The Nova Scotia Legislature

The House resumed on:
September 21, 2017.

Public Accounts -- Wed., Oct. 25, 2000

[Page 1]

HALIFAX, WEDNESDAY, OCTOBER 25, 2000

STANDING COMMITTEE ON PUBLIC ACCOUNTS

8:00 A.M.

CHAIRMAN

Mr. Russell MacKinnon

MR. CHAIRMAN: Good morning, ladies and gentlemen. Welcome to today's Public Accounts Committee. Our topic today is the national highway system and with us here today we have from the Department of Transportation and Public Works, Mr. Howard Windsor, our Deputy Minister of Transportation and Public Works; Mr. Martin Delaney, Executive Director for District Operations; Mr. Bill Hogg, Deputy Minister of Finance; and as well, Mr. Ramsay Duff, Assistant Deputy Minister of Finance. Welcome gentlemen. Also in attendance, we have a number of members of the Legislature. I will allow them to introduce themselves, starting with Mr. Morse.

[The committee members introduced themselves.]

MR. CHAIRMAN: Just joining us now is another one of our colleagues, Mr. Barry Barnet. Of course, I am Russell MacKinnon, Chairman and member for Cape Breton West.

Gentlemen, generally speaking, you are familiar with the process. If you would like to open up with a few remarks and then we will start off with some questioning. Mr. Hogg.

MR. WILLIAM HOGG: Mr. Chairman, I will begin with some very brief remarks so that you can get to your questions. My colleague, Mr. Windsor, also has a few brief remarks.

We estimate that the federal government collects $125 million in federal excise tax on fuel in Nova Scotia in 1999-2000. Mr. Windsor will have details on how much the federal government is providing back to Nova Scotia in contributions to road construction and maintenance. The federal contributions have been sparse in recent years. In February 2000, the federal government did commit $600 million over four years to highway improvements for all of Canada. This program, however, does not begin until the year 2002-03 at the rate of $150 million per year for four years for all of Canada.

1

[Page 2]

From the Department of Finance's perspective, the situation with federal excise tax on fuels illustrates what provincial Finance Ministers and Premiers have called the fiscal imbalance in Canada. Provinces are faced with spending pressures that test revenue-raising potential while the federal government's fiscal structure generates surpluses of increasing amounts.

In the case of fuel taxes and highway spending, the federal government continues to collect fuel excise tax but has discontinued their past long history of contributing to highway construction and maintenance. Provinces with no additional revenues are left with the infrastructures to maintain. The federal government continues to collect revenues but contributes much less to highways. This situation provides more stability to the federal fiscal situation but increases the risk to the province's fiscal positions.

Those are my brief comments to start off and I would ask Mr. Windsor to make his comments.

[8:02 a.m. Mr. David Morse took the Chair.]

MR. CHAIRMAN: Mr. Windsor.

MR. HOWARD WINDSOR: Good morning. I just want to start by providing you with a brief overview of the Department of Transportation and Public Works' budget for highways and the federal funding that we have received up until this point in time in terms of highway construction in the province. The total budget for the Department of Transportation and Public Works in 2000-01 is almost $250 million. The total funding for roads and bridges is almost $184 million with capital funding amounting to approximately $58 million and maintenance expenditures of $126 million. The major change in the 2000-01 budget from last year has been an allocation of an additional $9 million to the rural impact mitigation fund earmarked for spending on our secondary road system.

Through the 1990's the federal government had cost-shared highway agreements in place with all provinces. All of these agreements, with the exception of two that are currently in Newfoundland, have expired or will have expired by the end of the fiscal year.

Since 1987-88 Nova Scotia has had four major agreements with the federal government entailing a total federal contribution of approximately $261 million. Federal spending on roads in recent years amounted to about $40 million annually. As agreements have run out, however, federal spending has dropped. This year federal spending on roads in Nova Scotia will be approximately $3 million or just slightly less than $3 million.

Every province and territory is facing the same situation. Accordingly, Transportation Departments in all provinces and territories have been working together for the past two years to present a united call at the federal government to make a significant long-term

[Page 3]

funding commitment to transportation, in particular highways. This joint effort has taken the form of what is called a National Transportation Investment Strategy. In making this submission, we have highlighted a fact that the federal government collects well over $4 billion a year in fuel tax revenues. We have also stressed the fact that Canada is the only G-7 country that does not have a national transportation funding program.

In its February 2000 budget, the federal government announced an allocation of $600 million over four years for highways with no expenditures occurring until 2002-03. All provincial and territorial jurisdictions have expressed disappointment with this announcement as the funding is inadequate in relation to the financial requirements that have been identified. Nova Scotia's share of this funding would amount to about $5 million a year or enough to build approximately five kilometres of highway a year.

Since the federal announcement, Nova Scotia has continued to promote the need for a federal/provincial highway agreement. The Premier has pursued this matter with colleagues at the recent Premiers' Conference in Winnipeg. The minister has made regular representation to his federal counterpart with the most recent occasion being through a one-on-one meeting here in Halifax that occurred sometime in September. More specifically, we have taken a clear position that Ottawa must put a much greater share of federal road fuel taxes back into the highway system.

Our specific request of the federal government is for a five year, $270 million cost-shared 50/50 agreement. This proposal has two main components, approximately $90 million for new construction on the national highway system and $180 million of repaving on the national highway system. The federal government will only fund highways on the national highway system.

Nova Scotia's component of the national highway system covers approximately 900 kilometres and includes many but not all of our 100-Series Highways as well as roads leading to the interprovincial ferries in North Sydney, Caribou and Digby.

With those few brief remarks on the department's budget, we would be prepared to entertain your questions.

MR. CHAIRMAN: Thank you, Mr. Windsor and Mr. Hogg.

We will start with 20 minute intervals.

The honourable member for Cape Breton West.

MR. RUSSELL MACKINNON: Mr. Windsor, what are the criteria for the establishment of any highway to become part of the national highway system?

[Page 4]

MR. WINDSOR: It effectively has to connect a province to a commercial route in another province. In other words, it represents an interprovincial piece of the system. Therefore, in Nova Scotia it is largely Highway No. 104 leading into the province through Antigonish into Cape Breton and Highway No. 104 in Cape Breton. It is the piece of the highway system that connects Nova Scotia to other provinces as well as Highway No. 101 which leads down to Digby.

MR. MACKINNON: So Highway No. 101 is part of the national?

MR. WINDSOR: Highway No. 101 is part of the national highway system. That is correct.

MR. MACKINNON: And Highway No. 104. What about Highway No. 107?

MR. WINDSOR: No.

MR. MACKINNON: Would it qualify?

MR. WINDSOR: I don't believe it would qualify, no.

MR. MACKINNON: I am curious because there is a letter dated here, and I will table it, October 28, 1999, addressed to the federal Minister of Transport, the Honourable David Collenette, signed by the Minister of Transportation and Public Works, the Honourable Gordon Balser, requesting that Highway No. 107 be designated as part of the national highway system. I am just wondering what the logic would be in that if, in your opinion, it doesn't qualify?

MR. WINDSOR: Most provinces in Canada have attempted to extend the national highway system for obvious reasons in that it helps us, in terms of the funding for our transportation system. The federal government, however, has been resistant to any extensions, in terms of the national highway system and have not added to it.

MR. MACKINNON: So, what you are telling me is that you have one opinion as to whether it would qualify and the minister has another opinion. It is ironic, this is the same highway system where there were bridges built to nowhere, there were roads that weren't completed that used a tremendous amount of offshore development dollars back in the 1980's, when John Buchanan was in office. I will leave that for now.

You have indicated that Highway No. 104, Route 4 is part of the national highway system, in particular from Port Hawkesbury to Sydney. Now from Port Hawkesbury to St. Peters I would suggest and certainly support the fact that that is up to national highway standards. From St. Peters to Sydney or more in particular, East Bay, I would submit that it is not. Certainly, last year or the year before the provincial government - with the support of

[Page 5]

Mr. Delaney and the previous minister - made considerable effort through the Big Pond area but there are a number of areas, particularly in the Irish Vale area and Middle Cape, they are no less than death traps and there have been deaths in that area.

I recall this summer where one tourist was driving down in the Irish Vale area and the road was so bumpy and narrow that on a straight piece of highway, he lost control of his vehicle. It could be for speed, it could be for a number of reasons but it didn't appear to be because I wasn't too far behind him and there was a good flow of traffic in the middle of the afternoon. The trailer jackknifed, went off the road and was totally destroyed. Probably within a week to two weeks the Department of Transportation repaved that section, 0.4 of a kilometre, about a foot wider.

If you have two tractor-trailers side by side from west coast mirror to west coast mirror, on many of the sections of that highway, the total distance from one west coast mirror to the west coast mirror on the truck on the opposite side going the opposite way, is actually wider than the asphalt, the paved section of the road. What is in the plans to address that serious problem?

MR. WINDSOR: As you indicated, we made some improvements on Highway No. 104 last year, where we did some widening, some straightening, some ditching, some shoulder repair on one section of the road. It is our hope to be able to make some investment in that route on an annual basis. We had planned to do some additional work on it this year but unfortunately, the tender call that we had came in higher than what we had anticipated and we were not able to undertake that work this year. We recognize the importance of Highway No. 4 and we would like to be able to continue to make annual investments in the upgrade of it.

MR. MACKINNON: Are there plans to recall those tenders for next year?

MR. WINDSOR: It would be my hope that we will be able to do that because it is an important route to us.

MR. MACKINNON: I noticed in an advertisement in the Hants Journal on July 14, 1999, the present Minister of Transportation and Public Works, when he was a candidate in the last election, indicated that he would move immediately to begin the twinning of Highway No. 101. On a number of occasions he was reported to have stated, with or without federal help. Why hasn't the province moved in that regard? Obviously, they haven't been able to come to an agreement with the federal government despite their claims that they would.

MR. WINDSOR: In terms of Highway No. 101, as you know we are proceeding with the work around Highway No. 101 in terms of trying to be in a position that we can proceed as quickly as we can when federal funding becomes available. We have kept the

[Page 6]

environmental processes moving along and we are doing some of the extensions to the structure out in the Mount Uniacke area. We have also completed the operational safety study that we released last week. We have, as the minister has indicated on several occasions, raised the importance of Highway No. 101 with the federal minister as our number one priority in terms of twinning.

I think our actions are twofold, one is to put ourselves in a position so that we can move as quickly as we possibly can when we have that available federal funding and we have continued to emphasize the importance of improvements to the road to the federal government.

MR. MACKINNON: Essentially what you are trying to tell me in very diplomatic terms is you are trying to buy some time until the feds kick in some money to proceed with the twinning of Highway No. 101. Am I to interpret that correctly?

MR. WINDSOR: I think what we are trying to do is, as I said, put ourselves in the position where we don't have any delays so when that funding becomes available we can proceed as quickly as we possibly can.

MR. MACKINNON: So then it is safe to say that there will be no twinning of the highway unless the federal government kicks in some money?

MR. WINDSOR: It is essential for us to have the federal funding. What we can do we will be doing with the funding that we have available. In my introductory remarks I indicated that we have a capital budget of approximately $65 million a year in the Department of Transportation and Public Works for a highway system that includes the 100-Series, as well as secondary series roads and trying to proceed with them as equitably as we possibly can across the province.

MR. MACKINNON: So it would be fair to say that Highway No. 101 will not be twinned unless the federal government puts in some money, given the dynamics of the budgetary process that you have?

MR. WINDSOR: We need to have federal funding.

MR. MACKINNON: In that particular ad - it was an ad that was posted and I don't know if you folks have seen it, I will table it later - when the honourable Minister of Transportation was running in the election, indicated he would dedicate all taxes raised through motor vehicle licensing and fuel sales to highway construction and maintenance. Has that been done?

MR. WINDSOR: Perhaps I will ask Mr. Hogg to address that.

[Page 7]

MR. HOGG: I haven't seen the ad that you are referring to but I am familiar with a platform commitment which sounds quite similar to that. In the - I am not sure of the exact name, we refer to it as the blue book - listing of the prospective government's commitments that they were making during the election which they subsequently carried on with after the election, one of those commitments was very similar to the wording in that ad. In the document that they circulated, they indicated that dedicating those taxes would occur in the second year of their mandate, which would be the upcoming budget year, which would be 2001-02.

MR. MACKINNON: That is not being done now, though, is it?

MR. HOGG: No.

MR. MACKINNON: You would expect it to be done in the second year?

MR. HOGG: The plan was - and this was published in the document - in year two of the mandate which is 2001-02 fiscal year, they would address that commitment.

MR. MACKINNON: That is promise number two down the tubes. Let's go to promise number three. Immediately move to negotiate a federal-provincial highways agreement. Through you, Mr. Chairman, to the Deputy Minister of Transportation and Public Works, could the deputy minister, Mr. Windsor, be kind enough to indicate to us, what is the status of the negotiations to date?

MR. WINDSOR: Starting in September of last year, this has been raised at federal-provincial meetings of Ministers of Transportation; the Premier has written to the Prime Minister; Minister Russell has written several letters to Minister Collenette; there have been two meetings with Minister Collenette where the subject of a national highways agreement has been raised, one in Ottawa and one more recently in Halifax; we presented to the federal minister a program that we think is a program of some importance for Nova Scotia highways in terms of both improved capacity on the 100-Series Highways as well as repaving work on the 100-Series Highways.

The federal government, as you know, has announced a $600 million program that would start in two years' time. Our share of that would be roughly $5 million a year for four years, which is roughly 3 per cent of that $600 million. We have continued to indicate to the federal government that we need - we as all other provinces - more than the $600 million that has already been announced in terms of the problems that we have. The federal government, however, has taken the position up until this point in time that it wants any work done on highways done within the context of the national program that would deal with all the problems. As I indicated, the only program at this point that they have come forward with is the $600 million.

[Page 8]

MR. MACKINNON: There is no conclusion to promise number three, that is what you are saying. There is no federal-provincial agreement in sight at this point. Can you foresee a particular date for a signing this federal-provincial agreement, based on the knowledge that you have to date? Are the negotiations to the point where you are crossing the t's and dotting the i's?

MR. WINDSOR: What we have at this point in time, from the federal government, is their announcement on the $600 million that they are prepared to put in for the national highway system starting in two years' time. We have nothing further over and above that at this particular point in time.

MR. MACKINNON: Except two meetings and a mitt full of letters.

MR. WINDSOR: Several requests to the federal government for additional assistance.

MR. MACKINNON: With regard to the tolls on the highways. I noticed the Minister of Transportation and Public Works has indicated he is against tolls for proceeding with the twinning of Highway No. 101, despite the fact that there seems to be increased calls from the Valley community. I don't know all the dynamics of it, so I have to confess right up front, and we have our federal Member of Parliament in the Truro area, Bill Casey, saying that the toll booth should be removed. Has there been any move in that direction, to remove the tolls off the Cobequid Pass?

MR. WINDSOR: No.

MR. MACKINNON: Is there any intent to?

MR. WINDSOR: No. The governments' position is that there will be no further tolls, but it is not prepared to remove the toll at the Cobequid Pass.

MR. MACKINNON: You say there is not enough money to address the needs for roads, the minister has proven to be ineffective in getting a federal-provincial agreement to date, so no tolls, no agreement. Where is the money going to come from? Are we just hoping that something will give?

MR. WINDSOR: Perhaps I could ask the Deputy Minister of Finance to talk in terms of the fiscal situation of the province and where the province's fiscal recovery plan is going. That might shed some light on that question.

MR. MACKINNON: It sure would since the government won't release that study.

MR. CHAIRMAN: Mr. Hogg.

[Page 9]

MR. HOGG: The funding for highways in the future will come from a variety of different sources. One source will be the federal government. We mentioned that there is an infrastructure agreement committed to by the federal government, although the highways portion of it is much farther into the future than I think most people would like - 2002, 2003 - before any amount of money starts flowing. In the minister's Budget Address there is a four year plan published at that point which shows a deficit that was contained in the last estimates of $268 million, reducing down to a deficit of $91 million in 2001-02, and subsequently surpluses in the third and fourth years. The reallocation of expenditures as well as some revenue growth, along with federal funding and re-priorizing of expenditures in the Department of Transportation and Public Works would be the only sources of funds to commit to highway construction.

MR. CHAIRMAN: The time for the Liberal caucus has now expired, and we will move on to the NDP caucus.

The honourable member for Sackville-Cobequid.

MR. JOHN HOLM: Mr. Chairman, if I could, there are a few things that I am going to start off with and then I will turn over this, hopefully, first round to my colleague, who is actually the Transportation Critic. There are a couple of things that I want to start off on. First of all, of course, I have to say that I, as I am sure all Nova Scotians are, am extremely disappointed that we have not been more successful in getting a more fair-minded approach out of the federal government in that some of the dollars that they are collected here in the way of revenues from fuel taxes pumped back into the province, and that former agreements that have expired are not being renewed.

The only comment I can make on that, given the tone of the former questions being asked, I just have to suggest that this government seems to be as remarkably unsuccessful as the former government was in negotiating new agreements, because these are things that certainly take place over a number of years. Now we have seen a couple of governments that have been unsuccessful.

I want to start zeroing in, first of all, if I can, on Highway No. 101. I appreciate that money is tight, I appreciate that things do cost money, but lives are also being lost and injuries are occurring. We had the most recent tragedy occurring on the highway just this past weekend. I am looking at a report called the Final Report - Operational and Safety Review, Highway No. 101, Mount Uniacke to Bridgetown, submitted to the Nova Scotia Department of Transportation and Public Works, prepared by the Atlantic and Traffic Management; that was from August of this year. I just want to refer to a couple of sections in that report. I do so because it deals with the site, and it is a site that has been known to be an extremely hazardous site on Highway No. 101; I am referring to the intersection at the Ben Jackson Road.

[Page 10]

[8:30 a.m.]

In that report that I just referred to, the RCMP, of course, also made some recommendations. In that they said that the Ben Jackson intersection should be eliminated. When you look at the accident statistics, later on in this report, showing the number of accidents and fatalities at that site over the past 10 years, going from 1990 up until 1999, those that involve property damage, those that are injuries and fatalities, that site, that intersection has been known for a long time.

The same report goes on and talks about what needs to be done in the short term. There they talk about in the immediate to 12 month period. Under the Ben Jackson Road intersection, complete plans for the elimination of this intersection, in the short term implement the following changes, establish a 90 kilometre per hour zone, erect intersection warning signs with flashing amber lights, and install pavement arrows on Highway No. 101.

We have heard the minister recently talking about things like more studies and so on. We have had a lot of studies. I appreciate that money is difficult. The province, though, is also collecting a lot of money in the way of fuel taxes; they are also getting a windfall, I suggest to you, on HST, because even though consumption is down modestly, the selling price of products, gasoline and diesel fuel, has increased significantly so the take of HST, despite the reduced consumption, is much higher than it was a year ago.

The province has some responsibilities. The government made a commitment: with or without federal assistance, work will begin. My question is, what is going to be done in the short term and in the longer term, here in longer term I am referring to a year or two? Are there plans under way to address these most serious safety concerns on Highway No. 101?

MR. WINDSOR: First of all, to the Ben Jackson Road intersection, in the longer term it would obviously be the preference of the department to see the intersection eliminated, and certainly the sooner the better in terms of its elimination. In the shorter term, as the operational safety review indicates, there are a number of other items that we could take care of in terms of speed zone reductions, improved markings, improved lighting and things of that nature around the intersection to provide motorists with greater warning that something is changing in terms of the roadway system. Those are items that we will be moving on immediately.

MR. HOLM: What does immediately mean?

MR. WINDSOR: As soon as we possibly can we will be dealing with those particular items. The other thing, I guess, in terms of the Ben Jackson Road intersection is that I would like to see, in terms of the more recent accident, the accident report on that particular incident to see whether or not that would provide us with some additional guidance.

[Page 11]

MR. HOLM: Just a couple of things, if I can, in response. I appreciate that staff who are here, staff don't make the policy decisions and staff can't allocate monies if the political masters aren't prepared to provide it. I have no disagreement with wanting to see the accident report and so on. But you go back and you take a look at it. The number of accidents at that intersection in 1990 were 14, 15 in 1991, 8 in 1993, 7 in 1994, 8 in 1993, 9 in 1995, 4 in 1996, 13 in 1997, another 5 the following year and 4 the year after that, and we already know that there have been more again this year. There have been fatalities at that intersection; there have been 25 injuries at that intersection. We know that is a very dangerous intersection. I believe it is the second-most dangerous site on that highway.

I would like to know what does "as soon as possible" mean? It doesn't take long to get a crew out there to reduce the speed limits. It doesn't take long to get a crew out to start to install any lighting and standards that may be necessary to install the overhead lights and flashing lights, it will take a few dollars but it is not a time-consuming matter. That is something that should be able to be done within a couple of weeks. Are there plans under way now to take corrective actions so that before this fall ends some safety measures will have been taken to improve the safety at that intersection?

MR. WINDSOR: Some of the paint markings, I understand, at that intersection have already been improved as a result of the operational study, when we first received it. The other items will be addressed as soon as we possibly can, starting this fall.

MR. HOLM: I am not saying this to anybody at the table, but you don't put a dollar value on human life and injury. Those areas, which have been proven over the years to be extremely dangerous, need to be addressed. I am sure, at least I hope, that the MLAs from the area will be beating up on their Cabinet colleagues to make sure that that work gets done immediately; whether the feds are going to come onstream or not, those kinds of things just cannot wait.

MR. WINDSOR: One of the things, Mr. Holm, primarily the major driver for undertaking the operational study in the first place was the recognition that even with federal funding there would be a period of time within which the road would obviously not be twinned no matter when the federal government made the announcement because it would take some period of time to construct it. The primary reason for undertaking the operational study in the first place was to see what short-term matters we could immediately undertake to try to improve the safety on the road, everything from improved enforcement through to some structural changes in terms of the road, just in order to be able to address, I think, the concern that you have just raised with me, that there are some things that obviously we shouldn't wait on.

MR. HOLM: If I can, I am just going to switch to another item briefly, and that is the Cobequid Pass. I know that the government has taken the position, and I am not disagreeing with it, that there should be no more toll highways. The Cobequid Pass though has been in

[Page 12]

existence for some time. Could you tell me how the traffic counts are comparing with what was projected, and how much money is being brought in on an annual basis through the tolls at the Cobequid Pass?

MR. WINDSOR: I don't have the specific traffic numbers here with me. We know that the traffic volumes are up over what had been originally projected and we know that revenues are up over what had been projected as well.

MR. HOLM: Would you agree to provide that information to this committee, those figures?

MR. WINDSOR: Yes.

MR. HOLM: Also, in terms of the cost for maintaining that stretch of road, that is maintained by the department and it is billed to the corporation. Do you know how much is being billed to the corporation for that?

MR. WINDSOR: I can commit to get you that information.

MR. HOLM: Also, maybe this is more the kind of information you can provide to us, of course it is a private corporation and the corporation is, I can't remember all the details of the contract, to be paying off the road and we are paying for it over, I think, 25 years. If there is excess money being brought in by the corporation, that money is to be paid to the province, money in excess of the cost for maintaining it, the cost for paying the - I guess you could call it the mortgage on the road and their excessive rate of profit. It is my selection of the term, excessive rate of profit. Additional funds that are raised would be paid back to the province, am I correct in that?

MR. WINDSOR: I think, actually, Mr. Holm, the money stays in the corporation until the bonds . . .

MR. HOLM: I should have said in the corporation because the corporation is a provincial body.

MR. WINDSOR: Yes.

MR. HOLM: I mean, in the private hands. If more monies are collected than is needed to pay for the agreed-upon rate of profit, pay for the interest rates, pay for the costs of the mortgage and so on, that additional profits would come back to the corporation. Am I not correct in that?

MR. WINDSOR: That's correct.

[Page 13]

MR. HOLM: Could you tell me if any additional monies were paid into the corporation this year? Was there a profit made, that the corporation made as a result of those tolls?

MR. WINDSOR: I could provide you with that information.

MR. HOLM: Do you know if there was, though, at the . . .

MR. WINDSOR: I can't say one way or the other at this stage, I'm sorry.

MR. HOLM: From a review of that road - I am sure the department has done an evaluation of it and the agreement that was entered into. Does the department believe that they could have, had they operated the toll system themselves, delivered at a lower cost to the consumer, even if they had gone the tolls, if the department had just gotten rid of the private sector and financed itself? Would the province have saved money instead of going the P3 route?

MR. WINDSOR: I am not sure if there has been an evaluation of that nature done so I can't answer that question.

MR. HOLM: Okay, I will stop there for the moment and I may come back to that. I will turn it over for a few minutes to Mr. Epstein.

MR. CHAIRMAN: Mr. Epstein.

MR. HOWARD EPSTEIN: Mr. Windsor, I wonder if you could help me understand something about the eligibility of different highways in Nova Scotia to be considered part of the national highway system. I was looking at the national highway policy for Canada, the document issued by the council of ministers responsible for transportation and highway safety. It is dated September 1998. It is in the materials here today.

Appendix I lists those highways that are considered part of the routes in the national highway system. I see in Nova Scotia that it looks as if the whole of the length of Highway No. 101 from the Halifax-Dartmouth metropolitan area, through to Yarmouth is considered a part of the national highway system. Do I read that table correctly?

MR. WINDSOR: That's right.

MR. EPSTEIN: So this tallies with your introductory remarks that part of the definition is taken to include highways that are connectors to another transportation mode. I take it, in this case, what qualifies Highway No. 101 is that it connects to the ferries in Digby and to the ferries in Yarmouth, is that right?

[Page 14]

MR. WINDSOR: That's correct.

MR. EPSTEIN: Is this an agreement that allows for automatic change or does each addition or change have to be directly negotiated with the federal government? For example, if we were to have, say, an international ferry connector at Shelburne, would that make, say, Highway No. 103 automatically part of the national highway system, at least from metro to Shelburne?

MR. WINDSOR: It is an item that would have to be negotiated with the federal government.

MR. EPSTEIN: So what you said about the idea of inclusion by way of connectors to other major transportation modes is the underlying principle upon which the provinces have worked together with the federal minister, is that right?

MR. WINDSOR: Correct.

MR. EPSTEIN: There is no reason to think that would necessarily change, is there?

MR. WINDSOR: No, I don't think there is. It is a matter that you could negotiate, obviously, with them, depending on what the answer would be.

MR. EPSTEIN: Okay, fair enough. Can you also tell me that when previous agreements have been in place across the country, whether the money that the federal government has been prepared to put in to support highway infrastructure has been allocated to provinces according to kilometres, or according to some other base?

You see the point of my question. For example, you spoke about a new program coming up in a few years. You said, well, Nova Scotia's share is going to be only around $20 million over the 5 years. Now, how is that money distributed?

MR. WINDSOR: There is no - typically, a percentage of the national highway system is the standard that would be used. So in Nova Scotia it is, roughly, 900 kilometres which is about 3.7 per cent, I believe, of the national highway system.

One other standard that is being used or being mentioned as a possible standard is percentage of the population, as another way of dividing up the $600 million. That final determination, yet, hasn't been made, though, in terms of what will be the criteria used.

MR. EPSTEIN: So, historically, the allocation has been on the basis of kilometres as a percentage of the total national system?

MR. WINDSOR: That's right.

[Page 15]

MR. EPSTEIN: Your statement before of the number of dollars you thought Nova Scotia would get would be an estimate on that same basis but that hasn't been negotiated yet, is that correct?

MR. WINDSOR: That's right.

MR. EPSTEIN: Okay, all right. That's clear enough, I think.

MR. CHAIRMAN: The honourable member has 20 seconds.

MR. EPSTEIN: Okay, the figure you used of over $4 billion that is being collected by the federal government in excise taxes, can you give us a current figure as to the number of dollars the federal government spends nationally on the highway system? It sounds as if all agreements have lapsed, is that right, or pretty well, except for Newfoundland?

MR. WINDSOR: I don't have the exact number with me. I can make that available. Yes, the ones that are remaining are in Newfoundland but I can't put a dollar number on it for you.

MR. EPSTEIN: It would be a fair conclusion that most of that money is . . .

MR. CHAIRMAN: Sorry, the time has expired. Okay, we now turn it over to the Conservative caucus and we start off with Mr. Brooke Taylor.

MR. BROOKE TAYLOR: Thank you, Mr. Chairman, and good morning, gentlemen. I just had a couple of questions. Perhaps I could start with Mr. Delaney. I know we have a considerable number of kilometres of public highways in the Province of Nova Scotia but I wonder how many bridges we have in the Province of Nova Scotia and what the average age of a Nova Scotia bridge is?

MR. DELANEY: We have roughly 3,800 bridges in the province. The average age is in the range of 55 years old.

MR. TAYLOR: Now, how does that stack up against some of our other Canadian provinces, for example? Would you have that type of information?

MR. DELANEY: I don't have it on a province-by-province basis but I think the Canadian average is about half of what the Nova Scotia average is, so it is more in the range of 28 years.

MR. TAYLOR: So you're saying that, on average, our bridges are twice as old?

[Page 16]

MR. DELANEY: Our infrastructure is older than a lot of the provinces because, of course, we are one of the first provinces settled. Yes, our infrastructure and particularly our bridges, are significantly older than a lot of other provinces.

MR. TAYLOR: Exactly. The point I am trying to make is that we certainly understand that our highways need to be upgraded and part of that infrastructure is our bridges. Our bridges are, essentially, very old and in need of urgent repair in some cases, I am quite certain.

Earlier on, the member for Cape Breton West was asking some questions relative to the toll road on the Cobequid Pass and the fact that our government has stated clearly, we didn't try to pretend to Nova Scotians that we were going to build toll roads. In fact, in the so-called blue book, we said, emphatically, that there would be no more toll roads.

My experience has been that when the honourable member for Cape Breton West's colleagues, Richie Mann and his federal counterpart, David Dingwall, ripped away the $26 million from the Strategic Highway Improvement Program, it left a very bitter taste in the mouths of Nova Scotians. We all know that the Cobequid Pass was imposed on Nova Scotians in a very callous, heavy-handed and dictatorial fashion. I want to know, just for the record, was that $26 million, Mr. Delaney, ever put back into the Strategic Highway Improvement Program as it was pledged by both Mr. Dingwall and Mr. Mann?

MR. DELANEY: Certainly, my recollection is that the province put up about 50 per cent of the capital cost of the Cobequid Pass, so I believe that money was reallocated, as such. We could certainly go back and check the records on that and provide that to you.

MR. TAYLOR: I would dearly love, Mr. Chairman, through you, to perhaps, somehow, make the request official, possibly, to send a note. Do I have to have agreement from the committee? I think it is important that Nova Scotians understand whether or not that $26 million was returned to the SHIP program. Quite honestly, some of us are a little bit sceptical, Mr. Delaney, as to whether or not that transaction ever happened.

MR. DELANEY: We can certainly check that and get back to you on it.

MR. CHAIRMAN: Will that suffice?

MR. TAYLOR: Yes, that will suffice. Now, we have talked about the federal government and the fact that we, basically, don't have a federal-provincial highway program in the Province of Nova Scotia. Highway No. 101, is certainly, no question, extremely dangerous but it has largely been neglected by the feds. Here we are, at federal election time, Ottawa is sitting up there with a large surplus and part of that surplus, as far as I am concerned - and I am just talking about Nova Scotia, Mr. Chairman, and perhaps Mr. Hogg, the Deputy Minister of Finance could confirm, reject or set the record straight - as I

[Page 17]

understand it the federal government in Ottawa is now syphoning off approximately $130 million, annually, through the excise tax - be it 4 cents on diesel and 10 cents on gasoline - from the consumers in Nova Scotia. Is that a fair statement, Mr. Hogg?

MR. HOGG: We don't get exact numbers from the federal government by province but our estimate is - and I think it is fairly accurate - $125 million that Nova Scotians pay in excise tax on fuel that the federal government would collect and use however they choose to use it.

MR. TAYLOR: Yes, for example, the very respected Nova Scotia Forest Products Association suggests that figure is closer to $130 million and governments in Nova Scotia, for the last several years, have been saying, well, the feds take off $125 million and hardly put a cent back. I don't know if their accounting or data collection is any more accurate but, whether it be $125 million, I guess, or $130 million, that is a lot of money that is taken away from the consumers in Nova Scotia. It is most disappointing that at least a good portion of it isn't being returned to help us upgrade our public highway system.

I think we talked a little earlier in the hearing about the fact that it costs something like - or I guess, perhaps, I am suggesting that, maybe, it costs about - $1 million to build one kilometre of road. The federal government's commitment to highways in Nova Scotia - you know, the same government that has been bragging about having billions of dollars in their surplus up there - they are committed to $5 million per year for the Province of Nova Scotia, or roughly five kilometres of new highway, if you put it in that context. Is that correct?

MR. DELANEY: That is correct.

MR. TAYLOR: I was intrigued by the questioning of the honourable member for Cape Breton West, a little earlier on. I think it is important that we all recognize the need to make Highway No. 101 safer. I don't think anybody in this Chamber would dispute that.

There have been some recent announcements by the Minister of Transportation and Public Works for the Province of Nova Scotia that are basically related to a study that was done by Atlantic Road & Traffic Management, the consultants. Improvements ranged from better maintenance and pavement markings to repairing road shoulders, eliminating some downhill passing lanes. I am curious to know how eliminating passing lanes is going to make the highway safer. I am also interested in knowing as to whether or not these passing lanes have, in fact, contributed to deaths on Highway No. 101. If it is a fair question, I am just wondering, what is the rationale behind eliminating passing lanes?

I know, Mr. Delaney, you were involved in eliminating passing lanes in Salt Springs, I believe, when Richard Mann was the minister, much to my chagrin at that time as Transportation Critic. The trucking industry was concerned because it took away - it is probably improper terminology but we used to call it - the granny lanes, actually making the

[Page 18]

two lanes more congested. That is just from practical experience, not from, I am sure, the accurate, scientific data that you would have, Mr. Delaney.

MR. DELANEY: If I can respond to that, I think Mr. Taylor is right, that in general traffic practise you tend to allow passing wherever it can be safely carried out and to arbitrarily remove passing lanes doesn't necessarily contribute to enhancing the safety of the road system. The issue of Highway No. 101 that was pointed out by the study was that the traffic volumes have risen to such a level that the characteristics of how the traffic responds to different events has changed some. The passing lanes they are talking about eliminating are, if you will, the downhill lanes adjacent to passing lanes. Because of the traffic volumes there aren't a lot of opportunities for passing on Highway No. 101 and there seems to be an increasing number of people getting upset by being held up behind traffic, so they are taking unnecessary chances.

There appears to be a pattern in fairly high volume roads of people pulling out into those lanes in times when there is traffic coming in the other direction, quite frankly, and that has been a concern that was raised by the consultant who carried out that study. That is one of the issues that certainly, we plan to carry out changes on right away and I believe some of those changes have already been made. But you are right, in general, we try to allow passing wherever it is possible. Once you get above 10,000 vehicles a day, there just aren't very many openings in opposing traffic and I think that is what has led to some of the problems on Highway No. 101; people either wander across the centre line or take unnecessary chances, unfortunately. We are certainly dealing with that as recommended by the study.

MR. TAYLOR: I travelled that highway several times, both as a commercial trucker and as a motorist in an automobile. I know that people get frustrated, I am not questioning that and I certainly am not suggesting that the study isn't accurate, but besides people getting frustrated with this so-called merging and the downhill passing lanes, I really want to know, has the downhill passing lane directly contributed to death on Highway No. 101?

MR. DELANEY: I can't answer that question today, but I can certainly get back to you on that.

MR. TAYLOR: I would appreciate that because I think it is important that while we respect the consultant's report and appreciate it, I guess from just a practical standpoint, I can't, for the life of me, understand how taking up pavement off a highway is going to somehow lessen death and carnage. Obviously, the department and the consultants are satisfied that that will make the roads safer and if it does, obviously, it is something that should be done but, again, if it hasn't contributed to death and it hasn't contributed to injury on the highway and the consultants feel it makes motorists frustrated, well, I think they are frustrated from the time they get from Mount Uniacke to Yarmouth, maybe. I will certainly be waiting for that information, Mr. Chairman.

[Page 19]

[9:00 a.m.]

There is also the issue of the stretch of Highway No. 101 between Digby and Weymouth North, which is not controlled access. Where does that issue currently stand and has the provincial government done anything to date, perhaps with the federal government, regarding that section of highway that is not controlled access and it is 100-Series, of course?

MR. DELANEY: We have initiated a corridor preservation study for the area from Digby to Weymouth North. That essentially involves acquiring mapping for the corridor, determining the constraints for providing service to communities and the environmental constraints and what have you and it involves an open house. We have had one to get community input and the next stage beyond that is developing a more detailed preliminary design and going through an environmental assessment process, which is a fairly timely process now. It is what we would see as a long-term project to move to building a highway in that corridor.

The first step is to identify the corridor to protect the areas that might be subject to commercial development or other development and to again, tee it up for a long range, depending on federal funding, to put it in our program and move forward with construction. It certainly won't be in the next five year range, it will certainly be beyond that, but we are proceeding with that work.

MR. TAYLOR: What is the average speed limit posted on Highway No. 101?

MR. DELANEY: The speed limit on Highway No. 101 is generally posted at 100 kilometres per hour.

MR. TAYLOR: I understand that initiatives are being taken or have been taken to step up law enforcement on Highway No. 101? Did the consultant's report make any reference to the posted speed on Highway No. 101? We know that it is exceeded on occasion, probably quite often. I know we have accepted some of the recommendations, maybe all of them but did they zero in on the speed limit on that highway?

MR. DELANEY: As I recall - and I don't have the report in front of me - there was a recommendation that we consider reducing the speed limit in the vicinity of the Ben Jackson Road level crossing. That is something that our traffic people have undertaken to review and will be dealing with shortly.

MR. TAYLOR: Has there been a general trend in terms of identifying the reason for the majority of these accidents? Is it inattentiveness? Is it speed? Is it alcohol? Generally with these accidents, how do the percentages roughly break down; do you have that type of data?

[Page 20]

MR. WINDSOR: We receive accident reports on all of these various events. I can't tell you specifically what the breakdown is in terms of the various factors. In each instance, what the investigators see as the contributing factor is identified in the report. Certainly, one of the major items is driver inattentiveness.

MR. TAYLOR: Our government committed an additional $9 million in this year's budget for the upgrading and maintenance of our secondary road system - and I think secondary is the operative word there - through the Rural Impact Mitigation fund. I am just wondering if you could talk a bit about the RIM fund and give us a sense of what has been done to date, and how well the program went?

MR. WINDSOR: As you indicated, it is approximately $9 million. Just slightly less than $4 million was spent on pavement patching, a little over $3 million on gravel patching, slightly less than $2 million on ditching and a little less than $0.5 million on brush cutting. The dollars were spread around the province in the four districts that the department operates out of. In total, there were 170 projects in the western region, 88 in the central region, 161 in the northern region, and 132 in the eastern region. These go from the very small to the very large and I think in terms of the response that we have gotten from the public, it has been very favourably received.

MR. TAYLOR: I would concur, Mr. Windsor, in my own observations and feedback. I trust most Nova Scotians are satisfied. I don't know if they recognize that despite the federal government's complete failure to address the needs of our infrastructure system across Canada and especially right here in Nova Scotia, our government, despite having to consider and deal with a horrendous deficit and large debt, has recognized its responsibility for the maintenance of our roads and highways. I know my colleagues and I are encouraging the minister to continue with that RIM program in future years. I am just wondering whether or not the department has made any finite decision regarding RIM for next year? I don't want to go too far into the future but I think it is a good program.

MR. WINDSOR: We are in the process, as are all government departments, of starting our budgets for the upcoming fiscal year and it will certainly be an item that we will be promoting in that budget priority-setting process of government.

MR. CHAIRMAN: That was excellent timing, only two seconds off. We now turn the second round of questioning over to the Liberal Caucus. If it is agreeable, we will work it at 15 minute intervals? I think that is good timing.

The honourable member for Dartmouth East.

DR. JAMES SMITH: Mr. Chairman, there has been some discussion on the impact of roads as a national highway system and also, economic development in our own province and then, of course, the ever-present issue of safety. We were talking about the Cobequid

[Page 21]

Pass and in preparing for this, I was just wondering if there are any statistics on - there has been one or deaths I think on the new highway, the Cobequid Pass highway - the number of deaths that may have taken place had the road not been done? If you had statistics on accidents and/or deaths, any projection on how many deaths would have taken place on the old Wentworth area if the road hadn't been done? This is something that I have thought of every time I go up there because as a physician, I had reason to meet many patients who have had accidents, near accidents and that sort of thing. We sometimes lose sight of why that was done and we are speaking of safety here on Highway No. 101. Are there any statistics on that that the department either formally or informally has sort of projected or gathered?

[9:08 a.m. Mr. David Morse took the Chair.]

MR. WINDSOR: I haven't seen any statistics on that; now that doesn't mean that there aren't statistics on that, they may have been prepared some time back. We can have an examination . . .

DR. SMITH: Because you talked about the Ben Jackson Road and the one the other day I drove on Monday morning just following or a few days after but it actually wasn't at that intersection either. That is the other thing, it is the one highway that I got confused on one rainy night coming back from a swim meet in Cornwallis. It certainly scared me. I was in the right place and just kept going and we got out of it okay, but all of a sudden in front of me was a No Entry sign and I didn't know where I was going in a rainstorm.

I think all of us have had experiences there, but I think it is the whole road itself. I agree the piecemeal changes will probably not change whatever is there, and that was the problem with the Cobequid Pass, obviously. People who never had problems in other areas seemed to have problems there. That was what my patients would be telling me. So, we don't have any idea how many, on that strip of highway. There was quite a loss of life. There has been no informal gathering of any statistics.

MR. WINDSOR: I am sure that we have statistics on what had occurred along the Wentworth Valley prior to the construction of the Cobequid Pass, and there may have been estimates done on what accidents would be avoided as a result of the construction of the highway. I don't know about that but we can check that.

DR. SMITH: Just on the national highway system, Highway No. 103 was mentioned earlier by one of the questioners, if there is a ferry, in Shelburne particularly. It is my understanding that Highway No. 101 is just a national highway qualifier to Digby not to Yarmouth. Is there any on the South Shore?

MR. WINDSOR: It is all the way to Yarmouth.

[Page 22]

DR. SMITH: All the way to Yarmouth, okay, but not the South Shore, not Highway No. 103.

MR. WINDSOR: Not Highway No. 103.

DR. SMITH: On your list of priorities, where would Highway No. 103 be at this juncture? Thank you for the speaking notes by the way, I found them very helpful, I tried to make notes and we can get it from Hansard later, but it was helpful here today. I think that is the thrust of what are the priorities. I know the last speaker in the PCs gave an eloquent dissertation on the significant job they are doing, but we don't quite agree with that honourable speaker, because we feel there has been money available. Maybe if the witness is looking for that, we could just point out some of the things.

In the spring we saw the Education Minister was under pressure to find funding for schools and all of a sudden there was $33.8 million, that is 33 kilometres of Highway No. 101 that could have been done; the Johnston Building, $12 million, that could be 12 kilometres of Highway No. 101. You are receiving at least $25 million this year in extra HST, that is 25 kilometres of Highway No. 101. Last year the government took in $140 million more revenues, that is quite a bit there, 140 kilometres. The list goes on, the equalization payments, we are getting $300 million.

This is why we are interested in getting a clear message in this province as to what their priorities are, and maybe even trying to get Mr. Casey and Mr. Scott Brison, he may not be back now anyway, but if he was there, they couldn't agree; one wanted Highway No. 101, one wanted the tolls removed. This is why we are interested in what the priorities are. This is very important, as was mentioned, both for the safety and the economic development of the province, and yet we see these monies, these windfalls the province is having; we have the $300 million left over from the province that they have for their Sysco environmental liabilities, and they are not spending any of that money, so that could be $15 million there at least. Then we have transitional costs, we have $300 million set aside for there.

We are not impressed, in spite of the comments made by the previous speaker that there isn't money available. We have the commitments; prior to the election we saw it in health care, they were going to fix health care, and Mr. Russell was going to fix the roads. Some cynics might even say they were elected under false pretenses. (Interruption) Not for me to say. I think the people of Nova Scotia will judge that. I know that is a bit of a ramble but I used that opportunity to throw those little tidbits in while maybe some of my questions would be answered.

MR. WILLIAM LANGILLE: Mr. Chairman, on a point of order, the honourable member of the Liberal caucus is drifting off course here. He is going from one area into health care and so on.

[Page 23]

MR. CHAIRMAN: I would encourage the member to perhaps stick with value for money. That is a very eloquent presentation he was making, but (Interruptions)

DR. SMITH: . . . monies to go. They are on record as a commitment to Highway No. 101. I just happen to feel that highway safety is a major issue, it is part of our health care system, really, if you want to extend that; it might be a long bow as well. I think that was relevant. I spoke well of that member in Tatamagouche last night, and in spite of that we had to help him get out of his litany when he strayed from health care. He strayed last evening from health care, telling all the good things the Tories were doing, but he was brought back to order by the meeting. That is another matter.

MR. CHAIRMAN: Thank you for that little diversion. I would absolutely like to recommend that the honourable member for Cape Breton West perhaps ask a few questions. I am sure he will do a good job.

MR. MACKINNON: Mr. Chairman, my question is to Mr. Windsor. I understand that the HRM has some major concerns with the service agreement, in particular the fact that the province is not putting its fair share into this particular agreement as of late. Would you be kind enough to enlighten members of the committee, what is the status of that impasse?

MR. WINDSOR: We have had a couple of meetings actually with staff from HRM in the last couple of months, most recently yesterday. It seems to me that it comes down to essentially two issues between our department and HRM. First of all is the question of paving on subdivision roads in the area outside of the core, in the municipality, and some concern on their part. As you know, in terms of the dollars that we happen to have available as a department, we haven't had the opportunity in the last couple of years to put money into the paving of subdivision roads, and it is obviously the concern of HRM that those on subdivision roads inside the core area versus those outside the core area see a difference in terms of the standard of service that is being provided. Paving is one issue.

The second issue is with respect to the overall standard of service that is provided in the core area and the non-core area for summer and winter maintenance of the various roads. On that latter point, I think it is probably fair to say that inside the core area HRM provides in some ways a higher level of standard of services on maintenance than we provide as a department. What we have agreed on the latter point with HRM is that over the next few months we will be establishing service levels for the department in the area that we are responsible for within the Halifax Regional Municipality.

MR. MACKINNON: Mr. Windsor, if I could interject for a moment, how far apart are the two parties, in dollars and cents? That is the essence of it.

[Page 24]

MR. WINDSOR: I don't think we have necessarily come to a discussion around how far off we are in terms of dollars and cents. What we have had from the Halifax Regional Municipality is an indication on their part of the numbers of roads within subdivisions that they would see as a priority for paving.

MR. MACKINNON: It must be serious when Mr. Meech is suggesting that the service agreement be torn up.

MR. WINDSOR: We had, in my opinion, a very good conversation between ourselves and the Halifax Regional Municipality yesterday around . . .

MR. MACKINNON: Was that as a result of his letter to the minister?

MR. WINDSOR: There was first one meeting, then a letter, then there was the subsequent meeting that we had yesterday.

MR. MACKINNON: Switching over to the CBRM, I understand that the province is looking at the municipality taking over these J-Class roads or a lot of the subdivision streets and so on, the ownership in the rural parts of the CBRM. I don't want to say that I am going to be ominous here but I think if my calculations are correct, similar to my prediction of the last time with a 30 per cent tax increase, I would suggest if this consideration becomes a reality, there will be another considerable tax increase for the residents of CBRM. Where does this particular initiative stand now?

MR. WINDSOR: We haven't approached CBRM on that particular issue.

MR. MACKINNON: But there have been discussions. I believe the minister in the House, on a previous day, indicated that discussions have been taking place.

MR. WINDSOR: There have been discussions in Sydney between our regional staff and CBRM on that particular subject, but there haven't been any recommendations that have come up to us in Halifax on that yet. So it is in a fairly preliminary stage.

MR. MACKINNON: What is the dollar value on that exchange?

MR. WINDSOR: I don't have that number.

MR. MACKINNON: Can you give an undertaking that you will provide it?

MR. WINDSOR: We can certainly have a look at that, sure.

MR. MACKINNON: No, I don't want you to take a look at it, I want you to give an undertaking that you will provide it.

[Page 25]

MR. WINDSOR: If we have the number we will provide it, definitely.

MR. MACKINNON: Even if it is an approximate number?

MR. WINDSOR: Sure.

MR. MACKINNON: Mr. Chairman, I guess just in summing up, I am a little perplexed, and I would be remiss if I didn't take at least one shot at the NDP. Here they are looking for pay raises, we are sitting on $1,200 chairs and there is no money to provide safety for the residents on Highway No. 101. Anyway, I understand my time has expired and I will certainly yield to my colleague to the left.

MR. EPSTEIN: When we left off before, I was making the point that it appears that the federal government nationally collects in excess of $4 billion per year in the fuel excise taxes but, in fact, invests very little of that money at the moment back into the highway system, province by province. It looks as if their proposal is not to put much, if any, of that money back into the national highway system for another couple of years. Is that basically right?

MR. WINDSOR: That is correct.

MR. EPSTEIN: Well, the conclusion I draw from that is that the federal government is pocketing about $4 billion which goes towards its large surpluses and I have to say that it is no trick for a government at any level to balance a budget or run surpluses if you stop spending money. Anyone can do that. That is the easiest way to balance a budget. The problem is always on the revenue side, not so much on the expenditure side. What we are doing here, if I read this National Highway Policy correctly, is accumulating deferred maintenance costs which were estimated last year or the year before at over $17 billion nationally. Isn't that essentially the picture?

[9:23 a.m. Mr. Russell MacKinnon resumed the Chair.]

MR. WINDSOR: As I said previously, the only commitment that we have at this particular point in time from the federal government is for the $600 million that they announced in the last budget that does not take effect until after the next two years.

MR. EPSTEIN: In the meantime, the deferred maintenance is just going to accumulate and get larger, isn't that right?

MR. WINDSOR: As a result of that, one of the issues that we have raised with the federal government - and most other provinces have also raised this with the federal government - is that the program needs to have an emphasis on repaving as well as building capacity.

[Page 26]

MR. EPSTEIN: I want to ask you something about your comments that you have made a request to the federal government for a five year, $270 million, 50/50 cost-shared agreement. Do I take it that if the federal government were prepared to do that, that the province would be prepared to do this right away?

MR. WINDSOR: We have indicated to the federal government that that would be our program, and obviously we would have to go back to government as part of the budgeting process, as well, to firm up our dollars.

MR. EPSTEIN: Clearly, I know how the system works, but the question is, if you could get the money, if the feds were prepared to come into it right away, is the province prepared to go into it right away?

MR. WINDSOR: Yes, we are.

MR. EPSTEIN: Okay, I have a couple of questions about this. One, if you just do your arithmetic on this, that means that you are really looking at spending about $54 million per year over a five year period, which if it is cost shared means each level of government would spend about $27 million a year. On the one hand you are saying to us you want the federal government to kick in $27 million a year, and on the other hand you are saying to us they are taking in $125 million in fuel excise tax from the Province of Nova Scotia. So why aren't we going to them and saying you can take your $125 million and we only want $27 million back, where is the other $98 million? It doesn't sound like much of a bargaining position to me.

MR. WINDSOR: The proposal that we put forward in our last discussions with the federal government was based more in terms of what we thought was achievable in terms of what we could get done as a department within some reasonable time-frame. That was the basis for the proposal that we put forward.

MR. EPSTEIN: Well, I will help you out. Is it also your expectation that the federal government wouldn't put any money in that isn't 50/50 cost shared?

MR. WINDSOR: No.

MR. EPSTEIN: Is it your expectation that the federal government would not put money in unless it were 50/50 cost shared?

MR. WINDSOR: It would be our expectation the federal government would want the cost sharing yes.

MR. EPSTEIN: On a 50/50 basis?

[Page 27]

MR. WINDSOR: Yes.

MR. EPSTEIN: So the $27 million is probably an estimate of the fiscal capacity of the province to match, is that right?

MR. WINDSOR: That is part of it, yes.

MR. EPSTEIN: Mr. Hogg, can I ask you if, in fact, a deal like this went through, would the Department of Finance be looking for some other way to have the other $98 million flow back to the province? If so, what are the possibilities?

MR. HOGG: From a realistic point of view, based on past practices, the probability would be quite low, not only in the area of fuel taxes and contributions to highway construction, but the approach of the federal government has been somewhat consistent, unfortunately.

MR. EPSTEIN: Once they have the money, they are holding onto it, is that right?

MR. HOGG: Not only are they holding onto it, but I mentioned at the outset a phrase known as the fiscal imbalance, it comes from a study that was provided to Finance Ministers and Premiers which talks about the very point that you are raising, where revenues are maintained or increasing at the federal level but their expenditure has been arbitrarily reduced, I would say, and it is also reduced in areas where they have backed away from any responsibility for maintaining or providing that service. If you look at roads, the provinces are left with the infrastructure deficit which you mentioned before, plus they are also left with having to provide funds for new infrastructure. The federal government was contributing at a fairly high level but is now down to a very small level. They do that throughout all their programs.

MR. EPSTEIN: Sure, I understand that. I was flagging this issue for you, and I hope that you can raise it in your negotiations with your federal opposite members. Mr. Windsor, back to you if I may, your department budget at the moment is about $250 million, and you have given us a breakdown as to how that money is spent. The implication of your proposal to the federal government is that you are prepared to put $27 million into a national highway maintenance and construction program. Are you anticipating that that money will be additional to the $250 million that you are now spending on roads, bridges and other things?

MR. WINDSOR: It would probably be my hope that it would be additional, because if you look at the capital budget of the department it has very little capacity to carry on this kind of program without additional funding being put into it.

MR. EPSTEIN: But if the feds come up with $27 million to match your $27 million, you are hoping you can come up with that additional money?

[Page 28]

MR. WINDSOR: A major piece of that would have to be additional money, yes.

[9:30 a.m.]

MR. EPSTEIN: I want to move to another aspect of matters that I haven't heard touched on directly but seem to me to be quite important. What I wonder is how transportation issues are dealt with as part of an overall energy strategy? I wonder if you expect this to be part of the negotiations with the federal government, because the federal government has signed on to the Kyoto agreement, they are saying that they are going to reduce greenhouse gas emissions, they have targets of 6 per cent below the 1990 levels. What they are wanting to do, of course, is to find different segments of the economy to work into that, and transportation is, of course, going to be one of those.

What I wonder, since most of the thrust of what we have heard so far has had to do with roads and building roads, is whether there is going to be any component of that that is going to involve other modes of transportation? Are we going to see proposals from the federal government to put money into commuter rail for passengers, are we going to see any kind of increase in rail for freight, and what is it that the province is going to do as part of that?

MR. WINDSOR: This particular component of the $600 million that I have been referring to is highway money. You recall that this was also a piece of a much broader infrastructure program that the federal government announced. That piece of it has a green component in it as well. I am not quite sure, to be honest with you, to what extent, if any, mass transit and things of that nature are covered within that particular component of the infrastructure program.

MR. EPSTEIN: All right, well I know I have introduced a new topic and maybe one you weren't entirely prepared for, but let me point out a couple of things to you. I am very concerned when I read in your department's Transportation strategy that there is but passing reference to environmental considerations as part of the overall strategy that the department has adopted. It is on Page 7 of your December 1999 Transportation strategy, the one called The Way Ahead. There is one paragraph there, that is about it. I don't find it very encouraging or very convincing that the main thrust of the policy continues to be roads.

What I worry about is not that you are paying attention to roads, that is fine. It seems to me that there are certain pressing necessities in that regard, but there are other pressing necessities that can be taken care of in ways that are less expensive and that make sense environmentally. I encourage you to think very thoroughly about that if you possibly can. I think that you will find that there are some dubious statements, if you go back and look at the National Highway Policy - Page 1, I have in mind, in the executive summary - you will see that they talk about the savings that might come forward from investing money in the highway system. They list, as very large numbers, travel-time savings, and then they say there

[Page 29]

is a little offset because of increased hydrocarbon emissions. Those numbers, for the hydrocarbon emissions, are quite small.

Do you know what? I don't believe either of the numbers that they generate there. I think you should be very sceptical yourself in going back and pushing for the analysis behind those numbers. I will give you the example, travel-time savings. I have seen analyses of travel-time savings that say silly things like if we can build the highways better and wider people will get to work 10 minutes quicker, and if the average wage is so many dollars per hour, you multiply that out by the thousands of people and you have your travel-time savings. Phooey! Do you know what will happen? People will sleep in a little later or they will take a few more minutes around the breakfast table with their family or they will listen to the news on the radio at home or read the newspaper; it has nothing to do with the productivity of the economy. I suspect that number is wildly inflated, and I think you should have a look at it.

The other thing is I think the number for savings for hydrocarbon emissions is probably wildly low. The complete externalities in terms of environmental impact of hydrocarbons and greenhouse gas emissions is enormous, and I think you ought to push to have a good look at these numbers, because I don't think they are convincing.

What I really wonder is how is it that your department is going to fit into an overall energy strategy for Nova Scotia? Are there people within the department who are looking at how it is that there can be a contribution to the Kyoto agreements and how it is that your department is going to fit into it?

MR. WINDSOR: We have been involved in the national round table as have all jurisdictions on transportation. We have done some items as well, in terms of taking a look at our own fleet in terms of its energy efficiency. We, along with the other Atlantic provinces, are doing some work around intelligent transportation systems, in terms of trying to move traffic more efficiently, things of that nature.

MR. EPSTEIN: I was aware of your self-examination of your own government fleet and I think that is a very good place to start. I think you can also look at van-pooling for different branches of the government and I would encourage you to work very closely with HRM on its initiative now with respect to commuter rail; there is a big opportunity now to do that. The reality of the movement of population in Nova Scotia is that metro is the main place that people live and the corridor between here and Truro and the corridor up to the Valley, is a main transportation corridor. There is a huge opportunity to do something serious about commuter rail in either or both of those corridors.

I don't know that the HRM can afford to do it without some kind of provincial help. I would encourage you to look at that, look at it seriously, and raise it with your federal counterparts to see if they are prepared to put money into it, as well. This seems to be the

[Page 30]

moment to do it, the federal government does have money to spend, go after them and not just for roads, so I hope that is on your agenda.

MR. CHAIRMAN: We will now turn it over to the Progressive Conservative caucus.

MR. LANGILLE: I would like you to explain what micro-surfacing is? Before you do that, I would like to congratulate you on your endeavours on Highways No. 102 and No. 104; I don't think Highway No. 102 has ever looked so good and we appreciate that.

MR. DELANEY: If I could address the question of micro-surfacing, it is essentially a surface treatment to seal and waterproof the road surface. Micro-surfacing by its nature also has some dimensional stability so it can be used to fill minor ruts and what have you but primarily, it is a surface treatment that seals the surface and prevents premature failure of the asphalt, so it extends the life of the asphalt surface. We have been using it more in recent years, many of our asphalts now are the high-friction mixes to deal with rutting from heavy trucks and what have you, so they tend to be more open mixes and require surface treatments to protect them for long-term life.

MR. LANGILLE: Can you give me an estimate of how many kilometres you have done micro-surfacing on for Highways No. 104 and No. 102?

MR. DELANEY: I don't have those figures with me, Mr. Langille, but I can certainly provide them.

MR. LANGILLE: Thank you. A few years ago it was my observation that specifically, Highway No. 311, when that was repaved they narrowed it down from what it was previously. I believe it went from 21.6 feet or so down to 20 feet. What they did was put the bottom lift of asphalt on the same width as the other pavement and on the final lift, they narrowed it. When a school bus meets a logging truck there is no room to manoeuvre. They barely have enough room to go by. Could you explain why that was done; why were these highways narrowed?

MR. DELANEY: I can just explain in general terms that every time you build a road up, the road tends to narrow, the shoulders get narrower and certainly, any roads that we have pulverized - and a lot of our roads got to the condition where they require pulverization and addition of gravels - and unless you actually physically widen the sub-grade, the usable surface does narrow. It narrows every time you repave a road and it certainly narrows more if you pulverize and add another six inches of gravel and four inches of asphalt. By nature, you have narrowed the usable roadway.

[Page 31]

MR. LANGILLE: My final question to you is getting back to what I refer to as a three lane highway, that is when you have a Keep Right Except to Pass and a broken line and then coming down the hill you also have a broken line. Is it the Department of Transportation's mandate for the down-cline to take away that broken line to make it a solid line?

MR. DELANEY: That was a recommendation in the Highway No. 101 study that Mr. Taylor referred to earlier. It is not necessarily our intention to look at all highways and make that change but certainly, we are going to review our policy on that as a result of the recommendation from the Highway No. 101 study.

MR. LANGILLE: Are you taking out any pavement at all on there?

MR. DELANEY: We are not removing asphalt, that is really a matter of the opposing lane to the passing lane now having a dashed line, if you will, that allows you to make a passing manoeuvre if there is no oncoming traffic. The recommendation, as I recall it from the safety audit, was to put a solid line so that oncoming traffic doesn't have the ability to make that passing manoeuvre.

MR. LANGILLE: I was always advised - as a previous police officer - that these types of highways are the most dangerous highways in the world, where you have a broken line in each direction, where two cars can meet. Have you seen any studies throughout North America on this?

MR. DELANEY: As a general rule, undivided highways are not as safe as divided highways, so I would concur with that statement. On the other side of the ledger is the typical 100-Series Highways or even trunk highways. It is necessary for safe traffic flow to allow opportunities for traffic to pass in areas where it is safe and those are the areas we typically on the road leave a dotted line which really informs the motorist that depending on traffic conditions, if there is enough site distance for them to make a decision whether or not to pass, it doesn't tell them they can necessarily pass but it indicates that there is an appropriate site distance so you can see oncoming traffic and make a judgement on passing.

MR. CHAIRMAN: The honourable member for Sackville- Beaver Bank.

MR. BARRY BARNET: If I can slightly shift gears, I will just be one moment and then I will pass on to my colleague, Mr. Morse. I was interested in this particular graph here that shows the amount of federal contribution, total to the highway infrastructures in the Province of Nova Scotia. The interesting point that I want to make and bring to your attention, is the fact that in 1995, 1996, 1997 and 1998, year after year there have been substantial increases in the amount of funding toward highway infrastructure.

[Page 32]

The bizarre point is that during those same years, the previous government chose not to spend a single cent on twinning Highway No. 101. Dr. Smith indicated that this government has made some choices as well. I guess my question is, does the department rank these things or make recommendations to the government in terms of where this funding should be spent? We have seen where a government chose, year after year when they got more money each and every year and in some cases they have doubled the previous year's money but they spent nothing. What I want to know is what would have happened had they taken that surplus, the $30 million, $40 million, $50 million and invest that in Highway No. 101, would that have gone a long way to resolve some of the outstanding issues? Would they have paved some of those streets and twinned some of that highway?

MR. CHAIRMAN: Just for a point of clarification for all members of the committee, perhaps if the honourable member could indicate the surplus that he is referring to?

MR. BARNET: What I am referring to, Mr. Chairman, is the graph that shows the total federal expenditures on highway infrastructure and what I am talking about is the fact that in 1993, it appeared as if there was less than $20 million and then the graph clearly indicates an upward swing where each year beyond that, there were some cases of $15 million or $20 million where they got more money but they spent none.

MR. CHAIRMAN: So what you are asking the witnesses is where that money went?

MR. BARNET: Why did the previous government choose not to spend any of that additional funding on twinning Highway No. 101?

MR. WINDSOR: Maybe I will turn this over to Martin, in terms of answering the history around some of the expenditures on the 100-Series Highways. Just before I do that, however, I will indicate that in terms of where we are as a department right now, Highway No. 101 is our number one priority. Martin, maybe you could refer to some of the history.

MR. BARNET: Before he answers, maybe it is not even necessary. We are saying Highway No. 101 is our number one priority. I guess what I am going to assume is that Highway No. 101 wasn't the previous government's priority and I will pass my time over to Mr. Morse.

MR. MORSE: First of all I would just like to clear up one little misunderstanding from yourself about the new chairs that now meet occupational health and safety standards here in the Legislature. They are one-third of the cost that you suggested here, I think you were confusing them with the HRM chairs. Very quickly to Mr. Hogg, 1 cent of gasoline fuel tax in Nova Scotia generates $12 million, approximately?

MR. HOGG: Yes.

[Page 33]

MR. MORSE: You have also indicated that we have $58 million in capital that we are spending this year on the highways?

MR. HOGG: That is what Mr. Windsor provided, yes.

MR. MORSE: I would like to point out that the honourable member who showed such concern for Highway No. 101, which goes through my constituency, has advocated a 4 cent decrease in the cost of the excise gasoline fuel tax. That would take $48 million - that was the honourable member for Sackville-Cobequid, a member of the NDP - out of our Transportation budget because we have pledged to make sure that those monies all go into highways. So that is a great concern to me, I can understand where he is from metro he may not be as in tune with the need in rural Nova Scotia for highway construction.

MR. HOLM: Mr. Chairman, on a point of order. I would like to see where the member is referring to things that I am calling for, I think if he has a closer look at it what he will find is that the province is gouging and getting windfalls on the HST and that that HST portion could be used to reduce some of the others.

MR. CHAIRMAN: There is no point of order.

MR. MORSE: Thank you for confirming that what you are advocating would, in fact, decimate our highway program, which would so damage our system in rural Nova Scotia. I would like to move on, please.

MR. HOLM: Mr. Chairman, on a point of order. I have to take exception to the comments that I acknowledge that what we are suggesting would decimate the highway system. He is putting forward as a statement of fact his misinterpretation, willingly misinterpreting what I have said. I would ask that he withdraw that intentional misinterpretation which is trying to leave a misrepresentation.

MR. CHAIRMAN: Order, please. What we have here is obviously a difference of opinion between two honourable members. I would suggest that we allow the honourable member to pursue his questioning.

MR. MORSE: On the national scene, the Government of Canada, along with the provinces, had agreed that $17.4 billion was needed to bring the national highway system up to snuff. They have committed $600 million which starts in 2002-03, not even beginning to scratch the problem. They have agreed that there would be substantial benefits to the entire country of meeting that requirement. We are the only G-7 country without a national highway system program. The United States, according to the document that was sent about, spends six times what Canada does on a national highway system. The federal government is using a $4 million annual fuel tax as a cash cow without any regard to addressing the concerns with the national highway system. These are the facts. This is what you have told us here today.

[Page 34]

Have you any disagreement with my statements? I would ask that to Mr. Hogg or to Mr. Windsor, whichever one would like to respond but I would ask that it be done briefly, as the time is ticking down.

MR. HOGG: Generally, the numbers you quoted are correct, $4 billion across all of Canada and there is a report pointing out $17 billion in estimated repairs on the national highway system across Canada.

MR. WINDSOR: I really don't have anything to add to that, other than to say that the numbers are accurate, yes.

MR. MORSE: Thank you. I will take that as a compliment and I think that pretty much sums up what the federal government is doing with our national highway system. The fuel taxes are a wonderful cash cow for them and what a coincidence that we are just in the early stages of a federal election. Perhaps Canadians can express their point of view by how they vote in the election. If this is the course that they want the federal government to take, then we as Canadians will have to accept it. Otherwise, they have a chance to make a statement on November 27th. Thank you very much, Mr. Chairman.

MR. CHAIRMAN: There is time for a 20 second spot.

MR. TAYLOR: Well, I would make an additional comment, Mr. Chairman.

MR. CHAIRMAN: You have 20 seconds.

MR. TAYLOR: Mr. Chairman, I would like to thank our guests for coming in, this morning. I think that is important. You will probably be doing it, Mr. Chairman, but I hope that the federal government does come through and doesn't play any more politics with this. If they do, I hope that we find ourselves in a position to match those 50 cent dollars, if you want to call them that. That will be difficult but I think we can rise to the occasion. Thank you.

MR. CHAIRMAN: Thank you. It is important that all political Parties get their partisan views in, of course.

We have enough time for some short snappers. We can allow each caucus two minutes if that is agreeable. We will start off with the Liberal caucus.

DR. SMITH: Mr. Chairman, I will try to be brief. I have to brief, there is no choice.

[Page 35]

We have spoken of the national highway system, quite eloquently, here in some speeches being made. I think the signal that we have given to the federal government has been split. It has been split between the Tory federal members that are going from this province and, also, from the action plan as developed.

Now, I just want to bring your attention to Page 3 of the speaking notes, which I appreciate were circulated this morning, on the specific request to the federal government from the province, 49 kilometres of Highway No. 101. The action plan was announced by the minister in March of this year. It called for 75 kilometres for a total cost of $87.5 million. Now, what is the discrepancy there? Why so little there? How was that number, 49 kilometres on Highway No. 101, determined? I would ask, to get my questions in and maybe get quick answers, how long is Highway No. 101 and how does this coincide with the twinning of 49 kilometres? Is this not the minister's promise?

I think the message has been blurred to the federal government, especially when we come forward with announcements that I will table, Mr. Chairman, of total costs of $87 million for the 75 kilometres and 49 kilometres - in the speaking notes circulated here this morning. Could I have some clarification on that and explain this discrepancy?

MR. WINDSOR: Ultimately, it would be our objective to do the full road but 49 kilometres is what we felt, as a department, we could reasonably expect to have accomplished over a five year period of the agreement.

DR. SMITH: Okay, and not the $87 million project, 75 kilometres, plus the $2 million in passing lanes. What was announced then is not achievable and is not on the priority list for this government.

MR. CHAIRMAN: Time. Just a short snapper, if you want to answer (Interruption) Did the honourable witness wish to answer?

MR. WINDSOR: Just to reiterate what I had said, in terms of the 49 kilometres, is what we saw as being achievable over the five year period.

MR. CHAIRMAN: The NDP caucus.

MR. HOLM: Just a couple of short ones. I will not do any of the political statements of some of the others.

A couple of things, if I could. First of all, in terms of the total dollars that are being collected by Nova Scotia - not federally, but Nova Scotia on fuel tax - that would be down slightly because of reduced consumption. Do you know how much is being raised and how much it is down from what was projected? If you don't have the figures here, will you agree to provide that to us?

[Page 36]

MR. HOGG: The consumption data that I have shows a decline of 2 per cent in consumption, so the . . .

MR. HOLM: The revenues would be down about 2 per cent?

MR. HOGG: Correct.

MR. HOLM: Okay. So consumption is down about 2 per cent but the price of gasoline has gone up. Now it is about 82 cents, it was 81.9 cents as I drove in today, in the local stations. A little over a year ago it was around 67 cents a litre which is an increase of about 15 cents a litre. On that 15 cents, Nova Scotia is collecting 8 per cent HST. So even if there is a 2 per cent reduction in consumption, Nova Scotia is getting a windfall, is it not, on home heat fuel, on diesel fuel and on gasoline products, in terms of HST? Do you have the increased amount of revenue that we are getting as a result of our gouging of that tax on top of those higher prices?

MR. HOGG: As you know, the HST is a value-added tax that is applied to a whole range of goods.

MR. HOLM: Including those products.

MR. HOGG: Including those products but not exclusively those products. If you were to differentiate all of the products that the HST has applied to you would find, as you point out, that the amount of HST charged on those fuel products would rise with the rise in price.

MR. HOLM: What I want to know is just, do we have the figure and how much more money is Nova Scotia collecting in terms of HST on those products?

MR. CHAIRMAN: Order, please. Perhaps the honourable gentleman would give an undertaking to provide that information if he has it. If not, we will just have to move on to the next caucus. Is that an undertaking?

MR. HOGG: Yes, we can provide that. I just want to point out that the increase in HST on fuel tax is also offset by the decline in spending that happens for consumers to pay for the additional price, so the net would not be the same as the specific number on fuel tax.

MR. CHAIRMAN: Sure.

MR. BARNET: I am sure he understands that.

Mr. Chairman, in 1992, the Cameron Government built a road base for Highway No. 101 from Sackville to Mount Uniacke. Subsequently, there was an election, and the Liberal Government came to power. Two years later, no work was done and, finally, after

[Page 37]

considerable public pressure, they paved that stretch. It is actually the smallest amount of money that was required.

Just recently, our government has made some announcements with respect to the work it wants to do on Highway No. 101. From the time that the road was paved by the previous government to now and our commitments that we have made, what was done on Highway No. 101? Was there any work done on Highway No. 101 during that five or six year period when we saw the federal contributions to highway funding increase substantially more than in the early 1990's and the years that we are talking about now?

MR. CHAIRMAN: Mr. Windsor or Mr. Delaney?

MR. BARNET: My question is with respect to twinning that highway. That is obviously the issue that is before most people

MR. WINDSOR: There have been no capacity increases since that period of time that you refer to in the previous government. In terms of, however, what has been spent on Highway No. 101 over that period of time . . .

MR. BARNET: I am talking about money spent twinning the highway. Has there been any money spent twinning that highway?

MR. WINDSOR: No.

MR. BARNET: That is very disappointing. That, in essence, is the root of the problem that we are facing as a government, the fact that we have gone through a deficit of highway spending over the past four or five years. I find it interesting that the previous government seems to point the finger and blame us when, in fact, they did nothing. The people who live in the Valley, who use that highway, who drive on that on a daily basis, they ought to be concerned about that and they ought to make those people accountable, and I think they did in the last election.

[10:00 a.m.]

MR. CHAIRMAN: Order, please. It looks like we have had a very productive day and I thank all members for their questioning. I certainly want to thank the witnesses for coming today and being forthright. Also, just as a little reminder, any of the documents or undertakings that have been given to be provided to individual members, will be directed through the Committees Office and that will be coordinated by Mora and supplied and tabled.

[Page 38]

Also, next week is our tour of the Halifax Port Authority. We would like to meet by 7:50 a.m. down in the foyer, next Wednesday, and it will be from 8:00 a.m. to 10:00 a.m. There is also a little extra room for research staff if any of the caucuses wish to bring at least one member of their research staff along.

That will conclude today's events, I thank everybody, it has been very productive.

The meeting is now adjourned.

[The committee adjourned at 10:01 a.m.]