspective why Sobeys or Atlantic Superstore think it's probably a great idea. From the farmers' perspective though it's one more way for them to get less for their product than they've been getting. It's not an issue that the product was not quality, it was never an issue of product not being safe and it has been sold for decades that way. It's a question of this company, or companies, you know, it's a way for them to be able to say, this is what you're going to get. You come and deal with us this way instead of going down into the local community. So I guess the response I'm getting is that there's not a lot you can do or will do in terms of being able to support the local small producer?
MR. D'ENTREMONT: We'll go back a little bit. This question was brought up at the Atlantic Farmers Council on Friday that I was able to attend with the Premier. On Thursday night Mark Eyking was there doing a presentation and that same question was asked of this federal minister. Basically what he had to say was the farmers are going to have to get themselves together a little more, set up some co-ops, look at some of their own trucking options and things like that. I don't agree with that because I think we have to be there to help the farmers get their product to market and there's a gap in what the Superstores and the Sobeys are looking at and we need to address that for our farmers. Like I said, this is a fair issue. It is an important issue for our farmers and my department is there to help them to get through this one.
MR. MCNEIL: I guess I'm in agreement with you. Is that happening now, though? Are there steps being taken now to deal with this?
MR. D'ENTREMONT: Yes, my department is working with the Retailers Association in addressing that very issue.
MR. MCNEIL: Okay, great. Yesterday you had mentioned Pork Nova Scotia and you're having meetings with them, I believe, I didn't write the date down. Is that right? Is there an upcoming meeting with Pork Nova Scotia to deal with the long-term
MR. D'ENTREMONT: There's a date in May, I think it's toward the first week, to work on a pork strategy with them. They've been working on getting their stuff together for the pork strategy, and we're aiding them in trying to put that strategy together. That meeting will happen sometime in May, I believe it's the first week, but I can that exact date for you.
MR. MCNEIL: And you'll keep us abreast of what's happening with that?
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MR. D'ENTREMONT: Absolutely.
MR. MCNEIL: Great. I'll pass it over to my colleague, the member for Kings West.
MR. CHAIRMAN: The honourable member for Kings West.
MR. LEO GLAVINE: Mr. Chairman, thank you for the opportunity of asking a few questions to the minister, perhaps only generally around the estimates, since my colleague has been looking after that. At a recent meeting, Kings County Federation of Agriculture member Charlie Curry said that the future in Kings County is agriculture. I put a lot of trust in that comment that certainly there is a future, however, when I see events in recent months, like Avon Foods develop, and see the kind of impact that is making, it's another indicator that all sectors of farming are going through hard times.
I was just wanting to know where your department is moving with making sure that those 3,000 acres are going to remain in production. As those acres are, of course, non-productive, they'll certainly go back to bush and scrub and so forth. I'm wondering, what kind of plan, perhaps, in the short- and long-term are you working towards to keep that base of acreage in production?
MR. D'ENTREMONT: We can't forget that the 3,000 acres represents the total crop rotation acreage. So the crops that will not be planted this year represent about 1,000 acres of those 3,000 on their core crop. Our department has been working closely with Horticulture Nova Scotia to look at other opportunities to plant other products, whether it be grains, whether it be flax, whether it be what have you, in order to use that acreage this year, if at all possible. The discouraging part about the Avon Foods issue, and for the farmers, is the lateness of the decision of Carrier to shut down that production.
I think if we would have known in September that they would not be running the next production year, I think we would have been better armed to identify new species or new products that could be grown on that. I know that my department, and that's with Linda MacDonald and our marketing crew, is working quite closely with Horticulture Nova Scotia to find other options for that acreage.
MR. GLAVINE: My colleague, again, Mr. McNeil, has already alluded to pork producers and the plight they have been going through just in the past 12 months. I'm not optimistic in the short term that things are going to dramatically change at the retail level to get the pork producer the kind of income that will stabilize their industry. I know that's a big drive and objective of my colleague, Mr. MacDonell.
I was wondering, are you prepared to take a serious look, once again, at a stabilization program where three levels, or perhaps we could even engage the federal government at a fourth level, to put some plan in place that would at least offer a medium-range stability to
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the industry? I've heard many plights over the past year from individual farmers and, of course, representing Kings West, I'm only too familiar with the difficulties that they've been facing.
I think, in the medium term here, some type of stabilization is an absolutely important way to go, so that when there is another downturn - whether it will be two years or three years, let's hope it's at least that long - that they would be able to then draw against the money that's put in the stabilization program, rather than coming directly, looking for a loan or grant monies that would be there for them. I would say stabilization program versus coming back and trying to deal or having to deal with the government again.
I think it's simply too valuable an industry to the province with 1,500 workers in the industry and the quality of the product is, again, so great, that I think we need to be making a commitment. I was wondering if there was anything along those medium-term investments in the stabilization, both from the point of view of investigating and some degree of commitment towards it?
MR. D'ENTREMONT: If you look at what we've been doing with Pork Nova Scotia up to now, in December we did announce the $3.5 million loan program to be administered by Pork Nova Scotia. So it was basically letting them work with the farmers in order to pay them on a per hog basis. Fortunately we've actually been getting some payback on this one, because the hog prices have gone up, even though we do have a couple of requests coming in from Pork Nova Scotia to make a bit of an adjustment on the payback target because of higher grain costs.
But if we look back at the root of this problem - and this problem has been with us for quite some time - I really feel that hog production is sort of a creature of government subsidies, if we go a long way back. There were a lot of subsidies provided to these farmers to get underway. There were a lot of subsidies in grain purchase and the grow rate and things like that. Since 1995, these folks have sort of been readjusting because those subsidies have dried up and disappeared. I think most of these farmers have absolutely phenomenal facilities in the way that they grow these animals, and they've gotten as good as I think they can possibly get in these production costs per hog.
So there are a number of gaps that we, as government - and that's all levels of government, at least the provincial and federal governments - have to look at. This is an issue right across Canada with increased grain costs. Since we're at the end of the railroad track, our prices, of course, are a little higher. In that whole vision piece that we're asking for from Pork Nova Scotia, we're working with them, I'm sure some of those things will be identified and dealt with at that time.
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MR. GLAVINE: One last question, Mr. Chairman. I know that some of the farmers and, again, a couple of the slaughterhouse processors have made really strong advances during a time of crisis to BSE. Once again, it's a time where government has certainly espoused, I think, a really positive approach with looking at Nova Scotia brand, local Nova Scotian-produced products. We know of some of the people who have made great strides. Once again, is government going to be there, side-by-side, with them in what, I think, could be the potential developing towards more of the 50 per cent, 60 per cent production level for Nova Scotia beef, being only at about 30 per cent. I think it has the potential to be a growth industry here. I'm wondering, how are you going to be side-by-side with the industry in moving forward there?
MR. D'ENTREMONT: Well, some of the things that we do want to do - and hindsight is always 20/20 - if we look at the grants and the amount of money that went to primary producers, I wish I could have a little bit of that back to fund some of the programs such as the one you're talking about with Boland Meats, but unfortunately my budget doesn't necessarily have a lot of grant investment or investment monies for those types of programs. So what I really need to do is sit down and talk with the Office of Economic Development and make this a priority, which I have already done, and I think the minister there has been making some moves to make sure that people coming with these programs or coming with these asks to increase our production and our slaughterhouse capability, that it be addressed as easily and as quickly as possibly. So, going to the issue in your riding, I think that will have a positive resolve on that one in the very near future.
MR. GLAVINE: I would like to end off by saying to the minister, thank you for being so obliging, on short notice very often, handling what are crisis calls when you're down on the farm. So, thank you very much for that co-operation, and best of luck as you move forward in your department.
[3:00 p.m.]
MR. CHAIRMAN: The honourable member for Victoria-The Lakes.
MR. GERALD SAMPSON: I would reiterate my colleague's statements in regard to the co-operation I've received from the minister on the Fisheries end of it.
MR. CHAIRMAN: Just one quick comment, you have one minute left of the time shared with the NDP caucus and then you will go into your hour.
MR. GERALD SAMPSON: Like I said, with the co-operation I received in the past from the honourable minister, I'm looking forward to some activity on behalf of the farmers of Cape Breton. I did place a phone call to two farmers in particular, Mr. Conrad Neeson and Mr. Eddie Randall down in Cape Breton, and asked them to provide me with some input. Some of the things that they mentioned, I will go through.
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First was the compliance program, and I asked what did they mean by that. The answer was, why raise beef or animals for slaughter with no abattoir in that area? That creates a problem for shipping and costs and whatnot, to get them to and from. I was just wondering how the minister would respond to that.
MR. D'ENTREMONT: Cape Breton does provide a bit of a problem when it comes to slaughter capability. As far as I understand, there is no slaughterhouse on the Island, not even a small one.
MR. GERALD SAMPSON: Not according to Mr. Randall. He was talking about an abattoir. I suppose everything must be licensed and inspected and whatnot, so I would imagine the closest one is - would it be Truro or Antigonish?
MR. D'ENTREMONT: Probably Antigonish. There's one in Antigonish and I think there's one - yes, Antigonish would be the closest one.
MR. GERALD SAMPSON: So that's something that the minister probably could speak about when he's addressing the farmers in Cape Breton at some time.
MR. D'ENTREMONT: That's right, and that really goes back to what the member for Kings West talked about, that we do need to really look at our investment in slaughter capability in this province. We're endeavouring to do that.
MR. GERALD SAMPSON: Sometimes a central location, like they say bigger is not always better for convenience and the economies of the local areas. The second thing that was mentioned was the fact that - and the farmer questioned me on it, he said, Gerald, did you ever think you would see the day that we would be importing milk from, of all places, Newfoundland? But they receive a subsidy there, he said we are flanked by subsidized provinces - there are subsidies in Quebec horticulture, subsidies in Newfoundland. He said how do you compete against subsidized provinces like that, they have a distinct advantage over the local farmers? I don't know if there's any plans to give a subsidy or anything to the farmers or to delve into that to make Nova Scotia farmers more competitive. Does the minister have any thoughts on that?
MR. D'ENTREMONT: I'm not aware of any subsidies that any of our neighbouring provinces are providing to milk producers. The milk supply is supply managed, therefore, there is an amount of quota that a farmer should milk and is capable of milking, which goes into an Eastern pool of milk. I don't know if there's any subsidies in other provinces. I really don't think there is, but I could get further information on that one for you.
MR. GERALD SAMPSON: The AgraPoint offices were brought up, and there's $2.2 million, I think, invested in the Kentville and Truro offices. There, again, statement that there's no office in Cape Breton. Regardless of your technology or whatnot, he said he feels
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there should be somebody on the ground in Cape Breton who could handle local problems and local issues, simply because we have the largest mixed farm in Nova Scotia, the Eyking Farm. We also have the largest strawberry-producer farm, Eddie Reynolds farm. So he said, here you are with two of the largest farms in the province, and nobody on the ground in that area. Are there any plans that maybe the AgraPoint offices would have a representative down in that area?
MR. D'ENTREMONT: We do have an agricultural representative in Point Edward, but if you go further to AgraPoint, again, it probably goes back to the member for Hants East, when he brought up AgraPoint, as well as the member for Annapolis, there is some rationalization that we need to do in AgraPoint in things that they provide to farmers. I'm sure within that rationalization, we need to look at where they are and where those farmers are that they provide services to. Point well taken.
MR. GERALD SAMPSON: Maybe cross-training or whatever of that individual - down in Point Edward would be an advantage.
Youth programs, that was another rather interesting area, because he was saying, just as a suggestion, that maybe money from the Farm Loan Board could be reinvested in incentives to have the youth enter into farming or to get involved or maybe even to stay involved, because apparently nobody's children on the farm are interested in staying in the farming business anymore. That was a concern, simply because - he quoted me the statistics - the average age of a farmer in Cape Breton is 56 years of age. They feel that within 10 years there will be nobody left, yet the average age of a farmer in Quebec is 33 because of their interest and their investment in horticulture and the investment in the youth in farming.
I always think that rather than reinventing the wheel, if a solution is somewhere else you could possibly copy it and then just massage it a little bit to make it fit our own local area. It's interesting to see that Quebec would have an average age of 33 and ours is 56. So the feeling is that in 10 years there will be little or no farming left in Cape Breton.
Also, he mentioned to me the fact that on the Island - and I've experienced this myself, when I used to hunt and whatnot - there's 2,000 to 3,000 acres of prime virgin land on Cape Breton Island that's already cleared, and it's just laying fallow in vacant farms. So if there was a program to interest youth or anyone, immigrants or somebody, to enter into the farming industry, the land is there, it's already cleared, and there are numerous other areas that, as I've heard, are growing up - well, it takes a while for the spruce trees to grow but they're growing up into spruce now, they've been laying vacant so long. It's a shame to see that kind of an investment or resource laying fallow.
The potential is there for new and young farmers. I don't know if the minister has any idea of - is there anything there for young farmers, an incentive to get them involved, to keep them involved or entice somebody to go into farming?
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MR. D'ENTREMONT: There is a New Entrants Program. Is it enough? No, probably not. But what it does do, through the Farm Loan Board, is that they're able to write off a certain portion of their loan, up to $25,000. I think we can do a better job there, and it's something that I, as minister, do want to work on over the next year or so. This is the number one issue, and you said it well. Actually, I think the average age of the farmer in Cape Breton is 57, so, it doesn't get any better.
The issue with Quebec, Quebec always tends to do things a little bit differently than anyone else anyway. I have had conversations with the minister there, and she has shown an interest in providing me with the information that we require to see how they do things because they seem to have a younger group of farmers, they do seem to have less problems. I know they are still experiencing BSE problems, they are experiencing slaughter problems, but I think they tend to do a little better than what our folks are doing. If I can glean a little information off them, I definitely want to go towards that.
You do bring up an interesting point with agricultural land that is growing up. The member for Annapolis should know that very well, as well, in his area, that there is a lot of land out there that is not being used. We need to look at youth issues with those. I don't know whether that should be getting people to plant grains, which might in turn help our pork producers, there's a whole bunch of things that we should be able to do that sometimes we don't have the legislative authority to pull off. Those are definitely some of the things that I do want to work on.
MR. GERALD SAMPSON: These look like bank accounts that are just laying dormant with great potential. The minister, himself, being of the French vintage and talking about Quebec, I suppose, I'm not saying that he's biased toward that or anything, where Quebec can do things a little better, but maybe you could use that French connection to facilitate the problems of the farmers in Nova Scotia.
MR. D'ENTREMONT: Well, let me put it this way, when we sit down and have conversations with all the ministers around the table, I tend to be the ad hoc translator for her. So I think we have a pretty good relationship there.
MR. GERALD SAMPSON: Mr. Minister, one thing that Mr. Randall finished off with was the fact that he was under the impression that around the percentage of maybe as high as 80 per cent of the farmers owe money to the Farm Loan Board. He was hoping that having that kind of a percentage owing money to the Farm Loan Board would create an incentive or a consideration by the province to help the farmers on Cape Breton Island, where there's so much money owing, that's a large investment to the government and they should get some extra help in return for that.
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With that, Mr. Chairman, I would respectfully thank the minister and hope that the comments that I've given in compliance with the wishes of the farmers of Cape Breton will be acted upon.
MR. CHAIRMAN: Just in the interest of time - actually I was 10 minutes ahead of myself, so we only went one minute into the hour for the Liberal caucus, if they want to take the full hour. I understand that they don't. I understand that the member for Annapolis has some comments and questions.
The honourable member for Annapolis.
MR. STEPHEN MCNEIL: Mr. Minister, you had mentioned earlier about the grains and all that, I'm just wondering what's happening with the grain elevator here in town that we had in the explosion in. Is that up and going?
MR. D'ENTREMONT: As far as we understand the grains handling centre here in Halifax is working fully. It is something that I would like to do a little more with, and maybe we could talk about that some other time.
MR. MCNEIL: Yes, that's great, because it is a good opportunity. With that, on behalf of the caucus - I've been quite fortunate, when I was elected eight months ago, that I became the Agriculture Critic, because it's a tremendous community to be working in and being involved with. I was also quite fortunate that you became Minister of Agriculture and Fisheries, because you've been very co-operative, and I want to thank you for that and put that on record publicly, and congratulate you and your staff for being there when our caucus has called. Once again, thank you.
MR. CHAIRMAN: I understand there are no further questions from the NDP caucus. Are there any questions from the government caucus?
Shall Resolution E1 stand?
Resolution E1 stands.
Respecting expenses for Executive Council includes a sum not exceeding $167,000 be granted to the Lieutenant Governor to defray expenses in respect of the Office of Acadian Affairs pursuant to the Estimate;
Resolution E40 - Resolved that the business plan of the Nova Scotia Harness Racing Incorporated be approved.
MR. CHAIRMAN: Shall the resolutions carry?
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The resolutions are carried.
We will recess for five minutes.
[3:14 p.m. the committee recessed.]
[3:21 p.m. the committee reconvened.]
MR. CHAIRMAN: Order please. Just so everyone is aware, the minister is starting at 3:22 p.m. (Interruptions) The day started at 1:45 p.m., and we've had a 10 minute break, so it should go to 5:55 p.m., roughly about 6:00 p.m. So we're starting at 3:22 p.m. with the minister's statement.
Resolution E5 - Resolved, that a sum not exceeding $7,350,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Energy, pursuant to the Estimates.
MR. CHAIRMAN: The honourable Minister of Energy.
HON. CECIL CLARKE: Mr. Chairman, I want to thank you and my colleagues for this opportunity to present and go over estimates for the Department of Energy for the ensuing year. What I will do is go into my comments as an introductory. I've had an opportunity to talk to both of my colleagues, who are the Critics for both the New Democratic Party and the Liberal Party. I do have an overall document of introductory notes and a speech associated with this, but I will table that for the official record and look at some highlights at this time, because I know that we agreed that we get into - sooner rather than later - some engaged dialogue affecting activities and operations within the Department of Energy, and what the year ahead will look like and any past accountability, questioning and clarification.
I do want to note that my deputy minister will not be with us today. However, as part of our ongoing mandate, there's a delegation from Nova Scotia in Calgary regarding onshore promotion to attract more small- and medium-size exploratory and development activities onshore here. It's continuing our efforts and really part of an overall complement of activities within the department to promote and to advance development in exploratory activity and, indeed, to derive benefit for all Nova Scotians as a result of these ongoing efforts. I am, and will be, joined today by two officials from my department directly, Allan Crandlemire, as well as Bernie MacDonald. I will have them available for consultation as we move forward.
We've also said, and I've taken note in 2003, it has been a year where there was great uncertainty and some questions around the future and the prospects around oil and gas and the overall energy sector. We've been able to move and advance on that in a significant manner, through steadfast stewardship of the department and the business plan, building on
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the energy strategy, and how we articulate the vision in the detailed operational and business plans that have been implemented and are ongoing as we speak.
Drilling and exploratory activity, of course, has been very much at the forefront of media attention. Project planning, such as where Deep Panuke would be in a revised development plan, re-estimates of the Sable reserves and a downgrade of that, and what it means, not only from a royalty point of view but also from a development point of view, and our ability to prospect new development leads.
So 2003 has been a year of taking stock, but it's also been a year where we've worked very hard to build and advance momentum around the overall energy sector. To do that, we've seen a record year with regard to seismic activity, we will see further and future activity on exploratory and development drilling as per the 18- month projection and plan. Also, onshore, with regard to our Electricity Marketplace Governance Committee Report and the 89 recommendations that were received by government are now up for review, as we move forward to implementation.
Natural gas distribution has become a reality in the Province of Nova Scotia. Just this past Winter, Heritage Gas began flowing to commercial and consumer households, and that will continue to expand and we look forward to that in the months ahead.
We've worked really hard around regulatory efficiency. The Atlantic Energy Round- table has been very important and key. Building on the Atlantic Energy Roundtable, we've had an opportunity to expand that through the Atlantic Energy Ministers' Conference that we have held just this past Winter in Cape Breton. Building on that framework, on all aspects of the broader spectrum of energy and marketplace issues for Atlantic Canada, we're able to go and meet with five federal ministers in Ottawa to build on the framework and also on the issues of benefits for our region, and continuing that forward in June with another Atlantic Energy Ministers' Conference.
We've been very pleased with the progress we've had and we have had a positive reception from the federal minister, the Honourable John Efford, to try to work forward on issues, especially those that are pertinent and prominent right now, that being whether it's Crown share, whether it's improved regulatory efficiency and the like. We have been favorable in our assessment of the relationship as it built with the new minister, and a lot of things that were initiated under the former minister, the Honourable Herb Dhaliwal.
But it's all about building a more competitive oil and gas industry in terms of regulatory process and looking at our industrial benefits for the region. There have been some issues around that, and we continue to work and derive Nova Scotia benefit. We see our investments in education and training, whether that's through the Nova Scotia Community College network or at the University College of Cape Breton, and programming, whether that's the $500,000 last year toward a dynamic positioning simulator or if you look at some
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of the other investments with regard to the Bachelor of Applied Petroleum Technology at the UCCB or offshore process training programs. That has been accommodated into the Nova Scotia skills forum that was held just this past Fall. That forum was really to take stock of the understanding, needs and assessment of go-forward and skills. The challenge was not, do we have the skills available, it's where and how do we apply the skills that Nova Scotians have to leverage, indeed, more benefit.
We are going, just this weekend, to represent Nova Scotia at the Offshore Technology Conference in Houston. We were a part of the delegation for Offshore Europe and Aberdeen Scotland. CORE, the Canadian Offshore Resources Exhibition, here in Halifax, was a positive experience. The Federal Energy Ministers' Conference held here during Hurricane Juan was another opportunity where Nova Scotia chaired and led new processes on a national level, which will build in Nunavut in the Summer months as we continue that agenda.
We've had a very aggressive meeting schedule with officials and government alike, whether that's Calgary, Ottawa, Houston or St. John's, Newfoundland, and we continue to advance on that. We're working diligently on managing our energy resources and, obviously, for that we have to validate our costs as was noted in the Auditor General's Report. We've responded positively to that, and have had a positive response back from the Auditor General. Of course, the revenues and monitoring for all these purposes is very important and we've seen, most recently, other indications of focus around those numbers and their significance and they have adjusted with our budget presentation.
Climate change is very important for us. The climate change agenda, Mr. Chairman and the members of this committee, Nova Scotia is very willing and we've all, from the Province of Nova Scotia and the coordinating departments, through the Energy Ministers' Conference, have called upon Ottawa for clarity over how we can meet that protocol that has been set as part of the whole climate change agenda. Nova Scotia has a willingness to comply, but our capacity to do so is only going to be able to be defined once Ottawa provides a proper framework around that, and that has been formally requested.
[3:30 p.m.]
Of course, we've had many positive things with regard to improving energy efficiencies in the programs around that, actually with R2000 housing where Nova Scotia is a leader in the country and I'm pleased to say that there's going to be a new showcase home in Sydney on R2000 technology in the coming weeks. We've seen when it's the TRAC Program here in metro or the University Pass Program with encouraging university students to take the bus, the Rapid Transit Program we're working with for efficient transportation of individuals, we're focusing on secure and reliable energy.
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Again, back to the governance committee report on the electricity marketplace. All the components are very detailed. They're very diverse, but they're all interlinked and they're very important to our ability to grow a stable marketplace with the integrity and the security of reliability that will take us into the long-term future, not only from economic benefit, but from reliability upon energy supply and utilization.
Whether it's natural gas in homes, whether it's the gas market development fund to leverage that, whether it's applications, for instance, by people wanting to get into that, like the Strait Area Gas or pilot projects, right down to traffic lights, energy efficiency use. The whole spectrum is one that we're mindful of and working toward integrating and advancing all as part of one. To do that as well, we're informing Nova Scotians, whether that's through the government's Web site as an ongoing educational piece, you can see it with regard to consumer information on energy pricing issues. We've undertaken public awareness research. We've produced an educational video that has gone to every school and library in the province and community colleges and we're seeing good benefit of educating youth about what the energy sector is about, and what job opportunities and career advancement can be achieved.
Most recently, we have undertaken a direct mail campaign in 120,000 households in Halifax area and urban Cape Breton about energy efficiencies and included electrical foam insulators and information about how to reduce drafts and how to improve efficiencies and ultimately reduce emissions as part of our climate change agenda. With that, I know there are many questions to be brought forward. I thank my colleagues and I welcome questions at this time.
MR. CHAIRMAN: Thank you, very much. We'll start with the Official Opposition.
The honourable member for Cape Breton Centre.
MR. FRANK CORBETT: With that said, being the proud member for Cape Breton Centre, I appreciate the man sitting on your right there, and he's someone that I've met before. He's part of a very good staff you have, minister. I'm going to make just a few brief comments and then I'll get into some questioning.
I want to say that myself and staff of our caucus had the privilege of a briefing by your staff, probably about two months ago now and I want to tell you it was a very informative and open briefing - I never use the word " frank" - but was an open and honest one. Some things we agreed on and some things we didn't, but nonetheless I appreciated how readily staff were to tell us stuff and if they didn't have it there to get it to us, so I appreciated that.
I also realize that when you talk about your portfolio, Mr. Minister, I think the area it kind of gravitates to is our offshore natural gas play and what that's all about. Again, I really agree with you in your opening remarks on the scope of what energy is because while
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I think we would all like to see the greatest amount of benefits from our offshore, the reality is that energy needs have to be met whether we produce it as an offshore commodity, like as our gas and oil, or whether it's with coal or whatever, but at some point the whole energy sphere has to be looked at.
What I'm going to do today in my first few questions, minister, is probably start with some questions that are more topical in the way of news around distribution. In these hallways yesterday, there were people from the Strait area talking about trying to get the municipal gas co-op development in the Strait area. Their words to me were that they felt they were not getting the desired support from your department, and so, I guess in that context, where is your department's stance on supporting the Strait Area Co-op and any information you can give me on that?
MR. CLARKE: Thank you, very much, for that question, and it is very topical as you've indicated. Maybe we can set the framework just for the purposes of the record. As you know, Strait Area Gas has a current application before the URB, and as part of that, no different than Heritage Gas, the Department of Energy has been an intervener with regard to meeting the appropriate criteria and going through the process of due diligence, which the public expects of us. In that process there have been opportunities provided for the proponents to receive commentary from the department and what is consistent is that no questions have been asked of the application for Strait Area Gas that wouldn't have been asked of Heritage Gas or will in the future be required of anyone else as we talk about Truro, Amherst, New Glasgow and other initiatives for natural gas.
One of the challenges you have is establishing clearly, when you're breaking new ground, so to speak, related to this, the first applications for natural gas distribution will have to go through the rigours of the assessment and the due diligence process. So there is a certain workload because any future people will have the benefit of the public records of their experience, but because this is the first initiative in the area there has to be the appropriate questioning and around the business case, in this case, for Strait Area Gas, about the viability and the stand-alone capacity to be able to be assured that a go-forward approval will meet with an ability to have the business case supported.
I had the opportunity this morning to meet with representatives, to meet with the Mayor from Mulgrave, as well as proponents and supporters of the application and as you know, the co-operative from Alberta that has a very large network on this front, and is very successful in community natural gas distribution. On the positive side, they have the level and they've enlisted the type of expertise and brought in the Alberta co-op, to help them articulate their municipal vision and how they see that relating to regional capacity building, and so it does come, and there has been a recognition that we have to be solid in the business case. Are we supportive of natural gas distribution? Of course. Those that have gone and been part of this, I think, can help advance that and if there's some clarity they can provide to some of the outstanding questions, then that will be a positive thing.
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MR. CORBETT: You mentioned you had talked to the folks from Alberta Energy Co-op and also the Mayor of Mulgrave, I think this morning?
MR. CLARKE: Yes.
MR. CORBETT: You know, they feel - they said in their brief to me - that your department was being overly and negatively aggressive toward this plan. When asked about it, they really couldn't give me a kind of like, from the pulse, reaction. They're linking, in a lot of ways I would assume, an independent board, that being the Utility and Review Board to your negativity. Is that a proper characterization of your department? I have the feeling that they're telling me that your department is extremely negative toward them.
MR. CLARKE: I think it's important for clarity, if you look at Heritage Gas versus Strait Area Gas, one of the things that's going to resonate is any commentary by the Department of Energy because we are the sole intervener in their application versus that for Heritage Gas that would have had multiple interveners at that time, so all the commentary and assessment that's going to be looked at is going to be focused on what the Department of Energy analysis would be. What I would say is this, if the Department of Energy, on behalf of government, was not doing our appropriate due diligence - and also I think it's important to note that any questions of Strait Area Gas have not been out of the blue, or sudden, there is a shock syndrome, that what do you mean we now have to apply with this.
There would have been opportunity to provide advance copy of the type of questions that would come forward and if you look at the Department of Energy support of Strait Area Gas being given the conditional franchise back in October 2002, there were some gaps that were flagged by the department to the regulator that have to be addressed in the public interest, because what will ensue is making sure consumers are properly protected and the marketplace is secure enough that this will be successful. There isn't in any way, shape or form, a desire to say, no. What we want is to make sure we've asked all the questions so that the integrity of a go-forward is there and everyone has the shared confidence, but being the sole intervener, any commentary on that, of course, is going to be viewed in a singular manner I would think.
MR. CORBETT: When you say you offered support from your department, can you expand on that a bit? You offered the Strait area people the support of your department, but what kind of support did that include?
MR. CLARKE: Well obviously on a consultative basis. As you work through these types of project applications and look at a franchise application of this nature trying to set out, one of things that we've done is to ensure that the proponents are very clearly aware and have been given an opportunity to have questions both offered up in advance and for consultative and other appropriate follow-up and again, it isn't about a desire and/or interest in seeing this go forward. I personally - and I think anyone else -would like to see natural gas and to see
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the interests and aspirations of not only Mulgrave, but the entire Strait area and the surrounding communities. The co-operative, to my knowledge, was having a meeting in Antigonish as well, to look at how the regional network can build. If those meetings mean that there is a greater ability to grow the appropriate business case around that, then we have to do that.
What we can say is, there is a responsibility upon the department and accountability, and the last thing we would want is a franchise to be to given and something go wrong; the next question would be, why did government allow this to happen if the proper business case wasn't in place. One of the questions that arose at a previous hearing was a question to the proponent group, and one of the representatives, when asked, well what if it was unviable, suggested that maybe the regulator or the province could come in and be in that. Well you know the province, it's not the intention of the department to own and operate gas distribution networks as opposed to help facilitate them. If that type of questioning has to be clarified, I think that's appropriate. Everything has been, in my opinion, very collegial. I do recognize if you've been advancing a project from a municipal and regional basis, there is going to be that level of interest and energy that has been infused in an application and any questions that draw the time line or approval process into question as a result, is not always going to be received favorably, but I think we're prepared to move forward, and we continue to be very open to working wherever we can to address the questions that are outstanding, and those in the public, with the regulator.
MR. CORBETT: I guess without giving me any proprietary information, when the folks you met with this morning from Strait area and from the Alberta co-ops, when that meeting recessed today, how would you describe how that went and is there an expectation from either side to come back with more information?
[3:45 p.m.]
MR. CLARKE: I guess the first item was acknowledging there was some media attention around their issue and their proposal. They did recognize that government has a responsibility to make sure the business case is as solid and stand-alone, in terms of self-supporting, as possible. We did indicate as well, and they did indicate that they recognize their needs to be an opportunity to work within the region and thus their meetings in Antigonish. Meeting with the officials - I think there are three supporting RDAs who are getting together for a meeting and looking at how to strengthen that business case. They're doing exactly what the questions that are before a regulator would be and that is, how are they as a region strengthening the business case they have before the board, and of the questions outstanding, what can they do as a region to overcome them?
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When they have their meetings, I look forward, whether the time is such that we're back Thursday for estimates, there may be some subsequent follow-up that we can do as well, and provide some clarity if possible. If you want, I can give you a little overview of some of the outstanding issues, if that would be helpful?
MR. CORBETT: Sure.
MR. CLARKE: I also recognize that Strait Area Gas has made great strides in complying and have always been willing to respond to the questions that have been there. There are about six or seven points, but issues remaining to be clarified are: how the URB would exercise authority over the ARB, which of course is the Californian company that's involved, while Strait Area Gas holds the franchise? There's a governance issue there; how and by whom will gas be delivered into the franchise system? Again, an operational question that just needs clarity; how Strait Area Gas can hold a franchise and not have municipal taxpayers bear any of the risk?
Again, public due diligence with regard to the ability of municipalities, of course, to take revenues that as you know under the Municipal Government Act, have implications and to clarify that item, and how Strait Area Gas can function without any operating capital in terms of, if they're going to do that, are there operational supports? Is it coming from Public Works staff, for instance, and to provide some clarity on that? What entity would fulfill the role of Strait Area Gas should it default or decide that it no longer wishes to hold the franchise? That was the question that arose previously and I kind of highlighted about government not wanting to be in the position to have to deal with a stranded franchise and the operational requirement. How much should taxpayers outside the franchise area be placed at risk? That is tied to the previous one.
Of the outstanding questions, I don't consider any of those particularly to be of a nature that will not be possible to be answered and/or unrealistic or reasonable for those questions to be provided. With the discussions we've had and with the Alberta co-operative coming in, I think those types of things, hopefully they'll provide some expertise and lend some support so those outstanding questions can be answered.
MR. CORBETT: That wouldn't be the first time that a distributor didn't fulfill its obligations and pull out of town.
MR. CLARKE: We know, history has taught us we have to be very careful on the front end. To that point, I think everyone expects us just to see this process through and to be as supportive of answering the questions, providing any assessment or analysis that will help in finalizing this. We also recognize, unlike, and this has always been an underlying item, just in the business planning process, municipalities have had and in this case, limited up-front financial investment. It's not as though they've gone out and have taken $1 million and put it at risk. They've been building it up and growing the business case around this without
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trying to expend large sums of public money at the municipal level and it has required working the business case forward, probably at a degree that a much larger gas interest would be able to have that expertise in-house with people who are building their case. So it is taking longer, but we've taken a full interest and, as I say, it would be very positive if we can get an approval in place.
MR. CORBETT: So I guess the short answer, did you feel that after your meeting this morning with the Strait area people and the Alberta Co-op that there was a better understanding of each other's position and that there was a go forward from that meeting?
MR. CLARKE: Yes.
MR. CORBETT: I'm just going to shift gears a bit and talk about LNG and particularly Access Northeast. I guess one of the terms of the land option between Access Northeast and Nova Scotia Business Inc., you know, I read, there was a story in I think the Halifax ChronicleHerald back in November that NSBI would probably get a maximum of $2 million for a 20-year period from the land? Is that accurate?
MR. CLARKE: Just hold on a second. If I can just, just with that, I have no problem providing the full answer around that. When I was the Minister of Economic Development, this was an item that I facilitated in terms of land transfer because when Access Northeast came forward, their business plan, in order to gain the teeth it required to move forward, needed to have a clearer sense that the available lands would be at their disposal to advance their whole business case and strategy around that and that has been the case. What I will do, with your indulgence, is confer with NSBI and Economic Development just to get that amount for you.
MR. CORBETT: Yes.
MR. CLARKE: I will be happy to present that to you on Thursday and any of the other business planning around that. I know at a previous occasion we had some discussion, I think it might have been in Question Period, around the issue of the amount of benefit of that versus the proposal in Maine which ended up being pulled anyway. Even financial incentives, if it's not the right location, are not going to overcome that and it wasn't enough for that buy-in to be there.
The aspect of a project in a regional area like this, as you know, with the competitiveness, and we have two known competing interests right now in the region, or at least potential projects, and that's the LNG for Bear Head and a proposal for one by Irving Oil in New Brunswick. Nova Scotia, in looking at that in terms of benefit I guess and I will get the number, we can probably discuss a bit further, but the municipalities in the region have been very strong proponents of this and one of the factors that has happened for Nova Scotia that has been picked up in the marketplace by even the non-proponents, but the industry
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players that are monitoring, you know, LNG and this proposal, is that our area and the Nova Scotia bid does not have a not-in-my-backyard syndrome attached to it - and that has been a big challenge elsewhere - because of the benefits that people see as associated with that, whether that's the building and construction trades in terms of the actual major infrastructure project, whether that's the regional spin-off benefit and the potential for other petrochemical opportunities to cluster in that region. As you know, with Statia and, of course, the natural benefits of that region, the fact that there's gas infrastructure in place now, building on all that, it really comes down to what are the next steps as a region and that's something I think as well that we'll seek to provide some clarity to the committee with regard to the discussions and the understanding around municipal taxation and benefit on that, too.
MR. CORBETT: I think the employer is talking, you know, if everything goes right, we're looking 30 to 40 jobs, full-time, but I think we understand that the large employment hit really happens in construction.
MR. CLARKE: Yes.
MR. CORBETT: You know I don't think there's any argument there and the possible spin-offs as you mentioned earlier, but I guess if this project is to go forward, you know, are we as a province setting it up for the maximum employment for Nova Scotians? You know, understanding full well if it's the trades component that would build it, there would be certain parameters built there and they're supportive. So we know that by and large those by contract agreements are going to be Nova Scotian jobs, but any of the specialty work, what can we do to guarantee Nova Scotia content or actual jobs and are we looking at any kind of training for the operators? I would assume that's where they would be, is operators of the 30 to 40 full-time employees if we were to reach the target of building this LNG plant?
MR. CLARKE: Well, it's an excellent question because it speaks to what we've heard with any major new projects and one that the benefit, you know, of the actual capital construction phase be derived within the Province of Nova Scotia and with this particular initiative that is the intention. There's a clear understanding by the proponents that Nova Scotian content and local benefit is a priority. The training associated with that is also opportune by the fact that we have the Nova Scotia Community College and the facilities both in the immediate community that can be accommodated for any training and I would say, no different onshore than off, with our occupational health and safety as it affects the offshore, our commitment to a project like this is going to be no less solid and, in fact, is going to help us to benchmark a new standard in showcasing to the world our commitment to having the most trained and occupational ready employees.
So we have the institutions in place, whether it be in the Strait area and/or within the Sydney area. We have the commitment of the company, but also as we go through the approval process, and that's the other thing, as this makes its way through, we will be able to define more clearly and articulate, you know, both through the regulator and also through
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the proponent the issues of benefit and employment. Subsequent to that is obviously the other project activity that it will help anchor and no different than our discussions, for instance, with Newfoundland and Labrador where if they're looking at pools of stranded gas, not just LNG but, you know, compressed natural gas or CNG opportunities. So people are taking a very regional eye to see how the next step is almost in the queue everyone is visioning, but the proposal by Access Northeast, no different than our previous discussion about Strait Area Gas, has to go through the same business case analysis and stand up to the scrutiny appropriate to these types of projects for them to move forward. But we do have the capability at Marconi to train the operators for an LNG and the capabilities of being enhanced in the Strait area. So I think if you're looking at the Department of Energy and the government, whatever we need to do to put the framework in place for jobs that will be created, will be there and we'll be prepared to work with the college and for government to make the necessary investments that Nova Scotians are the principal employees of any project.
MR. CORBETT: In your discussions, and I appreciate they may be still very preliminary with the proponent, have they kind of indicated to you any kind of desire to help fund any kind of training or have they proceeded that far yet?
MR. CLARKE: I think our discussions with the proponents at this point have been very much on the broad planning framework around this and I think what speaks to the proponent's willingness is the amount of activity and the amount of liaison they've had directly in the community. They grew this from the conceptual stage when they were ready to launch the business concept in that area, brought it forward in a very constructive manner, engaging all of the community players because they recognized for this to work it has to have community, not just buy-in for the project to go ahead, but community support to be successful in the long term. You just can't have an initiative like this and be a stand-alone.
So the other discussions we've had and, most importantly, at this time are around capitalization of the project and the appropriate financing components, access to a secure supply agreement in place and ultimately their coming forward with the next step of a business plan. Once it comes to the regulator, of course, we can look at that time more fully on the employment side, but it has never been anything but their intention to make this as a Nova Scotia-based project, but it's one that requires a wider investment and involvement.
[4:00 p.m.]
MR. CORBETT: It's probably a safer answer from your other ministry, when you were with Economic Development. A part of the conversation, they've been offered rebates by way of payroll or job guarantees, targets or anything like that? Are you aware of that from your old portfolio or from the new one?
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MR. CLARKE: No. The strongest thing we could do previously and when I was in my previous portfolio in Economic Development, was facilitating as I say, the access to the land lease around that. The opportunity to work with them and again facilitating, preparing Nova Scotians for jobs and opportunity working with - I've met with the building and construction trades representatives around their interests and again to your point about content, we're working with them and I have to compliment the Cape Breton Island Building and Construction Trades Council because they are sitting down, they are working through.
One of the things, the time line for the construction of this would lapse over some of the labour issues and what they understood was that labour stability, rate stability was very important and as you say, that's going to be a huge boost to the construction and building trades and everyone is working it through. If you look at it from the point of the other previous question about the proponent being engaged, they very much are and I think everyone has taken a very serious interest and has an acknowledgment that this has to be so solid because of the competition. When you consider the dozens of these sites that are being proposed around North America and into the Gulf area and only a few projects that will actually proceed. The strength of the Nova Scotia business case and the consolidated, consistent and comprehensive buy-in and support, has been very valuable.
As far as issues such as payroll rebates, for an initiative like this we don't subsidize Sable offshore, nor are we going to be providing subsidies for a market-driven opportunity like this. I think we can provide supports and program support as well behind getting Nova Scotians job ready, and that's a good investment, but there won't be any series of, it's not going to be based upon Nova Scotia financing components of this as well. Its market driven.
MR. CORBETT: I'm going to make a really big mistake here and ask a question I really don't know the answer to. Anytime we hear, I think you touched on it before, minister, about one of the real big upsides of the Bear Head project it is that there is not the in-my- backyard syndrome. Whenever we hear of a gas plant, we always go - I shouldn't say always but a lot of them go - to the extreme of living on a powder keg. It's my understanding that LNG is not as volatile as one first would suspect or it's hardly volatile at all I guess. With that said, does that restrict any kind of future endeavour in that area, to grow that area out as an industrial site that would, as we talked earlier, be kind of hiving off the LNG business? Is it the fact that if there's an LNG plant there, are there vast restrictions that would stop you from building other kinds of co-dependent type plants?
MR. CLARKE: Actually just to answer a previous question, the idea was as well that as we pull this in it will actually help the clustering you referred to. Just with clarity, the actual land mass that's in place is for the regulatory approval process for safety zones and the like around that. You remember a few months ago it came to a bit of a public highlight when there was an incident at an LNG facility in Qatar and there was a subsequent explosion at that facility, but upon further analysis it wasn't the actual infrastructure as it was another incident that created the problem. For our region, and again back to even just our neighbours,
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Newfoundland and Labrador, where there are great amounts of stranded gas that can be potentially processed and put in, those are the next steps that we want to see.
The other thing that we look at is, and I'll note, when I had my meetings in Houston, the last set, of all the major meetings we had and with all the major corporations and that, what was of note was all of their LNG professionals or heads were in on meetings, and it really showed that there is a greater interest in the Nova Scotia business case that's being put forward. Even the media monitoring around that has been analyzing Bear Head and list it as a credible proposal. Just getting to that good status is quite significant, because some of the reporting at the Energy Council in Alberta, was quite scathing. So just to get a development project at the level it is in its phase of development in a business plan, was quite impressive and to the point that everything will be done to ensure that the proper zones are in place for safety according to a facility like this, but our goal and hope is that it will advance other industrial petrochemical opportunities.
MR. CORBETT: I guess an area I want to get into, and appreciating some of these questions are not specific to your ministry but just more as an adjunct because of the business that's proposed there. Besides jobs, there are other revenues derived from having a property of this size. One obvious is tax revenues. We had some problems and I think of what you said before going through the approval process that one of the things every time we go there, we have a bit more of the past to learn from. I guess with that in mind, we've had pretty much what I think we've described in some terms as a debacle around the fractionation plant.
In conversation with the people in the Strait Area, do you see property tax revenues being a problem around here or is that part of your package of saying that they're working pretty well in lock step and know which way to go with this?
MR. CLARKE: One of the aspects, of course, is municipal benefit and what a project of this nature would mean from a taxation point of view. I think what I can provide you with clarity on today is that the government will ensure that there is a framework to build on for a major industrial such as this, and no different from other major industrials in the province, we have to look at what that size of infrastructure means but also what the appropriate level of taxation is for such a facility and to that point, and the reason I say and I guess maybe this is just a forerunner, the proponent in order to close out their business case, is going to want clarity on what the tax structure is going to be. So I'm more than confident that in the very near future we're going to be having that discussion and we'll be discussing it as colleagues in the process of the certainty that's required and the framework of engaging our municipal units in what the taxation or benefit aspect would be.
MR. CORBETT: Revenue is one aspect. I guess there's another aspect, like LNG is obviously is not subject to offshore royalties. I suppose, are there any other mechanisms that your department is considering to capture economic rents from the company? Is there anything, I'm appreciating the fact that we're trying to attract them and we're not going to
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start trumping them all of a sudden with extra fees that are not elsewhere, but also with that said is that we also shouldn't be kind of waving the white flag either. Is there a discussion within your department of trying to capture revenues from here?
MR. CLARKE: The answer to that is yes. One within government as a whole to help deal with this and really to gain that certainty, that's part of helping to facilitate advancing the business case forward. As I say, I anticipate in the very near future we will have a framework hopefully in place to bring forward for discussion. There is a time factor and there's a timeliness around this project.
This isn't something we can delay for another six months. We need to be able to provide some clarity and get it out there for comment. Ultimately what is - I guess to your point - the balance between recognizing the benefits of industry like this but also recognizing the importance of proper levels of taxation for municipal and regional benefit. To that end, we are working on that.
Also, with that, I'm just looking at a note with regard to, we'll be supporting pipeline infrastructure for gas supply for new users and power generation, for example, as some outcomes that could be part of that. What does all of this infrastructure mean in terms of other building and going back to some of the other regional desires of community support and infrastructure utilization for consumers in the region?
Without trying to get ahead, I think we'll have a framework for you to look at and for all Parties to be able to assess in the coming days. I don't anticipate that to be very long.
MR. CORBETT: You know, one of the positions of the company was they had the intention to plug into Maritimes & Northeast pipeline and we know it takes our gas to New Brunswick and to the New England states. Have you had any discussions about building laterals or offloading some of the gas, either a dedicated portion or an as-needed basis, for use by Nova Scotians?
MR. CLARKE: One of the discussions, of course, around any of the planning that would have been part of the up-front process was looking at the relationship to the main infrastructure and how to utilize that to its maximum efficiency. So there is a plus around that. There has been, of course, business to business discussions around that, there have been discussions around what it means for the long-term stable supply within the region. I guess if you come back to it, the overall distribution plan is, even if you take into account this project, Maritimes & Northeast, if you look at Heritage Gas as their distribution - I think what we will see is that spreading of infrastructure and building off of the infrastructure that's there. There's the ability to do that because of its need for extra capacity or maintaining pressure levels where you have compression stations and the like. So, those things will be there and the proponents' discussions with some of the gas users such as Nova Scotia Power have been there and are looking at what loads from the region can be a reliant supply.
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What this also means, one of the things we've seen is what provides that level of maximum utilization of the infrastructure that's there, and it can be increased and it can be facilitated. How do we look at what the interests are? To answer your question, yes, in terms of looking at the laterals, but to recognize as well that in trying to do that, you get into a whole host of stakeholders, it becomes somewhat complicated. I think if we look at where that goes, it just