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MR. CHAIRMAN: I call this meeting to order, and I'd like to call the estimates of the Department of Economic Development.

Resolution E3 - Resolved, that a sum not exceeding $74,666,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Economic Development, pursuant to the Estimate.

MR. CHAIRMAN: The honourable Minister of Economic Development. We will begin with an opening statement from you, Mr. Minister.

HON. RICHARD HURLBURT: Thank you, Mr. Chairman. It is an honour to be here as Minister of Economic Development. The timing is impeccable today, I just arrived from Yarmouth maybe three minutes ago. Anyhow, I had to sit at the hospital and had issues in Yarmouth to deal with and here I am.

With me today, Mr. Chairman, and members, is my Deputy Minister, Paul Taylor, and Joyce McDonald and Kevin Elliott from Financial Services, and a number of my staff from my department to help me provide answers to any questions that the members may have.

As I am sure the members have noted, the budget estimate for the year 2007-08 is $74.7 million, and I'd like to take a few moments and highlight some of the important work that will result from the $14.6 million increase.

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As you are probably all aware, two-thirds of the increase is $10 million that will be used to help Nova Scotia become the most connected jurisdiction in North America. We will ensure that 100 per cent of Nova Scotians will be able to access broadband by the end of 2009, Mr. Chairman. That's a big, bold statement. People are claiming 100 per cent now with only 85 per cent coverage - we're saying 100 per cent coverage within our province.

As all members are well aware, we have a pilot project going on in Cumberland County now, and we've already hooked up our first customers to that pilot project and we hope to be expanding in other parts of the province by summertime. We are working with the regional development authorities throughout the province to map out the remaining unserved areas and we'll group them into zones. The provincial funding, combined with the yet to be determined federal contribution, will be used to put in place the necessary infrastructure for wireless broadband. This infrastructure, including such things as upgrading and building provincial towers, will help attract private sector service providers.

Access to broadband is as important today as paved roads, electricity, and telephones were in the past. We need it to communicate, to access information, and to conduct trade whether we're in urban or rural areas of our province. It is critical to the growth of the economy and to our quality of life; in fact information technology is all around us and so are the opportunities that it can provide. Last year a provincially sponsored contest in Cape Breton uncovered eighteen innovators and a wide range of technologies, from medical devices to information and communication technologies to industrial and energy innovations, that were developed by Cape Breton entrepreneurs. Created and managed by InNOVAcorp, the I-3 technology start-up competition was designed to encourage and support entrepreneurs. This year, with additional funding, the I-3 competition will involve more regions in Nova Scotia, to encourage the formation of new technology companies.

We will also increase direct financial support to encourage innovative companies to adopt new applications, technologies and processes. By continuing to encourage such innovation, the government is directly addressing the issue of increased productivity in Nova Scotia.

The business of InNOVAcorp is to help knowledge and technology companies based in Nova Scotia, and which are just starting up, to get their products ready for export. Last year alone the agency's services advanced the efforts of more than 106 companies and 30 university research-level projects. InNOVAcorp is one of the five agencies that fall under the responsibility of the Minister of Economic Development and they all play a role in growing our economy.

Mr. Chairman, the Trade Centre Limited continues hosting events and conventions, injecting approximately $180 million a year into the local economy.

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Our Waterfront Development Corporation, which manages lands and water lots in HRM and elsewhere, will play an important role in this July's Tall Ships event. This 10-day festival is expected to attract nearly 600,000 visitors to Halifax and six other ports.

The Nova Scotia Film Development Corporation helps grow an industry that makes a significant contribution to our economy, and also helps raise the profile of this province. Film and television productions are expected to increase by 7 per cent this year, generating nearly $130 million in economic activity for our province.

Nova Scotia Business Inc. celebrated its fifth anniversary last November. In the past five years Nova Scotia Business Inc. has completed over 60 financial investments, made approximately 50 business development deals, supported more than 50 export missions, and visited over 3,000 existing companies throughout the province. About half of the over 13,000 new jobs that were created by NSBI are in communities outside of HRM.

This year the eligibility criteria for NSBI's payroll rebate program have changed for small- and medium-sized businesses. The number of jobs required to qualify has been lowered to twenty-five as an incentive to business investments, particularly in rural Nova Scotia. Companies will also have the flexibility to move this lower, should circumstances indicate.

Another economic development tool that we have at our disposal is the Industrial Expansion Fund which continues to provide a solid return of $3 in salaries, wages and tax revenue, for every dollar invested. Over the past three years some 3,600 jobs have been created or maintained through the investments made by the IEF, and the majority have been in rural Nova Scotia. Here in Nova Scotia we are guided by Opportunities for Sustainable Prosperity, our economic growth strategy. It calls on government and business communities to make economic decisions that respect our environment, our people, and our quality of life. It is focused on the long term, not a quick fix.

We, in Economic Development, are committed to the principles behind the recently introduced Environmental Goals and Sustainable Prosperity Act and we are firmly committed to the principle that a clean environment is absolutely essential to future economic success - only by respecting our environmental health will we be successful in the international marketplace.

Careful planning and strategic investments will ensure access to a skilled workforce that can support economic growth. Attracting and keeping skilled immigrants is one part of the solution - we also need to look ahead and prepare for future labour force needs by coordinating our higher education system with those needs. Economic development in Nova Scotia is very much a partnership approach, with emphasis on local and regional levels.

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Mr. Chairman, Nova Scotia is recognized as a leader in community economic development because of the successful model used by the fourteen regional development authorities. Whether it is downtown revitalization, broadband expansion, e-commerce capacity, immigration activity, increasing exports, or increasing the literacy rate, RDA activity builds strength in our communities.

Mr. Chairman, I cannot say enough about the RDA system we have in this province. Everywhere I have been visiting, in other parts of our country and internationally, they're recognized and I'm very, very pleased at the success that they hold within our province. In saying that, there's always room for improvement, but we have an RDA model and an association that is willing to work with government and the communities to meet the needs of their communities.

Nova Scotia Economic Development and NSBI will continue to work on the problems of out-migration. Experienced staff in our offices located throughout the rural areas of the province work closely with regional development authorities to deliver economic development programs and services to assist businesses. More than 50 per cent of our investment incentives take place outside of Halifax - programs like the Credit Union Loan Guarantee Program and the Community Economic Development Investment Funds have a large take-up in rural Nova Scotia. We need to make sure there are job opportunities available in our rural areas.

Sometimes our students need opportunities to get work experience, and local business operators need a hand creating those job opportunities. Another $800,000 will be added to the Student Employment Program, bringing the total to$1.8 million, and an additional 250 jobs will be added this year to the over 400 jobs created last year. We will add a new complementary program this year, and an additional $750,000 will be used for a new winter works employment program. This program will offer a wage subsidy to organizations to allow them to hire otherwise unemployed and underemployed individuals.

I appreciate the committee's indulgence with these opening remarks. Before I end, allow me to thank my professional staff at Economic Development. It has been another busy year in the areas of sustainable competitiveness, community and rural development, procurement and supplier development, and corporate information and technology strategies.

Mr. Chairman those are just a few quick snapshots of where we have been and where we plan on going. Again, I want to emphasize the dedicated staff that we have in the Office of Economic Development and the five Crown corporations that serve under my jurisdiction.

And with that, Mr. Chairman, I will open it up to questions.

MR. CHAIRMAN: The honourable member for Halifax Chebucto.

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MR. HOWARD EPSTEIN: Thank you, very much, Mr. Chairman. Sorry, I'm going to stop because the minister wants to add something.

MR. HURLBURT: There was a typo. The Student Employment Program this year - it's not $1.8 million as I read, it's $2.7 million this year. Thank you, Mr. Chairman, I just wanted that on the record.

MR. EPSTEIN: The minister's attention to fine detail is always appreciated. What's also appreciated every year is the representatives of this government coming and talking to us about the extent to which the provincial government plays a role in stimulating the economy. From the perspective of my Party, I agree that the provincial government has a very legitimate role in stimulating the economy in our province. I think it's a crucial role, it's something that seems to be a basic duty of government to pursue, yet it's always a surprise to find a Tory Party coming and speaking of the virtues of supplementing the initiatives of the private sector by the government investing in infrastructure and coordinating with the education system, making strategic grants and loans.

[3:15 p.m.]

That's the kind of thing that the NDP seems to really have always believed in, which is there's a legitimate role for the government to play in the economic life of the nation. Maybe we're not all that far apart on at least this aspect of things, and it leads me to wonder from time to time exactly ways in which a differently constituted administration might behave differently with respect to economic development. I think we have some admiration for the basic idea here - that is the idea of the government having a legitimate goal in the shaping of the economic life of our province, but perhaps we'd be prepared to go a little further and target the dollars in slightly different ways. I guess maybe one of these days we'll get to find out.

In any event, in the meantime we have this minister - you, Mr. Minister, and your department, and I'd like to start with one aspect of the question of infrastructure in Nova Scotia. Unless I missed it, I don't think I heard to you refer to it in your introductory remarks - this has to do with the concept known generally by two different tags, one is the Atlantic Gateway and the other tag I've sometimes heard attached to it is Atlantica. I raise both of these names because it seems to me there's an important difference between the two of them, and I want to point out what I at least understand to be the difference as the terms are used.

The Gateway seems to focus on the ports, it seems to essentially recognize that whether it's Halifax, whether it's the Strait, whether it's Sydney - and I hear the minister say Yarmouth - or some general combination of that, that of course one of the natural advantages that Nova Scotia has is our geographic position in terms of international trade. Clearly the destination market is much more when it comes to international trade - the United States, then the Canadian domestic market which is smaller by a factor of 8, but we have the

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advantage of geographic position being adjacent to the United States, we have the advantage of having a number of deep-water and generally ice-free ports here. Indeed the additional advantage, particularly in Halifax, is already having well-established, good container piers which are not fully utilized at the moment.

The Gateway concept really focuses on seeing if there's some advantage to us that might be developed in terms of expanding the amount of international trade, of promoting our ports as a target - and I read a very interesting interview this morning in the Report on Business, The Globe and Mail, with Karen Oldfield, the CEO of the Port Authority, talking yet again about her hopes for our potential links with India. She's apparently been to India a couple of times since she became the CEO, and she's interested in taking advantage of container traffic coming through the Suez Canal, which she rightly says is a shorter route into the North American market than sending container traffic through the West Coast. Of course we know that there's a strong interest in promoting the West Coast, and the Pacific Gateway is one that seems to have attracted a lot of attention on the part of the federal government particularly in terms of their dollar commitment to it, it's pretty substantial - I think something on the order of $5 million is being talked about as an investment on the West Coast.

Going back to my main point about the difference between Gateway and Atlantica - as I understand it, all the talk about the Gateway is really in terms of increased traffic and then transfer of those containers onto the existing routes, some of it truck, some of it rail. Where the truck and rail routes go is primarily up through Ontario and down through places like Sarnia in terms of access to the United States, so there's kind of a big curve across North America right into the Chicago- Midwest heartland. Then if there's further distribution to the heavily populated east coast of the United States, the New York and Boston markets, then it's by other rail links and other truck traffic. This is really I think the departure point as I understand it between Atlantica as a concept and the Gateway as a concept. As I understand, the Gateway really says let's just increase the attractiveness of our ports, let's attract companies to come and import and export through our ports, and let's continue to rely on the existing rail and truck routes and see what happens after that.

Where Atlantica seems to at least try and build on this - if that's the right word - it seems to contemplate the possibility of a big, four-lane highway system right down across New Brunswick and through the northern New England States, through Maine, Rhode Island, New Hampshire down to Massachusetts and presumably on to Boston and New York - and I have to say I find this peculiar. I've looked at what it is that the Atlantic Institute of Market Studies has had to say about Atlantica, I've listened to speeches made by some people in the business community about their idea of Atlantica, and they couple it with some harmonization of road regulation between the Canadian and American regulations.

I have to say when I look at it, it seems to me what they're essentially thinking we ought to do is change our regulations to match some of the American ones, or maybe it's the

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other way around, but they would result in less safe highways because it would lengthen the number of hours that truck drives could go, it would lead to these kind of linked trucks - there's a technical name for them I don't remember what they are - but it's essentially two trucks in tandem but with one cab to drive them.

First I find it hard to imagine the Americans spending the dollars to build a four-lane highway down through that part of the New England States, they haven't done it yet and I don't know if it's part of the Atlantica proposal that we spend dollars to build highways in the United States but I have to say I wouldn't find that a very attractive proposal just on the face of it.

I'm wondering first, minister, whether you could comment on this whole idea of the Gateway, of Atlantica, tell us where it stands, what you see as your involvement and whether you conceive of this as being a Gateway proposal or an Atlantica proposal. If you have any comments on Atlantica I'd sure be happy to hear them and maybe we can start with that topic if that's okay.

MR. HURLBURT: Thank you. First of all I want to thank you for your opening remarks commenting on our government and how we see business and how we can improve business in our province. Premier MacDonald's government believes in partnering with all levels of government and with communities. That's how we create better economic communities throughout our province and we're doing that with our federal government and our municipalities. Again, I can't emphasize enough how important the RDA system is in this province and how well it's working. They represent, as you know, all levels of government and communities. People are envious in other parts of the country of how the RDA model is working here in Nova Scotia and I'm very proud of what they've accomplished since they've been up and running.

To get to your comments on the Atlantic Gateway I just want to clear this, that the lead department for the Atlantic Gateway is led by TPW. Naturally there's a group of deputy ministers and department staff from all departments that will be working on the file but the lead is Transportation and Public Works. It's all modes of transportation in and out of our province is what we're focused on. Naturally we're focused on the containers as a key element right now but we're looking at air, sea and land modes of transportation links. I can tell you in my own home community I know our people are excited about the Gateway, they think it might be a tool to help them with our airport situation in southwest Nova Scotia. We also have to look at our sea links and our land links, we have to look at better highway links here in Nova Scotia.

We have a great number of entrepreneurs and we can increase our economy here tenfold by having this Gateway concept and having Nova Scotia as the lead in it. I can say that I was very pleased and our government was very pleased on Monday last week when the federal government tabled their budget and there was a segment in the budget for the Atlantic

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Gateway. I think it was, I can't tell you the exact number, $130-odd million a year for the next seven years for the Atlantic Gateway concept. That is a step in the right direction, that's where our Premier and this government have been focused and we took that to Ottawa, our Premier spoke at the Canada Club in Ottawa on how important the Atlantic Gateway is to this part of the country. We have been leading on that file and TPW has taken the lead on it. I don't know if that gives more insight to the member but that's where it is. It's not focused on only one mode of transportation, it's for all modes of transportation in and out of our province.

MR. EPSTEIN: Thank you, I understand that another department is the lead department but surely given the importance of this for economic development there has to be some focus on this from your department. I'm glad then that we can continue our discussion. I want to link this question with another aspect of your opening remarks and it has to do with your support for the idea of sustainable prosperity. I notice you went out of your way to link your overall vision of economic development with the idea of sustainability. I cannot tell you how much I agree with that. I've said this for many years, that it's not a question of antagonism between sustainability and economic activity, it's a question of finding a way in which they can exist harmoniously. Indeed, the position I have stated here a number of times to different departments, to different ministers, is that economic development will not take place and cannot take place unless it's on the basis of a respect for sustainability, nothing else is going to work.

This gets me back to the issue around which we're still calling the Gateway and what others have referred to as Atlantica. It does make a difference in terms of the mode of transport when it comes to the movement of goods in terms of sustainability. There is a big difference between goods moving on the roads by truck and goods moving by train. The hard fact is that goods by train not only don't wear down our roads and cause potholes and wear and tear and the accident and safety difficulties, the trouble with transport of goods by truck compared to train is the amount of energy used. There's an enormous amount of energy used per ton of goods moved compared with trains. My point is that if there's buy-in by your department, by TPW, or by your government on the question of the way Atlantica has been shaped and promoted and it being so closely tied to an expanded highway system then I have to say this seems inconsistent with adherence to principles of sustainability.

What I'm inviting you to do is comment on whether you have understood that there's an important energy difference between the two modes of transport of goods and whether there's a commitment inside your government to favouring rail rather than trucks or do you see yourself as neutral?

MR. HURLBURT: I can tell you that our government is very supportive of the rail service. As you know, our government is committed to the Cape Breton rail, our government took the lead with the Digby ferry and my department was a lead. I thank my staff for showing the leadership on that file and finding a resolution in the short term while we can

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find a long-term fix. I believe that's what we have to do, we have to work in partner, as I've mentioned earlier, with other levels of government if it's the federal government or other local governments, I believe that it's key to prosperity in this province. I believe there are opportunities in this province for smaller container ships through Shelburne and I'll only use that for an example. We have to look at all modes and we have to protect our environment for our children and their children's children.

[3:30 p.m.]

MR. EPSTEIN: Minister, I may have missed it but I haven't seen any statement yet by any of your Cabinet colleagues, or for that matter from yourself publicly, with respect to the Atlantica proposal. Can I ask if you are aware of any public statements, have you made any with respect to Atlantica as conceived by the Atlantic Institute for Market Studies?

MR. HURLBURT: No I can't say that I've heard but I can say, I will re-emphasize what I said earlier, that our Premier has shown the leadership in this province and he's taken the mission to Ottawa on the Atlantic Gateway. We believe that is the concept for this province and what it's going to do not only for this province but for all of Atlantic Canada. I believe that is a concept that will work and apparently we have the ear of the federal government because they saw to put it into the budget this year.

MR. EPSTEIN: Minister, I hear you repeatedly mention the Gateway. We're very supportive of the Gateway. It seems to me that there's a real opportunity for our province to build on our natural advantages of location and the nature of the existing ports, no doubt about it. This is in fact a very good thing.

What I'm concerned about is that so far there has been silence from your government about the other conception that is out there. There's an associated name for an idea that is being promoted with a variety of additional elements and they involve a tendency towards deregulation, they involve a definite emphasis on road traffic and there are many in the business community with whom your government seems interested in partnering who have a definite view on this. They're not neutral on it, they seem to be moving ahead with advocacy, at the very least, of the possibility of the Atlantica proposal not just the Gateway. Where we see the founder and I think president of the Atlantic Institute seconded for a year to the Prime Minister's office I think we have occasion to worry about this, about whether this is the kind of conception that is going to be promoted.

I'm going to tell you what I'm going to do. Because I've raised the Atlantic Gateway and also Atlantica and I've heard you not pick up the term Atlantica and concentrate instead on the Gateway, it's going to be my starting assumption that you do not promote Atlantica and that in fact you are in favour only of the Gateway and not of the expanded conception. If that's not correct I think this would be the time to make some comments on it but that's perhaps where we can leave it just for the moment. I do want to add that our Party, although

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very much in favour - just to be 100 per cent clear - we're very much in favour of the idea of the Gateway, the idea of Atlantica is one that does not find any favour with us, partly on grounds of safety and partly on grounds of expense and partly on grounds that it seems to be anti-sustainable, that's where we stand on it.

Unless you wanted to comment on that I think I'll move to another issue. It has to do with this, it's also an infrastructure issue and you flagged for us the issue of connectivity and broadband, a very good point. I have to say that I am looking forward to seeing whether we really will achieve the 100 per cent target by the end of 2009 simply in terms, of course, of how effective we can make businesses in rural areas - this seems essential. It's a given that this kind of two-way access to the world that is needed by businesses and rural areas depends on having access to broadband. Partly it has to do with the public in the wide world knowing that we're here and knowing that individual businesses are here whether they're in Cumberland County or HRM or Yarmouth County, it doesn't matter, people have to be able to find us if they're looking.

On the other side of it of course we have to be able to reach out to people in the rest of the world and again the Internet is the way that it's done. Specifically of course for some industries, many of which are located in your part of the province, when it comes to the filing of manifests, of documents with the border service of the United States for the transport of products, fish and lobster, they seem to be requiring now that this be done on-line and in a very timely way before the product arrives at the border and before the trucks or other mode of transport arrive there. Given that we trade so heavily with the United States particularly in our natural resources, we're exporters, we want to be able to do this by broadband. I'm looking forward to this, I think this is a good thing, I've certainly heard, as no doubt you have, from businesses all around the province, there's a real appetite to have this go forward. I wish you well with this, I hope it rolls out in an appropriate way and that the target for the date is met.

There are a couple of things I do wonder about though when I think about this proposal. First it has to do with the RDAs and the reliance on them. I think I heard you say that you are going to be looking to the RDAs to map out the unserved areas. Now this seems to me a very good way to involve the RDAs but as you'll know of course in your part of the province there's no RDA. Southwestern Nova, has it gotten itself organized again?

MR. HURLBURT: We've always had an RDA. It's the Valley.

MR. EPSTEIN: It's the western Valley, I'm sorry.

MR. HURLBURT: Yes, but that's up and running now.

MR. EPSTEIN: That's part of where I was going. Is there an update now because I knew that they had kind of fallen apart amidst some bickering amongst the municipal

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partners for some unexplained reason and lost a very good person. I think it was Janet Larkman maybe who was their executive director. Have they reconstituted themselves?

MR. HURLBURT: First of all I want to thank the member. What I'm hearing from him initially is that he supports our budget because he thinks the broadband is great. I really appreciate knowing that you're going to support our budget. I also want to say yes we are asking the RDAs to work with my department in mapping out unserviced areas in the Province of Nova Scotia. They're the people with their feet on the ground and they know the areas. In my tour of the province, meeting all of the RDAs across our province and municipalities, that was one of the key issues. Every visit I had across this province as the Minister of Economic Development was about broadband in this province and how important it is to rural communities and how they have to be connected to increase their sales or what have you in the province.

The RDAs are helping and there have been some community events. How many meetings have there been so far? Five meetings so far in different regions of our province helping us to find the unserviced areas and to work on this. We have set our goal by the end of 2009 to have 100 per cent broadband in this province and we're determined to do that. My staff is very dedicated and they know the time frames and they're working within those guidelines to make sure that it happens to all areas of our province.

To get back to your final question on the RDAs we have a full complement of RDAs across our province. In the western Valley there was an issue there and they were down for a year or so but now they have a new RDA and Mr. Gushue is the new CEO for that RDA and they are up and running and they're doing very well. As a matter of fact, I went down and met with that RDA approximately a month ago or something like that and met with their full board in the community and they're in tune and ready to try and help the economy of the area they serve.

MR. EPSTEIN: Thank you. It's a bit of a reach to assume that you've got 20 votes sitting on our side of the floor for the budget but you can consider . . .

MR. HURLBURT: One at a time, Mr. Chairman.

MR. EPSTEIN: I said it was a reach, based on my comments. In any event, can I just ask a bit more about particularly the Western Valley is their name. Are all the municipalities back in on that RDA, do you happen to know?

MR. HURLBURT: All the original ones are back in the Western Valley RDA except for Clare. While they were down, Clare chose to go with the southwest RDA so they moved theirs towards the Yarmouth side and now the line is at the Digby County. The County and the Town of Digby have now gone with Valley municipalities and they've formed a new RDA out there.

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MR. EPSTEIN: So it has been reconstituted and the lines have actually been changed a bit but everyone's back in, basically, at least in one RDA or another. That's the overall picture?

MR. HURLBURT: Yes. The key here is that all communities now in the Province of Nova Scotia are being serviced by RDAs.

MR. EPSTEIN: Okay. I'm glad to hear that. Now what I'm wondering is, I'm not sure what I heard about these community meetings. Are the RDAs actually being able to identify the unserviced areas? Is this actually working out?

MR. HURLBURT: Yes, they are working with our staff in identifying the unserviced areas right now so that we will have a plan to move ahead and we're doing it by regions after the pilot program is completed.

MR. EPSTEIN: This actually gets me to another aspect of this question of broadband and how it will actually work in terms of the mechanics of it. Normally this kind of communication I think would be regulated by the federal government and I think must continue to be regulated by the federal government. Sorry, do I understand from some officials in your department that might not be the case? My understanding is that all things like radio, television, phones and broadband were regulated by the federal government, by the Federal Communications Commission. Do we have some jurisdiction?

MR. HURLBURT: Dan MacDonald, CEO from InNOVAcorp will answer.

MR. DAN MACDONALD: When it comes to broadband services those are not regulated services. In this case where we may or may not use wireless, depending on the application, those are unlicensed frequencies. While the federal government and the provincial government will partner to roll this out, regulation in this case does not apply.

MR. EPSTEIN: If I can just pursue this, minister, does this mean that the feds have chosen at least at the moment to leave this as an unregulated and unclaimed area or are they actually saying they don't have jurisdiction over it? Are they just leaving it unregulated at the moment?

MR. DAN MACDONALD: Broadband services, Internet services are not regulated.

MR. EPSTEIN: Okay, but I would venture an opinion that if we attempted to assert some regulatory authority ourselves we might run into a question. It was really a peripheral point to my main issue which is this, did I understand that as part of the provincial government's involvement you're actually proposing to construct some towers? Is that actually physically how this will happen?

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MR. HURLBURT: As soon as we identify all the unserviced areas and as we move ahead with our plan - we will be doing it by regions in the province - we will be looking at the infrastructure and when we put the next RFP out, that will be identified, what needs to be done in those communities to have infrastructure to help service the area.

MR. EPSTEIN: In your opening remarks I think I understood you to say that you hoped that once the infrastructure was built there might be a role for the private sector.

MR. HURLBURT: Yes.

MR. EPSTEIN: Okay so this is really where I was going. Does this mean that you were hoping once built you will be able to sell the towers to private operators?

[3:45 p.m.]

MR. DAN MACDONALD: In the province already today the province owns towers for things like police, fire, ambulance radios - that's an asset of the Province of Nova Scotia. Through this project we realized that asset could be very strategically used to encourage private sector players to come and place their equipment on those towers, it would reduce costs significantly for them. When we're looking at this project we may need to upgrade some of those towers, we may need to build additional towers but there would be maximum leverage of those things. This would be for the broadband roll-out but also for emergency radio services. Basically it's the Province of Nova Scotia leveraging an asset it already owns and planning to upgrade those towers - many of them have to be upgraded anyway, in pace with the broadband roll-out.

MR. EPSTEIN: This seems to be a good idea, I have no problem, of course it's entirely appropriate that we have a system of our own towers for police and fire and other kinds of emergency communications, this is necessary. It seems to me as well that if that's what it takes to get broadband into the rural areas by adding on to the towers then that also seems to be fine.

What I was really looking at was whether it's part of the plan to build new towers and perhaps sell them, that was really what I took from your opening remark. I wasn't sure if I had misunderstood. So the answer is no, if new towers are built the idea would be to lease them, not sell them. Is that the idea?

MR. DAN MACDONALD: If new towers are built by the province then there would be a process and a price, if you will, or a cost structure for private sector players to leverage those towers. It is not the province's intention to build and then sell towers. It is our intention to build if necessary and then lease access.

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MR. EPSTEIN: Okay, got it. Thank you very much. That's a big help to have that clarified. Minister, moving through some of the other points, actually the representative of InNOVAcorp might be useful to keep here at the table for this. I noticed you talked about productivity and you talked about InNOVAcorp as lending significant aid to increasing productivity. I'm wondering if you could tell us anything about how you're measuring productivity in the province and whether there are particular targets that you then want to meet. Is there anything we should be thinking about when we're considering productivity?

MR. HURLBURT: When I had the opportunity here a month or two back to go with Dan and his team and visit the BioScience building down here on the waterfront - and I would suggest that all members visit that site - how impressed I was with start-up companies that are in there and how they share services at the BioScience Enterprise Centre. What it's doing is it's helping companies get established and get their product to a stage where they can go out and market in the marketplace. They're partnering in that bioscience and under the leadership of Dan and his team down there they're doing a tremendous job and they're helping create new companies in this province and expertise in this province. I do not have the numbers here, Dan if you want to answer.

MR. DAN MACDONALD: When it comes to InNOVAcorp metrics we do have a set of public metrics, they're in both our business plan and our accountability report. They range from the revenue created by our companies to the employment created by our companies to payroll to the investment attracted by our companies and so on. There's a significant scale to that already.

MR. EPSTEIN: I may have misunderstood the ways in which you might have referred to productivity originally, I thought it was perhaps a more general notion. I'm glad to hear this reference to a measure. It seems to me that one of the standard measures is number of dollars of generated product or service sold compared with the numbers of dollars invested, perhaps sometimes one sees figures in terms of productivity per worker, that's another way of measuring productivity. By some measures it's sometimes suggested that productivity in Canada is perhaps sometimes not as great as it is elsewhere, and it's sometimes suggested that the productivity in Nova Scotia is not as great. I want to suggest another measure which is productivity in terms of unit of energy expended, that seems to me another way of thinking about just how efficient our economy is overall.

I'm wondering which measures the department or agencies like InNOVAcorp think we should pursue and whether we even have a good handle on them here. Do we have baseline information? Are we working towards this?

MR. HURLBURT: We have many tools in the Office of Economic Development through the payroll rebate program, through the IEF, through InNOVAcorp, and testimonials. Let me give you one example from my own home community, of Register.com. They were up to 330 employees I believe or something like that. It's the people who sold Register.com

[Page 15]

on doing their expansion in Yarmouth, it's the people who sold CSC to open up their new facility in Yarmouth. When you say you're from Nova Scotia people adapt to Nova Scotia because they know the work ethics of Nova Scotians. People take pride in what they do here in Nova Scotia and their productivity is always superior.

But as far as numbers, Mr. Chairman, through you, I do not have the hardcore numbers here - we can get you some stats on it if that's what the member wants.

MR. EPSTEIN: It would help. I know the minister is a regular booster of Nova Scotia - we're right under everyone's nose, isn't that right? They shouldn't forget about us. Here we are . . .

MR. HURLBURT: That's right.

MR. EPSTEIN: That's right. Okay, so it sounds to me as if we might have data on the productivity of some individual companies. I'm not sure whether we would have data for the province overall - that's really what I was wondering, whether we were making any progress on that.

So, Mr. Minister, moving to a slightly different topic - when you were going through the agencies that report to your department and that you have some responsibility for, I noticed you mentioned the Trade Centre and I wondered if this was a point of entree for the Commonwealth Games. Is this something the Trade Centre had any involvement in? The reason I wonder of course is that people associated with it seem to have been engaged in this - is this something that you had any involvement with, or your department?

MR. HURLBURT: Our department was involved initially, it was turned over to Health Promotion and Protection, they were the lead on the file of the Commonwealth Games.

If I may, Mr. Chairman, just to go back, maybe the member should do a visit and talk to the executives of Michelin here in Nova Scotia - they employ, I forget what the numbers are, 3,500-plus employees here - and what they feel about Nova Scotians' work ethics here in this province. They're very pleased with their team that they have in all their plants here in the Province of Nova Scotia.

MR. EPSTEIN: I'm sure they are, and I know that Michelin has been a long-time resident in our province as a company with multiple locations. In terms of an export industry it's one of our leading industries. I have to say though that when it comes to productivity, work ethic is not the only issue, I have absolute faith in the work ethic of Nova Scotians, but productivity is a cumulative measure of not just the work ethic but of the machinery and plant that workers are given to work with, and of the management that leads them. It's the combination of all those things, along with the general economic picture, that kind of leads

[Page 16]

to productivity. I assure you I have no shortage of faith in the work ethic or abilities of our workforce, but when I think about productivity I think of it in an expansive fashion and that it extends to the quality of our management, the quality of our plant along with, as I said, general economic conditions.

I take it that if there was involvement of one of your agencies it was at a very early stage of the Commonwealth bid and then after that moved to another department, to Health Promotion and Protection?

MR. HURLBURT: Just for clarity, Mr. Chairman, it was a part of my budget and it was just a flow through from my department over to Health Promotion and Protection, that's the only input that we had.

I also want to state, going back to productivity of employees here, we have to stay in tune with new technology in our province and that's why we have the tools that we have at Economic Development that are working very well to help companies out in all parts of our province, rural and urban. The IEF fund is there to help new technology for companies and to up their productivity. So we do have tools and that's why we work with companies of all sizes in our province.

MR. EPSTEIN: I agree. Mr. Minister, I'd like to move to another topic if I could, and it's the problem of out-migration. I noticed you flagged this as you made your introductory remarks. I have to say I'm extremely worried about this. We all know from the population statistics that total population in our province is pretty well stagnant, and it has been for awhile - it goes up a few thousand, it goes down a few thousand, it's not much on a population that's still short of a million people - and there's no real change in the offings as far as I can see. The overall picture is one in which a lot of the smaller and rural areas are finding themselves depopulating - a lot of people are moving either to metro or just out of the province. This is a serious problem. The people who are doing the moving are often those people who are in their prime producing years, people at the end of high school and right up into age 50 or 55 - they are people who are either moving to metro or moving out of the province to seek work. What that means for the resulting areas, of course, is that that population is an aging population, as well as one declining in terms of overall numbers.

So there are some regions in the province, some counties, where this clearly is going to cause problems. It will mean after awhile, for example, school boards will look at the number of new births - and they project ahead five years - and they are going to say to themselves, never mind building new schools, we should be closing some of the schools we have. When that happens, of course, there is something of a self-fulfilling prophecy. If the infrastructure isn't there to attract people then it becomes harder to get businesses to come - even if there is broadband, if there's no school or the school is too far away, this becomes problematic.

[Page 17]

It becomes even more expensive for the province to deliver health care services if there is a smaller base population. Maybe we can't find the workers we need to work in those hospitals and that becomes a problem, it becomes more expensive per capita to build roads for a municipality, and it becomes more expensive per capita to put in water and sewer. It's pretty obvious what the array of problems is, yet there has been no real turnaround in this picture.

I wonder if we can begin to look at the problem of some of the counties where there is this declining population and where out- migration is a real problem. I have to say, as good a program and as useful a program like winter works can be, it's clearly a short-term measure, it's seasonal, it moves from year to year, and it provides a limited particular kind of work. We have to look at ways that will give those areas a chance to stay and be vital and continue to thrive, otherwise we're going to just find ourselves without a rural area in any vital economic sense - it will be nice to go visit, and pleasant, and for those of us who live in the city it is a welcome relief to get out and admire the countryside. But that's not what we want, I think we want something different. We want a province where we have as much of a thriving rural area as we do a thriving series of cities around the province.

[4:00 p.m.]

So that is the topic I would like to turn to next. When I look at it the picture is mixed. I know you pointed out that half of the 13,000 jobs that NSBI was responsible for, or that they have either retained, supported, or attracted over the last five years are outside HRM, and that's as it should be. I think that that's right, but given the fact that the population is about 50/50, that's not a surprise. I think we're, in metro now, 43 or 44 per cent of the population, so it's no big surprise that there would be that kind of split.

Could we be specific? What about Cape Breton? Do you have the de-aggregated figures that are for Cape Breton, either in terms of NSBI's contribution to jobs, or growth and change in jobs particularly?

MR. HURLBURT: Mr. Chairman, we do have those stats by region - but you talk about the out-migration of our youth, and what I believe we have to do is have the infrastructure and the tools in place to work within communities in our province, to make sure we can sustain the jobs that we have and enhance them by creating a new environment.

Just last year alone we attracted, through Nova Scotia Business Inc., five new companies to the province, high calibre, high-paying jobs. In their Industrial Expansion Fund we are helping companies out, and let me just give you a small example - in Cornwallis Park we just helped a small company down there and it is going to create ten more jobs. There was investment through the IEF Fund to create an additional ten jobs in that community and it is all export.

[Page 18]

I just met with Lewis Mouldings down in Weymouth. They've had their growing pains, there's no question, but they have a vision and a plan to advance their company and create probably upwards of another 35 to 50 jobs - new jobs in that community in rural Nova Scotia.

What we just did with Advanced Glazings for example, in Cape Breton, that is going to help them expand and create new jobs, and good-paying jobs, and exporting their products. So we are working in all regions of our province. The stats, I do not have them with me here right now, but I can sure get you the stats on what has been done throughout the regions of our province.

MR. EPSTEIN: Mr. Minister, of course you will know that NSBI's chairman, Mr. Thomas Stanfield, finished his term not so long ago and there was a long interview with him in the newspaper, in the business pages, on March 11^th, about his tenure as chairman. It was quite an interesting interview, and you know he is a successful business person himself and an interesting fellow and has clearly put a lot of time into NSBI over the last few years.

I'm going to just quote to you one of the questions and answers. It was a kind of a question and answer style of interview.

Question: What is your biggest disappointment?

Answer: Anadarko. I thought it was going to be a home run; it may still happen at some point in time. We didn't have a lot of skin in the game in that one but we offered a lot of encouragement, influence and touchy-feely stuff. We were very much involved in the process, but we didn't have to spend much of taxpayers' money to get there. I think that along with Enterprise Cape Breton Corporation, we've done a nice job in Cape Breton, but Port Hawkesbury is a disappointment. We were starting to hit some home runs and then we hit a couple of foul balls, so now we have to go back in and try to fix that one. It is not a disappointment, but we need to do more in the Valley. The Valley is an area that concerns me. They've lost out on a couple of things on the agricultural side; we've got to find something to replace that, maybe it will be in agriculture. But at NSBI our job is to find jobs and right now they're hurting in job creation.

Now he has picked out two kind of sub-regions in the province here. He is pointing to the problem in the Valley, which of course has long been dependent on agriculture as its kind of core activity, and he is pointing to the problem with Anadarko and the Strait area and what has gone on there. Although he suggested that maybe there have been some advantage and some benefits in Cape Breton, I have to say that continues to be an area about which we should all be very worried. It has all the indicia of an area in trouble, as it has had for many years - declining population and worries about infrastructure, and we hear complaints of

[Page 19]

course from the municipal level, from CBRM, about economic development problems, higher unemployment rates than in other parts of the province. So there are lots of reasons to worry.

Now, of course, given the international picture on agriculture, I think Mr. Stanfield is right to indicate that agriculture may well be in trouble, not just in the Valley, not just in Nova Scotia, maybe in many parts of Canada in a variety of other areas. So again I was wondering if there is anything that we should think of that is going to kind of move us in a better direction in either of these areas, whether it is the Strait, or Cape Breton as a whole, or whether it is the Valley. It is one thing to talk about five jobs here and ten jobs there, all of which I think is healthy, but it is a long way to go to make this a thriving economy in those parts of the province. So I'm wondering, is there anything else in the offing, anything else that we should be turning our minds to in terms of initiatives that we can be taking?

MR. HURLBURT: Mr. Chairman, through you to the member. First of all, I must say on behalf of all Nova Scotians, we are indebted to Mr. Stanfield for service to NSBI for five years, he did a tremendous job and I thank him very much on behalf of all Nova Scotians for serving on the board.

Secondly, in all regions of our province there is always room for improvement to help grow our economy. The Strait has had some severe blows, absolutely, but we have some files that we are working on and we have dedicated staff through OED and NSBI that are working on those files as we speak, to see if they can make sure that we do everything in our power to see them come to a reality.

We are doing that in all areas of our province, like with the Stora issue that we had, that hopefully is resolved now. There have been issues up there, absolutely, but there are some files that are looking very, very positive for the area and I'm not at liberty to elaborate on them right now, but I can tell you we're not turning a blind eye to the Strait area by any means.

MR. EPSTEIN: Well, I certainly didn't mean to suggest you were turning a blind eye to it and I don't mean that at all. I was just hoping for some indication that we might be able to reverse a trend. Unfortunately people are voting with their feet in this case, that's when it comes to the economic issues. They are moving, we know the attractiveness of Alberta and they've been here recruiting, companies have been here recruiting. It means we lose people who could be part of our workforce.

All of us know families where this has happened, where people have moved out despite the higher cost of living out there, despite the fact that they might have to live in apartments rather than homes, in communal living situations and send money home because they can't take their families with them. This is happening, it's a reality. Many of us will know people who have done this.

[Page 20]

It's one thing to look for large companies to come in, for example, RIM, this is an example of a large company and your other example of Michelin is a large company, but it seems to me we have the opportunity for a lot of homegrown entrepreneurs on a smaller scale. What I worry about with companies that are attracted from somewhere else is that sometimes they are here mostly because they get financial inducements and it's never clear how long they are going to stay. So I wonder whether we couldn't have more of an emphasis on retaining Nova Scotians and encouraging them to open their own small businesses.

I hear frequently from people who are recent university grads or people who are about to be university grads, who are contemplating the job market and they say, can't stay in Nova Scotia even though I would like to do that, because I can't find a job here. What I'm wondering is whether there's a way in which we can help people start up their own businesses. It's that kind of small-scale entrepreneurship that I think we should be a bit more focused on. Is this part of the department's thinking?

MR. HURLBURT: Absolutely, through you, Mr. Chairman. I can also start my remarks by saying that in life in general you can't always hit a home run, but we do the very best that we possibly can. What we're doing through our department and through InNOVAcorp and NSBI, we're looking at all avenues we have and the tools we have to work with.

I spent a week in Alberta last fall with 26 companies from Nova Scotia, out there promoting what they're doing here in Nova Scotia. Our focus was to sell our finished product out there, not have our employees go out there. We asked if we could find products, a widget that we could build here in Nova Scotia and ship the finished product out there.

I must say that out of that trade mission one company did get two contracts that I'm aware of, and I don't know about other companies. The companies went on their own to make that mission and the mission, in my estimation, was a great success. Our Premier took the time, with other Atlantic Premiers, to go out there and to promote our companies and our provinces. That was a great mission and it worked very well for Nova Scotians.

You asked about small businesses and help to start up small businesses. You know, we have, through the credit unions here in this province, funding that's guaranteed by the Province of Nova Scotia. That has been a huge success in this province for small-business entrepreneurs. We have NSBI that's there to help out with the payroll in companies starting up and we have the IEF fund that's there to help out companies to get started. There are all these tools. They're all working for the benefit of Nova Scotians and every dollar that we've invested through the IEF fund, we've had a return of $3. So I think that we're doing very well.

There's always more to do but we also must keep at it and if there are new tools needed, let's create those tools. The I-3 of InNOVAcorp, that's another great tool that we

[Page 21]

have and, you know, we have to keep working with them to make sure that people are aware that they're out there, and I don't believe that's only my job, I believe it's all of our jobs to make sure that the companies and Nova Scotians are aware of what we have and what government has to offer.

MR. CHAIRMAN: The honourable member for Cape Breton South.

MR. MANNING MACDONALD: Mr. Chairman, thanks very much. Well, Mr. Minister, welcome back, just waiting for my turn here. I was thinking about this being the annual rite of Spring when we all get together to talk about the estimates of various departments after the fact, you know, because these are the estimates, and everything we want to know about the department is in the briefing books that we have. All of the expenditures that are already expended, we can ask questions as to why they're expended, but the fact is we're not discussing, lest anybody think we're here discussing a budget that was just tabled in the House the other day, that is far from reality.

What we're here doing is discussing what was already spent and, in essence, a previous budget of the Province of Nova Scotia, but it is again the Springtime and we do this laborious thing of 40 hours debate on estimates which leads us up to the vote on the budget, which has nothing to do with the 40 hours we just debated. I mean that's something that I could never understand, but it's the practice that I guess I'm not going to be able to change, or anybody around this table probably won't be able to change but, you know, it would be nice if we had 40 hours of discussion on the current budget that was tabled in the House so that we would have a better understanding of what we're going to be voting on in two and a half weeks.

[4:15 p.m.]

Having said that, Mr. Minister, I do want to welcome you to the debate here today on estimates. Maybe I would say that in your role, Mr. Minister, you're probably the minister of the "damned if you do, damned if you don't" department in government. Everybody is looking for a piece of you and your department and, as a result of that, I believe that your department makes some good moves in the course of your daily activities. From time to time there are going to be moves that aren't so good because of changing economic conditions in the province and the need sometimes to experiment with certain businesses or the need to go out and try to encourage people to start something new in the province, and with that there's always a certain failure rate. There's a lot of second-guessing in your department, Mr. Minister, about what you should be investing in and what you should not be investing in.

Mr. Minister, maybe by way of the first question I'll come right to the point regarding rural economic development. Earlier today in the House I tabled a bill calling for a Ministry of Rural Economic Development and I would like you to comment on that. I feel that rural Nova Scotia - and I'm talking essentially almost everything out of the 60-mile radius of

[Page 22]

where we're sitting here today, in any direction, this probably could be considered rural Nova Scotia, and there are small communities that are hurting in this province and there's a tremendous out-migration.

If you look, Mr. Minister - well, you did look and you know that the different counties in this province, the loss of population versus the growth in I believe three counties, in particular, was substantial. The loss in other counties in the province was also substantial, in some cases like 5 per cent and 6 per cent - in the Premier's own riding, for example, 5 per cent - since the last census was taken.

There doesn't seem to be too many new opportunities there and I wonder how you would feel about giving a rural economic development strategy a try, with its own minister, or do you feel there's perhaps another way that you can achieve the same goal?

MR. HURLBURT: Thank you, Mr. Chairman, through you to the honourable member. I know that member has sat in my chair so he knows that again, you do not always hit a home run. I can say that my personal belief is that through the Office of Economic Development, with the tools that we have, we have the tools for rural Nova Scotia and I would not want to play rural against urban, I believe we're all Nova Scotians and we have to do what's fair for all Nova Scotians.

In saying that, if you look at the funding mechanisms and the tools that we've had to work with in our department, those tools have been used, and I think it was 60 per cent of NSBI companies that have been attracted with the payroll incentives were in rural Nova Scotia. The IEF funding, if you look at the percentage of that and the graph of where that's been spent in our province, you'll find that the majority of that was spent in rural Nova Scotia.

The incentive that we have with the credit unions, the majority of that is in rural Nova Scotia. You know myself, my government and my department are always open if there are new ideas that we can do to create and help the economic growth in all parts of our province, I'm more than willing to look at new ideas and innovative ideas that will help create a better environment economically in our province.

I understand where the member is coming from, I come from rural Nova Scotia and I understand that. In my tours around the province - and again I can't emphasize enough here today how important a role the RDAs are playing in this province and what they're doing for all regions of our province. They are a key player and they represent all levels of government and communities. That's a key tool that we have and if we can strengthen that and enhance that in any way, I'm always open to ideas and be creative with what we can do.

I believe we have tools at our disposal now that we are using, and they are working. Now, is there room for improvement? There's always room for improvement. If we can

[Page 23]

expand on anything, I'd be more than willing to sit down with the member and maybe in a week or so we'll have time to sit down with the member and have a more in-depth discussion on this.

MR. MANNING MACDONALD: Thank you very much, Mr. Minister. You would agree with me, as well, that you can't, in your business and in the business of the department that you operate - and, by the way, let me say and I said it here last year, that you do have an excellent staff in your department and they've been interested in promoting Nova Scotia, there's no question about that. You have an extreme level of professionalism there that I think you've very fortunate to have and the government is very fortunate to have that type of civil servants.

A lot of them have gone back to our days in government and they are still there and I think that's a testament to their desire to grow this province, regardless of which Party is in power or which Party is running the show. They are truly dedicated civil servants and they realize that you can't do business from an empty wagon, you have to get out there and you have to experiment and you have to take chances in this business if you're going to grow the economy.

It's a very competitive business today and we have to be one step better than our sister provinces, or indeed Canada and the world, in trying to attract business to our little corner of the earth here, which brings me to another question. There still seems to be, Mr. Minister - I don't know how to put it - a problem that's out there with the mandate of your department, in terms of OED, your ministry, and also the NSBI and also the Industrial Expansion Fund. Maybe you can clarify what the difference is.

I'm going to lead into some other questions on NSBI because NSBI, I think, is starting to perform a very valuable role, in my opinion, but there's a lot of misconception about who NSBI actually reports to and if you look at the budget this year, you see very little reference in the budget document to NSBI. You see all kinds of references to the Department of Economic Development. People are starting to wonder whether we have NSBI, which is funded publicly, operating as somewhat of a quasi-private entity within government, and people are starting to question that because they are dealing with taxpayers' dollars here. Maybe you might want to comment on that.

MR. HURLBURT: Thank you, Mr. Chairman. NSBI has a very important role to play in this province, to grow our economy, and they are doing that. Their mandate is very, very clear and they do report to me and my department.

The other tool that we have in our department is the Industrial Expansion Fund. That is a great tool that's working for this province in some areas that NSBI cannot - it does not meet their criteria - and that's when the IEF fund is there and it will help companies to expand, existing companies or new companies that are coming in that maybe don't meet the

[Page 24]

criteria of NSBI, what's in their mandate. But in saying that, both organizations are working co-operatively to better serve the people of Nova Scotia and they've done that on numerous files in our province. Up in the member's riding - well, I guess it's just adjacent to your riding, Advanced Glazings - we were there (Interruption) Yes, we were there and NSBI was there to support that company and any other company in that area and any other part of the province.

I firmly believe that we do have the tools to work with and, if there's a misconception by the general public, maybe that's my job and my department's job to put clarity to that.

MR. MANNING MACDONALD: I think, Mr. Minister, what our people are saying to us is that while NSBI is out there trying to attract business and its mandate seems to be just to do that, and that's fine, but are we putting a lot of eggs in one basket here in Nova Scotia with the continuing proliferation of call centres in different parts of the province?

I say that in my area, for example, the payroll rebate system works very well in call centres. It's something that's been around for a long time, back to our government days, and it has been employed as a method by the current government, which is great, and it has been built on and expanded on, and that's great, too, but I shudder to think what will happen in my area - and there are so many people talking on the phones down there now that they must be talking to one another, we have a call centre on almost every corner. What concerns me is not so much that these jobs are there, but what happens if the technology changes? In other words, maybe somebody from NSBI or yourself, Mr. Minister, could tell me what's in the future to compensate - are we starting to employ a strategy in a different direction? As sure as the call centres came here because of technology, they'll probably leave because of technology, at some point.

It's interesting that very few of the call centres own anything - they could pick up like that and leave. They're only there as long as they're making money for their customers. If they can make as much money or more money somewhere else, with cheaper labour costs, that's where they're going to end up - payroll rebate or not. I'm just wondering, in my particular area and certainly I speak for the member for Cape Breton Nova as well in this regard, we're both concerned at what happens down in our area if suddenly the technology doesn't allow for call centres to make any money in our area anymore and what is there - not only our area, but up here as well, the call centres - has NSBI addressed this? What's next, what kind of strategy is going to be employed next to keep jobs or go in a different direction to attract new jobs?

MR. HURLBURT: Mr. Chairman, through you to the member, NSBI's mandate to go out looking for new companies for our province, they are the leading business development agency for the province, and OED supplements them with a few different tools that we have in our department.

[Page 25]

In saying that, you know, NSBI has attracted five leading financial service companies here to our province. Their five-year mandate has now expired, and they are now coming up with their new business plan for the next five years and I think that you'll see some new focus and direction. And working with the government and with the Office of Economic Development, I believe that we will be advancing the province.

But I can emphasize again - and I know the member has been on them - these trade missions are great tools. They're doing a tremendous job for the province. They're promoting our companies here in our province. I know the member was on a trade mission not too long ago and he saw the benefits, and I can expand on it - one little company in Debert, the contacts that they made in Florida alone, and I think it was two contracts for that one little company that I can think of right off the top. That's the mandate of NSBI, but I think that we have to expand on it. Yes, we have gone through the first five years and now we're looking at the next five years, and there will be a new direction that NSBI will be going.

MR. MANNING MACDONALD: Thank you for that. Could you tell me, Mr. Minister, how many people actually work for NSBI?

MR. HURLBURT: It's approximately 70, Mr. Chairman, through you.

MR. MANNING MACDONALD: And what would the annual payroll be for NSBI? Where I'm leading, Mr. Minister, is that I would like to also have them check to see - I don't expect you to know that off the top, I never did - but I mean what I am trying to get at is the percentage of payroll costs at NSBI to the amount of money they have in their budget for development.

MR. HURLBURT: Mr. Chairman, through you to the honourable member, I will endeavour to get that information and I will table it to both Parties.

MR. MANNING MACDONALD: I guess what I'm trying to get at there - and that's fine, Mr. Minister - what I'm trying to get at is that I would like to know whether or not NSBI is being funded appropriately for the number of people they have. In other words, are they trying to operate with a budget that isn't sufficient to get the job done in terms of developmental dollars, and the percentage of cost to run the department versus the amount of money they have for development? That has been a concern, and our researchers have asked me to try to get that information.

[4:30 p.m.]

MR. HURLBURT: Mr. Chairman, if I may. My personal feeling and what I've seen since I've been here in the Office of Economic Development is, I believe that there's adequate funding there to run NSBI and their staffing. If there was a need, I meet monthly

[Page 26]

with the chairman and with the CEO of NSBI, and it's never been flagged that there has been any shortage of funding for the operations of NSBI. It's never been brought to my attention.

MR. MANNING MACDONALD: One concern we do have, Mr. Minister - and I'm sure that concern is shared by others - most people who work for government, they work for a very transparent organization no matter what department they're in, and the people of Nova Scotia know exactly who works for them, they know exactly what their budget is, they know exactly what their mandate is, and they know exactly how much money is being paid from the public purse to operate a particular department. That doesn't seem to be the case with NSBI and our people are asking me, as the critic, to find out, is there room for any more transparency without compromising their ability to do work in the province? For example, why wouldn't NSBI's expenditures be detailed in the budget, the same as the Office of Economic Development was or the Industrial Expansion Fund or any other department of government - what's the corporate governance difference here?

For example, Mr. Minister, I know exactly how much money you make, but I don't know how much money anybody in NSBI makes - that's not a very good example, but it's one that's, nevertheless, asked.

MR. HURLBURT: Mr. Chairman, through you to the honourable member. Just for clarity here, is the member asking for a breakdown of the employees and the costs to the taxpayers for each employee - the administration of NSBI?

MR. MANNING MACDONALD: No more or less than any other department reports, yes. If the transparency is not there, there's room for suspicion as to mandate, and it sort of suggests that they're not responsible publicly for the spending of the public dollars, and certainly Economic Development is and certainly any other ministry is. I'm just wondering, I suppose, what the difference is here, and is that difference there because it might compromise their ability to do business in the province, or if that's not the case, then why is it there? Maybe at some point you could get back to me on that and let me know, what's the difference in governance there than any other department?

Because we are dealing with public dollars - I mean, you know, with all due respect to the people who are running NSBI, they're not running a private company; they are responsible the same as any other department. Mind you, saying that, I think they're doing a good job - with a couple of exceptions that I've noted in the past couple of years, but everybody has those - overall their record is excellent. But that's not the point - the point that people are driving home to me is, why the mystery surrounding the information from that department? So maybe you could, at some point, get that information to me.

MR. HURLBURT: Mr. Chairman, through you to the honourable member. I apologize for not having that information here today, but I will endeavour to get that information here. That is a Crown Corporation. Those are public funds and you are entitled

[Page 27]

to know exactly the information you're asking, and I will make sure that the members get that.

MR. MANNING MACDONALD: Thank you, Mr. Minister, I appreciate that. Can I go to the Industrial Expansion Fund for a moment? When monies are appropriated in the Industrial Expansion Fund, how is this done? How are the monies appropriated for the Industrial Expansion Fund - how is this done?

MR. HURLBURT: Through you, Mr. Chairman. There is a line in our budget for the IEF funding, and I think that's what the member's asking . . .

MR. MANNING MACDONALD: I guess what I'm asking is how it's done and the particular criteria as to why it's done. In other words, what falls under the Industrial Expansion Fund purview, umbrella, and why - rather than Economic Development or rather than NSBI?

MR. HURLBURT: Mr. Chairman, it comes from our statutory capital funds and it's a tool that we have in the Office of Economic Development that maybe the criteria from NSBI, for example, it's there in the Office of Economic Development to help.

MR. MANNING MACDONALD: In other words, if NSBI or another agency of government is struggling to deal with a particular initiative that has to do with the expansion of industry in the province, then this would be an umbrella agency to cover that? (Interruption) Yes, okay. And that's where perhaps you mentioned Advanced Glazings, would that be one that would fit that mould or is that directly NSBI?

MR. HURLBURT: Segments of that could be through the IEF, the payroll rebate would be through NSBI.

MR. MANNING MACDONALD: Would Protocase be an expansion? They have to grow their physical plant down there, what would that come under?

MR. HURLBURT: That file is with the Office of Economic Development now and we are dealing with that.

MR. MANNING MACDONALD: Thanks for that. The authority to spend money under the Industrial Expansion Fund, is that deployed in the same way as ministerial approval through Cabinet?

MR. HURLBURT: It has to have an R&R through Cabinet, yes.

MR. MANNING MACDONALD: Back in the mid- to late-1990s there was one entity doing all the work in economic development. Now we seem to have three and all with

[Page 28]

different mandates, and I think that is what's confusing some people in regard to what the particular mandate of each one of those is, who they report to, and what kind of money is allocated to those three entities under your ministerial hat.

I know when I was minister we had a lot of small tentacles off the Department of Economic Development that I was responsible for and you still are - like InNOVAcorp would be one and a few others that I can't think of off the top now - but these are pretty major sidebars to your department and actually, NSBI is probably bigger than your department in terms of spending and its role in terms of growing business in the province.

Two or three years ago, I don't know if it was Premier Hamm who said that the role of Economic Development was going to change into a policy-delivering department and NSBI was going to do all the lending. Now we have a situation, Mr. Minister, where we have OED doing lending, NSBI doing lending and the Industrial Expansion Fund doing lending. I'm just wondering, is there a duplication there, is there a better way of doing it, or are you satisfied that all those three have a complementary role to play in terms of developing the province? That's fine, if that's what it takes to get the job done, I guess.

MR. HURLBURT: Mr. Chairman, our proposed budget is approximately $75 million for the upcoming fiscal year and NSBI's is approximately $28 million. I believe that we have tools that are very complementary to one another and are a help in all areas of Nova Scotia. NSBI's main goal is to lead and attract new companies to our province through the tool that they have with the payroll rebate.

The IEF fund is there to help them, if you have a new company, for assistance in capital if so needed, or existing companies here that want to expand or want to do some new innovative things to increase productivity or enhance their labour force. I just use, for an example, through the IEF fund we just helped out a small company in Cornwallis and they are going to create 10 more jobs in Cornwallis. Well, 10 more jobs in Cornwallis is a lot of jobs in Cornwallis.

We are talking to a company in Weymouth now and if they can create 35 more jobs in Weymouth and we can do that through the IEF funding, that tool is there and it is helping us here in this province, in all parts of the province. I will tell you, the majority of it is going to rural Nova Scotia and it's helping existing companies to expand or sustain the existing jobs they have.

We're in a global market here, and other provinces and territories are after the same things we're after. I know the honourable member knows that the aerospace industry is growing in leaps and bounds in our country and here in our province. These are tools that we have to work with to help these companies expand and attract new companies here to our province. I really believe in the aerospace industry, you know, you do not have to be centrally

[Page 29]

located, I believe that you can be in any region of our province. That's my firm belief and I think that we have the tools to assist and help companies.

MR. MANNING MACDONALD: Mr. Minister, thanks for that. Just as a matter of interest, you mentioned Cornwallis, is Darmos Toys still operating down there?

MR. HURLBURT: Yes, that's a company, yes. It's Foamworx.

MR. MANNING MACDONALD: It changed its name?

MR. HURLBURT: That's a company I was just talking about.

MR. MANNING MACDONALD: They had a contract, we took a chance on that company down there some time ago, I believe the mid-1990s, and there was a lot of trepidation there whether they could make it from down in Cornwallis because they had to ship virtually everything out. They had a contract with Disney at the time. Do they still have that contract? They make the toys that you walk on the wire, that kind of stuff.

MR. HURLBURT: Yes, it's promotional foam works that they're using for hockey, baseball, sports, and they're expanding their business. I was just down there last Thursday evening on my way back and I'll tell you the employees are ecstatic, you know, that they're expanding, that they're going to be there. It means a lot to that community, the same as it does in any region of our province when we can create jobs in the province. So that was a very wise and a good investment in that area of the province.

MR. MANNING MACDONALD: Mr. Minister, $28 million for economic development in the province, it might seem to a layman to be a lot of money, but it's not a lot of money when you're trying to grow your province and you're trying to compete. Sometimes I think that we, like I said before about doing business from an empty wagon, sometimes, and I'm certainly I guess putting myself in the position, as again a former minister, but I was saying you never have enough money to develop what you want to develop and to grow the business in the province and take chances on new industry, new developments, something that may be foreign to us before and why not, why don't we take a chance on it?

[4:45 p.m.]

If my memory serves me right, I think New Brunswick's economic development budget is much bigger, or it was at least anyway, and I believe that we're doing a good job competing with limited resources. To have that kind of money available is not a huge amount of money considering the job that needs to be done from Yarmouth to Glace Bay, to Cape North, you know, and to Cumberland County, all those places. It's a huge province and I think that if we're going to be in this business then we have to have the tools to do the job.

[Page 30]

So I certainly don't think that our budget is too big in Economic Development, rather I don't think it's big enough, but you have priorities, we have priorities, and money is not easy to come by these days. I just wanted to say that because I think let's not miss out on opportunities because we want to play a softer role. I think we should get in there and play hardball on some of these things and try to encourage new business in the province.

One of the success stories, Mr. Minister, of course, is Maurice Guitton and Composites Atlantic, you know, who's a good example of what's operating in rural Nova Scotia. I believe you were alluding to that company, as I said earlier, 380 employees, that's very significant. That company started out in Nova Scotia with a very small loan back in the early 1990s, you know - and I won't bore you with which government started them out, but I mean that's one that has stood the test of time and grown. It's a tribute to your department and your people within the department that you stuck with Maurice and his company. So that is a good success story for Nova Scotia.

MR. HURLBURT: If the member would allow me to respond to this. We're talking, Mr. Chairman, through you, like $75 million approximately in my budget and $28 million in NSBI, but those are levers for us to work with other agencies, the federal government through ACOA, and Industry Canada. (Interruption) That's right, and that's what I mentioned earlier in my remarks, partnering, and partnering with municipalities, coming up with the right tools and the right mix for their communities.

I can tell you - maybe I shouldn't - but I am quite proud of the partnering we have done in my home community with Register.com. They came to our community because the three municipalities, the province and the federal government saw the benefits. The money that was put in there was three-pronged, so what I'm trying to say here, out of the approximate $103 million between NSBI and the Office of Economic Development, that gives us a great lever to get other funding from other governments.

The member is actually 100 per cent bang on with Composites Atlantic. They are a success story in this province and I don't care who brought them in, they are here and they are doing a tremendous job for this province. They're creating employment and sending the finished product out of this province, and that's a real success story.

MR. MANNING MACDONALD: The company is proving it, it has stood the test of time over the years and it has grown. I believe those are the kinds of companies we should be dealing with, and that's why I'm so pleased that your department is interested in the Protocase operation in Sydney and Advanced Glazings, those are two good companies that have a chance of taking off and I believe they will take off. I think it's something that we have that kind of new development in terms of glazing that's operating and being produced right here in our area, but they do need a leg up to get going, much as what Maurice Guitton needed back then, so I'm pleased about that.

[Page 31]

I have a couple of questions - how am I doing for time, Mr. Chairman?

MR. CHAIRMAN: You have about 26 minutes.

MR. MANNING MACDONALD: Okay, lots of time. I'm going to get into a couple of particular questions here and these are the obligatory questions my staff comes up with that they want to know why. Let me talk about Ski Cape Smokey for a moment.

We have all heard about Ski Cape Smokey closing because of funding issues. Can you briefly describe to me what arrangement you've had with Ski Cape Smokey and whether or not it's still on your agenda to do something with?

MR. HURLBURT: Mr. Chairman, absolutely, we are determined to work with the community and the society to come up with a solution to Ski Cape Smokey. We made it very clear, the government wants to be out of the ski resort business, we want the community and society to come up with a business model so they can take it over and operate it and it will be sustainable. Saying that, I know that the other levels of government are willing to work with us as we work through this and they know now, the society, and they are doing due diligence to come up with a proper business plan that will be sustainable in the future without asking for government assistance.

MR. MANNING MACDONALD: Mr. Chairman, I think it would be fair to say that there's an ingredient missing in Ski Cape Smokey and I think that's a huge infusion of private capital because that ski hill down there is world-class, there's no question about that. It has some logistical problems, one is location in the winter and the other is the inability for the infrastructure to have grown around it to make it a major holiday area for winter holidays. I guess what I'm getting at is, has the government given any thought to partnering with Ski Cape Smokey to try to encourage going out to look for private investors for that particular area to make sure that skiing gem, those hills - it was good enough for the Canada Games and did a wonderful job there and it has great potential with an infusion of private money.

What I'm leading up to is we have a European group now on the Island developing a golf situation, a total golf package, a hotel and spa, the whole thing out in the Main-á-Dieu- Louisbourg area - well, more toward Louisbourg. The question is, somebody must have attracted them, they just didn't find that area themselves, somebody must have put them on to that. I think they're on to something good down there, they are starting to build already.

I'm just wondering why the same kind of enthusiasm doesn't seem to be there for outside groups coming into Ski Cape Smokey. If you develop a high-end operation down there, the infrastructure will come. I'm talking about the landing strips for planes and the improvements in the highways to get over there in the wintertime, that kind of thing. Has the government looked at that in terms of Ski Cape Smokey? You're absolutely right, with Ski Cape Smokey, if you're going to invest $50,000 to $100,000 a year, then you're going to be

[Page 32]

right back at it next year again trying to keep them open. I'm wondering if perhaps there's a strategy by government to try to go out there and attract some world-class players to develop that area.

MR. HURLBURT: Mr. Chairman, I'm sure the member is well aware, we put a tender out a few years back and there were no responses to it. My view, my department's view and government's view is let's work with the society. They are looking at different models now to see what will work, which will be sustainable into the future, and we want to partner with them to help them develop that business plan. If that business plan indicates that they have to find some private investment, we will be there to support them and work with them. I think they have to take the lead and they are taking the lead.

I'm very impressed with what has happened here in the last couple of weeks, how they have grabbed this and they are working on it right now and they're looking at different models for up there. They are looking at the lodge as a separate identity maybe. They are looking at different avenues that they can create a better environment financially for the foreseeable future. I think that our role right now, they know where government is and that government wants out of the ski business.

MR. MANNING MACDONALD: Mr. Chairman, I'm not disagreeing with that. What I am saying is, who attracted the German people over to Cape Breton? Somebody must have been in there saying, we have a golf Mecca down here, we have all kinds of land in the Louisbourg area and we're going to develop this, and they have deep pockets. I'm saying here we have a world-class ski operation over there and I'm just wondering whether or not your entrepreneurs within your department, is there any other European money over there that might want to come to Cape Breton for development for the winter activities, because we do have this major development for summer activities now?

If you could see the kinds of houses they are building down there and the kind of money that's being spent already in that particular area. I don't think they've come with their hand out at all to anybody in government that I'm aware of, this is all private money. I'm just wondering if we need to send somebody headhunting looking for these people to show them Ski Cape Smokey and show them the potential down there.

Ben Eoin is a great ski facility down in the chairman's riding, but it can sustain itself because it's right in an urban community. There has to be a different mandate for Ski Cape Smokey because of where it's located, but it could be a high-end operation if we could attract some deep pockets to Cape Breton for the winter season. I just throw that out there in case you guys want to keep going with trying to come up with ways of doing something with this, Mr. Minister. Certainly, you would get our support in sitting down with any entrepreneurs who want to get involved over there. But the answer over there is a large private injection of capital, there's no question about that.

[Page 33]

Back to the Public Accounts. In the Public Accounts we notice that the Office of Economic Development gave $2 million to the 2014 Commonwealth Games, the Candidate Society. What has happened there? What's the explanation for the $2 million and where is it going now?

MR. HURLBURT: Mr. Chairman, I would like to go back to Ski Cape Smokey. I would encourage the member, and all members, to work with the society but I can assure the member that I will be instructing my staff in the Cape Breton Region to talk to the society. Maybe there is a partnership there and if you don't explore it you'll never know, so maybe we should explore it to see. (Interruption) That's what I'm saying, that group there to see if maybe there's a potential private investment from that group, I'm not sure. But we definitely want to work with the society, the society is very determined to find a business model that will work and that's sustainable, and I give them all the marks for trying that.

The member asked me about the $2 million, that was for an original bid and that was a flow-through from my department to Health Promotion and Protection, because they were the lead on it.

MR. MANNING MACDONALD: In the Public Accounts this is one that I'm sure jumped off the page when we saw it there. Why did the department give $8,115 to William Dooks, who I would assume is the current Minister of Energy? Can anyone explain that one? I just had to ask that, Mr. Minister, because everyone in my department said, you have to ask that question. I would like to know the answer too.

MR. HURLBURT: Mr. Chairman, I wonder if the member would mind giving me the page number that's on.

MR. MANNING MACDONALD: I don't know if I have that. We can go back to it, we can keep going while she's looking it up. It's in the list of expenditures and I just can't put my finger on it right now. I'm sure there's a perfectly logical explanation for it, but I'd be interested in knowing what it was.

MR. HURLBURT: Mr. Chairman, it was for airfare to attend the World Trade Organization ministerial conference in Hong Kong. He was there to represent Minister Fage.

MR. MANNING MACDONALD: Minister Fage?

MR. HURLBURT: Mr. Chairman, yes, this is 2005-06.

MR. MANNING MACDONALD: Minister Fage was minister of the department?

MR. HURLBURT: Yes.

[Page 34]

MR. MANNING MACDONALD: Okay, so it was for travel for Mr. Dooks to attend this conference on behalf of Minister Fage?

MR. HURLBURT: That's right.

MR. MANNING MACDONALD: The next question, why did the department give $6,000 to the Finance Minister in New Brunswick?

MR. HURLBURT: They saw that we were doing such a great job here in the province they wanted to. I can tell the honourable member and all members that since the new government in New Brunswick - while staff is looking this up - saw what this government and departments have done and how they created jobs in this province and I must say, they are a bit envious of what's going on with our RDAs and with NSBI and OED. They have asked to have a private meeting with me to discuss how we can do some interconnections with the two provinces that will help both provinces out. So I was flattered by the statement from the Minister of Economic Development in the Province of New Brunswick.

[5:00 p.m.]

MR. MANNING MACDONALD: Is that why you gave him $6,000?

MR. HURLBURT: No, I'm getting to that. There was a conference held in New Brunswick, CIFO Council, and we sent a member from our department and reimbursed New Brunswick for that.

MR. MANNING MACDONALD: Okay. In 2004-05, the member for Cumberland North was the Minister of Economic Development during that time. The County of Cumberland received 41.3 per cent of the funding from the Office of Economic Development during that year. In 2005-06, Cumberland County only received 4.5 per cent. This number seems much more reasonable in the total scheme of things across the province. I'm just wondering how that county went from 41 per cent down to 4 per cent. It seems to me an extraordinarily big difference there, but quite a lot of the money seemed to find its way to Cumberland County, I'm just wondering - I never did an analogy of during that same period of time how much flowed down my way, but you might say that the minister was very active. It's just something that jumps off the page at us, Mr. Minister, and I hope we got value for the money up there in Cumberland County during that year. I assume we did but you don't have to comment on that.

MR. HURLBURT: Do you want to know how much was spent in Yarmouth that year?

[Page 35]

MR. MANNING MACDONALD: I'm not going there. There's another amount that I would like to get some clarification on. It's a $10 million payment to Royal Trust Global Securities Services. Would somebody enlighten me as to what that is?

MR. HURLBURT: Mr. Chairman, through you to the member, that flowed through to the NSRIT fund and it was put into the trust account, Nova Scotia Research and Innovation Trust.

MR. MANNING MACDONALD: It is a large amount of money, and perhaps some of these large payments should be accompanied with some kind of explanation so I wouldn't be sitting here asking the question.

MR. HURLBURT: I quite understand where the member is going and this was for the funding for our universities.

MR. MANNING MACDONALD: Back to the population decline in the province, I'm sure that you're concerned about that, Mr. Minister, and it seems to me that the situation is getting worse in parts of this province that can ill afford to lose any of its young people and, along with that, can ill afford to lose some of its small businesses. I'm talking about the coastal communities in the province and I'm talking about the traditional jobs that were available in those areas that are disappearing. I know you said earlier that you're working on doing some things in rural Nova Scotia now, and that's commendable, but we're still losing people. I'm wondering if any attempt has been given lately to develop a strategy to support small business where they're at, you know, to grow those in the same way that we would support new business that say wanted to set up in metro.

I'll give you a good example of a business. Now, I would like to use this comparison because it worked. It was the film industry in my area. It was set up in the late 1990s with a couple of productions, not the least of which was Andy Cochrane in Pit Pony which was operated out of Sydport, where the new sound stage was built there. The reason it was built there, Mr. Minister, was because the Province of Nova Scotia enhanced the tax credit to permit the establishment and the operation of sound stages outside of Halifax metro. In other words, there was a better tax deal given to encourage the film industry, in this case the CBC and Cochrane Productions, and the Pit Pony. There were other films like the New Waterford Girl and Squanto and a few others that were done in Cape Breton - mostly because of this enhanced tax credit.

What happened was the tax credit was pulled back so it wasn't feasible anymore for anybody to operate outside of Halifax metro. So what happened was the sound stage closed in Cape Breton after training some 250 people to work in the industry. Instead of the industry operating there with the help of government, the people who are trained in that operation have now moved on. They've come up here to work or they've gone to Toronto or, in some cases, they've gone to California to work in the film industry, but they were trained in Cape

[Page 36]

Breton by Andy Cochrane and by the CBC who was a partner with Cochrane Enterprises, and things were going nicely until the rug was pulled out from under them on the tax credit.

It's that kind of thing that I was hoping the government would turn its attention to, to upping the ante in rural Nova Scotia to make it feasible for people to operate small businesses in those areas, and I might be bold enough to suggest that in certain cases business in Halifax can operate independently of government, in a lot of cases - they don't need a government hand-up like you would in maybe Yarmouth, or in Kentville, or in Glace Bay, or wherever. We had a great business going in that film industry down there and now it's a warehouse. Even the old mine they built there for Pit Pony is still there - the face of the mine and everything. All the people who were trained there are all working up here in productions, or they're working somewhere upcountry, Toronto, or Los Angeles, in California. It's kind of a shame that the tax system is such that it's not favouring setting up small business in rural Nova Scotia - rather it's more universal.

There is a difference, but the difference is not big enough. I'm talking about the tax incentives they're given - it was good enough to do it then, but it's not now and that's why the business closed. I'm wondering if the government will consider talking to your Finance counterparts and looking at a system of tax incentives in rural Nova Scotia that would be higher than the tax incentives given in HRM, for example, spread the work around, I guess is what I'm saying.

MR. HURLBURT: Mr. Chairman, through you, I understand what the member's saying. I know the Nova Scotia Film Corporation is contributing $130 million to the economy of Nova Scotia. It is a big business, and it's a very, very, very competitive business. I can speak with some personal input - in Shelburne, when the Scarlet Letter was being done in the Shelburne area, what that did for the economy - I can go back to my construction days with my own little company, the work we did for that company when it was in Shelburne and what it did for the economy of Shelburne. And not only for Shelburne, but for all the surrounding communities. I hail from Yarmouth, but companies from all over western Nova Scotia were involved in doing that. It was over a $50 million film and what it did was unbelievable.

Right today, we have, it's 5 per cent, the premium right now for rural Nova Scotia. I understand what the member is saying, the sound stage in Shelburne, it's the same thing - it's basically gone. It's an extremely competitive business. Every province in this country is looking for the film business and every state in the United States is after them also. It is competitive.

But going back to the member's remarks here about existing companies and small companies that want to expand - look, I believe if I can create, through our department, five jobs in the Barrington area and the Shelburne area and the Queens area, five jobs are a lot of jobs in rural Nova Scotia. Ten jobs - I don't want to put a number on it, I believe that we

[Page 37]

have to do what we can do, but we have field staff in the Office of Economic Development, and in all regions of our province we have field staff from NSBI. I firmly believe in partnering with different levels of government and communities.

I know the member understands where I am in my views. I believe we have the tools here and we have to get it out more to the existing companies and let those companies know exactly what tools are there by government to help them. I don't believe companies are asking for a handout, they're asking for a hand up.

MR. MANNING MACDONALD: When you were talking there about jobs here and there, it's amazing in the film industry, television or films, the amount of food they consume there - I don't know what's different about that business, but they're always eating. Down home there were people literally living off the business they were taking over to the sound stage every day, and the taxis are coming and going. It's something that, not only for the actors and the TV production itself, or the movie in the case of New Waterford Girl or Squanto or a couple of others that were down there, it's labour-intensive, heavy labour- intensive and good jobs.

The upside of having it there for a few years was that we trained people, but unfortunately they had to go off-island to ply their trade - you know, down the road. It's too bad we're not still producing films in Cape Breton and Shelburne, and also the TV productions that we did down there, because they were highly successful. But they did get a leg up because they had that incentive and the tax credit, and once that was pulled back - it wasn't entirely pulled, but it was pulled enough where it discouraged people. As I understand, there's three here in Halifax. I don't whether they're all still operating, but certainly why would anybody go to Sydney if you had the same tax credit system as you have in Halifax?

MR. CHAIRMAN: Your time has elapsed, honourable member.

MR. MANNING MACDONALD: Thank you very much. Mr. Minister, I appreciate your time. That does it for our caucus on Economic Development. I'm not so sure where the NDP want to go.

MR. CHAIRMAN: The honourable member for Halifax Chebucto.

MR. HOWARD EPSTEIN: Mr. Chairman, and Mr. Minister, we're intending, now that I've heard from my colleague for Cape Breton South that he's not intending to go back to it, we're intending to take the next hour and a half or so and then maybe leave the minister 10 or 15 minutes to make a closing statement, if he wishes, at the end. Otherwise, we'll just take the next hour and three-quarters, but we'll run the four hours to the end of this evening.

[Page 38]

If the honourable member or members of his caucus wanted some of that time, he could get back to us, I guess.

MR. MANNING MACDONALD: . . . won't be back. Mr. Minister, you've been patient. Anyway, I'll check to see, Howard, and I'll let you know. Okay?

MR. EPSTEIN: That's fine, that's great. Mr. Chairman, we intend to kind of share the time a bit amongst ourselves.

MR. CHAIRMAN: Who will be starting?

MR. EPSTEIN: I think my friend, the member for Pictou East, is going to start.

MR. CHAIRMAN: The honourable member for Pictou East.

MR. CLARRIE MACKINNON: Thank you very much, Mr. Chairman. Mr. Minister, I appreciate the opportunity this afternoon. I just came in to jump in with a couple of local issues, if I could.

First, I am really pleased and I agree totally with the statement that you just made about the importance of five jobs and ten jobs and so on. We have an opportunity in Lismore, in my constituency, for 50 new jobs with a new species and the reopening of Ocean Choice - the defunct fish plant there.

One of the number of things in the budget that I thought was, in fact, good, was - well there was actually good, bad, and ugly in there, but I just want to address one of the good points, I think this is going to help rural communities - and that is the payroll rebate program and the move from 50 down to 25 jobs for support.

[5:15 p.m.]

But what I'm asking in relationship to Lismore is they are talking about 50 jobs on a seasonal basis and they are talking about guaranteeing five months employment. Do seasonal workers actually count if you have the person years to make up the 50? So if they went to a few more employees, they would, in fact, over five months, have the 25 person years - is that the way that is going to be? This would be a tremendous enticement to this new project - and this is not what you met with them last Fall about, this is just a development of recent weeks, not months ago.

We're very pleased that a number of departments, including yours, are now involved with this group. It has so much potential for my riding and I just wanted clarification on that.

[Page 39]

MR. HURLBURT: I thank the member for that question. That is a really good question and I just got clarity of it myself. They annualize the jobs, so if there were 50 jobs at six months, it would be equivalent to 25 jobs. But also, the company in question, we're waiting for a report back from the Department of Fisheries and Aquaculture on that file. That's where that file is right now, we're just waiting for that department to get back to us.

MR. MACKINNON: Thank you very much, I think that's good news for Pictou East.

In relation to high-speed Internet, and I raised this with you in the House, in one particular area, Barneys River, there are about 100 business jobs there, including heavy trucking. The heavy trucking involves transporting to the United States, and there are new forms that are required that cannot be done with dial-up. I have had, in the area, the government relations manager for Aliant, and I have a commitment from the government relations officer to be a partner in the cost-sharing of high-speed Internet to that area. I have taken him down and met with the heavy trucking people and also had them over to a large mill there as well.

But, there are a number of businesses in that rural area that need Internet service, so what I've done is I have written to Peter MacKay. It's a project that I want to work very closely with Peter on and I am awaiting a response, but Aliant is willing to go ahead, not in 2009, but within months if another partner comes forward. So the other partner that we're looking for is either the provincial or federal government. I'm being told by Aliant if one partner steps up to the plate, they are prepared to go with high-speed Internet there.

So what I'm asking is, I'm going after both the federal and provincial governments to ascertain if there is a partner ready to go.

MR. HURLBURT: Mr. Chairman, through you to the member. I am quite sure every member will be lobbying for their own riding to make sure they get high-speed Internet immediately. But if there are private entrepreneurs out there who want to provide the service, then by all means go ahead and provide the service. We're doing a pilot project, I made it very clear that we will be doing mapping. We are doing that now and working with the communities and RDAs to map unserviced areas in our province and finding the right tools for the pilot project so that we can expand services throughout the province.

I'm not going to sit here today and tell you that your community is going to be the next community, but what I am telling you is this government is determined that we will be putting broadband, 100 per cent coverage, in this province by the end of 2009. Every community wants to be the next community, but let me make it very clear, there are no more pilot projects. We're doing one pilot project right now to work out all the wrinkles and to come up with the process as we move ahead in this province.

[Page 40]

Now I'm not saying your community is not going to be the next and I'm not saying it is going to be the next, but there are numerous communities in this province and if a private carrier wants to deliver that service tomorrow, by all means, they can go ahead and provide it.

MR. MACKINNON: Well, Mr. Minister, I appreciate that response, but I don't know how we are going to get from one pilot project in Cumberland County to the full service of all the areas that need high-speed Internet in rural Nova Scotia if we can't move beyond that one pilot project. There has to be a next step - there has to be a next step in relationship to achieving that goal.

Here is a situation where Aliant is willing to step up to the plate with a considerable amount of money; they are willing to subsidize this service. I have a commitment from them to do that and all we need is the other partner to pull it together. So how do you move beyond the pilot project in Cumberland to full service in 2009 if there isn't a next step?

MR. HURLBURT: Mr. Chairman, through you to the member. There is a next step and I just told the member and all members of the committee that we are doing the mapping of the unserviced areas in this province. It's going to be a fair process in this province. There will be an RFP come out to deliver that service to unserviced communities.

For me to sit here today and say here, I'm just going to cut a cheque for Aliant or EastLink or anybody, that would not be fair to Nova Scotians. There's a fair process and we're going to do the fair process mechanism that we have.

We had an RFP out for the pilot project and the successful company was Seaside Communications. All companies had the same opportunity; a lot of them chose not to even bid on it. So for me to say yes, today I will sponsor your community and just give Aliant whatever they're asking for, I would not be doing my job or my staff would not be doing their job. There will be an RFP coming out after this pilot project is over.

MR. MACKINNON: The business about mapping is sort of a concern to me because the people in rural Nova Scotia don't have to be mapped - they know they don't have the service.

Here's another scenario - I am working hard in my constituency to try to do something before 2009. I don't know what other MLAs are doing, but I have another situation . . .

MR. HURLBURT: Fifty-two MLAs, we're all trying the same thing.

MR. MACKINNON: Okay. Well I think this MLA is making some real progress. I want to give you another illustration. We have a situation in Eureka where True North

[Page 41]

Communications is involved with a tower for the fire department. This tower that is in place and is being serviced, their communications are going to cover a very wide area through this tower - it's covering a good chunk of the East River Valley - True North Communications is prepared to service the area with Internet from the same tower. I'm working with them on immediate service and I'm wondering if there's anything at all that you can do as part of your plan to get to 2009, to step in with some kind of encouragement in either one of these two cases?

MR. HURLBURT: Mr. Chairman, through you to the member. I'm not trying to be argumentative here this afternoon, but I am making it very, very clear to the member, and I don't want to give false hope to any member of the Legislature, there is a process we are following.

And you're telling me now this company is servicing that community - then that community is being serviced, and I'm talking unserviced communities in this province. The member also stated earlier in his remarks about doing the mapping. There are a lot of communities in this province that are being serviced, and we want to know the communities that are not being serviced. Those are the key areas that we will be zoning in on after this pilot project is over with. Again I want to make it perfectly clear, there will be a public tendering process for this service in the province.

MR. MACKINNON: Well, I appreciate the comments and I don't want to be the least bit argumentative as well, but I'm just wondering how we get beyond Cumberland County to service these areas. However, having said that, in relationship to part of my riding, I want to point out that we will be proceeding with Internet service.

That area that I'm talking about is not serviced. This tower is just being set up with communications in Eureka, but I think it bodes well that we have taken the initiative in Pictou East to supply service to a chunk of the East River Valley through this fire department tower. Perhaps it can be used as an example to service other areas, for $49 per household, so we are going to be making an announcement without any help in relationship to doing something within the constituency. But we have to move on, beyond Cumberland County, if we're going to meet that goal.

However, having said that, I want to move on to another topic which is near and dear to all of Pictou County, and that is TrentonWorks. I have to compliment the province, and in particular, Peter MacKay, for stepping up to the plate in recent days or in the last few weeks to take a lead role in relation to trying to do something to avert a closure of TrentonWorks.

Many of us in Pictou County are writing to Bill Furman, President of the Greenbrier Company in the U.S., trying to encourage the operation to stay in Pictou County. But I want to ask the minister, are there any recent developments in relation to TrentonWorks? I do

[Page 42]

appreciate what has been done in recent weeks, and I want to give a bouquet to those involved.

MR. HURLBURT: Thank you. I detect, I think, in the member's comments here in his last question that he will be supporting the budget apparently because he wants broadband in these communities - I really appreciate hearing that.

Anyhow, the issue with TrentonWorks - as the member knows, my department has been working very, very closely with TrentonWorks, as the members brought up in a question last Fall in the House with TrentonWorks. We have worked very diligently with TrentonWorks looking at other avenues of fabricating, and they were one of the companies that went to Alberta with me in the Fall and they secured two contracts. They're looking at diversifying.

Our government and our department is committed to doing what we can to help TrentonWorks, but the corporate company has to be there as a partner also. We're working with them and they're developing their own business plan, but Greenbrier has to be a part of the solution here. There are a lot of jobs and high-quality jobs and they're doing a tremendous job, what they do up there. I know that - and I forget the name of the company in Alberta they did business with, it's one of the biggest fabricating companies in Canada, in Alberta, that they partnered with to make a widget and ship it off, the finished product, from here in Nova Scotia. So, we were very pleased - and they made the second trip, with our Premier, to Alberta this year.

[5:30 p.m.]

We have to keep working through the issues. There are issues there. As you know there was a union issue, and I think that has been resolved, but there are other issues there that we have to work on and we are committed to working with them, but the corporate company has to be also a partner.

MR. MACKINNON: Thank you very much, Mr. Minister. I did point out in the beginning there were a number of good items in the budget, but I don't know how you came to the conclusion that I would vote for that budget based on Internet service by 2009, when we need such service so quickly in some of these areas. We are moving forward with or without expansion beyond the Cumberland County pilot project, but we sure would appreciate your assistance in some of these projects sooner rather than later. Thank you.

MR. HURLBURT: Mr. Chairman, through you to the member. Maybe I'm getting long in the tooth here and my hearing's not quite 100 per cent - I just thought I detected that in your remarks. Maybe I misheard what you had to say, but I will tell that member and all members what we're going to do - we will be rolling out our plan in the second half of this

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fiscal year. And I appreciate the concerns of that member. We all have businesses in rural Nova Scotia and they need high-speed Internet, there's no question.

Putting my previous hat back on, as an entrepreneur in years gone by I know how important it is to have the modern technology at your fingertips if you're trying to run a business. So I understand where the member is and I appreciate him standing up for his constituents and making it known that they want to be on the radar screen for the first round. I thank you.

MR. MACKINNON: Thank you very much, Mr. Minister, and Mr. Chairman.

MR. CHAIRMAN: Thank you, member.

The honourable member for Queens.

MS. VICKI CONRAD: Thank you, Mr. Chairman, and thank you to the minister and his department for giving us an opportunity to ask questions. I just want to say that I have, over the past several months, had opportunity to speak with various staff members of your department and I'm very impressed with not only their knowledge and expertise, but their dedication to seeing that economic development across this province moves forward.

I also know from speaking with many business owners that they too value the service that InNOVAcorp and Nova Scotia Business Inc. offers. Again, thank you to the staff and to yourself as minister for that.

I know we ended off with my colleague talking about broadband, and I'm going to let you know that I'm going to start off talking about broadband.

Basically I'm looking for an update on the broadband services in Queens, in particular to TDC Broadband and where they're heading. Just this past week and a half I have had a number of calls from constituents in the area with concerns that TDC Broadband is finding themselves in some difficulty once again, so I am looking to dispel those rumours, if that's possible.

I am hearing from constituents the company is finding themselves in some difficulty, and I understand the difficulty is that they have requested some assistance from the province to move their services forward in other areas outside of North Queens and that request has been turned down. It has been indicated to the company that - I think it's Seaside, yes - Seaside Communications has been awarded the contract, as we know, for the pilot project in Cumberland. I just want to take you back to when TDC Broadband first appeared on the scene in North Queens. It was the understanding of the municipality there, and the communities, that TDC was actually a pilot project funded partly by the province and also by the federal government, so I guess there was some question around were they really a pilot

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project at the time, and now Cumberland, where Seaside is now the pilot project that we're seeing in the province.

So, getting back to the rumours that I'm hearing - I know that they went through some difficulty several months back and that they were able, with much networking with staff from Nova Scotia Business Inc., to turn themselves around that they got the company up and running again and the high-speed Internet was turned on again. However, now I'm hearing that they are facing difficulties, so if you could give me an update on where they are and where we are in Queens in terms of being, I guess maybe experimental pilot project number one - prior to Seaside's pilot project, if that makes sense.

MR. HURLBURT: Mr. Chairman, through you to the honourable member. First of all, I must thank you very much for your kind remarks with staff of OED and all the Crown Corporations. I am very humbled to be in the department, to have such a great staff and they are very dedicated to this province, to help grow the economy of this province and to work with all regions to make sure that it's fair to all regions of our province. I thank you for your kind words to the staff.

To speak to a private company, TDC, I can't speak to that private company. Your question, was that a pilot project? It was not a pilot project of the Province of Nova Scotia. It might have been a pilot project of the region of Queens, but it wasn't. That is now deemed a serviced area, that part of the community. But what our goal is, through the Province of Nova Scotia and through my staff, is to ensure that Queens and all areas in our province have sustainable broadband service for years and years to come.

We do not want it piecemeal, we want to be doing a service that will be there, sustainable for the people, that's not lit up today and shut down tomorrow. I'm not trying to throw water on it, but I'm just telling you that's our goal, and when we put our RFP out there our requirements in the RFP will be to make sure that that company has the resources to be sustainable for the future.

MS. CONRAD: Thank you. If I could just continue on in the same vein around TDC, I thank you for your response there and I do understand yes, they are a private company and there was some difficulty at one point in time in them having the best business management for their company as they needed to have. I understand that they do now have business management in place, and there was some discussion with other members of your caucus that it looked like there would be a move forward plan in seeing that service expand outside of North Queens to take in other areas of the Lunenburg County area.

Part of the