The Nova Scotia Legislature

The House resumed on:
September 21, 2017.

Public Accounts -- Wed., May 24, 2000

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HALIFAX, WEDNESDAY, MAY 24, 2000

STANDING COMMITTEE ON PUBLIC ACCOUNTS

8:00 A.M.

CHAIRMAN

Mr. John Holm

MR. CHAIRMAN: Before we begin, maybe it would be appropriate if members of the committee introduced themselves to our guests, before I introduce our guests. I would also point out that the member for Halifax Fairview will be joining us, she will be replacing the regular member from the NDP here today. We will begin with introductions from the Progressive Conservative caucus.

[The committee members introduced themselves.]

MR. CHAIRMAN: Our guests this morning are Mr. Gary Findlay, General Manager of the Nova Scotia Liquor Commission; Mr. Bruce Rogers, Executive Director of Retail Sales; and Ms. Sheila O'Leary-Jones, Director of Finances. We are also joined, as we usually are, this morning by representatives from the Auditor General's Office. This morning we have Mr. Claude Carter, Deputy Auditor General, and Mr. David Hicks, Audit Manager.

With that, maybe we could begin. Just to point out to committee members, if it is agreeable, we might want to save 5 or 10 minutes at the end of the session, if possible, to deal with the letter that we received from the Minister of Economic Development with regard to the request that we had made of him at our meeting two weeks ago. With that, I will turn it over to our guests. Mr. Findlay, you will be making the opening remarks for 5 or 10 minutes, as you had indicated.

MR. GARY FINDLAY: Mr. Chairman, good morning to you and members of the committee. My name is Gary Findlay and I am the General Manager of the Nova Scotia Liquor Commission. I understand that I will be allowed a few minutes, and I will keep it to a few minutes, to bring you up to date on the recent performance of the organization, some of our current activities, and we would like to thank you for that opportunity.

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As you may know, the NSLC operates 100 self-service stores, providing broad coverage to customers around the province. An illustration of this is that there are only approximately 12,000 people of drinking age who are not within 20 kilometres of a liquor store, most are much closer than that. These 12,000 people are widely dispersed throughout the province in smaller communities. During the course of our business year, over 15 million customer transactions take place across the store system. There are approximately 2,000 products available in the system at any given time. These products are sourced from about 363 suppliers from 43 countries.

While there is a broad range and choice of product selection available to our customers, beverage alcohol, not unlike many consumer products, sources about 80 per cent of its sales from about 20 per cent of the products available in the market place. The major suppliers and the most popular products in Nova Scotia are not that different from those in other parts of Canada, allowing, of course, for a few regional differences. All products are not available in every store, as the product mix in each location is tailored to the selection purchased most frequently in a given market area. Any product in our system can, however, be obtained for all locations around the province. In addition to this, if customers request a product that we don't have in Nova Scotia, we have a special order program and will source it either from another liquor board or from the supplier in question, if it is available.

In addition to the normal product selection, we have a Port of Wines program, which consists of our flagship store here in Halifax and 22 Port of Wines outlets located in various stores around the province. Again, our Port of Wines products can be brought to any store to meet requests from customers. The product selection in the Port of Wines consists of a core list of products that are available on a somewhat consistent basis, and another changing group of products that may only be available in limited quantities.

The NSLC also offers a wide range of promotional and merchandising programs in the stores. These programs are such things as added-value offers, monthly price reductions, red tag value specials, display programs, just to name a few. They are designed to provide our retail customers a number of value or price options in the various product categories and allow for a competitive supplier environment in the Nova Scotia market place.

In addition to this, we have a number of other services for customers that are worthy of note. A Bottle Your Own Wine service is available in eight NSLC outlets, strategically positioned around the province. Nova Scotia was the first jurisdiction to locate a bottle your own operation within a retail liquor store. Another concept that has proven very successful is the store within a store concept, where liquor boutiques operated and staffed by NSLC employees are located within grocery outlets, another first for Nova Scotia. These operations are very effective in certain market areas from a customer service and a financial perspective.

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Other initiatives that we undertake such as our Food For Thought units, which are designed to provide a range of wines and information and allow easy and quick matches with various food dishes, have also been well received. These are just some examples that in combination with relocation or redesigning of some of our stores where we are working to provide a customer-friendly, convenient and interesting shopping environment for our customers.

From an employee perspective, NSLC employs over 900 people, made up of 503 full-time employees, 162 regular part-time employees, and approximately 300 casual staff members. Included in these numbers are our 8 person senior staff complement responsible for the major functional areas of the operation. Of the full-time and regular part-time complement, 564 or 85 per cent are unionized members of three NSGEU bargaining units. NSLC store managers are also members of NSGEU. As would be expected from a retail operation, 85 per cent of the full-time and regular part-time complement are in the retail store and warehousing areas. Casual employees are almost totally utilized in the retail store system, with the exception of occasional fill-in or short-term assignments in other parts of the operation.

Over the past number of years, the employee complement at the NSLC has been reduced significantly, 20 per cent on a full-time equivalent basis across all levels of the organization. These reductions have been implemented during a period when hours of operation and days open for the stores have increased. This reduction has been part of a long-term plan, and has been achieved through normal attrition, regular retirement, early retirement programs, changes to our processes, elimination of redundant tasks, and a change in the employee mix to one that is more conducive to the needs of a retail operation.

In addition to their normal duties, as some of you may know, NSLC employees are actively involved in the many charitable and social responsibility activities of the organization. The NSLC initiates or participates in many social responsibility programs, such as Don't Buy for Minors, Safe Graduation, the Blue Thunder Police Band, and a major recent initiative, The Plan Ahead to Get Home Safe campaign. This is a program that involved 188 schools across the province and is focused on students designing and drawing messages on bags that are then used in NSLC stores. These messages about the responsible use of alcohol are very effective, and the program has widespread acceptance among students, schools and teachers.

Another ongoing activity of NSLC staff is, of course, the identification and refusal to sell to underage people. This ongoing and important activity is supplemented at key times of the year by a program we call Check 25. It increases the awareness of the staff and the public to the issue of underage drinking by taking the approach that anyone who appears to be 25 years of age or younger may be challenged and asked for identification before they will be served.

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The organization and staff are also involved in supporting numerous fund-raising activities such as the United Way, IWK-Grace Hospital, Children's Wish, Crime Stoppers, our Cash Can program in the stores, and many other activities, either at the provincial or local level.

We are also fortunate at the NSLC to have a key employee group that has, in addition to beverage alcohol experience, a wide range of expertise obtained in the private sector. This exposure and training covers a broad range of private sector business activities and includes previous employment with multinational consumer products companies, national and international retailers, human resources, property management and development, major food chain experience, discount retailers, and private sector wholesaling, to name a few. This broad knowledge base has been a very positive factor in assisting the organization with the many changes it has put in place over the past number of years to improve our customer service and increase efficiency.

Finally, on the financial performance front, the story is very positive for the NSLC, a revenue generator for the province. Sales during the fiscal year 1998-99 were $351.7 million, an increase of 5.9 per cent over the previous year. This enabled the NSLC to transfer profits of $129.2 million to the province; this was an increase of 9.1 per cent or $10.8 million higher than the previous year. During the 1999-2000 year, just finished, our sales increased to $371.4 million, and profits were up again to $135.2 million, an increase of $6 million. Projections for the current fiscal year reflect a moderate increase in sales volume and a further increase in profit to $141 million by the end of the year. During the past decade, the NSLC has contributed $1.3 billion to the general revenues of the province.

I would like to thank you for allowing us the time to provide you with this information, and would be pleased to try to answer any questions you may have.

MR. CHAIRMAN: Thank you very much, Mr. Findlay. We will begin our questioning with the Liberal caucus, 20 minutes first round. You are beginning at about 8:12 a.m. and you will finish at about 8:33 a.m.

The honourable member for Cape Breton West.

MR. RUSSELL MACKINNON: Mr. Chairman, I thank the members from the commission for appearing today and for their opening remarks. Obviously, I think one of the issues that we have floating around in the last number of days and weeks has been the fact that the government would like to privatize the Nova Scotia Liquor Commission. Is anybody from the Liquor Commission aware of any government study that has been undertaken to that effect?

MR. FINDLAY: No, as I am sure you are aware, there is a review committee under way at the moment, which is conducting just such a study.

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MR. MACKINNON: You are not aware of any study that has been undertaken?

MR. FINDLAY: To privatize the Liquor Commission?

MR. MACKINNON: Yes.

MR. FINDLAY: No.

MR. MACKINNON: Has there been any discussion with the government in terms of the possibility of privatizing the Nova Scotia Liquor Commission?

MR. FINDLAY: No, other than the process that is going on now. The idea of privatizing the Liquor Commission is not a new one, there have been various positions put forward over a number of years, and obviously comes up in conversation or communication at the time, but we haven't been involved in any studies involving privatizing the Liquor Commission.

MR. MACKINNON: You wouldn't have had any discussions with the government in terms of the impact of privatization, if that were to take place?

MR. FINDLAY: We have identified, in the past . . .

MR. MACKINNON: I am not talking about the past, I am talking presently.

MR. FINDLAY: No. I sit on the review committee that is going on at the moment.

MR. MACKINNON: You are on the review committee then?

MR. FINDLAY: Yes.

MR. MACKINNON: There is a process that is active, considering the privatization of the Nova Scotia Liquor Commission?

MR. FINDLAY: There is a process that is active in identifying the various options, as was pointed out in the budget statement by the minister.

MR. MACKINNON: Is privatization one of them?

MR. FINDLAY: Any change to the Nova Scotia Liquor Commission would have an element of privatization in it.

MR. MACKINNON: Is that a yes or a no?

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MR. FINDLAY: All the options that are available are part of the mandate . . .

MR. MACKINNON: That wasn't my question. Is privatization one of those options?

MR. FINDLAY: The minister stated that it was, yes.

MR. MACKINNON: I am asking you, as a member of that committee, is that one of the options?

MR. FINDLAY: Our role there is to identify all the options and take them back to the government.

MR. MACKINNON: In fairness, Mr. Findlay, I am not asking for a Dances With Wolves, I am just asking for a simple yes or no. Is privatization one of the options that is being considered by the committee?

MR. FINDLAY: Yes.

MR. MACKINNON: Obviously, there has been some consideration of some comparables on this particular issue. Is that not correct, like looking at other jurisdictions?

MR. FINDLAY: That is exactly what is taking place at the moment.

MR. MACKINNON: Have you looked at the Alberta model?

MR. FINDLAY: We, as members of the Liquor Commission, are well aware of the various models used to . . .

MR. MACKINNON: Mr. Findlay, please. I understand there are various models, my question was quite specific, have you looked at the Alberta model?

MR. FINDLAY: Yes, we have.

MR. MACKINNON: What is your analysis of the Alberta model, in terms of recommending whether you would privatize or not privatize?

MR. FINDLAY: Our analysis of the Alberta model was to look at it for what it is. We made no recommendation or analysis of whether the Alberta model would be used or would be effective as a privatization model, that is not our role. Being in the industry, we obviously are well aware of all the things that go on.

MR. MACKINNON: Mr. Findlay, you indicated you sit on the committee that is reviewing that process, am I correct?

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MR. FINDLAY: Right.

MR. MACKINNON: Part of the mandate is to consider various options, one being privatization, correct?

MR. FINDLAY: Right.

MR. MACKINNON: Obviously, you would have to look at other comparables to find out whether you would be making a prudent decision, if that were one of the options considered, is that not correct?

MR. FINDLAY: Yes.

MR. MACKINNON: Obviously, you would have to look at such comparables as the Alberta model, because that is one of the more pronounced ones in the country, am I correct?

MR. FINDLAY: Right.

MR. MACKINNON: Are you telling us that you have examined other jurisdictions, but you haven't made any recommendation at this point?

MR. FINDLAY: That is correct, sir.

MR. MACKINNON: I see.

MR. FINDLAY: The process is just under way. There have been no recommendations made . . .

MR. MACKINNON: When you say just under way, could you put a time-frame on that? When did this commence?

MR. FINDLAY: The committee was assembled after the announcement in the budget, I don't know the exact date; since the Budget Address.

MR. MACKINNON: Are you aware of the significant increase in robberies of liquor stores since they were privatized in Alberta?

MR. FINDLAY: I have no information on that, one way or the other.

MR. MACKINNON: You haven't examined the Alberta model in much detail then, is that what you are telling us?

MR. FINDLAY: That is right.

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MR. MACKINNON: How many robberies of Nova Scotia liquor stores have you had in the last year?

MR. FINDLAY: One or two, I am just trying to remember.

MR. MACKINNON: One or two, is that the norm, the average?

MR. FINDLAY: No. We have had very few robberies over the past 20 years.

MR. MACKINNON: How many would you say in the last 20 years?

MR. FINDLAY: I don't have the exact number, but it would be a handful at the most. I can get it for you. It is a very small number.

MR. MACKINNON: May I suggest then, if you look at the Alberta model, you would see probably an 1,100 per cent increase in robberies after they privatized the liquor stores in Alberta. I would suggest that would be a major consideration. My next question is, what social control measures does the commission take to ensure that underage and drunken people are not permitted access to alcoholic beverages?

MR. FINDLAY: As I mentioned earlier, it is an ongoing part of the responsibilities of the people in the store to identify and demand identification from those people who appear to be underage or for those people who they can determine may be buying for minors. That is something that is an ongoing, daily part of their jobs.

MR. MACKINNON: As a member of this particular review committee, has there been any consideration given to the impact of privatization in terms of such individuals or under-aged individuals accessing private liquor stores for the purchase?

MR. FINDLAY: The social aspect of the business is one of the elements that would be considered by the committee before any final recommendation is made. I mean all of those things are business issues. They are social issues.

MR. MACKINNON: What other models is your committee looking at besides privatization?

MR. FINDLAY: The number of models has not been determined. The mandate is to look at various options that might be available and that has not been completed. There are a number of models that are fairly well-known. There are all kinds of variations of those. The whole objective of this is to look at each key variable to see what the impact is both from a customer service, an economic and a social perspective, but that has not been done yet.

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MR. MACKINNON: How far down the road would you foresee that being concluded?

MR. FINDLAY: It would be a guess, but I would say within the next couple of months.

MR. MACKINNON: Mr. Findlay, how long have you worked for the Liquor Commission?

MR. FINDLAY: Since 1993, sir.

MR. MACKINNON: What was your background before that?

MR. FINDLAY: I spent most of my career with the Bristol Myers Squibb Company, which is an international pharmaceutical health care and consumer products company, in various positions.

MR. MACKINNON: The other focus on this, because what we are hearing the government saying is there has been a program review. What about the present structure that we have? What is the feeling of yourself and your board of directors in terms of the operation of the present Liquor Commission? Is there generally a good rating on that? I mean the satisfaction level, how would you rate it on a scale of zero to 10?

MR. FINDLAY: I think from our perspective we think we are doing a good job, trying to improve things, but as any business evolves, it does not mean that alternatives cannot or should not be looked at. We have a very positive feeling about where we are and what our performance has been and what our return has been, but it is certainly the prerogative of the shareholders, if you will, and the government to look at options. This happens not only in the public sector, it happens in private sector business as you know.

MR. MACKINNON: Yes.

MR. FINDLAY: Our role as management is not to decide that, it is to execute the best we can with the structure and the environment that we have.

MR. MACKINNON: You have indicated that over the years you generally look at the various models and ways to improve service and operations. The committee that you are now serving on, obviously, you have not come to any conclusion as to which model you would recommend, correct?

MR. FINDLAY: That is correct.

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MR. MACKINNON: Over the years that you have been in operation, let's say since 1993, have you looked at any other particular model and compared yourself, like how you are doing, let's say not just provincially, but in terms of nationally?

MR. FINDLAY: We, as a matter of routine, in our business planning cycle we look at other jurisdictions, what they do, what their performance is, what their structure is and it is something that we do as a matter of course. Many of these structures, as you may know, have evolved over a period of 50 years. It is not something that you can go and easily put your finger on as to why they did or did not do such a thing, but that is a routine practice for us.

MR. MACKINNON: That having been the case, have you during that period of time made any recommendation to government as to how you would change the structure of the Nova Scotia Liquor Commission in terms of operations, delivery of service, quality control, purchasing, anything to that effect, any significant change of policy?

MR. FINDLAY: I would not say we have made any recommendation to government over the course of the time that I have been there. As part of our business reviews and activities we have identified different models that are used across the country. We have not said that this one is the right one or the wrong one because we don't believe that that is the role of management. Our job is to point out where we are, how we perform, what is out there and respond to questions or inquiries on that subject or any other subject. The structure of Liquor Commissions is very much a policy decision of government.

MR. MACKINNON: That I appreciate. So what you are saying is you have not made any recommendation to government to change the structure of the Nova Scotia Liquor Commission in any of the reference points that I have mentioned?

MR. FINDLAY: No, other than as I mentioned to you, we have identified that this province does that and here is where we are and what that would mean, but not any great detailed study because . . .

MR. MACKINNON: How would you rate the Nova Scotia Liquor Commission in terms of other jurisdictions? I mean obviously they would have to depend on the expertise from people like yourself who are on the front line so to speak and with some general expertise in running such a large operation. How would you compare yourself to other jurisdictions?

MR. FINDLAY: We would compare ourselves very well to other jurisdictions on most of the key business areas. There are, however, as you know, many different perspectives on how beverage alcohol should be retailed.

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MR. MACKINNON: Yes, but obviously since 1993 you did not see a need to change that policy because you were quite content that you were receiving a maximum benefit; in other words, good value for your dollar? Otherwise, if you were not, you certainly would have improved your operation, am I correct?

MR. FINDLAY: I think there are two elements. I think we have seen a need to change and a need to improve our operation and I think we have done so. I think our financial performance would point that out along with many other customer service things that we tried to introduce. In terms of going further than that and dealing with the structure of the organization, that is not a mandate that we see ourselves having.

MR. MACKINNON: So what you are telling us is that the trends in terms of revenues, operating costs and profits to the commission are pretty much in line with what you envisaged since the commencement of your tenure?

MR. FINDLAY: Yes, they are, taking everything into consideration. We have improved our profit significantly. We have reduced our costs. We have also done that during a period when - as you may or may not know, the beverage alcohol business is a very mature one. It has been in decline for a number of years, particularly through the early years of the 1990's and all through the 1980's in Canada, the U.S. and other countries. So volume, as you know, has a very major impact on our performance.

During the past couple of years there has been a stabilization and a minor improvement in that volume. There are a lot of reasons for it, not the least one being that we have had a much stronger economy here in the Province of Nova Scotia. So many of the changes that we have tried to put in place over the past few years, I guess you could summarize it by saying they are bearing fruit. It is one thing to get your costs in line, but when you are doing that and fighting declining volumes and declining sales, it does not show up. It is not as visible as it might be but, as I mentioned, over the past couple of years, that has changed significantly.

[8:30 a.m.]

MR. MACKINNON: Mr. Findlay, over the course of years, you have looked at different models and done various analyses. Have you looked at the issue of alcohol consumption under the different models, whether alcohol consumption would be higher under one model versus the other?

MR. FINDLAY: There is not a significant degree of difference that we can determine in one model versus the other. What you tend to see is differences in the types of products that are consumed. If you look at all the provinces in Canada, there have not been any great ups and downs either way. Now there are many other factors that influence that.

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MR. MACKINNON: So, what you are saying is there would be no difference from one model to the other, whether it be public, private or a mixture of either.

MR. FINDLAY: No, I am not saying there would be no difference, I am saying that from what we can determine now, there is no major difference. I think it is important to keep in mind there really is only one province that has changed their system significantly. All the other provinces have variations of how they distribute beverage alcohol.

MR. MACKINNON: That is Alberta.

MR. FINDLAY: Right. So, you are you kind of looking at a sample of one. When you look at that, they have experienced some consumption increases, but so have other provinces for various and sundry reasons. So there is nothing you can put your finger on and say there is a dramatic difference one way or the other.

MR. MACKINNON: So you don't have any detailed analysis of that issue?

MR. FINDLAY: We have the consumption levels on all the provinces in Canada. In fact, I think they are actually included on the back page of our annual report. I can send you the absolute detail if you wish.

[8:32 a.m. Mr. David Morse took the Chair.]

MR. CHAIRMAN: I want to thank the Liberal caucus and pass it over to the NDP.

The honourable member for Halifax Fairview.

MS. EILEEN O'CONNELL: Mr. Chairman, I apologize for being late, a combination of traffic and garbage day was enough to do me in. Hello. Of course, the problem with coming late is I really don't want to waste your time by repeating things that other members may have asked you. But, I do have in front of me four reports on privatization elsewhere; the Alberta study done after the fact, the socio-economic impact for Quebec, Ontario and a Nupti summary of campaigns against liquor privatization.

My first question, and maybe you can't answer it is, from everything I have read, assuming government can read, why are we even doing this? Why are we even looking at it. I read that in Alberta, for example, all is not rosy. There are two sides to every story, but there have been definite issues around Alberta privatization and so on. I don't see a groundswell anywhere in this country for privatization of liquor commissions except in the case of Alberta, it is an ideological position. They said it was going to be revenue neutral. If you have any light to shed on why we are even going through this exercise or why we would want this, I would really appreciate knowing what that insight is.

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MR. FINDLAY: The only comment I can make on that is the one I made before. In the life cycle of any business or organization or the way things are done, people from time to time challenge it and ask to have it reviewed. Our role is simply to examine and collect information in the most objective way we can as to what the implications may or may not be. As you know, we are surrounded by lots of opinions, but I think what we need are facts and that is the process that I am involved in. As to why somebody would or wouldn't want to look at it, I really can't answer you. Everybody has their own view.

MS. O'CONNELL: Well, then I am concerned because of the short time-frame, right? You have until June 26th to June 30th to get it on the minister's desk? That is what the minister said in the House. June 26th to June 30th to go to P&P or wherever these things go.

These studies that were done are fairly comprehensive, they couldn't possibly have been done in four or six or eight weeks; and secondly, they were done by independent researchers. In the case of the Alberta one, it was done by the Canadian Centre for Policy Alternatives, but it was done by independent researchers at the University of Alberta and the University of Calgary. Doesn't that concern you that there doesn't seem to be a time-frame to look at this intelligently and with some dispassion?

MR. FINDLAY: I guess when anybody sets a time-frame you always wonder if it is long enough. On the other hand, our job is to get the resources together to meet that mandate and there is lots of information available on the various models, they just need to be analysed further. I can't speak as to when the process will totally end. I know what our role is and that is simply to work with the committee that we have and whatever resources we need to objectively look at all the reasonable variations. It is not for me to say what will or won't happen with that information after it is finished.

MS. O'CONNELL: I understand that, but I guess my question would be if you felt you hadn't been able to complete the job or didn't have adequate information, would you be prepared to say so in a report for June 30th? I mean, you can read reports from other provinces and they do have some validity, there is no question, but they are not Nova Scotia and they may very well be different for Nova Scotia. When it all shakes down in a very short time, do you feel comfortable that you would be able to say, no, we don't know enough? Maybe we have to take another step that you hadn't anticipated?

MR. BROOKE TAYLOR: On a point of order. I am not sure where the honourable member is going with her line of questions, but my understanding is that the purpose of this committee is to examine and assess past expenditures, in this case, the Nova Scotia Liquor Commission, and as a consequence of that, we can better determine whether or not Nova Scotians have been getting good value for their dollar. It seems as if we have moved into privatizing the liquor store when in fact that is an initiative that the government may or may not undertake down the road. I am a little bit curious as to whether or not this line of questioning is in order.

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MR. CHAIRMAN: I think that my concern is that we are getting away on possible future policy as opposed to the auditing function of the committee, which is value for money. Perhaps if we could focus the questions more along that line.

MS. O'CONNELL: I can certainly clarify the connection for the member who doesn't get it. Value for money under one system or another is what this committee is about and I would suggest that the member for beautiful Colchester-Musquodoboit Valley read his own government's Budget Speech to know where this is all going. With all respect, Mr. Chairman, (Interruptions)

MR. TAYLOR: Again, Mr. Chairman, on a point of order. The point I am making and the honourable member knows full well, in Public Accounts - and I understand she is substituting today and that is fair - however, our job is very clear and that is to examine past expenditures and determine how they impact the Public Accounts of this province. Now, if we are going to examine privatization, perhaps that is something another standing committee, perhaps Economic Development, could look at on a future day, but my understanding, when we agreed to bring the witnesses in here today, was to look at how the Nova Scotia Liquor Commission impacts the Public Accounts of this province. Clearly, we are deviating away from what I take to be our mandate.

MR. CHAIRMAN: I would ask the member if we could perhaps stick a little closer to our jurisdiction.

MS. O'CONNELL: Thank you, Mr. Chairman. What we do know in general is that liquor revenues are going up in this province. I am correct about that, right? It may be that the member for the beautiful Colchester-Musquodoboit Valley and others are driving Nova Scotians to drink, but that is not necessarily so either. Let me ask then about something current that I think would have a huge effect, should things hypothetically change.

Mr. Findlay, I went to the website and I got some wonderful stuff about what it is the Liquor Commission does for social responsibility. If we have to talk about money in this committee, let's talk about money. Let's talk about value for money. I would just love it if you would spend a few minutes on the costs and the cost benefits of things such as paying for supporting the Blue Thunder Police Band which is a wonderful initiative; the Don't Buy for Minors; and the Check 25 program; the Safe Graduation Program; the University Responsibility Campaign; the Ride Dry; Plan Ahead; Colourful Messages; and all these wonderful programs. Then there is one, two, three, four more: Metro Free Ride; Crimestoppers; Pregnancy & Alcohol Awareness; Alcohol & Drugs Don't Mix. These programs, and some of them we are acquainted with and most of us probably didn't know there were so many of them, can you talk about them for us and tell us how successful they are, the relative degree of success, and what it is that they might cost?

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MR. FINDLAY: I don't think I brought the actual cost of the individual programs, but the comment I would make is that it is not so much the absolute cost of it but it is that we can use the organization because we also partner with various suppliers to execute and distribute these types of programs as part of our daily routine if you will. One of the advantages we have, of course, in terms of even getting out messages is to do it through our store system, do it as part of programs that we run, not just social responsibility programs. It could be through our consumer guides, or it could be other advertising vehicles that we use. We can deliver the messages on a somewhat cost-effective basis.

In terms of the responses to the programs, the couple you mention, the Blue Thunder Band is very, very popular, although they only have so much time to dedicate to this program. We try to put it in various schools around the province to give some exposure to the different regions over a period of sometimes years, because again their ability to deliver these concerts is somewhat limited. That is very popular. I think part of the very positive aspects of that is that it ties the law enforcement community in a friendly way to delivering a message.

The most recent one, and the one that got a lot of exposure is the campaign project we run in the school system. As I mentioned earlier, it is targeted around Christmas, although we are trying to make it more visible on a year-round basis. It is an example of not just a cost issue. It is really effective because we can work with teachers, with students, using resources that we already have to not only develop the program but to coordinate it.

I can get the absolute costs, but I think the real issue is not the dollars and cents, it is the ability of the organization to deliver on those types of programs.

MS. O'CONNELL: Is there a budget line that says this is what we invest in these programs, or is it out of a separate department?

MR. FINDLAY: It is part of our budgeting process. We do a very detailed zero-based budgeting system. If I was to speak off the top of my head in real costs, not counting what I said earlier about the ability to do it as part of ongoing activities, it is probably in the $50,000 to $60,000 range. But that far underestimates the value of it if you had to simply do that on a stand-alone basis.

MS. O'CONNELL: Would you agree with a simple statement such as the cost of these programs have not impinged on the profits of the Liquor Commission?

MR. FINDLAY: Well, it is an expense, but I think it is not only an expense, it is an obligation, particularly in the case of somebody who is in the business of distributing and selling beverage alcohol. There are very few organizations today that don't take part in some kind of social responsibility effort, whether it be beverage alcohol such as we are in or others. All of our major suppliers also develop and invest in, either through time or money, social

[Page 16]

responsibility programs. So, I can't say there is no cost to it, but we think it is a very worthwhile one.

MS. O'CONNELL: Thank you very much.

MR. CHAIRMAN: The honourable member for Sackville-Cobequid.

MR. JOHN HOLM: Mr. Chairman, just a few brief questions. I think though that the last series of questions points out something extremely important, and that is that the Liquor Commission is not only making profits but sees it as an obligation and a responsibility in a social context to try to address a number of the issues, and that is something that is pretty difficult to put a cost on in terms of the value that is returned to society.

A few questions if I could. First of all, you are doing a study and all that kind of thing, but has the commission done an evaluation of the Liquor Commission as a corporation? What is the value of the corporation?

MR. FINDLAY: First of all, the answer to your question is no, because to determine what the value of the corporation would be, you would first have to determine what you want to do with it. We could do property values, and we could do rough estimates.

MR. HOLM: No. That can be done, and I am sure there is somewhere on the books a listing of what assets you own and the value of them. But, if a company is to be privatized, and Nova Scotia Power is something that was done before, and I know you weren't involved in that. There was a process to evaluate that company and then shares are sold off. Of course, many who look at it would say that it was sold off at a tremendously undervalued price.

If there is any discussion on one of the options, to be privatizing any or all parts of it, then of course there has to be a hard-nosed business evaluation done so as to determine what is the actual value of that business. We know it is returning a tremendous and growing profit to the Province of Nova Scotia. I would suggest that if you were to compare Nova Scotia Power before and after privatization, it would show that Nova Scotia is losing out. If there is even a consideration of doing that as one of the options, you would have to do a hard-nosed business evaluation to find out what the value as a business to this province is. Can that be completed within the 30 days that is given to the committee to complete its review?

MR. FINDLAY: All I can tell you is that to my knowledge that type of evaluation has never been done. As to whether or not that could be done within the time-frame you mention would remain to be seen. I can't answer your question because I don't know if that is a viable option or not.

MR. HOLM: So what we are really doing then is considering some options to do something with something we don't know the business value of to the province.

[Page 17]

Taking a look at comparisons in Nova Scotia and the returns that we, as taxpayers, receive from the Nova Scotia Liquor Commission and compare that to the kinds of returns in other jurisdictions, how does Nova Scotia fare compared to other provincial Liquor Commissions in terms of our expenditures and rate of return in terms of profits? Are we favourable, are we near the top, near the bottom? How are we doing?

MR. FINDLAY: When you compare us to other jurisdictions that are somewhat similar in structure to ours, we are very, very similar. In some cases, our bottom-line return is approximately 36 per cent of sales. You will find a similar type of performance in New Brunswick and Ontario. It is somewhat lower in others, and it can be higher.

MR. HOLM: So we are sort of in the middle of the pack, we are not doing great but we are not doing badly.

MR. FINDLAY: I think we are doing very well compared to the types of structure that we have versus similar structures. As I mentioned earlier, many of the other systems have evolved over many years, and ultimately there are very different factors. It is very difficult to compare Newfoundland and Nova Scotia, for example. It is a totally different business environment. We do those kinds of comparisons recognizing what the differences are, and whether those are differences that you can do something about or that you would want to do something about. Each case has to be assessed on its own merits.

MR. HOLM: I want to go into a dinosaur from the past for a moment, there is a warehouse that the Liquor Commission rents in Hammonds Plains I believe.

MR. FINDLAY: Bayers Lake.

MR. HOLM: That warehouse, when does that lease expire, and when did it begin?

MR. FINDLAY: The lease began in 1987, it is a 25 year lease to own the building, lease to own.

MR. HOLM: Have you done a cost-benefit analysis, was anything ever done by the commission, to find out whether or not when we leased that building it was more space than we needed, or whether it was good value for the money?

MR. FINDLAY: The planning for that building was done 15 years ago . . .

MR. HOLM: Under the former Conservative Government of Mr. Buchanan.

MR. FINDLAY: . . . obviously to meet the business environment of the day.

MR. HOLM: Ian Thompson.

[Page 18]

MR. FINDLAY: At the time, obviously, an analysis was done. The net of it was that - I wasn't there at the time - it basically combined five locations that were scattered around the metro area, and it was done for very valid business reasons at that time. Maybe I could ask Bruce Rogers to comment on that because Bruce was much more involved in it than I was.

MR. BRUCE ROGERS: First of all, I think there was good value for the decision that was made at the time. If you are talking about the warehouse proper, the warehouse proper is about 110,000 square feet. We replaced several locations around the province which were 110,000 square feet at that time. I believe the benefit to the NSLC and obviously the government at that time was that the saving would have been $230,000 a year over and above the model that we had in place at that time. We believed that there was good value for the commission. The square footage is the same size as what we had replaced, as I had indicated, however, the cubic content is about 25 per cent higher than the cubic content of what we had previously, but that is just a prudent, good business decision to go higher as opposed to spreading out.

[8:53 a.m. Mr. John Holm resumed the Chair.]

MR. CHAIRMAN: Thank you. Maybe when I am back in the other chair again, I may revisit that topic. The time for the New Democrats has expired. Now for the Progressive Conservative caucus.

The honourable member for Colchester North.

MR. WILLIAM LANGILLE: This is one of the problems when you sit in the back row, you have to stand and it is a little more uncomfortable when you stand rather than sit.

Thank you very much for coming. As you know, it is value for dollar, that is why we are here. I just want to state our government's position. Our government has said that we will govern this province in a manner that ensures value for taxpayers' dollars and provides essential services and programs to Nova Scotians. I guess my first question is, would you consider this an essential service?

MR. FINDLAY: I think the sale of beverage alcohol is an essential service. As to how that is distributed and retailed, I don't know, I guess that is a matter of perception.

MR. LANGILLE: That is what I am asking you for, sir, your opinion, and that of your two colleagues too. Is this an essential service for Nova Scotia?

MR. FINDLAY: Yes. The sale and control of beverage alcohol is an essential service, in terms of it has to be done. How it is done is a matter of opinion.

[Page 19]

MR. LANGILLE: I want to touch on what Nova Scotia has for control over their liquor. We have the wholesale control and the retail outlet. I think it is fair to say that we have complete control over the wholesale and retail outlet of liquor in the Province of Nova Scotia, is that correct?

MR. FINDLAY: Yes, sir.

MR. LANGILLE: Is there any other province in Canada that has complete control over both aspects, wholesale and retail?

MR. FINDLAY: No, all provinces in Canada maintain control in a broader sense over beverage alcohol, including Alberta. Other provinces have a different method of distributing and retailing it, which in most cases involves some elements of the private sector, some elements of the public sector, but the control of beverage alcohol remains with the province, they just choose different ways to provide the end product to the customer.

MR. LANGILLE: It seems here today that all we do is zero in on Alberta. Excluding Nova Scotia, there are eight other provinces out there. I would like to touch on the Maritimes; I would like to touch on New Brunswick and Prince Edward Island. Can you give me the breakdown of their sales? Do they allow sales in grocery stores, what types of sales and so on?

MR. FINDLAY: I will speak to New Brunswick first. New Brunswick has instituted - it started, I believe in 1993 - a program to inject agency stores into their system. What an agency store is is a private sector operator, but the prices and the policy still rest with the Liquor Commission. It is often said that beverage alcohol is available in corner stores in New Brunswick, that is not correct. How that works is, it was a planned expansion of some private sector stores, while at the same time they closed a number of their corporately owned stores. They now, I believe, have about 70 privately run agency stores and 50 New Brunswick Liquor Commission stores. About 25 per cent of their business goes through these agency stores, but unlike a true privatization scenario they still control all the key elements, including the price that the retailer must sell the product for.

In Newfoundland, again this is historical and geographical, I can't begin to tell you when it all happened, but because of the nature of the province, the wide dispersement of the people, they have, for many years, allowed the sale of beer in a multitude of small stores, retail outlets. These are totally private sector stores, they could range all the way from a small corner store to a gas station to what have you. That is kind of a unique system, and it relates to beer, and it has a lot to do with the volume and distribution costs of beer. It has been like that for many years.

MR. LANGILLE: What about P.E.I.?

[Page 20]

MR. FINDLAY: P.E.I. is very much like Nova Scotia, the one exception is they have one agency store. Their model is almost identical to ours.

MR. LANGILLE: Do you know where that one agency store is? Is that an outreach place?

MR. FINDLAY: It is in a small community, I can't remember the name, which is the whole premise of agency stores. They are located in smaller communities and you maintain your corporate stores in the large ones.

MR. LANGILLE: In Ontario, they have the Brewer's Retail, which is operated by the Brewer's Retail; and your LCBO; and they also have agency stores in Ontario in outreach places.

MR. FINDLAY: Yes. The LCBO, as you say, is a very different structure. The bulk of beer sales go through the Brewer's Retail outlets, which are owned by two major brewers, and I think one or two others have a small stake in it. LCBO stores also sell some types of beer, but in limited size selection. They have agency stores, but their agency stores are pretty much in very small communities, primarily in the north. I don't know if I have answered your question or not.

[9:00 a.m.]

MR. LANGILLE: That is fine. Now, looking at all these different provinces with their different types of retail sales and so on, you must have a plan, or you must be thinking in the future how you would get maximum value for dollar out of expanding retail business in Nova Scotia? (Interruption)

MR. LANGILLE: Maybe I could just answer the honourable member there. I believe I said to expand.

MR. CHAIRMAN: Maybe the member would like to repeat his question, making it clearer in light of the responsibilities of this committee.

MR. LANGILLE: Maybe we could have the question repeated.

MR. CHAIRMAN: The clerk doesn't keep a written transcript. We have to wait until the Hansard is ready in about a week's time.

MR. LANGILLE: What I was saying is, you must be able to look into the future for expansion. I didn't say privatization, but I am saying expanding your business and I don't think there was any word that I said about privatization.

[Page 21]

MR. FINDLAY: We look at our store numbers, our store locations and our coverage as part of our ongoing business process. At the moment, we believe that the number of stores that we have in this province is just about at the maximum and unless there is some significant shift in population or something to that effect, we have pretty much reached the saturation point because, as I indicated earlier, there are very few people in the province who aren't within a relatively close distance to a store so if we simply add stores, it will just increase costs.

MR. LANGILLE: Thank you and that is where I was going. I will bring you back to your opening statement, where you said that in the year 2000 you expect a $141 million profit and that that was an increase. How are you expanding this increase? That is where I am going.

MR. FINDLAY: That is very much sales related, as I think I indicated; I may not have. We look at the market place and the trends, and what is likely to happen to the volume, in quite some detail. We also discuss it with some of our major suppliers as to where they see the volume going, so that increase that is projected for this year is based on a moderate increase in sales volume. To put it into perspective, if we have a 1 per cent increase or - and unfortunately it usually works the other way - a 1 per cent decrease, it impacts our sales line by over $3 million and our bottom line by approximately $1.4 million. So we see for the next year, in fact the next two or three years, some moderate volume increases which we can deliver without significantly increasing our cost base, so it improves our profitability. It is a combination of volume increases and the maintenance, for the most part, of your cost components.

MR. LANGILLE: Now I would like to move to the head office. How many positions are there at head office?

MR. FINDLAY: Including our warehouse, maintenance people and people working in the various functional areas, there are 144 people at head office.

MR. LANGILLE: What would be the salary for the head office staff, including yourself?

MR. FINDLAY: Excuse me, I am just trying to look it up. I am sorry to make you wait. Our store operations salaries are approximately $20 million, so the difference for the warehouse and head office group would be approximately $5.5 million.

MR. LANGILLE: Now, I just want to bring you back for a minute to Colchester and Cumberland Counties. I believe you said, if I recall right, there were 12,000 people in a radius that didn't have access to liquor. Was it a 20 kilometre radius?

[Page 22]

MR. FINDLAY: Across the province there are approximately 12,000 people of drinking age who are not within 20 kilometres of a liquor store.

MR. LANGILLE: I want to bring you back to Colchester and Cumberland Counties. Do you feel that the residents there have access through the present system?

MR. FINDLAY: Colchester and Cumberland Counties would be one of the areas where there are a couple of communities that are certainly further away than the 20 kilometres.

MR. LANGILLE: Thank you. How much time do I have left, Mr. Chairman?

MR. CHAIRMAN: You have until 9:14 a.m.

MR. LANGILLE: Okay. I just want to bring back something my colleague to my left said earlier. How many robberies did you say you had? I believe you said a couple of robberies in the last year?

MR. FINDLAY: Well, they don't average a couple a year. I think somebody asked me the question how many we had last year. I believe it was two. It certainly doesn't average that, we have had a handful in over 20 years.

MR. LANGILLE: The reason I am bringing that up is statistics, sometime you can bend them whichever way you want to go. A quick example would be if you had four robberies this year and two last year, you would have a 100 per cent increase in crime, wouldn't you?

In Alberta, I think Superintendent Rick Hansen stated in 1996 that there was no increase in crime, before privatization. I just want to make that point for my colleague here from Cape Breton.

You have touched on quite a few areas in your opening remarks and also the Liberals and NDP have. I would like to get into the amount of volume you carry in liquor and wine. How many different types of wines do you carry?

MR. FINDLAY: We carry approximately 2,000 products in our system, I am just trying to get the breakdown. As of the moment, there are roughly 1,000 different wine products and sizes.

MR. LANGILLE: Without going too far in depth in that area, who determines what wines you get? Is it marketing, or is it demand by the consumer? How do you go there?

[Page 23]

MR. FINDLAY: We have a merchandising department and a listing committee and we look at the market place on, if you like, a category management basis. Our objective is, within reason and recognizing the volume and potential in any given category, to carry a range of products in all the different sub-sectors. In the case of wines, this involves different countries, different styles, reds, whites, varietals, different price points. So all those things are looked at and analysed.

We use many factors to do that. We obviously have information from other markets. We look at it from a realistic point of view of how much product can you put in our stores, what the financial implications are. For example, we have a very different product mix in our store system. It is examined in great detail, store by store, a lot of utilization of technology in terms of examining not only sales, but profitability, ordering, inventory, but it is done by a group of people and they look at numerous factors, what is the potential of the product, what type of support is the supplier going to put behind it, and in the end what we try to do is get a reasonable mix of products across all the product categories.

MR. LANGILLE: Has there been a change in the drinking habits of Nova Scotians in the last few years? Have they been switching products?

MR. FINDLAY: The wine category in Nova Scotia continues to show some increases. The spirits category, for example, is relatively stable, but it had been in decline for many years and beer is showing moderate increases. Within those broad categories you get some phenomena happening at different points in time. For example, at the moment Cooler-type products are very popular. These things tend to cycle in an out. A number of years ago the same type of thing happened.

Other things that you will see in the market place now are products that we call ready-to-drink products. They are pre-mixed which makes it easier to serve for home entertainment or parties, or what have you. In a broad sense there is no dramatic change in the consumption patterns other than that wine continues to show relatively good increases. It is not unique to Nova Scotia. It tends to be happening in most parts of Canada.

MR. LANGILLE: You have uniform prices throughout Nova Scotia? Is that correct?

MR. FINDLAY: Yes, sir.

MR. LANGILLE: Who determines these prices? How are they set?

MR. FINDLAY: We have a mark-up that applies to various products and product categories. That is basically fundamental to our business plan, a similar type of system that would be used by any retailer or any other liquor jurisdiction, and it is a mix. There are various mark-ups across the various product categories. Obviously, it is designed to ensure

[Page 24]

that we continue to deliver the profits to the province that we have been. It is part of our normal budgeting process.

MR. LANGILLE: Is my time running out?

MR. CHAIRMAN: You have got about 30 seconds.

MR. LANGILLE: I will pass the 30 seconds. Thank you.

MR. CHAIRMAN: We will be coming back for second rounds, probably about 12 minutes for each caucus, if that is agreeable, and that would still leave us 10 minutes if we have any other business at the end. I will turn the time over now to the Liberal caucus.

The honourable member for Dartmouth East.

DR. JAMES SMITH: Mr. Chairman, I thank the visitors this morning. We will divide our time because I think we want to come back, it will give the witnesses a chance to think about the value of the business, I think the member for Cape Breton West would like to revisit that. So I will just give them time to think about that. If we can put a figure on the clean-up for Sydney Steel, maybe we can put a value on the Nova Scotia Liquor Commission.

I just want to make a couple of comments. Earlier we discussed the various programs and the initiatives of the commission. I think that has been very positive. Generally we view that as a good initiative, not only support in the community, but the programs that you have done. I want to comment on that. I was out grabbing a cup of tea and I thought I heard that the Liquor Commission was an essential service. I was wondering how the people in the IWK-Grace who lost their jobs yesterday, who look after fetal alcohol syndrome children, would view that, but it was explained to me that it was the control of the product more than anything else.

Are there any members of your staff giving any information, Mr. Findlay, to customers in the retail business that there may be some changes coming next month; in other words, people who are looking to sell liquor in corner stores and, again, we are into that privatization, but is there any information being given out by your staff that you are aware of that would indicate there may be something for them next month or some announcements on that matter? I know we are talking about the review committee and maybe we can go back to that as well, but I am just hearing some information from some of my constituents that they have been told some information. Is there anything, to your knowledge? You may not be aware of it at that level, but . . .

[Page 25]

MR. FINDLAY: Dr. Smith, there is nothing certainly to my knowledge being given out about that issue, but I can tell you I have probably heard just about any rumour or concoction that you could possibly dream of, but we are certainly not giving out any information that I . . .

DR. SMITH: I just wanted to confirm it for the committee here this morning because I agree with you, there is a lot of talk on the street and a lot of speculation on how far this government will go with this. I guess when you are talking value for money, if something is working well, if it has fitted well into the programs and the community is being responsible and that sort of thing, why change that and why go into other areas and, if so, what will be the downside of that? We have spoken about the studies in Alberta and the others and we know that even if the money flows, the taxpayer is the same, there are social concerns. I guess that is my area as a family physician in a past life and current responsibilities is the control and how that could be ensured.

The review committee, who is involved in that? You said, yourself, you were a member. Who makes up that committee relative to your responsibilities?

MR. FINDLAY: I am the representative from the Nova Scotia Liquor Commission as is our chief commissioner, Doug Caldwell, and there are members from Finance, Tourism, Communications, Department of Justice.

DR. SMITH: So the two people, the chair of your board and . . .

MR. FINDLAY: Myself.

DR. SMITH: Yes. I guess from the Opposition's point of view and I know that it is the wish of the committee that we don't go too far down the road, but we are always concerned that when the House of Assembly closes, we lose our ability to hold the government accountable so announcements are held off until after the closing of the House, but has there been, to your knowledge, any promise of any guarantee of jobs at the senior management level within the Liquor Commission should we go to privatization? Has there been any commitment or any discussions held with people like yourself or others in senior management?

MR. FINDLAY: No, there have been no promises and no discussions.

DR. SMITH: We talk a lot about the selling of the product of beverage alcohol and the buying area. Where would be some of the downsides if there was a break-up of the Nova Scotia Liquor Commission on the buying side? Where would be the loss in revenue for Nova Scotians if the Liquor Commission was broken up into a privatization, specifically on the buying?

[Page 26]

MR. FINDLAY: I am having difficulty answering because, again, that would depend on how it was done.

DR. SMITH: So there would be some options as to how it was done?

MR. FINDLAY: Yes, there are. Those are all things that we certainly believe have to be carefully examined before anything is done.

DR. SMITH: With the changes across the country and I know it is difficult to compare, you said that we were performing relatively positively within the pack. But the trends in the revenues and the operating costs in the province since 1993, how do they compare particularly with Alberta and Ontario? Do you have those figures with you today or some indication of that?

MR. FINDLAY: Our operating costs, as a percentage of sales, are lower than Ontario. Alberta, I can't give you the answer because there is no direct comparable. As you know, once they decided to take the steps they did, they don't have operating costs in the same way we do. However, they have operating costs that remain in the system. They have also combined their gaming and alcohol and a number of other entities, so it is not possible to determine what their exact costs are.

DR. SMITH: I can appreciate that because even comparing something like Pharmacare across the country, it is almost impossible to do. You would think it would be simple, but it is not.

One of the things with Alberta, because at various times I have read different studies, when you move out into the private sector, is the control. Are you relatively happy now with the situation within restaurants and taverns and the retail outlets in the province? Do you think they are being responsible? I have a 19 year old daughter now. She is pleased that she is legal now, but it seems pretty easy in a lot of places and there are a lot of concerns in some communities. The bar doors fly open at 2:30 a.m. and they come out into the streets, not far from here really and you read about a lot of very violent crimes committed at that time. That is another question relative to closing hours. Are you, as a good corporate citizen, satisfied that the controls are there, that the restaurant people are being responsible? We won't get into smoking, we will just stick to alcohol at this juncture.

MR. FINDLAY: That is not something that really falls under our jurisdiction. It is the Gaming Authority. I know that they certainly monitor, and I also know that the licensing community has a number of very good programs that are designed to train and assist their staff in addressing some of the things you raise. But I can't really comment because that falls outside the Liquor Commission's jurisdiction.

[Page 27]

MR. MACKINNON: Mr. Chairman, my question is to Ms. O'Leary-Jones. With regard to the value of the company, I understand there are a number of different ways that could be evaluated. You can look at it by asset value or as a growing enterprise. In this particular case, the exclusivity is really the material value, depending upon the rate of return; if you want a 5 per cent rate of return or a 10 per cent rate of return or what have you. It is much the same as what transpired with Nova Scotia Power several years ago. Have you looked at any of these evaluations?

MR. FINDLAY: No. We have never . . .

MR. MACKINNON: Excuse me, Mr. Findlay, I am asking Ms. O'Leary-Jones.

MS. O'LEARY-JONES: I was just waiting for the microphone. We haven't looked at anything in any great detail, exactly as you say; net worth, depending on how you are taking a look at it and what type of operation it is. You have to look at all those aspects of the business, but we haven't looked at anything in any great detail to come up with that.

MR. MACKINNON: Would it be very difficult to look at the two scenarios?

MS. O'LEARY-JONES: The two scenarios being?

MR. MACKINNON: One, strictly as an asset value. Just taking the straight assets like the buildings, the land, the stock?

MS. O'LEARY-JONES: Strictly talking as a book value, no, that is accounting, so that is just a matter of what numbers are on the paper.

MR. MACKINNON: Do you have an idea of what that is worth?

MS. O'LEARY-JONES: Not offhand.

MR. MACKINNON: Can you give an undertaking to the committee you will provide that?

MS. O'LEARY-JONES: Sure.

MR. MACKINNON: The other scenario is in terms of, you take your revenues, your profits for the year. Obviously you are looking at approximately $130 million or $135 million?

MS. O'LEARY-JONES: Bottom line of the current year.

MR. MACKINNON: So if you wanted a 10 per cent rate of return, how would you translate that into a market value?

[Page 28]

MS. O'LEARY-JONES: Exactly as you say. You would have to take a rate of return, that is a normal rate of return that you would expect to have from that flow of dollars and just take your forecast from there and calculate it out.

MR. MACKINNON: That plus the fact that this would be an exclusive market.

MS. O'LEARY-JONES: Well, that is the other thing you would have to take into consideration, yes.

MR. MACKINNON: So there is a formula to be applied to that, is there not?

MS. O'LEARY-JONES: To some extent, yes.

MR. MACKINNON: So that is not really that complicated to come up with even a general idea.

MS. O'LEARY-JONES: True.

MR. MACKINNON: Could you give an undertaking to the committee to provide that before the day's end?

MS. O'LEARY-JONES: Sure.

MR. MACKINNON: Mr. Chairman, that goes back to the other issue, the fact that Mr. Findlay has indicated they don't know the value of the asset or the company, when in fact it is very easy to ascertain that. I will leave that with the committee.

MR. CHAIRMAN: It is time, and we are passing to the member for Halifax Fairview for the NDP.

MS. O'CONNELL: Mr. Chairman, I just have three or four more questions that I would like to ask. From everything I have read and discussions, it is my understanding - and maybe I am just asking for clarification - that at this particular moment in the corporate life of the commission that it is fair to say, and I just want you to confirm or correct me, that you have been able on the whole to maintain prices, improve service, and increase profits all at the same time. Would that be a correct statement?

MR. FINDLAY: Yes.

MS. O'CONNELL: One of the things that also comes up over and over again around the issue of how to deliver the purchase of alcohol is the whole issue of convenience. Certainly the commission in recent years has provided better hours, for example, at some stores and so on. Convenience seems to be the main consistent argument. Everything else is

[Page 29]

debatable, but the one thing that comes up over and over again is the question of convenience. With that comes the issue of social control, I realize that, but has the commission looked at ways of making the purchase of alcohol more convenient without dismantling the system if you like? Just as an aside, I was delighted on Monday to be able to go and, as The Chronicle-Herald said, tipple the Queen on Victoria Day. Is that the first time the stores have been open on such a day? I don't recall.

MR. FINDLAY: We opened them last year. In response to your other question about convenience, of course it has a number of different definitions. Within the structure we have, the steps we have taken are one that you mentioned. Also, over a number of years, the store hours themselves have been expanded in a number of communities. On the convenience side, too, we have also, and still do, looked at where our stores are located, how they are designed, where the shopping trends go. As you may know we have either moved or redesigned certain stores in different areas to make them more accessible. But we have done that within the confines of the organization that we have today.

MS. O'CONNELL: Do you get a lot of complaints about store hours?

MR. FINDLAY: No, not really. As a matter of fact, I guess a number of years ago prior to my coming here, the commission had actually extended them to quite late to some of the stores here in metro. It was not successful.

We have, certainly in the major centres, a number of stores that are open until 10:00 p.m. on a very regular basis. We track customer complaints, and store hours is not one of the ones that is brought up that often.

[9:30 a.m.]

MS. O'CONNELL: Thank you. I just have two more questions. I am not in the restaurant food business or the lounge business, so I don't know a great deal about it, but I am told that restaurants, when they buy, I don't know if it just wine or all liquor, that there is a surcharge on the purchase and it is 9.3 per cent. Is that correct?

MR. FINDLAY: That is correct. There is a 9.3 per cent licensee revenue charge. That is a charge that is assigned by the Alcohol and Gaming Authority, not the NSLC. We collect it when the licensee community purchases product from our stores, and we then turn around and remit it to the Gaming Authority the same way we would send HST to the federal government.

MS. O'CONNELL: So that is another department of government that is taxing them. It is not a Liquor Commission tax?

MR. FINDLAY: No.

[Page 30]

MS. O'CONNELL: What is the purpose of it? Do you know? Obviously you are not responsible for its creation or its continuance, but what is its function? Presumably if you have a higher tax it is for more service, ideally. What is it?

MR. FINDLAY: It is a licence revenue charge that has been in existence in this province for 30 years. Because we are not responsible for it, I can't tell you the details of how it came to be or all the elements of it. As I said, all we really do is collect it and remit it.

MS. O'CONNELL: So you don't even get to keep it.

MR. FINDLAY: No.

MS. O'CONNELL: So it has nothing to do with the profits?

MR. FINDLAY: No, it does not show up in the financial statements.

MS. O'CONNELL: Okay, I didn't know that. So if we want to know what its purpose is, we should be talking to the Alcohol and Gaming Authority?

MR. FINDLAY: Yes.

MS. O'CONNELL: Thank you. The other question I had is that I have been told that restaurants are unable to access their purchases through credit-card buying. Is that correct?

MR. FINDLAY: That is correct.

MS. O'CONNELL: Now why would that be?

MR. FINDLAY: It is really strictly a revenue issue. The practice of liquor boards across the country has been not to extend credit cards to the licensee community. There is one exception to that, and that is the Province of Ontario. It really comes down to a question of the costs that would be incurred by doing so.

MS. O'CONNELL: Costs that would be incurred by?

MR. FINDLAY: Costs that would be incurred by the Liquor Commission which would then reduce the revenues to the province for providing that service.

MS. O'CONNELL: Is that the cost of card usage, or is it lost revenue from . . .

MR. FINDLAY: No, it is cost of the card usage.

[Page 31]

MS. O'CONNELL: Okay. I find that kind of bizarre as a consumer, if I wanted to, and I don't, but if I wanted to I could go into the liquor store and I can buy a bottle of wine on my credit card, right?

MR. FINDLAY: Right.

MS. O'CONNELL: I find it simply bizarre that probably among your best customers there is an inability to do that. The bottom line seems to be solid for the commission. Have you looked at that recently and considered policy changes there, or is there some rock solid reason why you won't even consider it?

MR. FINDLAY: It is an issue that comes up occasionally. It comes back to the simple fact that there would be a cost incurred with no offset, and it would reduce the revenues to government.

MS. O'CONNELL: It is a 9.3 per cent surcharge and the cost of the cards is 3 per cent.

MR. FINDLAY: The cost of the cards varies, between 1.5 per cent and 1.7 per cent of sales are the cost of the credit card usage. The 9.3 per cent has nothing to do with this.

MS. O'CONNELL: Oh that is the other one. So that is what you would stand to lose?

MR. FINDLAY: That is the reason. Remember that is on $65 million.

MS. O'CONNELL: That is on the bulk of the purchases, is it? What percentage of purchases would the restaurant-lounge community be, roughly?

MR. FINDLAY: They represent 17 per cent of our total sales or approximately $65 million in sales. What the ultimate usage rate would be, we don't know. We do know, obviously, what the low side, the middle, and the upside are, but the reason it has not been extended is strictly a revenue reason.

MS. O'CONNELL: Could you see at any time if the commission was continuing to be profitable that that would be a cost that could be borne either by the commission or shared by the commission and the restaurateurs. It seems to me to make it quite difficult, particularly in light of the fact that the ordinary consumer no longer has this inefficiency. For many years it was consistent for both, right? You couldn't use a credit card no matter who you were, whether you were a consumer or a business. It seems to me to be somewhat antiquated. How you deal with the loss of revenue, I don't know, but it seems to me that it might be an antiquated practice which, if remedied in some reasonable way, might make people less inclined to obsess about dismantling a perfectly good, functioning, profitable government

[Page 32]

enterprise that is responsibly run on behalf of the people. Did you get all that? Anyway, you don't have to answer that, but that is really a point I wanted to make.

MR. CHAIRMAN: One minute left.

MS. O'CONNELL: Mr. Chairman, I don't have any more questions. If somebody else wants my minute.

MR. CHAIRMAN: We will turn it over to the PC caucus.

MR. DAVID MORSE: Mr. Chairman, I would also like to thank the witnesses for coming in today, and I want to assure you that without the briefing notes, I could have kept you busy for a couple of hours, no problem. Actually my first question, I am going to direct to Mr. Carter. My Liberal colleague was sort of hinting around a question which is always near and dear to my heart, and that is the value. He was looking at the two potential evaluation methods, one being the net book value. He was also talking about what I would call the annuity stream which is the expected future income. So, for a corporation which is fairly secure and which I would suggest is the value of having the monopoly rights to deliver liquor, wine, and beer to Nova Scotia, that is the value; it is not the structure, the buildings. They have value, but the special asset that makes the Liquor Commission so profitable is this monopoly right to distribute alcoholic beverages which, last year, produced a profit of approximately $130 million. My question to Mr. Carter is, what would an annuity stream of $130 million be worth? What is the capital value if we had a cost of capital of about 8 per cent?

MR. CARTER: Can we use 10 per cent, because I think that calculation is easier? As you know I don't have a calculator with me.

MR. MORSE: I do. You use 10 per cent, and I will give you the rate.

MR. CARTER: Let's talk hypotheticals. I remember back in Finance 201 in university, if you have a guaranteed stream of income from an operation, and you say what rate of return do I want to make on it, and if I say I want to make 10 per cent on it, then what am I prepared to pay in today's dollars, and you simply take that guaranteed return amount and divide it by 10 per cent. So if you were using $140 million divided by 10 per cent, then you have $1.4 billion. Now there are other considerations in there, obviously, and you are looking at it there from the buyers side and not from the sellers side. Again, I want to emphasize that we are talking about generalities as opposed to a specific consideration like something like the Liquor Commission. There are a lot of other considerations.

MR. MORSE: The point that I wanted you to confirm was that the distribution rights to alcoholic beverages in Nova Scotia is an extremely value asset, and something in excess of $1 billion would not be at all out of line. If you used 8 per cent, based on the $130 million,

[Page 33]

as a sustainable income, it comes out to a little more than $1.5 billion. That is the only point I wanted to make, I am not saying that it is worth that amount of money, I am saying that is the upside.

MR. CARTER: That is right, that is the upside. Again, what is the rate of return that a buyer would be looking for. Is 8 per cent enough in a guaranteed, pretty well risk-free situation or a limited-risk situation, or is 10 per cent or 12 per cent what the buyer would be looking for? At one level, it is very simplistic, when you get into a specific situation, there are a lot of other complexities that come in.

MR. MORSE: I just wanted you to help me illustrate a point, and you have done that. In your Mission Statement - I am first going to address it to Mr. Findlay - bullet number three, generate revenue for the Province of Nova Scotia as a retailer, through efficient financial and properly-controlled operating practices. Okay, that is a laudable part of a Mission Statement. I think it pertains to trying to run an efficient operation. That is what I am taking from your Mission Statement. Of course, we are always looking for standards by which to measure our performance. Maybe I will flip this one over to Mr. Rogers. Mr. Rogers, roughly how many square feet are in your retail operation in the province?

MR. ROGERS: We probably have somewhere in the range of a little over 0.5 million square feet, about 500,000 square feet of space.

MR. MORSE: The operating costs of the liquor stores are approximately $62 a square foot?

MR. ROGERS: I guess, if you are using that number, yes.

MR. MORSE: How does that compare to grocery stores or liquor operations in New Brunswick, P.E.I., Ontario or Alberta?

MR. ROGERS: You can't just go by square footage. If you take a look at some of the other jurisdictions, some of them, using Ontario as an example, Ontario does not sell the range of beer that we have because that goes through the Brewers' Retail. If you take a look at Newfoundland, they are the same way, they don't sell a lot of beer. We basically sell most of the beer in the province here, other than a couple of manufacturers' stores.

MR. MORSE: Are their operating costs lower because they diversified the operation?

MR. ROGERS: As Mr. Findlay said earlier, if you boil it down and you want to take a look - you can break the detail down, but if we take a look at some very top-line numbers, take a look at our cost of operation and the percentage that we deliver to the province versus Ontario, we are in line with the largest liquor board in the country.

[Page 34]

MR. MORSE: Basically what I am asking for is what steps have been taken by the NSLC to benchmark your performance compared to other comparables?

MR. ROGERS: I think Dr. Smith had asked earlier how we compare to some of the other boards across the country. When you consider the size of our province and the population versus the others, we do quite well. We are in the middle of the pack as opposed to if you just simply look at population, you would say, well, why wouldn't you be at the lower end . . .

MR. MORSE: We are talking about the $62 a square foot as an operating . . .

MR. ROGERS: Yes, $62 a square foot, I am not sure what it is in the others, but I would tell you that the $62 a square foot is a number, I don't have a comparison with Sobeys or someone else. If you take a look at our performance in the 1990's, we have been able to significantly reduce our costs.

MR. MORSE: I am not sure that you are really getting my point. My point is, I think that as a Crown Corporation you are always obliged to be measuring the NSLC's performance against other standards, because how else could you know an objective measure of your performance? There has to be some sort of standard and that is why I ask the question. I am not saying that it is readily available, but I think you should be out there searching for this. I just wonder if what you are alluding to in your answer is that some stores are much more profitable than other stores in the province because maybe the store at Downsview Mall, which is in metro, does a great volume, a tremendous turnover and, accordingly, there are economies of scale whereas a store that is on Sable Island may not do as well.

MR. ROGERS: I guess I was looking at it in the context of your first question relative to the overall performance, relative to the mission statement but, again, we do make comparisons with the other boards. I don't have those comparisons with me. You would find that in most of the key performance areas we stack up very well.

MR. MORSE: But I was looking for objective performance standards from outside the corporation and I guess basically at this point in time you are unable to give me some and this . . .

MR. ROGERS: We don't have that.

MR. MORSE: . . . would be something that I would certainly ask any Crown Corporation to try to use in the running of their corporation. At this point in time I am going to pass it over to my colleague.

[Page 35]

MR. ROGERS: If you take a look at NSLC operations which are audited, basically our salary ratio is 5.5 per cent.

MR. MORSE: But, again, I was looking for an outside comparable. I understand you have got your internal controls.

MR. ROGERS: I am going to give you one of those, okay, I have one. The LCBO, their salary ratio, this is only salary now, theirs is at 7.8 per cent; ours is at 5.5 per cent. Unfortunately, Zellers is not audited because we cannot get that, but from talking with people in the industry, their ratio is 9.5 per cent. Again, Superstore, unaudited, but pretty good information is 9.2 per cent. Sobeys we understand is close to 10 per cent. So that is the salary issue.

On the total of store expense, NSLC is at 9.1 per cent; LCBO at 10.6 per cent; Zellers at 14.5 per cent; Superstore, somewhere around 17.5 per cent.

MR. MORSE: That is good. That is what I wanted to hear and I thank you for the answer. I am going to pass to my colleague, the member for Pictou East.

MR. CHAIRMAN: You have just a little over two minutes.

MR. JAMES DEWOLFE: Mr. Findlay, I am going to jump right in because our job as legislators is to determine that the taxpayer of this province receives good value and a good return for his hard-earned dollars with regard to the Nova Scotia Liquor Commission. For years I have heard about this hidden empire, the administration, the old boy's club and that taxpayers are getting the wood put to them from this hierarchy and just in case there are some fallacies and misconceptions, let's try to clear them up right now in the remaining minutes. I really would like to know, and I am sure the taxpayers of this province would like to know, for instance, what your salary is and Mr. Rogers' salary? You surely could provide that in the remaining seconds.

MR. FINDLAY: Mine is a matter of public record. I think it is around $116,000. I cannot remember the exact number. Mr. Rogers' is $87,000 and Ms. O'Leary-Jones is $77,000.

MR. DEWOLFE: Those are pretty fair salaries. You indicated there were 144 staff. Can you tell me how many salaries would be over $40,000 let's say, just in rough figures?

MR. FINDLAY: Not over $40,000; I can tell you there are, I believe, 10 over $60,000.

MR. DEWOLFE: Ten over $60,000.

[Page 36]

MR. FINDLAY: I could check that number for you. I don't want to give you . . .

MR. DEWOLFE: Are you the only one who would be over $100,000?

MR. FINDLAY: Yes.

MR. DEWOLFE: So there are some pretty hefty salaries being paid at the administrative level if you compare it with the Ministers of the Crown and so on. Thank you.

MR. CHAIRMAN: The time has expired on what we had agreed to. Do we wish to move on to another round for a minute or two of questioning or call it quits at this time? (Interruptions) There has been a request to deal with the other items that are on the agenda. So with that I would like to, on behalf of the committee, thank our guests for their appearance today and the Auditor General's staff. A number of undertakings have been given today to provide and follow up with certain bits of information and if you would not mind, please, providing that to the clerk, then she will see that it is distributed to all committee members. So, again, thank you very much for your attendance.

I guess we will move on with the couple of other items of business that the committee has to address before next week. The copy of the letter is the one thing and I had received this letter last week and had given it to the clerk and asked that it be distributed to all committee members. It is the letter from Mr. Balser as the Minister of Economic Development and it is a follow-up to our inquiries and actually the report that was tabled in the House last Wednesday in which the House gave approval to our requests for additional information regarding the expenditures of the regional development authorities.

I did not think it was appropriate for me, as Chairman, to make on behalf of the committee, decisions about which additional information the committee wanted and so with those brief comments maybe I could throw it open to the committee. I know I have a few thoughts on it that I may interject.

The honourable member for Colchester-Musquodoboit Valley.

MR. BROOKE TAYLOR: Yes, Mr. Chairman, I think in the honourable minister's second paragraph to the last, he points out the categories such as the RDAs' salaries, employee benefits, et cetera. In the final paragraph, of course, he is asking the committee if they want more detailed information and I am wondering do you need, again, a motion? I thought your letter was quite comprehensive frankly and I understood that what we were requesting would be, those particular issues, . . .

MR. CHAIRMAN: All of these items are contained in the audited statements and we can get the audited statements, but I think two weeks ago we were looking for some more detailed information. I don't know if we wanted to have every copy of every printing or

[Page 37]

supplies order, I think that the committee wanted some more detailed breakdown under certain categories.

MR. TAYLOR: Could I just . . .

MR. CHAIRMAN: One of the things - and to just throw it out for the committee's response to this - in terms of the time line, I don't think that we necessarily want to go back for details for all six years. That may be an excessive paper account and I was going to suggest two years. Also, in terms of more detailed information, how about under salaries and benefits, information about travel, professional services, conferences, seminars, board expenses, and . . .

MR. TAYLOR: Mr. Chairman, if I could finish.

MR. CHAIRMAN: Yes.

MR. TAYLOR: If you recall, and I am sure you do because you chaired the meeting when Mr. Kavanaugh and the Cape Breton County Economic Development Agency were present, they came to this committee, as you know, with some general statements, in fact, relative to expenses, and Mr. Kavanaugh told us at that meeting that he thought his expenses were somewhere around $10,000. There was absolutely no information to confirm that or support that. So what I was pointing out, I think, Mr. Chairman, unless I misunderstood your letter, that we were asking for some detailed breakdown of information like that and that is what I would like whether it is Mr. Kavanaugh, or whoever in that agency. Is that . . .

MR. CHAIRMAN: That was one of the items certainly that I was mentioning.

MR. TAYLOR: Yes.

MR. CHAIRMAN: Mr. Kavanaugh had also said that he would go back to his board and try to get clarification on whether or not they are willing to provide it. That is why the committee went the other route. We have not heard, I don't believe, anything back from the Cape Breton County Economic Development Agency and the board's expenses was one item and I was also suggesting a number of other areas.

MR. TAYLOR: You also asked relative to the Education Minister, and I thought that was a finely put together letter, if there were any other arrangements across the province similar to Mr. Kavanaugh's.

MR. CHAIRMAN: No response on that issue.

MR. TAYLOR: No, I understand.

[Page 38]

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

MR. MACKINNON: Mr. Chairman, I, too, reviewed the letter of Minister Balser dated May 12th. In the second paragraph the minister indicates that the provincial government ". . . does not select or appoint their boards and RDA staff are not civil servants." That is not correct. In fact, it is totally erroneous. I will table for the benefit of the committee members a list of the board members for the Cape Breton County Economic Development Authority and we will find that the regional manager in this particular region that we are dealing with, the regional manager for Nova Scotia economic development, is the provincial representative on this board. I would conjecture that the minister would have this information on hand presently and it would be very easy for the minister to provide it if he so chose.

While I don't want to detract from the opportunity to deal with it in this manner, I think it is inappropriate for the minister to send a letter to the members of the committee stating something that is not correct. I would like to put that on the record.

MR. CHAIRMAN: I thank the member and it is my understanding, as well as the member for Cape Breton West, that the province does appoint to all boards some representation.

MR. MACKINNON: Absolutely, Mr. Chairman. Perhaps the minister may be misguided or ill-advised or perhaps there may be a little bit of political mischief there, I am not sure, in alleviating his responsibility, but that having been said, it is not for me to draw a conclusion other than the fact that the facts speak for themselves. What he said in his letter and what the evidence clearly states, are two different things.

MR. CHAIRMAN: Okay. Well, I guess those are two separate issues, if I may, and I am not trying to interject on that point. I would like us to deal, first of all, with the issue about what areas we want to have additional information. I don't think that we want to have every postage stamp bill provided. Maybe I will just list some items. I don't like just operating on whatever I think is appropriate because that is when the committee chairmen get into difficulty. It has to be committee decisions, if at all possible. I would suggest the list that is contained in the second last paragraph: the salaries that are paid; asking for information on professional services, conferences and seminars; board expenses and maybe project expenses? Would it be reasonable to ask for that information over the last two years? I am just throwing that out as a quick list.

MR. MORSE: Mr. Chairman, that certainly sounds fine to me and the minister has indicated in his letter that he wants to be helpful and he is just looking for some guidance. So, we are agreeable with the NDP position.

MR. CHAIRMAN: That is not the NDP position, that is just mine.

[Page 39]

MR. MACKINNON: You can advise Father Neville to hold his powder for a few days. He has been writing letters left, right and centre.

MR. CHAIRMAN: Well, I am not advising anybody anything. Remember, this doesn't only deal with Cape Breton, we are asking this information from all of them. Is that agreeable, then, to the committee, those items that I just listed?

MR. MORSE: Agreed. (Interruption)

MR. CHAIRMAN: Yes, we indicated for a two year period, over the last two years. I think that was agreeable? Okay.

MR. TAYLOR: Just to go back to the issue that the honourable member for Cape Breton West raised, relative to his view of the regional development authorities. You know full well, Mr. Chairman, you have been around a long time, that the spirit and intent of RDAs - now I can't speak for when the former government was in power. I know some things happened, Mr. Kavanaugh disclosed things relative to the previous administration - they are independent organizations. Nobody disputes that and the intent is that they be managed by local boards. Yes, there may be municipal, provincial (Interruption).

Mr. Chairman, what I am saying is, you know full well and the honourable member knows full well that appointees from municipal, provincial and sometimes federal governments make their way to the boards, but the boards are supposed to operate, irrespective of the previous administration, at arm's length and that is what the minister is saying, so I take issue with the honourable member for Cape Breton West.

MR. CHAIRMAN: I don't know if this is a point of order, but what I hear is a disagreement between two members.

MR. TAYLOR: Oh, no. It is not a point of order.

MR. CHAIRMAN: What I hear is a disagreement between two members.

MR. TAYLOR: That should be expected in this place.

MR. CHAIRMAN: I guess if there is no business that is going to arise from that since we have reached the time of 10:00 a.m., we also have one more item we have to deal with before we adjourn and that has to do with the meeting schedule. The list of all of the groups that we have agreed to call, I am now told, will be ready this afternoon. Mora has had difficulty getting anybody to agree to be here for next week's meeting.

[Page 40]

There is still a possibility that one of our requested groups from Transportation will be able to appear, but we had hoped to have the Department of Health and Mr. Ward. He is going to be out of the province next week, so he can't appear, but he has assured us that he will be here on June 7th. As Chair, I would like to request that a letter be sent seeking confirmation of his attendance, so that we don't find, a few days in advance, the meeting not taking place because he is unable to be here.

[10:00 a.m.]

MR. MACKINNON: Mr. Chairman, make sure we send that letter to the right mailing address. Is that going to be in British Columbia or Nova Scotia?

MR. CHAIRMAN: I think that we will be able to, with the help of capable staff, get the letter delivered.

MR. DEWOLFE: It was my understanding that we were not going to meet in June. Wasn't that decided at the last meeting?

MR. CHAIRMAN: It was July and August.

DR. SMITH: I just want to thank staff for the record of the dissertation given by Mr. Dexter at the national meeting. I read it. I find no real problem with it. There were some comments about casinos. The information I had led me to believe that other things had been said there. For the record, I want to state that, as Mr. Dexter is not here. I am not really offering an apology, I operated on the information I had. It shows the importance of good record keeping. How the process evolved and how he spoke or whatever, that is another issue. I don't understand that, and I won't dwell on that. But as far as the content, I want to say I was pleased to have received it, and read it.

MR. CHAIRMAN: Of course, that was an in camera session last week, but I know that he will be appreciative.

MR. LANGILLE: What is the list of witnesses that we have, and the departments that we have? What departments do we have coming up?

MR. CHAIRMAN: A moment ago, I indicated that last week, I believe we were down to six groups that we had agreed to. That list is being typed up, and will be available, I am assured, for all members this afternoon. (Interruption) What we tried to do, in the initial stages, we had the Department of Health; that has been on our list for some period of time. Since they weren't able to be here, we are trying to get them for the next meeting which is June 7th. We also have to have a meeting of the committee members, it was agreed, as a follow-up to the planning session, to get ready for this fall. We probably won't be able to get, other than the Department of Health, more than one or two more meetings in during June.

[Page 41]

The rest will have to be scheduled for the fall. It is really a matter of who is going to be able to be here during June.

MR. LANGILLE: I guess that is my point, we are running out of time. We should have an alternative in the event that we don't get the Department of Health in. Who would be our alternative?

MR. CHAIRMAN: The Department of Transportation and Public Works would be my thought.

MR. LANGILLE: That is fine. Just in case we don't . . .

MR. CHAIRMAN: They are certainly ones who should be able to respond to our request. I don't really take kindly to . . .

MR. LANGILLE: No, I agree.

MR. CHAIRMAN: . . . we have meetings agreed to, and then if those meetings ended up . . .

MR. LANGILLE: I agree, but you say we have to get ready for September. We can't be putting that off. That is just my concern.

MR. CHAIRMAN: I agree.

MR. TAYLOR: A comment, Mr. Chairman. The honourable member for Dartmouth East, I would just like to mirror his comments regarding Mr. Dexter's contribution relative to the provincial Public Accounts meeting. I had an opportunity to review it. Although I didn't sit on the Public Accounts Committee as a permanent member during the time-frame that Mr. Dexter spoke on, I thought he certainly covered a wide area and did an excellent job. I understand that Mr. Dexter did that more or less on the fly, so to speak, by the seat of his pants. He certainly did not impute any motives. I thought that, irrespective of comments of the member for Cape Breton West about that particular discussion, Mr. Dexter made what I thought was a great reflection on the Public Accounts Committee for the Province of Nova Scotia for that time-frame.

MR. CHAIRMAN: I am sure he will be very pleased with that, but I am still reminded of the motion passed at the meeting. So certainly, I still, as one of the co-chairs anyway, would intend to honour both the spirit and the letter of what was requested.

MR. TAYLOR: We go by the cuff, too.

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MR. CHAIRMAN: I never go by the cuff. Never. Okay, is there anything else before we adjourn?

MR. MORSE: Mr. Chairman, I think that what you are saying is that you are going to ask for confirmation from the Deputy Minister of Health on his attendance on June 7th?

MR. CHAIRMAN: Yes.

MR. MORSE: And that there will be no meeting next Wednesday.

MR. CHAIRMAN: There is still a possibility that Transportation officials may be able to be present next week. I would certainly ask staff to make sure we know the answer to that question by tomorrow morning at the absolute latest, so that committee members can be advised well in advance.

Is it agreed?

It is agreed.

MR. TAYLOR: Motion to adjourn.

MR. CHAIRMAN: The meeting is adjourned.

[The committee adjourned at 10:08 a.m.]