The Nova Scotia Legislature

The House resumed on:
September 21, 2017.

Public Accounts -- Wed., Feb. 9, 2000

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HALIFAX, WEDNESDAY, FEBRUARY 9, 2000

STANDING COMMITTEE ON PUBLIC ACCOUNTS

8:00 A.M.

CHAIRMAN

Mr. Russell MacKinnon

MR. CHAIRMAN: Good morning, ladies and gentlemen. My name is Russell MacKinnon. I am your Chairman of the Public Accounts Committee for today. Today on the agenda we have the Bras d'Or Waterfront Project, sometimes known as the MacNeil's Cove project. With us here, in attendance, as witnesses, we have: Mr. Chris Bryant, Executive Director, Community Economic Development; Mr. Neal Conrad, Director of Regional Operations with Economic Development; and Mr. Ross Kennedy, the Regional Manager of the Cape Breton Eastern Regional Division. With us, as well, from the Department of Transportation and Public Works, we have Ms. Barbara Baillie, who is the Area Manager, and from the Department of Natural Resources, we have with us Ms. Rosalind Penfound, Executive Director of Land Services.

Also we have, as a regular, Mr. Roy Salmon, the Auditor General, seated right behind our witnesses. Members of the committee, starting on my extreme far left, is Mr. Darrell Dexter, who is the member for Dartmouth-Cole Harbour. Next to Mr. Dexter is Mr. John Holm, the member for Sackville-Cobequid. To my immediate left is Mr. Jim DeWolfe, the member for Pictou East. Next to Jim is Mr. David Morse, the member for Kings South. In the second row we have Mr. Bill Dooks, the member for Eastern Shore.

With that, the general process is we will allow our witnesses to make any opening remarks that anyone would prefer to make, generally 5 or 10 minutes just to start things off, then we will turn it over for questioning with the respective caucuses.

MR. CHRIS BRYANT: Mr. Chairman, I think you have plenty of documentation in front of you so we will speak to that but we won't have any opening remarks from the Economic Development side.

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MR. CHAIRMAN: Ms. Baillie or Ms. Penfound.

MS. ROSALIND PENFOUND: I could make a few preliminary remarks, I guess, given the opportunity, about the Department of Natural Resources' role in the MacNeil's Cove area. I do notice you have most of the relevant material from our department in your binder so I won't belabour that. Just by way of general summary, the Department of Natural Resources administers submerged Crown lands. We do not own any land in the area surrounding MacNeil's Cove. Boats have been mooring there for decades. In 1996, the department issued a licence to a group called the Bras d'Or North Community Development Association to operate a mooring grid. I guess our general approach to these kinds of things is that it is better for a community group to be undertaking that kind of activity than for government to be dealing with each individual boater. We have two or three situations around the province where that is what we are striving toward - a community group that would deal with boaters and landowners and try to have a community-based organization.

The way it would work is you would lay out a grid in the water with safe distances between the moorings. I think the maximum in that area was to be about 45 although I don't think they ever really reached 45. In addition, the Bras d'Or North Development Association had made an arrangement with adjoining landowners for an access point for boats to come and go but I would reiterate, Natural Resources owns no land around the cove and was only involved with the mooring grid as managers of the submerged land. There were concerns expressed by some area residents who were unhappy with the operation of the grid. I don't think there was ever anybody ever saying we don't want the grid, it was just who was running it and how it was operated and there were some issues along those lines.

There were numerous meetings, mostly attended by our regional staff and in 1997, I believe it was, it might have been 1998, a couple of people from the area made a complaint to the Ombudsman's Office about Natural Resources handling of this matter and there was quite an extensive review. There was an interim report. The Ombudsman met with representatives of our department as well as people from the community, issued an interim report, heard comments back and then ultimately issued a final report with some recommendations about how Natural Resources should handle these mooring grids.

As a result of that report, we have made some revisions to our policy. One in particular that might be of note and would seem to be a concern, our policy had been to never authorize anybody to have a mooring within 100 metres of a private landowner. So if you came to our department and said, I would like to moor my boat in this little cove, we would say, well, you have to be out at least 100 metres from the shore because we don't think you should interfere with an individual owner and they have certain riparian rights. Because of the nature of the concern there, we decided and amended our policy, and the Ombudsman approved, to make that 200 metres. Let's just be sure we back everything off 200 metres so that nobody has any trouble. Anyway, there were a number of things that were recommended, which the department has followed and the Ombudsman has replied that the changes we have

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made have been acceptable and the complaint is considered resolved in terms of how the department has handled it. That doesn't change the fact that we still have a mooring grid and we still administer that submerged land and there are still issues around community concerns there.

We did not, however, authorize the construction of the boardwalk. We haven't given anybody any money to do anything in the area. Our involvement has strictly been with respect to activity in that area below the ordinary high water mark. We continue to work with the community, or to attempt to work with the community, to ensure that the mooring grid is operated in a safe and useful manner for the community. That is our prime concern, how the mooring grid is operated.

I guess that is all I will say. I am happy to answer questions as we go along but I thought it might be important to note that that has been the extent of our involvement, which has been in the wet area as opposed to on the dry land. Thank you.

MR. CHAIRMAN: Mr. Dexter, to start off questions.

MR. DARRELL DEXTER: Mr. Chairman, I have a lot of questions and I am going to start on this side and go across, if that is the most convenient way to deal with it. I notice that Brian MacSween is not here today. He was the person who seems to have had carriage to this file, is he not?

MS. PENFOUND: Yes, he would be, I think his position is called Crown forester, but he is the local guy who would be the main contact on this. That is right.

MR. DEXTER: I am curious why you didn't bring him along, he is pretty key in this whole exercise.

MS. PENFOUND: I guess I didn't understand that he was requested. I had a call to attend and I am here. I guess I assumed that if anybody else was required, they would have been requested and would have come.

MR. DEXTER: Well, before you came here, did you consult with Mr. MacSween?

MS. PENFOUND: Yes.

MR. DEXTER: Did you consult with anyone else?

MS. PENFOUND: I am talking to staff regularly about it; in fact I was in Sydney on Monday to talk with him and with several other people in the offices.

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MR. DEXTER: Were there specific meetings that took place with respect to preparation for this appearance today?

MS. PENFOUND: Yes, I would say.

MR. DEXTER: Who did you meet with?

MS. PENFOUND: I met in Sydney with Brian MacSween and with one of his colleagues there named Dave Harris. It was a dual-purpose thing, one was to review where we were to date on the mooring grid, in terms of our dealing with the community group. I would certainly say that we had planned to meet sometime over the next couple of weeks, and I requested to meet before I came here so I could be sure to have those things fresh in my mind.

MR. DEXTER: Did you receive any specific direction with respect to your coming here today, as to what you were to offer for testimony, or . . .

MS. PENFOUND: No.

MR. DEXTER: You have had an opportunity to review the Ombudsman's Report?

MS. PENFOUND: Yes, indeed.

MR. DEXTER: Of course you know that the licence that was issued to the Bras d'Or North Community Development Centre was issued in July 1996.

MS. PENFOUND: Yes, that is right.

MR. DEXTER: You know at the time that that happened that the Bras d'Or North Community Development Association wasn't in good standing with the Registry of Joint Stock Companies.

MS. PENFOUND: I think that is the case; I would have to go back and look, but I believe you are right.

MR. DEXTER: You have practised law in this province for a considerable period of time, is that fair to say?

MS. PENFOUND: I haven't practised law for a long time, but I am a member of the Barristers' Society.

MR. DEXTER: You would know that the effect of not having registration before the Registry of Joint Stock Companies affects the standing of companies?

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MS. PENFOUND: Yes, certainly. I think they are a society.

MR. DEXTER: What is that?

MS. PENFOUND: I think they are registered under the Societies Act.

MR. DEXTER: Sure. It would affect the standing of the society, is that not correct?

MS. PENFOUND: Yes.

MR. DEXTER: They can't participate in proceedings.

MS. PENFOUND: Yes.

MR. DEXTER: Wouldn't you think it would be a pretty standard thing to do, to check to make sure that a society is registered?

MS. PENFOUND: Yes, that is the case, and we do routinely do that.

MR. DEXTER: It didn't happen in this case.

MS. PENFOUND: I would have to look and see exactly what the checking was. I wouldn't dispute that that is the case. I would however add that we, in the department, deal routinely with community groups and it is not an infrequent thing that community groups - because you are largely dealing with volunteers and people who are putting an effort into some community thing and have other jobs that they are going to, sometimes things get out of sequence. It is not necessarily unusual for there to be things like that that are addressed and they go and get reinstituted or whatever. I certainly wouldn't dispute what you are saying.

MR. DEXTER: One of the problems is that it goes toward an indication of the organizational foundation of the community group itself. I wonder if, just before we continue, I could just ask the Chairman how much time I actually have. How much time do I have?

MR. CHAIRMAN: I am going to allot each caucus 30 minutes starting off. I figured that way it would be an appropriate time to get into the meat of it.

MR. DEXTER: One of the problems is that if you don't keep up your registration at the Registry of Joint Stock Companies there are questions around whether or not special resolutions have ever been filed and appropriately recorded. You don't know whether or not the memorandum has been altered; you don't know whether the membership of the society has been altered. All of those are problems, if you don't keep up your registration. Would you agree?

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MS. PENFOUND: Yes.

MR. DEXTER: Okay. This was something that from the very beginning you would have been on notice of, simply by doing the check.

MS. PENFOUND: Yes.

MR. DEXTER: One of the parts of the interim report by the Ombudsman is a chronology that they set out. I don't know if you have had an opportunity to review it, it is on Pages 10-17. The Ombudsman sets out a detailed chronology of events. Is there anything in that chronology that you would disagree with?

MS. PENFOUND: I haven't read it in the last little bit, but no I don't think so. I don't have it in front of me and I haven't read it in the last few days, but I don't remember taking issue with anything in terms of the factual account they had.

MR. DEXTER: Throughout that chronology, on virtually every page there are references to Brian Boudreau. Would you agree with me that the application for the mooring licence was primarily conducted through him or his office?

MS. PENFOUND: Again, I would have to look in the file. (Interruptions) Certainly he had prime involvement. I believe he was president of the group at one time, was clearly very closely involved with what was going on and continues to have interest in the area. If I recall, I believe he had signed one of the applications that came in.

MR. DEXTER: Let's deal with that specifically. The reality is that the licence was granted in response to an application from Brian Boudreau, signed by him, and I believe that in the chronology, that is dated in and around March 4, 1996; just for the record.

MS. PENFOUND: Yes, I don't dispute the factual.

MR. DEXTER: Would you agree with me that that application, that specific application, along with it is part of the filed documents, include a letter of support, I believe it is from both Sidney and Vince MacNeil, are you aware of that letter?

MS. PENFOUND: Yes.

MR. DEXTER: If you are not, I just wanted to point to Page 10 of the interim report, it sets it out verbatim as to what it says. I read that and I thought, well, I did agree with the Ombudsman's finding that there is a rather narrow definition of upland owners, however, it fell within your definition and this apparently satisfied the requirements of the department. The next thing that happens with respect to the MacNeils is you get a letter dated March 10th, which is the second letter, and I would assume that that would have come as quite a

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shock to the department. Are you aware of the letter I am talking about? I want to be clear about it.

MS. PENFOUND: It is the one where Sid and Vince MacNeil said they don't . . .

MR. DEXTER: That is right.

MS. PENFOUND: Yes. I believe within very short order of that letter arriving, they called and said they withdrew that letter.

MR. DEXTER: I want to deal with that later, but right at that point, you get a letter from them that says that they don't agree with this mooring grid. I would assume at that point you would know that there was something seriously wrong, the department would understand there is something seriously wrong. In fact, that is what precipitated the phone call to them, I assume.

MS. PENFOUND: I would assume so, yes.

MR. DEXTER: What the letter actually says is this, "At the time the letter was signed on February 6, 1996 no mention was made of a mooring grid to be installed in the Cove and at this time I am not in favour of the mooring grid to be installed in the Cove . . . and the letter was not intended as such.". Is there any other interpretation that you could place on that other than that that letter was submitted for a purpose for which it was not intended?

MS. PENFOUND: I am not sure I follow your question.

MR. DEXTER: The original letter was . . .

MS. PENFOUND: The original letter where they agreed, you would say this letter means . . .

MR. DEXTER: It was never intended to support a mooring grid.

MS. PENFOUND: That is not an unreasonable interpretation.

MR. DEXTER: So at that point, would you agree with me that the department had been deceived with respect to a part of the application for the mooring grid?

MS. PENFOUND: No, I wouldn't go that far as to say the department had been deceived. It seems to me that there are a lot of people with a lot of interest in what was going on there.

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MR. CHAIRMAN: On a point of order. I believe the honourable member knows the rules of the House on certain terminologies. Perhaps the word misled would be a better word than the word deceived. I believe, according to Beauchesne, that is inappropriate.

MR. DEXTER: Only unparliamentary if I am referring to . . .

MR. CHAIRMAN: Well, we are in a parliamentary process.

MR. DEXTER: But I am not referring to the actions of a member, I am just asking a straightforward question, whether or not the department feels . . .

MR. CHAIRMAN: With all due respect, the implication is there and I believe the honourable member does know the rules of the House.

MR. DEXTER: Misled.

MS. PENFOUND: I am not sure that I would go that far. What I was beginning to say - and this again is not atypical of situations where we find ourselves dealing with a number of people in the community - this was the first time a mooring grid was going to be issued there. There was certainly a lot of community interest. Sid MacNeil owned the property over which access was going to be had. It is not necessarily unusual for people to work their way through this stuff to be unsure of what they think about it. Certainly the letters are in opposition to each other, clearly, and that clearly would be a surprise to the department.

On the adjacent landowner thing, if I could clarify. There seems to have been and there has been, through the review that the Ombudsman did as well, some thought that in issuing a mooring grid it is important to have the consent of every upland owner around the cove. Our policy takes into account the interests of upland owners and their riparian rights by being sure that the moorings are placed significantly back from their shorefront property. The involvement of Sid and Vince MacNeil was not in terms of needing their permission for the mooring grid, it was because it was over their property that the Bras d'Or North Group was going to be inviting people to launch their boats. So it was connected to them as landowners at the launch site as opposed to just their position as an owner around the cove. That is why they were particularly involved.

MR. DEXTER: I understand that. I read through the documents and I understand that that is part of what comes under the definition of the upland owner. This points to a problem that I want to get to as well. As you may know, what happened was, I think the Ombudsman points out, that this was a prescriptive easement that over the history of that slipway, the public had used it for years, and what happened was the Brad d'Or North Community Development Association closed it to the public and if you weren't a member of the Bras d'Or North Community Development Association, you couldn't use it. Is that right?

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MS. PENFOUND: I don't know if that is correct. The report that they did reviewed how we had handled it and I am not sure if they drew any conclusions about who owned rights and what property. I don't dispute that there may have been some comment on that, but we haven't investigated the ownership of that land.

MR. DEXTER: But you knew that the membership in the community development association had been restricted?

MS. PENFOUND: I am not sure that I knew it was restricted.

MR. DEXTER: Okay, if you would have read the memorandum in the Registry of Joint Stock Companies and if you would have looked at their membership, then you would have know that the membership . . .

MS. PENFOUND: Yes, I am sure there is restricted membership in any society.

MR. DEXTER: You mentioned, and I think rightly so, that somebody from the department phoned Mr. MacNeil after they received this letter because, as I said, it must have come as somewhat of a shock to find out that a previous letter didn't apparently mean what they thought it meant. At that point Mr. MacNeil says, I am going to withdraw that letter. Well, there is a fundamental problem with the withdrawal of that letter because in the letter he says, "At the time the letter was signed on February 6, 1996 no mention was made of a mooring grid . . .". Once that is out there, you can't withdraw it. I mean essentially the previous letter didn't bear on the issuance of a mooring grid licence at all. Now you know that.

The Department of Natural Resources knows that it has a letter that really has absolutely nothing to do with the issuance of a mooring grid licence. In fact, what Mr. MacNeil says is that it was in support of the other part of the project that was going on, I assume the boardwalk, the park, the flags, flagpoles and all the other things that were going on in MacNeil's Cove at the time, but not the mooring grid because he didn't know anything about it. Doesn't it seem to you that at that point in time what the Department of Natural Resources should have done is to go at least back to the two Mr. MacNeils and ask for a letter of support directly for the mooring grid and the mooring grid licence? Isn't that the reasonable thing to do?

MS. PENFOUND: There was day-to-day contact between the local staff and the Bras d'Or North group and the landowners. My assumption, I guess, is that Brian MacSween and the folks dealing with them would have, after talking with him and understanding that he now would realize this March 10th letter would be viewed as no to the mooring grid, when he says I am withdrawing that, they would take that as him supporting it. He didn't protest the mooring grid and he was asked to consent because of this access thing back and forth on his property. There have been boats mooring there, I think, for 40 or 50 years, so it is just a

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question of who would be managing the grid, not that there would be boats going there; boats have been there for a long time.

MR. DEXTER: When you say it is just the question of who would be managing, that is central to why we are here.

MS. PENFOUND: I think that was the primary issue.

MR. DEXTER: I think there is lots of litigation around the whole question of whether or not silence is consent. I don't believe that reasonable people looking at a file will make that kind of an assumption. They know now that what they have is a letter that clearly never intended to support the mooring grid and for whatever reason the department decides not to go the one step further. If it is true that Sidney and Vince MacNeil were prepared to support the mooring grid, it would have been a very simple thing to get a letter of consent, don't you think?

MS. PENFOUND: I am sure it would have been. Every time the department deals with an individual person or a community group - perhaps in hindsight we should have gotten it here, but our files would be 10 times as thick as they already are if we had every conversation and every issue committed to writing. It would be nice if the next letter in here said, I agree with the mooring grid, but . . .

MR. DEXTER: Right. By March 1997, the Department of Natural Resources, quite frankly, has quite a mess on its hands. It has a community that is divided. You have people who are arguing over the mooring grid itself, the management of the mooring grid, access through the slipway, membership in the community association, and there is a meeting held in March 1997 . . .

MS. PENFOUND: In the area.

MR. DEXTER: . . . in the area. You have read the notes on it . . .

MS. PENFOUND: I wasn't there but I know it occurred.

MR. DEXTER: Did you talk to Mr. MacSween about it?

MS. PENFOUND: Yes, I have. Not in the last few days but I did at the time talk to him.

MR. DEXTER: Apparently at that meeting, Mr. Boudreau stands up and says, look, if you don't like the way we are managing the mooring grid or our intention to manage the mooring grid, fine, we will have a vote on it, we won't do it and by the way, we will rip up

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all of the other improvements to MacNeil's Cove as well. I am going to take this stuff and go home essentially. That's what the notes say.

MS. PENFOUND: Yes, I don't dispute that. I wasn't at the meeting but I have to go with what was in the notes.

MR. DEXTER: What they do in the end is they form a six person committee that is supposed to have a look at resolving some of these issues. Now, apparently that committee lasted a very short time. Essentially there was no agreement. It appears from the minutes that I saw that the first and only meeting lasted nothing more than a few minutes because the disagreements were so fundamental.

MS. PENFOUND: I think that's right.

MR. DEXTER: After that point in time, there is really only the Bras d'Or North Community Development Association that is going forward with the management plan, the . . .

MS. PENFOUND: They have a licence at that point, to run the grid. But the department's goal was to try to have the various interests in the area represented on the committee so that they could resolve their differences and try to work together to make this mooring grid work. Clearly that didn't happen because they couldn't reach any agreement.

MR. DEXTER: At that point, Mr. MacNeil, the same Mr. MacNeil who gave his consent and then withdrew it and then in a phone call says I withdraw the previous letter, now says he would be in favour of the mooring grid licence on certain conditions. So you have yet another position by Mr. MacNeil, apparently.

MS. PENFOUND: Yes.

MR. DEXTER: The Department of Natural Resources makes numerous requests to the Bras d'Or North Community Development Association for information. You ask for a plan of the mooring grid and the only thing you get is a handwritten plan?

[8:30 a.m.]

MS. PENFOUND: I believe, yes.

MR. DEXTER: Hand-drawn plan, not to scale?

MS. PENFOUND: Yes.

MR. DEXTER: It isn't until, I think, 1999, that you actually get a proper survey?

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MS. PENFOUND: Yes, I think that is right.

MR. DEXTER: You never do get a declaration of exemption under the Navigable Waters Protection Act?

MS. PENFOUND: No, that is correct.

MR. DEXTER: You don't get the information you require with respect to the designation of emergency moorings?

MS. PENFOUND: Yes, I think that is right.

MR. DEXTER: In fact, until very recently, you do not even get a description of how the group intends to manage the mooring grid?

MS. PENFOUND: Yes, that is right.

MR. DEXTER: This is really quite an amazing litany of mismanagement of a licensing feature of the provincial government. All of the things that would reasonably be expected do not happen. I would say under the definition of snafu, this is where it fits. This is nothing more than a group of people who apparently flouted every single request that you made to them. In the end, you end up having to withdraw their licence. Isn't that the end result of all of this?

MS. PENFOUND: Well, I guess I certainly wouldn't dispute anything you have said on their failure to comply with items that they have been asked for. Again, I would hasten to add that it is not an unusual thing for us to try to work with a group, to try to bring them along. Often you have a group that has never done it before and you are leading them through the steps, all those kinds of things.

One of the recommendations in the Ombudsman's Report was that the department should be stricter in its requirement for groups such as Bras d'Or North, or any community group, to meet deadlines and to submit reports. As a result, I believe in the fall of 1999 we clearly, by correspondence, indicated here are the things you have to do. You need to get that clearance under the Navigable Waters Protection Act. Here are the outstanding items. They had, I believe, until the end of December to do that. They hadn't done so. They were granted another further extension for a month and at the end of January, had still not provided everything required.

They have since received a letter from the department indicating that, you are not in compliance and it is recommended that your licence be terminated.

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MR. DEXTER: It is recommended or the licence has been terminated?

MS. PENFOUND: The recommendation from field staff is that it has been terminated and their termination notice will be issued from the Halifax office, as is the norm.

MR. DEXTER: Has it been issued?

MS. PENFOUND: I haven't been in the office the last two days. It may or may not have gone out but it will be going out on the recommendation of the field staff.

MR. CHAIRMAN: For a point of clarification, my understanding is that the department has to serve 30 days notice.

MS. PENFOUND: Yes. We have to give them 30 days notice.

MR. DEXTER: So from the initial application in March 1996, the department finally decides that there has been non-compliance in January 2000?

MS. PENFOUND: Yes.

MR. DEXTER: Thank you. I wanted to ask a couple of very specific questions with respect to the Department of Transportation and Public Works. This is with respect to the building of the boardwalk. The building of the boardwalk required that there be a consent issued. I believe it is called a minister's consent for building and access to property, is that correct?

MS. BARBARA BAILLIE: That is correct, yes.

MR. DEXTER: Was such a consent issued?

MS. BARBARA BAILLIE: Yes, it was.

MR. DEXTER: When was it issued?

MS. BARBARA BAILLIE: February 3, 1995.

MR. DEXTER: What is the nature of the consent? What does it do?

MS. BARBARA BAILLIE: The permit, the consent, the building and access permit is the same permit you would use if you were applying for a driveway access to a house and the same permit covers any structure within 100 metres of a 100-Series Highway.

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MR. DEXTER: The consent that was issued, what does it do? Which property does it . . .

MS. BARBARA BAILLIE: It gave the group permission to build the boardwalk on a Department of Transportation right-of-way, Department of Transportation land.

MR. DEXTER: Along where?

MS. BARBARA BAILLIE: Along Highway No. 105, the Trans Canada in that area.

MR. DEXTER: Specifically, is there one consent or are there two?

MS. BARBARA BAILLIE: I don't understand your question, I am sorry.

MR. DEXTER: The property runs along the Groves Point Road and then the proposal originally was to have a floating boardwalk?

MS. BARBARA BAILLIE: Yes.

MR. DEXTER: And then it would continue on property that ran along the highway?

MS. BARBARA BAILLIE: Right.

MR. DEXTER: So was there one consent or were there two?

MS. BARBARA BAILLIE: No, there was only one. There was consent along Highway No. 105, the Trans Canada, along our right-of-way. The land along the Groves Point Road is not our land. There are private landowners in between and the access to the boardwalk, like you said, the floating boardwalk was supposed to come around and the actual access to the boardwalk was off the Groves Point Road.

MR. DEXTER: I wonder, just so that I am clear on this, if I could have the Clerk of the committee show you these documents.

MS. BARBARA BAILLIE: Yes, that is what I have.

MR. DEXTER: Perhaps copies can be made at an appropriate time. There appear to be two consents and they confuse me because they are both described as DOT permit number 258. One is for Groves Point Road in Bras d'Or, the other one is for Trans Canada Highway No. 105. They appear to be issued on the same day.

MS. BARBARA BAILLIE: The Highway No. 105 permit, now, I don't even have that in my file; all I have is the Groves Point.

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MR. DEXTER: Yes, you have the one that says Groves Point Road on it?

MS. BARBARA BAILLIE: Yes.

MR. DEXTER: What can you say about the veracity of that document? Do you know if it is a real document?

MS. BARBARA BAILLIE: Along Highway No. 105, yes, the signature - it wasn't myself who approved this, it was two area managers before me. The signature appears. It is hard to comment.

MR. DEXTER: It would be rather unusual that you don't have a copy of a consent that was apparently issued by your department in your file?

MS. BARBARA BAILLIE: Yes. There is also a covering letter with that, stipulating that the permit is for construction of a boardwalk along our right-of-way.

MR. DEXTER: Does the Department of Transportation own property along Highway No. 105?

MS. BARBARA BAILLIE: Yes, we do.

MR. DEXTER: Do you own all of it that the boardwalk was going to be going over?

MS. BARBARA BAILLIE: Well, where the boardwalk is now, no, we don't own all that land.

MR. DEXTER: In fact, there are a number of other owners along there?

MS. BARBARA BAILLIE: Yes.

MR. DEXTER: I think there is PetroCanada, Irving, Campbell's, and now I understand Mr. Gracie owns part of it.

MS. BARBARA BAILLIE: He bought the Irving part.

MR. DEXTER: Right. So the consent that you gave never extended to those, could not extend to those properties?

MS. BARBARA BAILLIE: No, we could not give consent for other people's properties.

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MR. DEXTER: I am going to ask you before you leave this committee if you would not mind - since you have copies of those permits - taking them back to your department and telling us whether or not in fact these are properly issued permits from your department? Would you agree to do that?

MS. BARBARA BAILLIE: Yes, certainly.

MR. DEXTER: Can I ask that you report back to our committee next week? Is that a sufficient amount of time?

MS. BARBARA BAILLIE: Okay, that is fine.

MR. DEXTER: I am out of time?

[8:37 a.m. Mr. David Morse took the Chair.]

MR. CHAIRMAN: You have 20 seconds.

MR. DEXTER: Are we going to get back to another round, do you know?

MR. CHAIRMAN: Yes.

MR. DEXTER: Thank you.

MR. CHAIRMAN: Perhaps we could pass the session over to the Liberals.

The honourable member for Cape Breton West.

MR. RUSSELL MACKINNON: Mr. Chairman, I guess I am somewhat perplexed that we are even here today, to be honest with you, aside from the fact that some issues I think really could be worked out at the departmental level with the respective lines of authority, but be that as it may, we are here.

I guess I have one blanket question for all our witnesses. My question is, at any point in time through this entire process, to the knowledge of any of the witnesses, was there any political pressure to do something to approve a licence, a permit, provide funding, or whatever, against the policy or the recommendation from within?

MR. BRYANT: From Economic Development's perspective, no.

MR. CONRAD: From my situation, no, absolutely none.

MR. KENNEDY: None at all.

[Page 17]

MR. MACKINNON: Ms. Baillie?

MS. BARBARA BAILLIE: From Transportation's, no.

MR. MACKINNON: Natural Resources.

MS. PENFOUND: No.

MR. MACKINNON: I notice a letter that was written February 3, 1996, by Gerald Murray. He was your predecessor, I believe, Ms. Baillie, giving permission to Mr. Boudreau, who was then President of the Bras d'Or group, the Community Development Association, to erect a boardwalk along the right-of-way of the Trans Canada, all along the Trans Canada to within its jurisdiction. Were you or are you aware that Mr. Murray, in fact, visited the site and showed the president of that association the extent of the department's tenures?

MS. BARBARA BAILLIE: I am not aware if he visited the site or not. I cannot comment about that.

MR. MACKINNON: Would it be logical to assume that that would have taken place?

MS. BARBARA BAILLIE: No, normally we don't visit the site. If the people ask for permission to put signs or anything on our right-of-way, it is up to them to locate our right-of-way. They can get those documents.

MR. MACKINNON: But if he were asked, he wouldn't have a . . .

MS. BARBARA BAILLIE: He would certainly go, yes.

MR. MACKINNON: And the permit, I believe he sent a letter to Mr. Boudreau on February 3, 1995 confirming that a permit would be issued and also that permit was signed on February 3, 1995, by Mr. Murray, Permit Number 258. Am I correct?

MS. BARBARA BAILLIE: Yes, that is correct. That is the letter I was referring to earlier.

MR. MACKINNON: There seem to have been some inference or suggestion that Mr. Boudreau, when he was President of the Bras d'Or North Development Association, used his position to carry out some activities that were not in compliance with proper process in dealing with permits and so on. I want to focus on the Department of Natural Resources for starters. With regard to the working relationship between this organization and the Department of Natural Resources, my understanding is when a project of this nature comes along that this is not a normal activity that takes place with the Sydney depot, am I correct on this?

[Page 18]

MS. PENFOUND: Yes, that is exactly right.

MR. MACKINNON: So it was a learning curve for the departmental staff which, on a regular basis, had to consult with senior administration at central office. Am I correct?

MS. PENFOUND: That is right. I am not certain, but I think we maybe only have three mooring grid files in the whole province and this would have been the first one of this nature.

MR. MACKINNON: So this volunteer organization, any time they were requested to do anything, they made a reasonable effort to meet the requirements of the department, is that not correct?

MS. PENFOUND: They certainly did make an effort, yes, and it is our experience in dealing with a community group, particularly in something that is not pro forma, that there is a lot of give and take and hand holding and trying to lead them through the steps. You have people who are inexperienced with dealing with government or undertaking such a project. It does involve a lot of give and take and it was one of the points that we made to the Ombudsman, that we felt that the department has to retain some flexibility in trying to help community groups work their way through projects that may have a number of facets and a number of complicated things involved.

MR. MACKINNON: Obviously, from our committee's perspective, it is the issue of value for dollar; also, by extension, the concern of liability. I notice that this particular community group also took the initiative to ensure themselves with a private insurance company. Were you aware of that?

MS. PENFOUND: Yes. I was not aware of the details of their insurance but I know that that was one of the issues that they had concern with and worked with Sid MacNeil, over whose property the access was going to be. One of the main concerns of those landowners was liability, if the public was going to be coming and going from their property. That was a concern for the group and the landowners.

MR. MACKINNON: Thank you. In fact, Mr. Chairman, I will table both copies of these documents.

My understanding, and the documentation appears to support the fact, is that honest intent was put into this by a number of community-minded individuals, even to the point of making sure that they were protected legally for liability, not only for the mooring situation and the slipway, but also the boardwalk and the documents. When the Clerk comes back, I will make sure that they are provided. I am sure the insurance company certainly would not have provided insurance without doing due diligence. Would you not agree?

[Page 19]

MS. PENFOUND: I would assume so, yes.

MR. MACKINNON: I am going to fast-forward over to the Department of Economic Development. Would Mr. Kennedy or one of the other witnesses be kind enough to inform us as to whether they felt they really received value for dollar on this project?

MR. ROSS KENNEDY: Yes, absolutely. I think it is a good project. It is evidenced by the activity. It seems to accomplish the intended purpose. It is a gathering point for groups, from tourists and community alike, during the summer months. I am told it provides seasonal employment for up to 25 individuals, which was part of the intent of putting that infrastructure in place. Generally, from people I have talked to, in fact, on both sides, both groups agree that, in essence, the project is good. It is just that one group has difficulty with the process.

MR. MACKINNON: That leads me to the essence of where this complaint originated and so on, that eventually it went to the Ombudsman's office. As I understand, it was initiated by one Mr. Clifford MacNeil, who at one time, I understand, was part of this Bras d'Or North Community Development Association. It is further my understanding that after several years of being involved with this association, Mr. MacNeil became very frustrated because in running his own business he was not able to secure some of the contracts or revenue opportunities provided.

It is further my understanding - and I believe Mr. Kennedy would be familiar with this particular issue - that the non-repetitive policy at the local municipal level, in terms of hiring of summer students is put in place to ensure that everybody would be given an opportunity for employment. In other words, if my son or daughter were to be hired on a summer project this year, they would not have first option next year - other individuals - so that everybody would have an opportunity. It is a fair-minded policy. I understand, from talking to members of that particular association, Mr. MacNeil also had a problem with that policy, then, eventually, took issue with the association, in general.

I am particularly concerned about an allegation that was raised by Mr. Dexter in the House of Assembly on a previous date about the fact that the province was putting public money into a private institution, a private latrine or bathroom facility. I took the liberty of checking with the association and I find that there is a letter of agreement, dated December, 1998, between the private landowner who has this particular general store and the association to cost share and in ensuring public access and also to ensure that he would provide the electricity and water on a regular, daily basis as part of the agreement.

To the officials within the Department of Economic Development, to your knowledge is there anything in terms of the funding arrangements or monies that you folks have provided that you would question in terms of not being appropriated in line with public policy?

[Page 20]

MR. KENNEDY: No.

MR. MACKINNON: You are quite happy with the fact that, I guess simply put, you wouldn't accept the fact that public money has been simply diverted into a private entrepreneurship without proper process and proper legal arrangement?

MR. KENNEDY: No.

MR. MACKINNON: Partnership.

MR. KENNEDY: Yes.

MR. MACKINNON: I understand, I guess it would be unfair for me, but we are in the business of politics here and I am still perplexed as to why we are here. It is so ironic that Mr. MacNeil's wife was the constituency assistant of a former member of the Legislature - the member for Cape Breton the Lakes, Helen MacDonald - and I somehow wonder if maybe there is an ulterior motive here, but be that as it may I like to stick to the public policy agenda. I understand that the department, CEIC, over the years, put a considerable amount of money in there in terms of ensuring that a lot of the displaced fisheries workers - and because it was in an area of high unemployment, those who had very little economic opportunity invested themselves into this particular project.

Would the officials please apprise members of the committee as to what value they felt, or do they still feel that they received value for their dollar?

MR. BRYANT: Just to fill in a little bit, the first phase of the project, the first boardwalk activity was funded entirely, as far as we know, by HRDC under the TAGS program. That was done in 1995-96. In 1996-97 we came in as part of our waterfront program, again with funding from HRDC being the majority of funding. I would assume since these projects haven't been in the news recently that they were well done and well looked after by HRDC. Ross, do you want to add anything on it?

MR. KENNEDY: The portion we came in for was essentially to assist with material costs, and as Chris mentioned, it was in Phase II. The project was ongoing at the time. It seemed at that point to be receiving good community support. We certainly weren't aware of any concerns by local landowners or groups, so we moved forward and thought of it, quite frankly, as excellent leverage with our federal partners, HRDC.

MR. MACKINNON: In terms of an economic tool, how would you assess this project in this particular area? From my own personal perspective, I have only been there once because my wife liked the store, that General Store set-up, and it was a real tourist attraction type set-up, this whole environment. She wanted to go shopping, so we went shopping. She is the boss. I had the general feeling that it was a good project.

[Page 21]

It has really done some good for the area. It has been environmentally friendly. It has resulted in cleaning a lot of tires, oil cans, oil filters, a lot of unpleasantries that have developed in that area over the last 30 to 40 years because of the commercial activity across there with three service stations. I am not saying that they are throwing it over, but if 2,000 pound boulders can be moved in Port Hawkesbury, from one end of the beach to the other, I am sure an oil can could be moved with a little bit of wind as well. Can you give us some measure of the value for dollar that we have received, not only in the short term but in the long term?

MR. KENNEDY: Well, it certainly went a long way to clean up the area and, as I mentioned previously, it conforms with the goals and objectives of our waterfront development program, the economic benefits I alluded to before: 25 to 30 seasonal employment positions through a combination of the private sector and the community group; it is an excellent venue for concerts and a meeting place for tourists and locals. I think generally it just conforms well with the benefits we expected to receive from that project.

MR. MACKINNON: I want to go back to this marina grid that has been referred to. For as long as I have been able to travel that area - not that long, but a fair number of years - boats have been mooring there for quite some time, and at least with a plan in place there will be some semblance of order and discipline and accountability. I look at your letter of February 2, 2000, from the Department of Natural Resources, signed by Brian MacSween, essentially giving notice to the organization. My understanding is that even prior to this the organization submitted a legal survey plan that was prepared by Harvey Surveys, from Baddeck, outlining a grid system there. Is that not correct?

MS. PENFOUND: Yes, that is correct.

MR. MACKINNON: Is it not also correct that they submitted some type of a document that would outline the rules of engagement or the written rules for the marina, even though they were submitted and perhaps not approved, but they were submitted for consideration?

MS. PENFOUND: That is right.

MR. MACKINNON: So it would be fair to assume that this newspaper article in The Chronicle-Herald, dated yesterday, suggests basically that there was no effort for this organization to comply. There was an ongoing working relationship, it is just the fact that in terms of time-frames, the organization really hasn't provided the documentation that you need to be able to complete the marina plan, and that also includes the rules of engagement.

MS. PENFOUND: Yes.

[Page 22]

MR. MACKINNON: Even though they have been submitted, they were discussed at the community level and with the boaters and so on and they drafted proposed rules of engagement, submitted them to the department, but the department still hasn't approved it yet or are saying they are not acceptable at this point.

MS. PENFOUND: Yes. I think the major shortcoming to date is the failure to obtain a permit under the Navigable Waters Protection Act, the Coast Guard people, for the plan, but they certainly have made significant effort on many of the requests that were made of them.

MR. MACKINNON: That is an interesting point because I guess two questions come to mind: one, how do you define a riparian right; and two, how do you define what are the legal definitions of navigable waters? Wasn't there also a concern that really there were some ambiguities on some of these issues and, given the fact that you are dealing with a large number of volunteers, well-intended community-minded people who are laypersons, this would be rather complex and sometimes overpowering stuff, particularly when they are doing it on a volunteer basis?

MS. PENFOUND: Yes, I would agree. It is often difficult for community groups and individuals who are volunteers to wend their way through the various requirements.

MR. MACKINNON: I noticed as well, and I think the point has been demonstrated to a certain extent, a lack of communication between the organization and various government departments and so on, but that from my experience in dealing with private and public issues, is not uncommon. As you have stated, Ms. Penfound, if you were to document every telephone call, every conversation, every trip and so on, you would be papered to death and you really wouldn't be halfway down the stairwell in terms of getting this project realized.

MS. PENFOUND: That is correct. It is my understanding from the local staff in Sydney that there were periods of time when they were in conversation daily with members of the group and other people in the community. There was a lot of communication back and forth, handholding and trying to get it worked out, and trying to address concerns raised by others.

MR. MACKINNON: So looking at it from a positive point of view, it is fair to conclude that one of the benefits of this process is that we now have better communication on projects that were really new to this particular area, particularly with the local staff within the Departments of Natural Resources or Transportation or Economic Development or even with the local planning authorities, because there is always that concern: well, no, that's a provincial jurisdiction so you don't have to get a permit in our department. I have been there, done that, believe me. So that's a benefit I see.

[Page 23]

I think the appearance of the community has been cleaned up. I think we have a good long-term investment. I am rather perplexed at why the NDP to date hasn't seen anything positive in this. In an area of high unemployment, where we desperately need projects to work to make communities stronger, and if there are some growing pains or there are some issues of concern between various landowners, as you have stated, Mr. MacNeil put his letter of objection in and then withdrew it. Was there any pressure on Mr. MacNeil from the department to withdraw that?

MS. PENFOUND: Not that I am aware of.

MR. MACKINNON: Are you aware of any pressure anywhere that would force him to do something against his will?

MS. PENFOUND: I am not party to what went on between individuals, but nothing that I am aware of, no.

MR. MACKINNON: You are not aware of any, per se. The Department of Economic Development, I believe, back when this project initially commenced, took the initiative - and I stand to be corrected - but would it be fair to say that it was in part their own initiative to go and meet organizations such as the Bras d'Or North Community Development Association, to find innovative ways of helping to deal with the situation of high unemployment in Cape Breton?

MR. KENNEDY: Yes, that's our mandate.

MR. MACKINNON: So when a government agency comes to a small community-minded volunteer group and says, we are willing to work with you and provide you with the resources to help employ some people, whether it be through the TAGS program, or any other type of Summer or Winter Works Program, they see a benefit, you see a benefit and it would be very difficult for them to say, oh, we are not sure. They have done due diligence, from a layperson's point of view, to the best of their ability. My understanding is that the initial kick-off of about $160,000 by CEIC was initially precipitated at the desire of CEIC. Am I correct on that?

MR. KENNEDY: I do know CEIC funded Phase I. I don't know who initiated, whether it was CEIC who made representations to Bras d'Or North or the reverse of that, but, as I say, Phase I was complete before our department began negotiations with the group on Phase II.

MR. MACKINNON: How much time do I have left?

MR. CHAIRMAN: You have six minutes.

[Page 24]

MR. MACKINNON: I would like to deal with this issue of upland landowners and a number of individuals who are reported to have raised concerns. I guess I really have to go to bat for these community-minded individuals and be critical of the Department of Natural Resources. I have a lot of respect for the staff there, they know that, but we all do things with good intentions. We are human, we are not perfect, so we do the best we can but I am rather perplexed. One of the people who took issue as an upland landowner is a brother of one of the staff in that office. After several years of this issue being on the table, all of a sudden someone who is closely connected with the department then decides to start taking issue with a number of well-intended community-minded individuals. They are not lawyers, they are not surveyors, they don't certify title. They do the best they can. It is not uncommon to go out and say, here is a deed for my piece of property and this is mine. Is it the policy of the Department of Natural Resources to go and search the title every time a project like this comes along?

MS. PENFOUND: No.

MR. MACKINNON: No, I didn't think so, so I have to question motive. Any member of this committee knows that I am very determined to make sure that we get value for dollar. I would suggest when you look at a project that is worth, between direct and indirect government expenditure, almost $1 million, we have probably invested less than $100,000 provincially and every dollar is important. I haven't seen any evidence anywhere to suggest that we haven't got value for dollar. I am concerned about why people who don't represent the area, don't have any idea or any sensitivity to some of the - in some cases - desperate economic situations that we face, create a negative environment and propagate that as if everything we do is a liability to society because we don't know how to do our work properly.

I would suggest that the Department of Natural Resources has done as good a job as anybody can do. They have made mistakes, admittedly so, but that is part of the learning curve. I would equally suggest that the insurance company, if that marina permit is withdrawn in 30 days - and it hasn't been withdrawn according to the letter, it is a letter of notice - contrary to the negative spin that they like to put on it, then they will say that Cape Bretoners don't want to do anything for themselves, they just can't get their act together and they don't want to do anything. When they try to do something, they are attacked fiercely from the most negative perspective that one could imagine.

I think that if anyone wanted to do any good that perhaps what we should do is take the initiative to at least speak to the members of this association. There is no indication that anyone has invited members of this association, Mr. Boudreau included if that be the case. He was the president. He was given the full approbation of the community, as president, on three separate occasions, so surely to heavens they must have seen some wisdom in his skills.

[Page 25]

I know the NDP are still upset at the fact that they lost Cape Breton The Lakes, but that is life, let's get on with it. This is a good project and I am very proud of the commitment that has been made by all the officials and the government departments here. I don't agree with everything and I have made that point, but I would like to congratulate you on a good project. It is not the negative garbage that is being propagated through the media for political purposes, I think it is terrible. I think you people should be very proud to stand tall in what you have done for that community and I certainly thank you.

MR. CHAIRMAN: That is just about time, four seconds. I think perhaps for now we will turn it over to the government caucus.

The honourable member for the beautiful Colchester-Musquodoboit Valley.

MR. BROOKE TAYLOR: Mr. Chairman, this is an interesting Public Accounts debate we have going this morning. I would like to focus a little bit on the financing of this project. We have heard from the honourable member for Cape Breton West that the taxpayers of Nova Scotia got good value for their dollar relative to this project. We heard from the Department of Economic Development that the provincial taxpayers got good value for the money they invested in this project and that is where I would like to focus.

I would like to ask somebody opposite how much federal funding and provincial funding actually went into this project? I have a document here that states that $650,000 went into the project. I have another one here that says $600,000 went into the project. I have another document here that says $375,000. How much went into it and how much from each level of government?

MR. BRYANT: I speak from Economic Development's perspective. Phase I, we understand HRDC put $300,000 into it through the TAGS program. Do we have a document that tells us it was exactly $300,000? I am not sure, but it is in that neighbourhood. Phase II was $238,000; $200,000 from HRDC, $38,000 from our Waterfront Development Program. Phase III was $30,000; $15,000 from our COF program, $5,000 from the private sector and $10,000 from the community group, a $30,000 project. Are there additional sums, Ross?

MR. KENNEDY: No, there is not, but I would just like to add, if I could, the provincial contribution was respecting materials only. Because of the nature of the financing through the TAGS program, the HRDC money flowed directly to the workers, so it was very difficult to determine exactly to the dollar. So we felt more comfortable to deal with the material costs only, having gotten confirmation from local HRDC officials that they were covering off the labour. So from an accounting and administrative perspective it just made more sense to deal with what we were being asked to do, which was a portion of the material costs.

[Page 26]

MR. TAYLOR: I haven't done the math there, Mr. Chairman, but it seems that when you add those numbers up, you would reach a figure that is over $600,000 and my concern as a member of the government and a member of this committee is that, in fact, the taxpayers actually didn't receive good value for their tax dollars. I know that it is counter perhaps to what the Department of Economic Development feels. However, just perhaps to continue focusing on the public funds that were expended on the project, I am wondering when the Department of Economic Development became involved in this project. I would like to know who brought it to their attention and the approximate time that the Department of Economic Development became involved in the project and felt that it should proceed?

MR. BRYANT: Let me just comment on the value for money issue and hand Ross the question on timing. We believe $38,000 of provincial government money to construct roughly 2,700 feet of boardwalk is excellent value for money. We have levered money from other sources. Obviously, there is only one taxpayer, but in terms of the money from our budget, I believe we have gotten value for money, no question. Ross, do you want to talk about timing?

MR. TAYLOR: Mr. Chairman, just on that point, the previous speaker indicated that we did receive good value for our money when the province invested only $38,000. Could you tell me what the status of that project is today?

MR. BRYANT: The status of the boardwalk?

MR. TAYLOR: Yes.

MR. BRYANT: Ross, do you want to . . .

MR. TAYLOR: Could somebody please tell me the status of that boardwalk project today that the taxpayers of Nova Scotia have received such very good value for their money?

MR. KENNEDY: Phase II has been completed. Would you like me to address when we became involved with . . .

MR. TAYLOR: Yes, please. I am sorry. I am kind of disjointed here . . .

MR. KENNEDY: Those discussions began in March 1996 and in February 1997 we issued an offer to assist with material costs. Our offer was $38,000. The total material cost was $56,000 and the other partner on the material side was the federal Enterprise Cape Breton Corporation. The final claim for that project went out in April 1997 and at that time Phase II was complete.

MR. TAYLOR: Mr. Chairman, in spite of the Department of Economic Development's opinion that the taxpayers of Nova Scotia did get good value for the monies

[Page 27]

that have been invested into that project, I would have to ask the Department of Economic Development whether or not they are aware that "No Trespassing" signs are now posted on that particular project?

MR. KENNEDY: At this point in time, no, I am not aware.

MR. TAYLOR: That is my understanding, Mr. Chairman, and I could stand to be corrected. Looking from the outside it seems like there has been a whole multitude of errors relating to this particular project. I am here this morning to get to the bottom of the finances, how they were expended and why the Department of Economic Development primarily felt that this project should proceed. Was it based entirely on reports relative to the criteria that you received from the Department of Natural Resources or from the proponent? When did the Department of Economic Development feel it was a good project, when they learned that HRDC would be coughing up approximately $560,000 if the province put in $38,000?

MR. KENNEDY: It was a work in progress. As I mentioned earlier, Phase I was complete and we were simply asked to participate, which is a logical request given that the Province of Nova Scotia through Economic Development administers a Waterfront Development Program. So part of my job as regional manager for Cape Breton is to bring funding to good projects and this one I identified as a good project and eagerly participated.

MR. TAYLOR: Perhaps I could ask this question and with all respect, Mr. Chairman, the Department of Economic Development employee continues to say this is a good project and the taxpayers of Nova Scotia have received good value for the money invested, but you know there was a story run last night on ATV News showing grass growing up through the boardwalk. It indicated that parts of the boardwalk had been taken away. There is certainly a rift in the community about the project. I just wonder is it the Department of Economic Development's position, today, that the taxpayers of Nova Scotia are still receiving good value for the monies, and I mean the monies because there is only one taxpayer, that have been invested in that project? I would like that clarified.

MR. KENNEDY: I still believe it is a good project.

MR. BRYANT: In terms of the project being complete in the spring of 1997, it was used in the summer of 1997, the summer of 1998, and the summer of 1999. Clearly there are some difficulties with the project. Ross has worked with both camps in an attempt to iron out those difficulties. There may be some problems at the moment, but with goodwill I believe those problems are solvable, but the three summers that the project has been in operation I think show the potential of the project. It would be nice, I believe, to see that potential continue and grow. I think it is unfortunate that the project has drawn a lot of attention because it has made it harder to solve those kinds of intercommunity problems that arise from time to time, but we believe those problems are still, with goodwill on both sides, solvable.

[Page 28]

Once they are solved, I believe the project will continue to pay good dividends for the taxpayers of Nova Scotia.

MR. TAYLOR: I think that is the first comment, with all respect again, Mr. Chairman, from the Department of Economic Development that I agree with this morning. I, too, hope that the concerns and difficulties down there are solvable. I don't know how realistic that is, but, you know, hope springs eternal. People have been following this sorry saga and I know that the federal government is under fire, especially the Human Resources Minister, Jane Stewart, for the so-called $1 billion boondoggle and I understand that monies out of that specific fund were directed into this project. Yet we understand that no audit is going to be conducted or at least no audit as of this point. I wonder if members of the Economic Development Department feel that there is no need for an audit relative to this particular project?

MR. CONRAD: Funding for this program that went in there really is based on a reimbursement for expenditures that are actually incurred by the sponsoring body. We are fairly confident, we are very confident, of course, that the expenditures that we have paid against our actual and true expenditures - and we have no intent to conduct an audit on this specific project at this time, although we do have the resources to do that - we paid out based on actual receipted costs that the organization contributed to us or showed to us. Those records are kept by the local community association itself.

MR. TAYLOR: I know other members and colleagues have questions they would like to direct to the witnesses this morning, Mr. Chairman, but I guess by way of closing comment or statement, I would say that this same department, the Department of Economic Development has told us not too very long ago that the taxpayers of Nova Scotia were getting good value for their dollar regarding the Mac Timber project, and they felt, I think it was Mr. Rick Alexander from the Department of Economic Development told us that it was a good project and good for Nova Scotians and the department felt that their commitment and participation was certainly warranted based on the circumstances as he understood them.

Mr. Chairman, I still disagree and I am disappointed that employees of the Department of Economic Development state and insist that the taxpayers of Nova Scotia received good value for the money that has been invested in that project. I just leave with this question, who is protecting the Nova Scotia taxpayers' interest in projects such as this? Who is left to protect the Nova Scotians' interest in these projects if we can't count on our own departments? Thank you.

MR. CHAIRMAN: Do any of the members of the committee . . .

MR. BRYANT: Just a small comment on that one. With the Waterfront Development Program, as my colleague, Neil Conrad has said, we pay out on the basis of receipted expenditures. Was $38,000 worth of materials and equipment put into the construction of the

[Page 29]

boardwalk? The answer is yes. I think we are very clear on the way that money has been spent. Did the community use that project successfully for three summers? The answer is also yes. Will it be used successfully in the coming summer? We hope so. We will work with the communities to try and work on that.

MR. CHAIRMAN: Mr. Dooks.

MR. WILLIAM DOOKS: Welcome ladies and gentlemen. Just a couple of questions. I should say, Mr. Chairman, I think we neglected to have a representative from the municipality here, we should have called a witness from the municipality. I have a couple of municipal questions I would like to ask, and maybe I could direct them to Mr. Kennedy, if you could answer them, sir. What involvement did the municipality have with this project from the start?

MR. KENNEDY: I don't know if the municipality had been a partner in the project from the beginning.

MR. DOOKS: You don't know if they were?

MR. KENNEDY: I don't believe they were, in terms of funding, I don't believe.

MR. DOOKS: But they had involvement, of course, through permits and this sort of thing.

MR. KENNEDY: I would expect.

MR. DOOKS: I have just looked back here on one of your pages and it tells it very clearly that before you would lever any funding that all permits from the municipality would have to be adhered to, so your department would check to make sure that there were proper permits put in place, from the municipality?

MR. KENNEDY: Normally that would be the course. In this case, it was phase two, it was a project in progress and the assumption was made that permits and so on were looked after in phase one.

MR. DOOKS: We are not sure at this stage, when Phase II was implemented, that the municipal permits were in place?

MR. KENNEDY: No. However I should add, though, that there were permits provided to us, the letter from the Department of Transportation that was brought up earlier. We did have that on file.

[Page 30]

MR. DOOKS: Yes, and I understand that the provincial authority can overrule the municipality, but I think that if indeed we had focused more on the municipal permit at this stage a lot of errors would have been corrected.

Would you say that we should have focused more on the municipal part, bringing them in as probably a partner in this project?

MR. KENNEDY: In hindsight, if they had been brought in prior to the beginning of this entire project, prior to phase one, yes, maybe a lot of these issues now could have been resolved before proceeding.

MR. DOOKS: That is right, because you understand when we apply for a municipal permit the planner of that department would look at all aspects, they would have written the private land owners adjacent to the property to get approval at that point, they would have contacted the Department of Transportation and also the Department of Health, so it would have certainly fixed a lot of things up, but I guess that is all behind us now.

I would also like to know about the material used for the project. Would that material go out to tender or would you have any part of that?

MR. KENNEDY: No, we don't get involved in that. It is up to the community groups.

MR. DOOKS: So basically we weren't really focusing on the permits, we weren't really watching where the material cost was going, so basically after the permit or after the request was granted, you simply would just cut the cheque to the organization?

MR. KENNEDY: No, it is not quite that simple. We would go out and do a physical inspection, and we would make sure that what was intended to be complete under the program was in fact completed. Then, yes, we would, as you said, cut a cheque after that.

MR. DOOKS: Liability of course, and once again if I go back to the municipality, if it had been addressed through that stage, liability is always a very important issue. Who was covering the liability throughout the project and then after the project was completed, who was going to continue covering the project liability?

MR. KENNEDY: I would assume that that would be a responsibility of the association, Bras d'Or North.

MR. DOOKS: I wonder if that was addressed.

[Page 31]

MR. KENNEDY: I addressed it at one point with the association, when it was brought to my attention that perhaps all the landowners weren't protected. It was after that that they ensured that adequate liability insurance was in place.

MR. DOOKS: So the community group was to own the project or does own the project, and we will say five years down the road the community got tired with the project and the volunteerism fell off, how were we going to secure ownership? Who owns the project?

MR. KENNEDY: My understanding is that there is a spirit of cooperation there between proponents, Bras d'Or North Community Development Association and the municipality, and that the municipality is assisting with some of the maintenance around that project.

MR. DOOKS: Would you say that it is the intent of the municipality to own the project?

MR. KENNEDY: In partnership. No, not necessarily own it, but Bras d'Or North, I think, would continue as the administrators of the project with some assistance from CBRM.

MR. DOOKS: This is why it is very important for all levels of government, we talked provincially, we talked federally here this morning. I was just wondering why we hadn't focused on the municipal aspect of it. Quite often as we do projects throughout Nova Scotia, and I would think the rest of Atlantic Canada, the excitement of a project initially is very much so, and later on, maybe for whatever reason, that tires, and then the municipality has to come in. The municipality would have to come in and take over the running of that park or project. This is why it confuses me and this is why I asked this question this morning, I cannot see why the municipality did not, once understanding that this project was taking place, forge ahead and want to be a partner with it, because I don't think it is traditional for the provincial government or the federal government to pick up these projects that we control.

Mr. Chairman, basically I can sum it up then by simply saying that the municipality didn't have a real part in it and we weren't really sure that we had the permits that were necessary to lever the funding there, and if for some reason, and I hope the project goes ahead and I hope it is successful for the community because I also represent an area that is somewhat deprived and we work very closely with your department and you do bring good things to our communities, but the ownership question is indeed still up. What is going to happen to the project if no one has true ownership? What happens if the municipality or the provincial government is not ready to take ownership if the community involvement drops off? Mr. Chairman, thank you for your time.

[Page 32]

MR. KENNEDY: Mr. Chairman, just one further comment, some correspondence that has been provided, that I don't appear to have in my file, it is correspondence between the Municipality of the County of Cape Breton, dating back to September 1994 regarding some involvement and their knowledge, and so on, with this project. They were working with the group at that point in time by the looks of this correspondence.

MR. DOOKS: Yes, I am going to direct that over to the coach here. Thank you, sir.

[9:30 a.m.]

MR. CHAIRMAN: Thank you, Mr. Dooks.

Mr. Morse.

MR. DAVID MORSE: Mr. Chairman, I certainly think that there were some good intentions here and that on the face of it, such a project would certainly be welcome in any community. You want to take full advantage of your natural resources and this would seem to have been an attempt to do this.

The nagging question that jumps out at me - and this also pertains to this letter that you have just referred to, Mr. Kennedy - is that the project would need the support of all the affected property owners and, indeed, the community. Having acknowledged that it may have, at its inception, seemed like an excellent idea, there are questions which, I think, are maybe answered by the "No Trespassing" signs that, perhaps, the checks and balances that one would hope would have been done were, perhaps, not actually done. In view of that, I am going to ask you again, would you proceed with this if you knew, in fact, all the landowners were not in favour of having a boardwalk on their private property?

MR. KENNEDY: Had I known that these sorts of issues would have arose, certainly. You would ask that they consult, the two groups get together, work things out before you put public money into that, absolutely, yes.

MR. MORSE: Just to confirm what certainly means. Certainly, you would not have proceeded with putting money into a boardwalk if you knew it was going over private property and that the private property owners were not in favour of having a boardwalk, and would, in fact, be putting up "No Trespassing" signs?

MR. KENNEDY: I would have had concerns.

MR. BRYANT: It seems to me, though, that this boardwalk has been around for quite a long time, there were "No Trespassing" signs. At the time it was constructed, were there private property owners who were objecting? Our information at the time was, no, that this was a well supported project. It has since had difficulties. How far in the future are we

[Page 33]

supposed to predict? We put money into this project in 1996-97 and we are now into 1999-2000. That project operated successfully and happily for quite some time.

I am sorry to see the problems that have occurred. Could they have been predicted in 1996-97 when we put our money in? Perhaps. But certainly, the indications we had at the time, this was a popularly supported project. You know as well as I do, because you have done a lot of work in communities, things ebb and flow, things are not always smooth in communities. There are lots of pressures on communities. We try to make sure, through our field staff and their contacts with people on the ground, that we will present most of the obviously preventable things. We cannot predict all of this stuff.

We still believe - and I know Ross has worked very closely with the players involved - that we would like to see this project back on track.

MR. MORSE: I want to thank Mr. Bryant for making that point. I absolutely agree with your point of view.You went into this on the belief that the support of the community was there.

I would ask you whether this letter that Mr. Kennedy just referred to a moment ago was, perhaps, one of the reasons why you went into this with confidence, that you had the support of the community? This is a letter from the president of the association and, indeed, the Deputy Mayor of the Municipality of the County of Cape Breton, at the time. Would that be the sort of information that a government would rely on to monitor the support from the community?

MR. BRYANT: I wouldn't say so. This correspondence wasn't provided to me at that time. In fact, in our dealings with the project Mr. Boudreau, as far as I know, wasn't involved as a county councillor. This information was not provided to our office in our assessment of our involvement with Phase II.

MR. MORSE: So the fact that Brian Boudreau sent a letter, stating that the ownership, and the lands and waters had been clarified, and yes, there had been consultation with both the public and landowners regarding the completed land and water use. There had been great support for this project including landowners, residents, visitors and boat owners that this was not the sort of thing that you were relying on when you proceeded with this?

MR. KENNEDY: No.

MR. MORSE: Well, anyway, I table this letter as the sort of thing that I would want to rely on if I was trying to determine the community's support for such a project.

MR. KENNEDY: One determination for me was the fact that they had successfully completed Phase I and had received considerable support for Phase II and having not been

[Page 34]

approached by anybody in the community to suggest that something was awry with the project, I think in the spirit of community developments it is incumbent upon our field staff to get out there and work on these sorts of initiatives and bring them to another level, if you can, and I am pleased to say that that is what we did in this instance.

MR. MORSE: So you don't take issue with this letter?

MR. KENNEDY: How could I? It wasn't part of the package that I had to assess. This is the first I have seen it.

MR. MORSE: I would welcome this letter if I was in a government department. But, unfortunately, the facts that have evolved since that time would seem in some measure vis-à-vis the "No Trespassing" signs, the establishment of another association that seems hell-bent on turning back the clock, which I gather also has community support, makes me wish that, as my predecessor mentioned a moment ago and indeed as the Chairman mentioned, perhaps we could have had some of the people in from this association to answer some of these questions.

In fact, Mr. Chairman, I hope that before we conclude this today that we have that opportunity because I think it is only fair that if we are talking about the actions of other people, especially people who have since gone on to become a member of this House, that they should have the opportunity to be in here and answer these questions because this letter to me seems to be quite a contradiction. While you have indicated that because the project was at that stage that you felt confident that you could go on and support it, and I have no problem with spending $38,000 to build a boardwalk if, in fact, it is wanted by the community, but as it has turned out this was not so. It was wanted by some in the community and it has become a grievous point of contention.

MR. KENNEDY: It is a real shame that those concerns weren't brought forth before the project proceeded or certainly before Phase II began. I just hope that both groups heed the advice in the Ombudsman's Report where it is suggested that they work together for the benefit of the community and I hope that spirit of cooperation occurs.

MR. MORSE: I have just one last point I would like to make. I think I have two minutes, do I, Mr. Chairman?

MR. CHAIRMAN: You have 1.5 minutes.

MR. MORSE: I understand and, again, it would be better to have somebody from the association answering this question, but I understand now in order to have access to the marina, you have to pay a toll of $83-odd a year. Would maybe Ms. Penfound answer that question?

[Page 35]

MS. PENFOUND: First off, there is no marina there, there is a mooring grid.

MR. MORSE: Okay, mooring grid.

MS. PENFOUND: A marina would be floating docks from the shore with boats tying up. There is no marina, there is a mooring grid. I don't know about the $83. I know that the terms of our licence and how it was to work was that boat owners would have a mooring assigned to them. They would apply to the group, have a mooring assigned, and for each mooring that the association authorized a boater to use they would remit to the department $25. In terms of an access fee over the land portion, I don't know anything about that. We don't own that land and we have no control of that.

MR. MORSE: My understanding is that, in fact, there is a fee that is asked of the association members and I also understand that previous to the building of this project there were multiple entry points. So one of my concerns is that we have now funded a toll access to the lake. Thank you, Mr. Chairman, I think my time is up.

MR. CHAIRMAN: I will now turn it over to the NDP caucus. Each caucus will have five minutes for further questioning.

MR. DEXTER: Mr. Kennedy, did the 1997 waterfront program have an equity component?

MR. KENNEDY: No, not to my knowledge.

MR. DEXTER: In your memorandum dated March 11, 1996, you say, "Mr. Boudreau is well aware that the 1997 Waterfront Program will include an equity component probably in the 30 percent range. Despite this Mr. Boudreau was adamant that we forward to you his application for assistance on the basis as outlined above.". It is now your position that there was no equity component?

MR. KENNEDY: At that time, that went to the committee, the general . . .

MR. DEXTER: Was there an equity component or wasn't there?

MR. KENNEDY: There was no equity component in that . . .

MR. DEXTER: In that project.

MR. KENNEDY: No.

MR. DEXTER: Was there one in the program? Did you require an equity component?

[Page 36]

MR. KENNEDY: Under the general guidelines of the program . . .

MR. DEXTER: Yes.

MR. KENNEDY: . . . we normally look for an equity requirement. In this case . . .

MR. DEXTER: So this was an exception.

MR. KENNEDY: . . . that was the purpose. Exactly.

MR. DEXTER: This was an exception for this program. Mr. Kennedy, you are aware that this project has no access from Phase I of the project, Phase II has no access from Phase I.

MR. KENNEDY: No access?

MR. DEXTER: Yes. It stands alone.

MR. KENNEDY: Yes.

MR. DEXTER: It stands along Highway No.105. There is no way to get to that except over the highway. The Department of Transportation, in issuing its permit, specifically said, you can't use the Department of Transportation property for access. Is that correct?

MR. KENNEDY: Yes.

MR. DEXTER: So the only access to this was on private property. You spent $38,000 of taxpayers' money to put a boardwalk on private property, 90 per cent of it on private property.

MR. KENNEDY: As I said, we had the permits from Transportation saying that they could . . .

MR. DEXTER: Did you have an easement across the private property?

MR. KENNEDY: Pardon me?

MR. DEXTER: Was there an easement across the private property?

MR. KENNEDY: Not that I am aware of.

MR. DEXTER: No. This project now has "No Trespassing" signs up on it, part of it has been torn up, there was never any access to the project. Quite honestly I can't believe that

[Page 37]

Mr. Bryant is trying to tell us that it was used over those years because it wasn't used. Do you really consider this project to be a success?

MR. KENNEDY: I do. Interestingly enough . . .

MR. DEXTER: That is preposterous, Mr. Kennedy. It is preposterous.

MR. KENNEDY: . . . both groups have told me they do. Both groups have told me at different times that they believe it is inherently a good project.

MR. DEXTER: We are not talking about Phase I, we are talking about Phase II.

MR. KENNEDY: I am talking about Phase II.

MR. DEXTER: Which is a strip of boardwalk along the Trans Canada highway that has no access, that hasn't been used, that has now been torn up, is on private property, and you are trying to tell this committee that that is a successful project by Economic Development's definition.

MR. KENNEDY: It has been used. It is there. Both groups have told me, subsequent to the completion, that inherently it is a good project, albeit not without wrinkles that the Ombudsman has tried to sort out, and Natural Resources are working with the groups to sort out, but inherently both groups have told me, in essence, it is a good project.

MR. DEXTER: Mr. Kennedy, we are not talking about inherently, we are talking about practically. This project is a fiasco. Will you admit that? Will you admit that Phase II of this project has been a fiasco?

MR. KENNEDY: No. Not in my mind.

MR. CHAIRMAN: Order. We have a minute and one-half left with the NDP. Then we will be turning it over to the Liberals for their comments.

MR. DEXTER: Mr. Kennedy, did you deal with the application for the installation of the washroom facilities?

MR. KENNEDY: Yes, I did.

MR. DEXTER: The access to that facility is through the tea room, is that correct?

MR. KENNEDY: Through the tea room?

MR. DEXTER: Yes. Through the store.

[Page 38]

MR. KENNEDY: As an interim measure those premises are being made available to the public until such time as the washrooms are completed.

MR. DEXTER: The septic system also services the apartment that is located over the store?

MR. KENNEDY: Well, it was - to my knowledge.

MR. DEXTER: It is a 500 gallon system. How many members of the public do you think that that system is going to service?

MR. KENNEDY: I think it will look after the needs with the exception of larger public events, concerts and so on, at which time you get extra capacity. It is going to provide some basic services to support the infrastructure that is in place on that waterfront now.

MR. DEXTER: We did a simple thing, we phoned over to the Department of the Environment and they tell us that it won't service anything more than the normal customers that go into that store and the apartment over top. Does that surprise you?

MR. KENNEDY: Well, that is contradictory to what the regional manager with the Department of the Environment told me, because it was at their request initially that I got involved in the project.

MR. CHAIRMAN: I thank Mr. Kennedy for his answer. Am I cutting you off or was that your complete answer? Okay. I want to pass it to the Liberal caucus. Speaking for the Liberals would be the honourable member for Cape Breton West.

MR. MACKINNON: Mr. Chairman, it is quite evident that the honourable member, the alias F. Lee Bailey over there, and his caucus have no desire whatsoever to see any type of constructive economic and social development in Cape Breton, simply because their Party lost a seat. I have never seen such parochial partisan politics in all my life. How desperate are they that they would even go to the extent, even when the department officials say both organizations see the project as a good initiative for the community, despite their differences. That is how low they will crawl to destroy people just for political gain.

Mr. Chairman, it has been stated, there are some growing pains in here. I would ask the question to Ms. Penfound, is she aware of the policy in the department that you have to have a certificate of title certified by a member of your legal profession every time one of these projects is done, right across Nova Scotia?

MS. PENFOUND: No, but keep in mind we were dealing with a submerged land part.

[Page 39]

MR. MACKINNON: Yes, provincial jurisdiction. So there was no search of title to see if, perhaps, there were some water lots granted back in the 1800's, was there?

MS. PENFOUND: No, because the area had been used for moorings for decades.

MR. MACKINNON: So it is fair to assume that when a layperson in consultation, through community meetings, public meetings on several occasions to deal with this, has done considerable due diligence as a layperson to make sure that everybody was onside with this project before it began? Obviously, all the government departments here seem to think everything was a go. So there was little reason to question this any more than any other one. Am I correct?

MS. PENFOUND: I suppose so, yes.

MR. MACKINNON: So, Mr. Chairman, my colleague has a few comments that he would like to make before I gobble up all the time.

MR. CHAIRMAN: The honourable member for Dartmouth East.

DR. JAMES SMITH: I was more concerned about his blood pressure, Mr. Chairman. I know he does feel strongly about this issue but I just want to thank our witnesses . . .

MR. MACKINNON: Maybe they should go to Cape Breton and find out what it is like.

MR. CHAIRMAN: You are showing your background as a caring physician, Dr. Smith.

DR. SMITH: Thank you, Mr. Chairman. (Interruption) Oh, that might be difficult under the circumstances, but thank you. I just, briefly, want to thank the witnesses this morning.

I have tried to get up to speed on this issue, because it is not one that I followed, particularly, other than through the media reports and some of the discussions here in the House of Assembly. It concerns me because I grew up in a small community, not unlike this, and know how these traditional uses of waterways and access can become issues when communities get divided. In all fairness, though, I do agree with my colleague that politics got involved here and I think that was a very negative factor.

We have heard from our witnesses this morning that there has been value for money in this project. There was momentum building. I look to the future. Can we survive? Is there any initiative that we can take away here this morning that this momentum that was gained - the job creation? We heard that there were 25 jobs in the summer, much-needed jobs -

[Page 40]

students, probably, young people - people that maybe are not employed the rest of the year, overcoming the decades of traditional usage of the waterways and the access to that.

Is there anything in a brief parting shot that we could say, what is to be the value and what can be done from here, and what are the plans of the future to make this a viable operation? There have certainly been some negatives with the boardwalk that we have heard daily. Would anyone like to comment, just as a last few words, as to what we can do?

MR. CONRAD: We haven't abandoned this project and we will continue to work with the groups in question to resolve any issues that we may be able to be of assistance in. I sincerely believe that this project will stand the test of time, only if there is a will built in the community itself to resolve some of these issues.

DR. SMITH: Thank you.

[9:50 a.m. Mr. Russell MacKinnon resumed the Chair.]

MR. CHAIRMAN: The honourable member for Colchester-Musquodoboit Valley.

MR. TAYLOR: Mr. Chairman, I would submit that when one runs out of a roll of toilet paper or paper towels, the tube that is left, at the very least you might use it for a moose call or a voice enhancer. (Laughter) I am not so certain what the future of the boardwalk/marina is going to be down in Bras d'Or. I know that all members in this Chamber today hope that it does come back in some useful way or some useful means, but my concern is from looking at pictures and understanding signs that have been posted, et cetera, that the project is being devalued, it is depreciating.

Dr. Smith hit on a good point. I guess I would like to ask further to that, what specifically are the Department of Economic Development, the Department of Transportation and the Department of Natural Resources doing to ensure that this project does become a success, or at least become available to the taxpayers of this province so they can get some value for the considerable monies that have been invested in it? What specifically are the various departments doing to ensure that? What are they doing to mitigate or alleviate that rift that exists between the two groups?

MS. PENFOUND: I guess by way of comment about where our department is at this moment, it appears that the Bras d'Or North Community Development Association will not be operating the mooring grid, having not met the requirements for the licence. It is the department's intent and wish that some community group operate that mooring grid. We don't wish to be issuing permits to individual boaters, we think it is something that fits more with a community organization. Having said that, it may not be possible for that to be in place for this season, as the season will soon be upon us. We are reviewing that situation now and

[Page 41]

it is quite likely that the department will have to operate the grid this summer to ensure that it operates.

It would be our wish that the community would come together to figure this out. One of the recommendations of the Ombudsman's Report was that they should get a mediator. We will try our best but we can't make them love each other.

MR. CHAIRMAN: The honourable member for Pictou East.

MR. JAMES DEWOLFE: Mr. Chairman, the honourable member for Cape Breton West certainly made, in my mind, a feeble attempt to shed a positive light on this project, a value for dollar for Nova Scotians. I think if any Nova Scotian were to see this project they would be very upset that over $600,000 of taxpayers' money went into it. Certainly I would agree with the honourable member's assessment of DNR's responsibility because I agree that DNR was operating on the best information that was available at the time, but in doing so the honourable member for Cape Breton West, I think unwittingly, redirected at least some of the responsibility back to his own colleague, the member for Cape Breton The Lakes, whose name appears on more documents that I have in my portfolio than anyone else.

That is of great concern to me, particularly this letter which indicates that there were proper procedures followed with regard to landowners and property owners and so on. It amazes me that anything could be built on private property without signed documentation by the landowner and property owners to agree to such a project. I contend that the project was indeed a failure. I hope that some good can come out of it because the taxpayers deserve no less. I certainly realize that my time is up so I won't pose this as a question to anyone. If someone would care to respond to it, I would be most appreciative because, my gracious, it is a shame and we must not let this sort of thing happen again. Does anyone care to respond to my statement from the other side?

MR. BRYANT: I think the word you used is, it is a shame, and I think that is the issue. I believe the proposal for some sort of mediation may be helpful. I know our staff was in contact with both groups and we continue to hope that we can restore some semblance of community togetherness on this project. No question, the media attention, this kind of discussion, has inflamed passions a little bit and we have to somehow see if there is some way we can remove this from the shame category and put it back into the enthusiastic category.

There is a piece of infrastructure there that I think has real potential, maybe not every summer, everywhere, but it has demonstrated some of that potential and we would hope that with interventions from our staff and goodwill on the part of some of the participants we can have this project functioning at its best.

[Page 42]

MR. CHAIRMAN: I thank all members for their interventions. I particularly would like to thank all the members of our panel here today for attending and being forthright and very helpful to the committee in our deliberations. I guess we have to move forward for next week's agenda. Tentatively what is scheduled is a briefing session for the Department of Transportation and Public Works actually on two issues. There were two rather substantive audits; one on the issue of leasing and one on the ice removal issue that was raised by a number of individuals. I believe the Tory caucus perhaps has an offering on the Sysco situation as well. Perhaps if Mr. Morse would like to enlighten the committee.

MR. MORSE: Certainly, Mr. Chairman. Last week, Dr. Smith brought forward the point, and rather well, that there had been a lot of things going on with the sale of Sysco and that perhaps it would be most appropriate to give the public a chance to view and to have us question just what went on with the various parties involved in this. We would like to see this come on the agenda with one little qualification and that is, of course, that the deputy minister be able to speak first, as our first witness; that would be Jim Spurr. So if the committee would welcome that qualified endorsement, we would like to vote on it.

MR. CHAIRMAN: Would you like to put that in the form of a motion?

MR. MORSE: I would like to put that in the form of a motion. (Interruption) No, just to put it on the agenda.

MR. CHAIRMAN: Just to get it on the agenda. Not necessarily for next week but to get it on the agenda.

MR. JOHN HOLM: Just to be on the record, since we had in our list submitted a number of weeks ago, requested Sysco, we certainly would be in support.

MR. CHAIRMAN: Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

MR. MORSE: Mr. Chairman, I think, following up on your suggestion during the session this morning, I concur that it would be most appropriate to have members from these two community organizations in the Bras d'Or area come in and speak. I think it is only fair to Mr. Boudreau that he have a chance to come in here in front of the Public Accounts Committee and explain his actions in this. So I would move that we have one more session on this morning's topic but some different witnesses.

[Page 43]

MR. CHAIRMAN: I believe I can speak for Mr. Boudreau. He has actually expressed interest in coming, with no hesitation.

DR. SMITH: I have no real objection. My only concern, Mr. Chairman, is that we don't prolong the political process and delay the healing in that community that we have heard, that working together and coming forward. We have this summer. (Interruption) That's fine and I hope it is but I think you can't imply motives. I think if an airing in public is important to either of these two groups, that is fine, but if again it is a media-hype session, it is a confrontation, the type of questioning we have seen here this morning - I think they should be treated with courtesy to hear what they have to say and to find a solution but I personally, as a member of this Legislature, do not want to be part of an ongoing saga here that divides a small community.

[10:00 a.m.]

I grew up in that type of community and I know how destructive this can be. Coming to Halifax, appearing before this august body and you, Mr. Chairman, as Chair, we can do further damage. I just don't want to be part of that, and I don't know how we can build a consensus on that, but it is going to be show and hype for the media, which it has been, and I think politics has been part of the negative factor here. I don't want to be a further part of it or represent my caucus in that area.

MR. CHAIRMAN: I believe Ms. Penfound made that point, that this process to date has made it very difficult for the community to heal. Perhaps with that in mind, we may want to allow the respective ministers for those departments to reflect on that for a week or so, and then we can come back. Would that be fair enough? It is entirely up to the PC caucus.

MR. TAYLOR: I tend to agree with the honourable member for Dartmouth East. My primary purpose in this committee is to examine the Public Accounts of this province and how they are expended. I have no interest in advancing the political agenda of a particular Party or members regarding this issue. I want to know if in fact during past Public Accounts hearings if MLAs, present or previous MLAs - I guess in this case present MLAs, perhaps Mora could tell us - have been called in as a witness. I would like to have an answer to that. Just so that I know we are not breaking some . . .

MR. DOOKS: It is getting a little confusing. Are we going to continue this or not? If so, Mr. Chairman, I would like to have representatives from the municipality come in, the Cape Breton Regional Municipality, to address the permit issue; I still believe that that is a very important part to be clarified.

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MR. TAYLOR: Mr. Chairman, on a point of order. I would like to clarify whether or not we are creating a new precedent relative to bringing in a colleague of ours to . . .

MR. CHAIRMAN: No, no.

MR. TAYLOR: We are not. Okay, that was my question.

MR. DEXTER: No, that is not true. That is wrong; that is wrong information, Mr. Chairman. In fact this committee took it upon itself to call the Premier and the Minister of Finance before this committee . . .

MR. CHAIRMAN: Order, please. I have just agreed with the honourable member, and perhaps the honourable member, Mr. Dexter, didn't hear what I stated. I indicated quite clearly yes. He asked it in a reverse negative to which I agreed. My personal suggestion is that I really would, from experience, allow the respective ministers in those departments to reflect on it for one week, and if you still want to proceed on this. We have other major issues, then certainly we can . . .

MR. TAYLOR: The precedent is there, Mr. Chairman, and . . .

MR. CHAIRMAN: Okay, then we need a motion.

MR. HENDSBEE: Would it be possible or advisable that if we are going to have someone from the regional municipality's planning department explain the permit process which should have been in place, if Mr. Boudreau is going to be there representing at the time either being on council or a member of the association, should we also not have representations perhaps of one of the affected property owners who were not in favour or conflicted? I think we should have all three sides present.

MR. CHAIRMAN: We have indicated that we will invite both groups, both representatives, plus . . .

MR. HENDSBEE: I would appreciate that.

MR. CHAIRMAN: . . . if Mr. Boudreau is a past executive member, that certainly can be included. We have to bear in mind that at the time he was a representative on this association he was not a member of the municipal council. So you would want to invite a representative from the municipal process, perhaps Mr. Spicer, in charge of permits, that sort of thing. So the question.

[Page 45]

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

Are we on for the briefing session with the Auditor General and Department of Transportation and Public Works next week? Okay. Roy.

MR. SALMON: I am concerned about attempting to deal with both chapters of the . . .

MR. CHAIRMAN: We can just deal with one.

MR. SALMON: I would prefer to deal with one next week . . .

MR. CHAIRMAN: Yes.

MR. SALMON: . . . and if you wish to deal with the second one, deal with it at a later date.

MR. CHAIRMAN: We will have that later.

MR. SALMON: Could I have some direction as to which one you would prefer to deal with next week?

MR. CHAIRMAN: Which do you want to do the briefing with, snow and ice or leasing? (Interruptions)

MR. TAYLOR: Mr. Chairman, there seems to be some misunderstanding as to who the witness or witnesses are for next week's public hearing.

MR. CHAIRMAN: No, we are having a briefing session with the Auditor General next week on one of two issues, either the ice and snow removal or the leasing issue.

MR. TAYLOR: Mr. Chairman, I understood that there was some flexibility. Is that timely? Can that be delayed?

MR. CHAIRMAN: Well, it is going to take us some time to round up the witnesses for a sequential meeting on this particular issue because we have to send out the invitations. We are going to have to get responses back and as you noticed before there were several delays on getting witnesses on the MacNeil project. So it would be almost mathematically impossible to have them for next week.

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MR. TAYLOR: Well, that is fair. I understand that.

MR. CHAIRMAN: So which is your pleasure for next week?

MR. HOLM: Mr. Chairman, if the Auditor General has a preference as to which he would like to do first, I certainly would be more than happy to accommodate that. If not, let's just do them in alphabetical order.

MR. SALMON: I don't have a preference.

MR. CHAIRMAN: Ice and snow it is.

The meeting is adjourned.

[The committee adjourned at 10:07 a.m.]