The Nova Scotia Legislature

The House resumed on:
September 21, 2017.

Public Accounts Committee -- Wed., Mar. 28, 2001

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HALIFAX, WEDNESDAY, MARCH 28, 2001

STANDING COMMITTEE ON PUBLIC ACCOUNTS

8:00 A.M.

CHAIRMAN

Mr. Howard Epstein

MR. CHAIRMAN: Ladies and gentlemen, good morning. This is a session of the Public Accounts Committee of the Province of Nova Scotia. We have before us today representatives of the Resource Recovery Fund Board. We are joined today by the Chief Operating Officer of the board, Mr. Derrick Firth, and the Chairman of the Board of Directors, Mr. Darrell Hiltz. I would like to welcome both of our guests to the proceedings today. Thank you for being in attendance.

We also have, from the Auditor General's office, the Auditor General himself, Mr. Salmon. Welcome, sir. I should note before we proceed, a couple of matters. There has been some changeover in the membership of this committee. I would like to welcome Mr. Don Downe who I think is serving now for the first time as a member of this committee, if I remember correctly. Is that correct? (Interruption) Mr. Downe, of course, is a former Minister of Finance of this province. I, myself, am now back on this committee after an absence of about a year and a half in the position of chairman. Have I overlooked any new members of this committee? Has everyone else been welcomed? I think Mr. Taylor joins us today as a substitute for Mr. Barnet. I think the other new members, their presence was noted at previous meetings.

My suggestion is that we might aim to save the last 10 minutes or so of today's proceedings to deal with the setting of future agenda items since we only have two other meetings scheduled for firm proceedings, so we might have a bit of a discussion at the end. With that in mind, if that is agreeable - if anyone has a problem, I would be happy to hear it, but if that is all right - then perhaps that is what we will aim at. That said, what I will do is ask our guests if they have any introductory remarks they would like to make to us and our normal proceeding is that after your introduction we will move to questioning. Please proceed.

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MR. DERRICK FIRTH: Thank you, Mr. Chairman. I would like to take the opportunity this morning to thank the members of the Public Accounts Committee for this opportunity to report on the activities and achievements of the Resource Recovery Fund Board over the past two years.

The Province of Nova Scotia established the Resource Recovery Fund Board in 1996 to help Nova Scotians increase their waste diversion to 50 per cent by the year 2000. I am pleased to report that we have been most successful. In September 2000, the Honourable Michael Baker, Acting Minister of Environment and Labour, announced that Nova Scotia was the first province or state in all of North America to achieve the goal of 50 per cent diversion by the year 2000.

All Nova Scotians should be proud of this achievement for it has brought national and international acclaim to our province. Around the world, attention is now focused on Nova Scotia's remarkable achievement. From CBC Television and Radio Canada International, from the United States National Public Radio System, from CNN World News, from Irish television and from Hong Kong television, media representatives have converged on our province to find out how to best manage waste to protect the environment and to improve the economy.

These accomplishments would not have been possible without the foresight of the Province of Nova Scotia in implementing the Solid Waste Resource Management Strategy. Municipalities, industry representatives and members of the general public all participated in the development of this innovative plan to help Nova Scotians reduce the amount of waste they send for disposal in landfills. In the last two years alone, municipalities across Nova Scotia diverted over 536,000 tons of waste.

On Monday, Mr. Hiltz and I had the pleasure of participating in the official opening of the Cumberland Central Recycling Facility. Including this operation, Nova Scotia now has seven recycling facilities and 18 composting operations, but only 18 municipal landfill sites.

This represents a significant change from the early 1970's when there were over 100 dumps, including some with open burning, that accepted organics and recyclable materials and general waste.

The Resource Recovery Fund Board fills an important role in this process by funding municipal or regional diversion programs. The Solid Waste-Resource Management Regulations require the RRFB to pay a minimum of 50 per cent of the net revenues in the Resource Recovery Fund to provide financial support to the municipalities based on the solid waste they divert. For the fiscal year ended March 31, 2000, the RRFB paid $4.65 million to the seven Solid Waste Resource Management regions, up from $3.16 million in the previous fiscal year.

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The RRFB also provides financial assistance and incentives to municipalities under approved programs. Approved programs are defined in Schedule "A" to the regulations as: municipal waste diversion programs; municipal household hazardous waste programs; and municipal waste management education programs.

For fiscal 2000, approved program funds of $1.8 million were awarded to 46 municipal projects that will create 24 new jobs. For fiscal 1999, $1.1 million was awarded to 40 municipal projects that will create 56 jobs. An additional $75,000 was directed to each of the four municipally-owned materials recovery facilities, or MRFs, to help offset construction costs. The RRFB also makes funding available each year in support of the Adopt-A-Highway Program.

The Solid Waste-Resource Management Strategy recognized that solid waste resources could be used to create new employment in Nova Scotia. Through their production of value-added goods, the RRFB actively develops locally-based opportunities for closing the waste loop in Nova Scotia. A good example would be waste glass. Almost 50,000 tons of waste glass are generated in Nova Scotia each year. The RRFB provided funding to a group of local entrepreneurs to collect 20,000 tons of waste glass each year. The glass will be reprocessed into various grades of aggregate to be used for sand blasting, reflective coatings and even sand for traps on golf courses. To fully exploit this new resource, the RRFB has partnered with the Environmental Industries and Technologies group within the Department of Environment and Labour, and Dalhousie University, to determine whether the glass aggregates can be used as a filtration media in water treatment plants.

For the fiscal year ended March 31, 2000, the RRFB allocated funding of $1.6 million to the value-added manufacturing program. To date, funding of $700,000 has been awarded to 15 projects that are expected to create 79 new jobs in Nova Scotia. For fiscal 1999, funding of $500,000 was awarded to 12 projects that created 40 jobs.

The Solid Waste-Resource Management Strategy recognized that education and public awareness are the cornerstones of environmental action. They are also vital to the RRFB's mandate to promote and encourage the three R's in composting in Nova Scotia.

During fiscal 2000-01, the RRFB made significant progress in its education efforts through partnerships with the seven Solid Waste-Resource Management regions. Regional educational funding of $600,000 was allocated to the regions based on population. Contracting directly with the regions has enhanced the quality of education programs and helped improve communications between the municipalities and the RRFB.

Municipal staffs are in the front line and are best able to provide residents with information on the full range of waste management programs offered in each region. It has also proven to be a cost-effective way to reach a larger audience through school

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presentations, attendance at special events and visits to the industrial, commercial and institutional sector.

For fiscal 2001-02, the regional education partners will conduct at least 176 school presentations, attend 147 outreach events, conduct 206 IC&I visits and make 88 visits to enviro-depots.

To complement the efforts of the regional education partners, the RRFB also partners with a provincial communications partner to develop generic education materials and coordinate media advertising of key waste reduction messages. In October 2000, the Honourable Angus MacIsaac helped celebrate the 1st Annual Nova Scotia Recycles Day. The campaign, designed to recognize the achievements of Nova Scotians in diverting solid waste from disposal, included contests in schools throughout the province, contests in special events at enviro-depots and a luncheon honouring the contest winners.

Through sponsorships of various events, such as the Canadian Waste Management Conference held in Halifax in September 2000, the RRFB has helped bring national and international acclaim to the province. These efforts are meeting with success. The CRA Atlantic Omnibus Survey for the third quarter of 2000 indicated that well over 8 in 10 Atlantic Canadians participate in household recycling programs. Participation was highest in Nova Scotia at 96 per cent, compared to a low of 67 per cent in P.E.I.

To help provide the funding necessary to fulfill these mandates, the RRFB operates the deposit/refund system for beverage containers. The program includes all ready-to-serve drinks, excluding milk, milk products and concentrates. Currently 99 beverage and liquor distributors are registered to sell more than 6,000 products in Nova Scotia.

In March 1999, the RRFB entered into an agreement with the Nova Scotia Liquor Commission to administer its deposit/refund program on wine and spirits, and beer sold in cans. This program added over 50 million containers to the deposit base. For the fiscal year ended March 31, 2000, deposits were received on over 260 million beverage containers.

The RRFB has established a network of 88 privately-run enviro-depots across the province to provide cash refunds to consumers. The depot operators receive a per container handling fee from the RRFB. Over 87 per cent of the households in Nova Scotia are within 20 kilometres of an enviro-depot. This system has enabled Nova Scotia to achieve a recovery rate of over 80 per cent, a remarkable achievement in less than five years.

Every tire retailer that supplies a new tire in the Province of Nova Scotia must register with the Resource Recovery Fund Board and enter into an industry stewardship agreement. Nine hundred tire retailers are registered with the RRFB. For the fiscal year ended March 31, 2000, these retailers supplied 847,000 passenger tires and 37,000 truck tires in Nova Scotia. For the same fiscal period, 652,000 passenger tires and 36,000 truck tires were

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collected across the province. As well, revenues from the program have been used to clean up over 300,000 tires from municipal and private stockpiles since the program began on January 1, 1997.

At my last appearance before this committee in November 1998, many concerns were raised over the operation of the Used Tire Management Program, and in particular the relationship between TRACC and the RRFB. I would like to be able to report that all these concerns were addressed and that the program has operated smoothly since then, but that is not the case, so I would like to take a few moments to discuss the developments of the last two years.

In July 1999, Nova Tire Recyclers Ltd., formerly TRACC, suffered a fire that destroyed whole tires and finished product stored at the plant in Cornwallis. I would like to take this opportunity to commend the local volunteer fire departments for their efforts in containing the blaze to a relatively small portion of the yard. The fire did, however, force Nova Tire Recyclers to shut down operations in order to conduct a proper environmental cleanup. I am also pleased to report, and I believe the Department of Environment and Labour will confirm, that there were no long-term environmental impacts from the fire.

The fire came on the heels of a financial review conducted by the Resource Recovery Fund Board. The review indicated that Nova Tire Recyclers was losing substantial amounts of money in the production of its two major products, cow mattresses and blasting mats, and that the long-term viability of the operation was questionable. A second independent review confirmed these findings. It was time for Nova Tire Recyclers to get out of the tire-processing business.

A buyer was found in Atlantic Recycled Rubber, a local company which was in the process of being taken over by Recovery Technologies of Cambridge, Ontario. It was a division of KTI Recycling of Canada. KTI operates tire-processing facilities in Canada and the United States. Nova Tire Recyclers requested that the tire-processing contract with the RRFB be assigned to Atlantic Recycled Rubber.

The Atlantic Recycled Rubber group of companies was prepared to construct a $3 million to $4 million state-of-the-art tire-processing facility in Kemptown, Nova Scotia. The plant would use a cryogenic or freezing process to turn used tires into crumb. Liquid nitrogen, the key ingredient in the process, would initially be imported by ARR. However, the long-term viability of the operation would require ARR to construct a liquid nitrogen plant in Kemptown at a cost of $4 million to $5 million. To support this large investment in Nova Scotia, ARR requested a longer-term contract with the RRFB.

At this point, the RRFB engaged an experienced tire consultant to help conduct a due diligence on the ARR/RTI/KTI group of companies. The consultant's report found that the facility could operate profitably at tire volumes historically available in Nova Scotia,

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provided that the liquid nitrogen facility was completed. The report concluded that there were significant risks with any contract within an immature and unstable industry; however, KTI's experience and demonstrated ability to achieve product sales and profitability were both positive factors.

On June 9, 2000, the RRFB entered into a new contract with ARR to process used tires into crumb rubber and/or tire shred for civil engineering or industrial purposes. The contract is for six and a half years and renewable for a further five, provided ARR is in compliance with all conditions of the contract. While the review process and negotiations were ongoing, the RRFB continued to collect used tires in Nova Scotia. Rather than continue to stockpile tires, with the inherent risk of another fire, tires were shipped to Quebec to be used in the manufacture of cement. The tires replaced nonrenewable resources such as coal, coke and natural gas in the cement kilns.

In October 2000, ARR assumed responsibility for the collection of used tires in Nova Scotia. Used tires are being shipped to RTI in Cambridge and other processing facilities in Quebec until the plant in Kemptown comes on line, within the next couple of weeks. They are testing that facility already and are now producing a tire shred, which is the first step in the process of producing the crumb. They basically chop the tires up into two to three inch, nominal size shred. That shred then goes through the freezing process and the crumb is produced. They are just in the final stages now of completing all the necessary hook-ups for the liquid nitrogen facility, and we hope they will be producing crumb within the next week or two. Just be careful, because there are still some sharp edges on that. (Interruption) From the steel belts, that is right.

We saw the Waste Resource Management Strategy recognize three fundamental principles of responsible solid waste management; polluter-pays, product stewardship, and shared responsibility. These principles confer upon both producers and consumers an obligation to assume responsibility for the post-industrial and post-consumer fate of all goods and materials. The Government of Nova Scotia would provide the RRFB with the authority to lead in the development of province-wide industry stewardship programs to recover and reprocess materials entering the solid waste stream. While the province would prefer a voluntary approach to industry stewardship, industry would prefer a regulated approach that ensures a level playing field. As such, progress has been slow, but progress is being made.

In February 2000, the province and the municipalities entered into an agreement with the Atlantic Dairy Council under which Nova Scotia milk processors will take responsibility for their packaging in Nova Scotia. The industry will make specific financial contributions to the solid waste management regions to offset the costs of managing milk packaging. Each dairy will also carry side panel advertising two to three times per year, in addition to the direct funding of waste management costs.

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The Department of Environment and Labour, the Pharmacy Association of Nova Scotia and the Canadian Diabetes Association recently announced a Safe Sharps Bring-Back Program for home users of needles, syringes or lancets. Pharmacies and the CDA will supply sharps users with containers made in Nova Scotia from recycled plastic. When full, the containers can be returned to the pharmacy or the CDA for proper disposal. The program is funded entirely by industry, although the RRFB provided communications material to help launch the program.

The Nova Scotia daily newspapers are close to an agreement with the Department of Environment and Labour that will see the RRFB administer a program of advertising credits on behalf of the province and the municipalities. The credits, to be based on the amount of newsprint consumed in the province, will be used for educational and awareness purposes only, including environmental issues such as recycling, composting, litter, water use and sewage. Although all of the above programs are voluntary, they highlight the important role of the Department of Environment and Labour in bringing industry to the table.

The Department of Environment and Labour has also played an important role in the development of a paint stewardship program. Negotiations began with the paint industry back in 1997. The industry was most supportive of a post-consumer paint management program in Nova Scotia but wanted regulations to ensure a level playing field. These regulations are just now being finalized and the program should be operational in fiscal 2001-02. Under the program, residents of Nova Scotia will be able to return unused paint to the nearest enviro-depot. The paint will be collected by the RRFB from the depots and delivered to a paint processing facility for recycling. The program will be funded by industry.

Not all negotiations have been successful. Negotiations with the fast food industry, which also began in 1997, recently broke off as a result of a recommendation in the Environment Act review that a levy be placed on disposable beverage cups. The industry had been presented with a comprehensive litter abatement program during the course of negotiations. The cost of the program was estimated to be $500,000 annually. The industry group rejected this proposal. It was heartening to note in the Throne Speech last Thursday that government is prepared to continue its lead role in negotiating new stewardship agreements with industry.

The RRFB has operated under a five year agreement with the Minister of Environment and Labour that expired on February 6, 2001. The agreement has been extended for six months while a new agreement is negotiated. Much has been made of a proposed clause in the new agreement that will see 10 per cent of the RRFB's net revenues directed to the Department of Environment and Labour each year, although this diversion credit funding will not impact the municipalities.

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The Resource Recovery Fund was established pursuant to Section 98 of the Environment Act, the Resource Recovery Fund Board, Incorporated administers the fund to achieve the goals and objects as stated in Subsection 4(1) of the Solid Waste Resource Management regulations. Section 7.01 of the agreement between the minister and the RRFB clearly states that the fund remains the property of the province and the board acquires no right, title or interest in the fund except as expressly provided in the Act, the regulations or the agreement.

We are not here today to argue the merits of transferring funds from the RRFB to the Department of Environment and Labour. We believe that DEL has an important role to play if Nova Scotia is to remain in the forefront of solid waste management. I have already touched on their role in negotiating industry stewardship agreements. DEL also plays an important role in the enforcement of the regulations, as the RRFB by itself has no enforcement powers. The Solid Waste Management Group within DEL continues to work with the municipalities to ensure that all Nova Scotians have access to recycling and composting programs.

We believe the Resource Recovery Fund Board has successfully concluded its first five year mandate with the province. Since 1996, $25 million has been generated for municipal diversion programs and value-added manufacturing, and we are projecting net revenues of $9 million for the current fiscal year. More than 860 million beverage containers have been recycled, and over 2.7 million tires have been collected. More than 3,000 Nova Scotians work in recycling, many through programs supported by the RRFB. We have achieved 50 per cent diversion, and in the process have made Nova Scotia a better place to live. Thank you.

MR. CHAIRMAN: Very interesting. Thank you very much for that presentation. The way we will proceed with the questioning is that each of the caucuses will have about 20 minutes, and we will start with the NDP caucus. The tradition in the past has been that when the Chairman wishes to ask questions, that time is taken from the time of the caucus to which the Chairman belongs. I am a member of the NDP caucus, and maybe I will start with a question, if I may. This will come off our time, just to be clear.

MR. RUSSELL MACKINNON: Mr. Chairman, on a point of order. Perhaps if you have questions, you should remove yourself from the Chair and ask the Vice-Chairman to sit in, in the event of any potential points of order or other issues.

MR. CHAIRMAN: It wasn't our practice before to do that, but I am quite happy to do it. I think we have Mr. DeWolfe as Vice-Chair, so perhaps he could come to that. I think he is happy with that.

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[8:23 a.m. Mr. James DeWolfe took the Chair.]

MR. CHAIRMAN: I am going turn attention now to the NDP caucus. We will set the time now at 8:24 a.m.

MR. HOWARD EPSTEIN: What I would like to ask about is this, what you were describing as industry stewardship agreements, I think, is generally known in the literature as extended producer responsibility, EPR. The idea being that the manufacturer of goods, instead of completing their responsibility at the point of sale, is actually required to become part of a longer involvement in the product. In Europe, I know they are now moving to the point where, for example, soon manufacturers of automobiles are going to have to take responsibility for taking back cars later on. This is a fairly dramatic example of EPR.

Clearly we don't have that level of manufacturing facility in Nova Scotia, but what you described on the whole is a system that has prevailed for too long with respect to solid waste in North America, although we are beginning to move away from it. The system that has prevailed has been one in which once manufacturers have sold their products to the consumers, responsibility for dealing with the products when their useful life is over then shifts to, typically, the municipal level and the municipal taxpayers have had to bear the cost of dealing with the waste products rather than leaving this or integrated the cost of that into the sale price of the item. Clearly this becomes an excessive burden for municipal taxpayers, sooner or later.

It is good to see you beginning to negotiate some agreements with some manufacturers. What I wondered about though was tires. We do, in fact, have manufacturers of tires here in our province, and tires have been a big focus of diversion from landfills. They are potentially hazardous items, they are big, bulky items, and the theory is that they can be used for other purposes. The system seems not to, at this point, rely on the manufacturer. The system that seems to have been hit on is one that is focusing on finding other companies to come in and begin to become involved.

When I heard you talk about negotiations with different sectors, for example, the dairy sector, where we do have producers here as well, and fast food outlets, I don't think I heard you talk about tire manufacturers. Have there been negotiations with tire manufacturers here? If so, how are they proceeding, or is this left for some other time? Could you help me on that?

MR. FIRTH: First off, I would like to thank you for your comments with respect to stewardship. We are quite pleased with the progress that has been made and we hope to continue that progress into the coming year. The tire program along with the deposit/refund program in Nova Scotia are both regulated programs. Under the tire program, the tire retailer is required to register with the Resource Recovery Fund Board and enter into an industry stewardship agreement. Under the terms of that agreement, the retailer remits to the board

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a fee of either $3.00 or $9.00 when a tire is sold in Nova Scotia. For that $3.00 or $9.00 fee, the tires are collected from the retailer and reprocessed in Nova Scotia.

That is a little different, I guess, from a non-regulated program, where you are in fact going back, farther up the chain, to industry to look for funding, as you say, to relieve the burden from the municipal taxpayer.

MR. EPSTEIN: I wonder if you anticipate any other sectors of the economy, or can you tell us which sectors of the economy you think are those that are most likely the next ones where you would hope to negotiate agreements?

MR. FIRTH: I think there is a couple of areas, one being used oil. We do have a used oil program in Nova Scotia right now for collecting the oil itself. There are programs now established in western Canada and in Quebec that collect not only the used oil but collect the containers themselves that the oil comes in and also the filters as well. These programs are, again, funded through industry and supported by industry. They are approached differently in some of the provinces. In Manitoba, for instance, the collection facilities are set up at municipal sites; in Alberta, the collection facilities are generally with an enviro-depot or a bottle depot, as they have out there. I think that would likely be one of the next ones we would look at.

Certainly another area as well is electronics recycling. You mentioned it in your introduction there, that some of the manufacturers are in fact instituting take-backs of their products. We have seen some of that already within the electronics industry. We are working on that one as well.

MR. DARRELL DEXTER: It has been a couple of years since you were last here. I remember, having been on this committee at that time, entering into a bit of discussion at that time around what happens with the money you receive and how it is distributed. I wanted to just, not that I spend a lot of time going over these financial statements, see if I am clear on them. This is from your 2000 Annual Report, if you have it there. Under Liabilities, you have listed Unearned Revenue of $3,175,500. I just want to be clear on what that represents. That represents money that you hold that will be going back to either consumers or to the enviro- depots, is that what that is?

[8:30 a.m. Mr. Howard Epstein resumed the Chair.]

MR. FIRTH: That is correct. That is a reserve that we set aside under the deposit/ refund program to cover the time lag between the time the distributor pays the deposit to the Resource Recovery Fund Board and that container is returned to an enviro-depot at which point in time the RRFB has to pay out the 5 cent refund to consumers, they pay the handling fee, then we have our transportation fees from the depot to the processing centre and our processing fees at the processing centre.

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So, what the reserve allows us to do is that if, for whatever reason, the program stopped tomorrow, the deposits would stop tomorrow. The containers that have been sold over the last six months would still end up coming back through the system for probably the next six to nine months and we would have to have some money in order to operate and to pay the costs associated with the operation during that period.

MR. DEXTER: This is probably not a new question for you, you've probably been asked it many times before but I'm going to ask it just so that it can be a matter for the record, but you receive these deposits, you would now have a track record long enough that you would be able to gauge how much of the product that you charge the deposit on never comes back, that is shipped out of the province or destroyed in some other way and for that product you would essentially retain that entire deposit. Is that correct?

MR. FIRTH: That's correct.

MR. DEXTER: Do you know what those figures look like?

MR. FIRTH: The recovery rate right now is running around 82 per cent, which means 18 per cent of the containers that we receive a deposit on don't come back through our system.

MR. DEXTER: What does that amount to in dollars and cents? Just so I understand it.

MR. FIRTH: Well, 20 per cent of 260 million containers is about 50 million containers at 10 cents, it's about $5 million.

MR. DEXTER: And that's yearly?

MR. FIRTH: That's correct.

MR. DEXTER: I guess that's all really pure profit to the Resource Recovery Fund Board.

MR. FIRTH: That's correct.

MR. DEXTER: Has there been any suggestion or any indication whether or not you think it's appropriate that should be retained by the Resource Recovery Fund Board or should it be returned to the consumers?

MR. FIRTH: Well, that's certainly one of the anomalies of deposit/refund programs in general; you don't make money on the containers you collect and are redeemed through the deposit/refund program and, in fact, the more containers you collect, the less money you

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make, obviously. So really the net revenues from the Resource Recovery Fund Board which are used to go back to the municipalities as diversion credits, approved program funding, value-added manufacturing funding, come from those containers that are not redeemed and also from the sale of the materials on the containers that are redeemed and that's the main source of your revenues in a deposit/refund program.

MR. DEXTER: You're returning 5 cents, 2.5 cents is going to the enviro-depot . . .

MR. FIRTH: It is 2.75 cents.

MR. DEXTER: Then the balance, 2.25 cents is used by the board for various . . .

MR. FIRTH: Part of that balance of the 2.25 cents goes to the transportation companies that collect the containers from the 90-odd depots across the province and bring those to four regional processing centres. We then pay those four regional processing centres to process those materials into a bale, for shipment to market. The balance would be used to cover the admin costs of the Resource Recovery Fund Board, those admin costs are less than 5 per cent a year.

MR. DEXTER: What you're saying is that these programs with the various municipal units couldn't operate at the deposit rate if you were only getting the two and one-quarter cent deposit?

MR. FIRTH: That is correct.

MR. DEXTER: There was another piece on the financial statement that I didn't understand completely which was under the net assets column; it says, invested in value-added manufacturing. Is there an equity position of some kind held in some of the manufacturing processes?

MR. FIRTH: Yes, the Resource Recovery Fund Board took an equity position in NovaPet Inc. in Amherst, the facility that recycles the PET plastic bottles collected in Nova Scotia, New Brunswick and Newfoundland. We have since been bought out of that equity position by the minority partners and we now own just 5 per cent of that company.

MR. DEXTER: I wonder if you could just tell me what you mean by that PET plastic?

MR. FIRTH: That is your pop bottles, or your 2 litre-type pop bottles.

MR. DEXTER: What does PET stand for?

MR. FIRTH: Poly ethylene terephthalate.

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MR. DEXTER: It is a mystery.

MR. FIRTH: It is easier to say PET, believe me.

MR. DEXTER: Now the province retains a 5 per cent interest in that and that is what is represented by that $304,000 . . .

MR. FIRTH: The $304,000 represents the 51 per cent. The buy-out has occurred subsequent to the year-end.

MR. DEXTER: I see. But that was the only equity position that the board had in any of its contractual arrangements?

MR. FIRTH: That is correct, yes.

MR. DEXTER: With respect to the tire recyclers you indicated - and I guess I remember the discussion that took place last time - and it was around the question of competition between Nova Tire Recyclers, previously TRACC, and other small cottage-type industries. I am just wondering where that stands at this point and whether or not - I guess it was scallop rings and other products that were being produced on a kind of local basis. I believe there were some complaints at that time about competition from TRACC. Does the new company manufacture these kinds of products and where does that stand?

MR. FIRTH: The new company will be manufacturing only two products, I shouldn't say two products, one will be crumb but they will produce varying grades of crumb and then the second product would be tire shred which would be about a one inch - that tread that I passed around this morning was about a three or four inch nominal chip. They can reduce that through a second process down to about a one inch chip and they have used that in some civil engineering applications, such as drainage in sports fields. Those are the only two products they will be making.

MR. DEXTER: They won't be manufacturing any kind of cow mattresses because I remember asking at that time whether or not there was going to be a cow mattress recycling program at some point in time because it didn't take the process very far down the line?

MR. FIRTH: With what has happened in Europe I think it is probably a good thing that they are rid of the cow mattress production.

MR. DEXTER: I was thinking with respect to tire recycling, I was wondering if you could explain to me, just so I understand it, where the $3.00 goes on each of the tires when you return them?

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MR. FIRTH: On that, $1.25 is paid to the tire processor to collect and shred the tires initially and that is to get the tire to this stage here. The second $1.25, actually, it is a varying schedule now with the new processor, if they take this shred here and process it into the one inch chip to be used in civil engineering applications, they get an additional 75 cents. If they take the shred and take it all the way to the production of crumb, they get an additional $1.25. They will get either $2.00 or $2.50 of the $3.00, depending on the product that they make. The remaining 50 cents is used by the Resource Recovery Fund Board, a big chunk of that has gone - as I mentioned in my statement - to help clean up over 300,000 tires from stockpiles around the province, both municipal and private. A portion of it would end up going back to the municipalities as part of the net revenue calculation, as well.

MR. DEXTER: I have some other questions on that but how has that process gone forward? Sooner or later that stockpile is going to be cleaned up. You must have some idea where you are in that process?

MR. FIRTH: We think we have most of the major stockpiles in the province cleaned up now. Any funds that were used for stockpile clean-up in the past will end up going back to the municipalities as part of our net revenue calculation.

MR. DEXTER: Again, do you know how many tires there are each year on which a deposit is received?

MR. FIRTH: Just over 800,000 passenger tires and about 35,000 or 40,000 truck tires.

MR. DEXTER: That is 45,000 to 50,000 truck tires.

MR. FIRTH: No, 35,000 to 40,000 truck tires.

MR. DEXTER: On those tires the deposit rate is different. Isn't it $7.00, is that right?

MR. FIRTH: It is $9.00 on a truck tire.

MR. DEXTER: So what is the total revenue from that program?

MR. FIRTH: It is about $3 million a year.

MR. DEXTER: Of that $3 million, all except one-sixth will go to Nova Tire Recyclers or its successor, which is - I thought you said - Recovery Technologies and then the names changed on me.

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MR. DARRELL HILTZ: It is Atlantic Recycled Rubber which is owned by Resource Technologies out of Cambridge, Ontario, who are owned by KTI Canada, whose head office, I believe, is in New Jersey. It is a local company, a separate, stand-alone company.

MR. DEXTER: That is always a bit of a shell game though really, isn't it?

MR. HILTZ: Maybe I could explain a bit about that if you would like.

MR. DEXTER: It costs $1,400 to set up a company here and then you are a local company, right?

MR. HILTZ: When Nova Tire had difficulties with the fire and the fact of the matter that we had to tell them after a couple of different consultant studies that they were basically insolvent, they wanted to sell. We agreed to look to see if we could find a buyer for them because they still had 6.5 years to go on the contract. We talked to several different companies and one happened to be RTI out of Cambridge, Ontario, who had been getting some product from Atlantic Recycled Rubber. KTI was in the process of buying RTI, so KTI bought RTI and they thought they wanted to buy Atlantic Recycled Rubber. As far as we are concerned we deal with Atlantic Recycled Rubber, knowing full well who the backers and the owners are.

MR. DEXTER: So they would receive approximately $2.5 million a year from the Resource Recovery Fund Board?

MR. FIRTH: Again, with the used tire program, it is the same as with the beverage container program, there is a percentage of the tires that don't come back through our system that are in fact used by some of those cottage industries that you referred to. We collect about 75 per cent to 80 per cent of the tires in Nova Scotia, of roughly 1 million PTEs as we refer to it, we collect about 800,000 through our system. So they would receive a payment based on about 800,000 tires at $2.50 a tire, to keep it simple, which is close to $2 million. That is basically our cost of operating that program, so there is about $1 million left over each year to cover our administration costs, education and awareness initiatives with respect to the program and then any monies left over become part of our net revenue distribution.

MR. CHAIRMAN: Mr. Dexter, I am going to move now to the Liberal caucus. Mr. Downe.

MR. DONALD DOWNE: Mr. Chairman, to Darrell and Derrick, welcome here. As a former Minister of Environment, it is a pleasure hearing your comments as to the vision and direction the government took back in 1996, to be the flagship for Canada on diversion. I understand we have been somewhat hailed as the flagship for Canada with regard to the determination to put our environmental house in order, as the Auditor General would sit in the back there would listen, and environmentally, it is important to have our house in order

[Page 16]

as well. I want to compliment the efforts that have been made. I do have some questions on a number of points. Picking up on the issue of what is next, I recall in discussions we have had on some of the issues that we were trying to get paint and how to deal with the manufacturer right through the chain, you mentioned used oil but there are other areas as well. I wonder if you would like to elaborate very quickly on some of the other areas that need to be approached?

MR. FIRTH: Certainly the Solid Waste-Resource Management Regulations banned certain materials from landfill and that has been sort of the first priority, dealing with those items. There is also a list of designated materials within those regulations that list - and I don't have that list in front of me, I do apologize for that, but some of the items on it were - newsprint, paint, electronic components, used oil, some of these things that we have talked about. We are basically trying to work our way down through that list of designated materials.

MR. DOWNE: I note with the dairy industry, I remember the meetings that took place and at that point it took about a year to get it resolved, but they actually put a program in place, themselves, as an industry, to resolve the problem. Is that the type of template that you are looking at for fast-food facilities and some of these other areas like the paint industry and other manufacturers, that they would be the ones who would develop a financial program to offset the costs to the communities?

MR. HILTZ: No, I don't think that the dairy industry is one of a number of templates. You mentioned the paint industry. The paint industry would work differently. Hopefully, the contribution that would be paid by the industry to have a recycled paint program would be paid to the RFB. We will administer and manage that program through the enviro-depot network, MRF sites, and then find a recycler through a proposal call to do that. The dairy industry, as you know, pays the money directly to the municipalities, the RFB is not involved at this point in time. The other one that you mentioned, we are working - as Derrick had mentioned - with the newspaper industry. There again, we will manage and administer that program on behalf of the province but also on behalf of the municipalities. We sort of work in most cases as a three-way partnership: the municipalities; the RFB; and to a lesser extent, the Department of Environment and Labour, as well, of course, private industry is very much involved.

Perhaps if there is one quick thing I could clarify about the tires, and that was in the year 2000, 832,000 PTE's, which means that a truck tire is equivalent to five passenger tires, but based on that it would be roughly $2 million that the new company would receive if they got credit for the full $2.50, which they wouldn't have. Sorry, I just wanted to clarify that.

MR. DOWNE: That comes off the NDP time later, does it? Only joking. The Department of Environment and Labour has basically, in the past, worked at arm's length with the board. The board had a somewhat, not quite, quasi-judicial body but it was a body

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that worked at arm's length to administer programs. Do you think that approach of having government at arm's length from the board is the appropriate way to deal with the environmental stewardship programs that are undertaken by RFB?

MR. HILTZ: Certainly, I think it works best at arm's length, because we work very closely, as I mentioned, with the municipalities. With respect to stewardship, Derrick had pointed out that we have no enforcement power, we have no regulatory, we have no legislative power. We have to work with the Department of Environment and Labour in that respect. Some industry groups want that regulation in place to make sure everybody plays by the same rules. We prefer to do the voluntary route. In the case of the dairy industry, that was a voluntary route. The paint industry, they want regulations just to make sure that it is fair. It goes back to your first question. There is no one set form to follow when it comes to talk about stewardship.

Also some history too. With respect to paint, we want to deal with the brand owners the same way as with the beverage industry. There is something like 99 distributors, that was with the distributors, but with the tire industry we have to deal with 900 retailers which in hindsight, we should have been dealing with the brand owners. It just makes life easier.

MR. DOWNE: My sense is that the general public have faith in the process with regard to the credibility of the RRFB and I note with interest back a few years ago in 1996, the member for Colchester-Musquodoboit Valley used to call the beverages depot the thirst tax, and the criticism was somewhat laughable back in 1996. The RRFB is certainly now rectifying the fact that it has moved forward and the government seems to be going in the right direction.

Now it appears with the 10 per cent - talking about diversion and recycling - the government is actually diverting 10 per cent of the money going into the RRFB and recycling it into the Department of Environment and Labour's budget. Maybe the member for Colchester-Musquodoboit Valley was really ahead of his time, realizing at some point that maybe his government would be in power to be able to take those dollars from that program and recycle them into the general budget in revenue.

My concern is, number one, I think the 10 per cent would represent about $500,000, if you can clarify that, and if the 10 per cent stayed the same, what would it mean in regard to revenue for the province this year in the Department of Environment and Labour's budget?

MR. FIRTH: When you say this year, you mean the upcoming fiscal year, 2001-02?

MR. DOWNE: Yes.

MR. FIRTH: We are projecting net revenues to be in about the $10 million range for 2001-02, so 10 per cent of that would be about $1 million.

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MR. DOWNE: You mentioned earlier that the Department of Environment - and I understand you don't want to get into the policy of the department, I understand that and I am not trying to put you in that particular position - but the Department of Environment's comments were that there are administrative costs and things of that nature that they have to go forward with. They have doubled their tax grab, they have doubled their clawback into the general revenue to the tune now of a potential of $1 million. What would they do to administer this program that would cost $1 million that would be different than when I was Minister of Environment?

MR. FIRTH: I can tell you what they do for us, and certainly in the statement I made reference of that. Firstly, certainly working with the department, as Darrell has said on the developing industry stewardship agreements; and, secondly, working on the enforcement of the existing regulations with respect to the deposit refund program and the Used Tire Management Program. Again, we have 900 tire retailers and we want to make sure everybody is playing according to the rules. If we identify situations where a retailer is not in fact playing by the rules and not remitting in accordance with the regulations, we can only take that to a certain point and if the retailer still refuses to comply at that stage, we have to turn it over to the Department of Environment for enforcement. Then, obviously, thirdly, as I mentioned, working with the municipalities to make sure everybody across the province has access to the recycling and composting programs.

The goal of 50 per cent has been reached for the province as whole, but there are still regions of the province that have not achieved that 50 per cent. The department is working with those regions to get it so that every one of the seven solid waste management regions in the province is in fact at 50 per cent as well.

MR. DOWNE: The success of your organization is applaudable - 3,000 jobs; we talk about Youth Live programs; 50 per cent diversion; the flagship of the nation; facilities from around the world are coming here, in Lunenburg County, one of the first facilities ever established - so you deserve a lot of credit.

Working with municipalities, making sure they get their fair share of these dollars is important to me as it is to you, I am sure. The fact that the provincial government, the Department of Environment and Labour are now clawing out $1 million in the upcoming year out of the budget, what could that $1 million have meant for value-added investment in further added value to the stream of waste, what could that $1 million do for further employment and further enhancement of sustainability of the environment through the RRFB vis-à-vis the Department of Environment, the $1 million grab?

MR. HILTZ: Maybe I can attempt to answer that. On value added, we love to see applications come through the door from people with innovative ways to add value to solid waste. Our experience has been, yes, we have had some very good successes and I don't know if we have had any failures in anything that we have invested in to date or not.

[Page 19]

MR. FIRTH: There may have been one, but . . .

MR. HILTZ: But anyway, for the most part, they are small, they are good, they are spread all over the province. We have invested somewhere in the area of over $1 million over the last two years. It has created a number of jobs which averages out to $8,000 to $12,000 a job, our contribution. But we do not foresee a whole lot coming through.

I guess what I am trying to say indirectly to answer your question is, we love to see them come through and if they did, yes, that money could go a long way to making investments into value added. But as it is now, we have no problem keeping up with any requests that come in.

MR. DOWNE: I will turn it over, but I would just say that maybe the municipalities, especially in light of the equalization discussions that are going on, could probably use that $1 million to offset some of the potential moves of the provincial government, but I will move over to my colleague.

MR. CHAIRMAN: Mr. MacKinnon.

MR. MACKINNON: Gentlemen, you have indicated the possibility of recycling paint. Will there be a fee attached on paint cans similar to pop cans, bottles, milk cartons and the like?

MR. HILTZ: Don't compare it to pop and tires or whatever, but we want an amount of money from the industry for a handling charge.

MR. MACKINNON: Have there been discussions on a deposit fee, or whatever you want to call it?

MR. HILTZ: There have been discussions on a fee, but not a deposit fee. A deposit fee is considered refundable.

MR. MACKINNON: What type of fee are you talking about? And how much a can, let's say?

MR. FIRTH: I can answer that perhaps. I have been in discussions with the other Atlantic Provinces - Newfoundland, P.E.I. and New Brunswick - to try to bring in a paint program that would be uniform across the region. In other words, whether you are in any one of the four provinces, the program would basically be the same.

Industry has certainly indicated to us that that is the road they would like to go, and where we are right now is we are tyring to determine whether or not there is sort of one fee structure that will work for the four provinces so to speak because Newfoundland, for

[Page 20]

instance, has some different issues to deal with, with respect to distance and so on, than what Nova Scotia has. That is what we are working towards at this point in time.

MR. MACKINNON: But you must have an idea of what kind of fee you are looking at, I mean, comparable to other jurisdictions.

MR. FIRTH: Industry has indicated to us that they would certainly like to make sure that the fee is set high enough. We have seen the situation in Newfoundland on the deposit/refund program where they start . . .

MR. MACKINNON: What is the dollar value in those jurisdictions?

MR. FIRTH: It varies depending on the size of the container. British Columbia, it goes anywhere from 25 cents to $1.00, depending on the size of the container. A four litre container in British Columbia, for instance, is 50 cents.

MR. MACKINNON: And you would foresee a similar type program in Nova Scotia?

MR. FIRTH: I would think so. Quebec brought their program in and the fees were similar.

MR. MACKINNON: My next issue is on the tire recycling. Obviously TRACC did not pan out quite the way it was anticipated and unfortunately, the new plant did not end up in Colchester County as the honourable member for Colchester-Musquodoboit Valley would like, but that is an issue he will have to deal with.

Atlantic Recycled Rubber, obviously that has given some hope and some new policy, new direction, new business plan. Has there been any discussion with ARR on the possibility of burning tires?

MR. HILTZ: No.

MR. MACKINNON: Has there been discussion on the possibility of burning tires with any other industry component in Nova Scotia?

MR. HILTZ: No.

MR. MACKINNON: So, it would be safe to say that the Resource Recovery Fund Board at no point in time, any official from this board, approached anyone within this industry in Nova Scotia to burn tires over the last year and a half?

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[9:00 a.m.]

MR. HILTZ: I think perhaps I can answer that. When the plant closed in Cornwallis as a result of the fire they had outside, we didn't want the tires to stockpile. There were a lot of tires in Cornwallis. They had a lot in Graywood which is the municipal facility out back and there were some other stockpiles throughout the province. There was one down in I think Upper Stewiacke or somewhere. We wanted to move those tires. I think the former CEO had a brief conversation with the cement plant at Brookfield, but the fact of the matter is Quebec was available as part of their way of manufacturing cement. Their tipping fee was established. They could take tires immediately and, yes, for a period of approximately a year, we shipped them to Quebec to get rid of them.

MR. MACKINNON: So, in short, the answer is yes. The Resource Recovery Fund Board approached industry to burn tires in Nova Scotia?

MR. HILTZ: The answer may be yes. There was an individual staff member who talked to someone, I understand, from the plant if they could.

MR. MACKINNON: Yes.

MR. HILTZ: I don't think if they would, but if they could.

MR. MACKINNON: The legislation and the regulations prohibit the burning of tires in Nova Scotia. Why would a representative from RRFB make such a proposal when Mr. Firth himself has indicated a little earlier in the deliberations that it is not the position of RRFB to question public policy, only to follow it?

MR. HILTZ: The question was are they interested in burning, would they burn them. There was no answer . . .

MR. MACKINNON: But that is not within . . .

MR. HILTZ: Until such answer was given, well, then you go the next step. It was just exploring options and there are all kinds of options on the table.

MR. MACKINNON: Yes, but, Mr. Chairman, that is not within the mandate of RRFB, is it, to burn tires in Nova Scotia? Well, it is or it isn't? Is it the mandate of RRFB to advocate the burning of tires in Nova Scotia? A yes or no would be fine.

MR. FIRTH: It is not black or white. I mean Nova Tire Recyclers and TRACC had a clause in their contract that allowed for 30 per cent of the tires to be used for tire-derived fuel. The existing contract that we had with Atlantic Recycled Rubber has that same clause

[Page 22]

in it and I understand the regulations in Nova Scotia prevent the burning of tires within the province or the import of tires to be burned within the province.

MR. MACKINNON: But yet RRFB was advocating that opportunity?

MR. FIRTH: We had a situation where the plant was shut down and as Darrell said, we were looking at different options. We collect 60,000 tires a month in the Province of Nova Scotia and the last thing we wanted was to have those tires stockpiled someplace and run the risk of having . . .

MR. MACKINNON: Let's take it to the next level then. Was that brought to the attention of the Minister responsible for RRFB?

MR. HILTZ: No, I don't believe so.

MR. MACKINNON: So RRFB went on its own to advocate the burning of tires against public policy and did not notify the minister responsible for the public policy, the legislation and the regulations?

MR. HILTZ: As I mentioned, we were looking for options. We wanted to know if they were capable of burning them. It is as simple as that.

MR. MACKINNON: But my understanding, according to Mr. Cross who attended the Economic Development Committee meeting on January 30th of this year, he indicated that RRFB approached them with the expressed intent of wanting to burn tires at their plant. That seems to be a little bit of a contradiction to what you are advocating today. So perhaps we could take on notice that you would clarify that and explain why RRFB would be acting outside of its mandate and the legislation that it is required to abide by.

MR. CHAIRMAN: Excuse me, Mr. MacKinnon, I am going to have to interrupt. The 20 minute time is up and I will move now to the Progressive Conservative caucus for their questioning. We will start with Mr. Taylor.

MR. BROOKE TAYLOR: Mr. Chairman, I would like to ask Mr. Firth how long he has been with the Resource Recovery Fund Board? It was established in 1996.

MR. FIRTH: I started in 1996, three months after the deposit refund program came on-line.

MR. TAYLOR: Yes, and I would also, if it is a fair question and appropriate, like to ask the Chairman of the Resource Recovery Fund Board what he was doing in 1996 at that particular time?

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MR. HILTZ: When, in 1996?

MR. TAYLOR: Yes.

MR. HILTZ: The program started on April 1st. I was Deputy Minister of the Economic Renewal Agency at the time in 1996.

MR. TAYLOR: Thank you very much. It is an interesting discussion and debate thus far, Mr. Chairman. If I could, seeing how tire recycling seems to be topical, I would like to kind of go down that road a little bit too. Mr. Firth, in what capacity were you acting in 1996 relative to the tire recycling contract that was entered into between RRFB and then TRACC? What was your capacity at that particular time?

MR. FIRTH: I was the acting chief operating officer.

MR. TAYLOR: As things unfolded I would suggest, Mr. Firth, that you were advised and in fact warned that the TRACC proposal was doomed for failure. Some of the warnings, I would think perhaps even most of the warnings and advisements, were based on good, sound reasoning at that particular time and in fact I believe ARR, the local company that is now building a nearly completed tire recycling facility out in Kemptown also submitted a proposal and at that time, Mr. Firth, you and the government of the day (Interruption) Yes, one of the members was boasting earlier about that government of the day doing all these successful projects and being on the forefront, the leading edge, blah-blah-blah but I have to just question you as to why we should be any more confident today? Why should Nova Scotians believe today that the tire recycling facility that is being established by a proponent that was essentially turned down in 1996 is now going to be successful?

MR. FIRTH: It is a different process from back in 1996. As I said in my opening statement, the crumbing of tires, there are inherent risks in that process, no question. In 1996 we recognized that there were risks in going that route in the province. The easiest thing to do would be to burn the tires, I mean there is no risk involved in that from an economic standpoint but from an environmental standpoint it is not what we want to do. But back in 1996 when the program was introduced, there had been a process of applications that were submitted. In fact, there was a committee that had been established by the four Atlantic Provinces to look at tire processing. That committee for whatever reason, and that was before my time so I really cannot comment on it, disbanded and Nova Scotia at that point in time decided to go it alone.

A consultant was brought in to review the work that the committee had done and to review the applications. They came down to the two final proponents being TRACC and Atlantic Recycled Rubber at the time. Atlantic Recycled Rubber's application, if I remember correctly, was calling for fees higher than the $3.00 that Nova Scotia was going to implement in the province and so the decision was made to go with TRACC because they could work

[Page 24]

within the $3.00 and $9.00 fee, and also would create greater employment in the province as well.

MR. TAYLOR: Mr. Firth, when RFPs were sent out or requested back at that particular time, all companies submitted bids based on similar RFPs, the same one essentially. When it was agreed by the Minister of Environment of the day, Wayne Adams in the Savage Government, to go with this TRACC company, was the contract or the terms of reference changed to include the 30 per cent provision to burn tires in other jurisdictions because at that particular time somebody had the judgment to ban the burning of tires in Nova Scotia. So I guess what I would like to know, and I think Nova Scotians would like to know, why was TRACC given the provision to burn tires, up to 30 per cent of Nova Scotia tires, in other jurisdictions, knowing full well, although it didn't say other jurisdictions, knowing full well at that time there was a ban on burning tires in Nova Scotia. That provision was put in place and it was put in place after the Resource Recovery Fund Board decided to go with TRACC.

MR. FIRTH: It was not put in place at the request of TRACC. It was put in place at the request of the board. As I just said, there are inherent risks in tire processing, the products, the markets go up and down for these products, be it a cow mattress or crumb or whatever the product is that they are making and certainly we didn't want to be locked into a situation where they could only make certain products and then face a downed market where they couldn't sell those products. The clause was put in for the 30 per cent burning to provide an out in just such a situation so that we wouldn't end up with either products they couldn't sell, or stockpile tires here in the Province of Nova Scotia that couldn't be made into anything.

MR. TAYLOR: What percentage of Nova Scotia tires are leaving the province today to be burned?

MR. FIRTH: None.

MR. TAYLOR: None. Where are the tires going?

MR. FIRTH: Most of the passenger tires are going to RTI, the parent company in Cambridge, Ontario for processing. Truck tires are going to some facilities in Quebec for processing into crumb or moulded rubber products.

MR. TAYLOR: In other jurisdictions?

MR. FIRTH: Yes.

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MR. TAYLOR: Would you say it's a fair comment, a fair statement to say that Nova Scotians haven't received very much value, very much worth for their contribution to this tire tax or environmental fee, whatever you want to call it, since it was implemented?

MR. FIRTH: No, I would disagree with that statement. We've collected 2.7 million tires, we've converted these tires from the sides of the road, from our lakes and our streams and I think that is a huge economical benefit to the people of Nova Scotia.

MR. TAYLOR: Well, I don't disagree that it is a benefit to the people of Nova Scotia but based on some of the figures that you've been floating around here this morning, you said since 1996 the Resource Recovery Fund Board, I believe, has generated for municipal diversion $25 million. I would think that the biggest portion of that $25 million, or certainly a large chunk of it, came from the tire tax. I notice the chairman shaking his head he disagrees, if you're bringing in $3 million a year and you multiply that by 4 years, that's $12 million obviously. You gathered up 300,000 tires that were abandoned in stockpiles, so we're getting good value for our money, Nova Scotians are getting good value for their tire tax.

MR. HILTZ: Could I just, Mr. Chairman, speak to that. Yes, $12 million, maybe that is the figure that was collected, but you realize that there were, I forget how many million tires were processed, in some sort at TRACC. The current company is getting $l.25 for collecting the tires, they have made a $10 million investment in Kemptown, I think that . . .

MR. TAYLOR: They who? Who is they, pardon me, Mr. Chairman?

MR. HILTZ: Atlantic Recycled Rubber.

MR. TAYLOR: Yes, with their money.

MR. HILTZ: Their money.

MR. TAYLOR: Not yours.

MR. HILTZ: Which they will be employing 20-some people, they will be receiving in the area of $2 million or $3 million of that tire tax a year to process those tires.

MR. FIRTH: If I could just make one comment; $3 million is the gross amount of fees that we received and as Mr. Hiltz says, we have costs against those and the net revenues from the tire program each year are probably in the vicinity of $750,000 to $1 million.

MR. TAYLOR: Well, I really submit it's a question of credibility. We have essentially the same players back in this Nova Scotia Legislature telling us today that we are having a $10 million tire recycling facility constructed out in Kemptown, Colchester County, where in fact it probably should have gone in the first place and I think hindsight is always

[Page 26]

20/20. I have to tell you, Mr. Chairman, Mr. Firth and some of his cohorts were warned, repeatedly, that the TRACC proposal was doomed for failure. In fact, it did fail and during his presentation this morning, he spoke of TRACC and all of a sudden we were talking about Nova Tire. What happened? How did TRACC Tire become Nova Tire and subsequently ARR has the contract?

MR. FIRTH: Nova Tire purchased the assets of TRACC Nova Scotia.

MR TAYLOR: How come?

MR. FIRTH: Nova Tire was owned in part by the Cornwallis Park, or Kespuwick Development Agency. They had invested significant amounts of money into the project. They were concerned about their investment and decided the best way to protect their investment was to purchase TRACC. I mean that is my recollection of what happened. You would have to go to Kespuwick and find out from them exactly why they made that decision.

MR. TAYLOR: Mr. Firth, earlier on this morning the honourable member for Lunenburg West talked about an arm's-length agency. We had earlier on, a few years ago, tabled minutes indicating that the Minister of Environment of the day attended meetings out in Debert with the Resource Recovery Fund Board, the Liberal minister of the day, Wayne Adams. Is that practice still going on? Are Ministers of Environment still going to the RRFB meetings and exerting pressure on the Resource Recovery Fund Board members? (Interruption) That is a fair question.

MR. MACKINNON: Mr. Chairman, on a point of order, the honourable member is obviously being rather presumptuous and making statements that have no basis in fact. I would ask if he would be kind enough to submit the evidence where a Minister of the Crown has exerted pressure on this board when the representatives here before the board have already indicated no pressure and they do operate at arm's length.

MR. TAYLOR: I would like to respond, Mr. Chairman. Yes, I would be very pleased to provide the minutes of meetings that were held out in Debert with the Resource Recovery Fund Board where one board member, Mr. Bolivar, the current Mayor of Bridgewater, expressed concern about the very presence of the Environment Minister of the day and, Mr. Firth, I know full well you are aware of that, aren't you?

MR. FIRTH: Yes, I am.

MR. TAYLOR: Yes, so I want to know, is that practice still going on today?

MR. FIRTH: No.

MR. TAYLOR: How long ago has it ceased?

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MR. FIRTH: The incident you mentioned was the last time that a Minister of Environment has attended a board meeting of the Resource Recovery Fund Board.

MR. TAYLOR: Mr. Chairman, I think it was quite appropriate that the member for Lunenburg West did raise that concern because it is a concern to all Nova Scotians and, again, I would submit through you, Mr. Chairman, to all Nova Scotians that I have concern with the credibility of members of the Resource Recovery Fund Board who are still making decisions regarding tire recycling in the Province of Nova Scotia, coming in and telling us today that Nova Scotians are going to receive good value, that there have been no failures, nothing but success when, in fact, the tire recycling in the Province of Nova Scotia up until now has been nothing but a nightmare. It has been catastrophic. It has been disastrous. It has been a boondoggle. There have been tire fires. There have been tires shipped out of jurisdictions, burned in cement plants that are competing with the Nova Scotia cement plant in Brookfield. I don't know how you can reconcile things like that and, in fact, I would say that if Mr. Firth was working for me, he would be fired. (Interruptions)

MR. MACKINNON: Mr. Chairman, on a point of order.

MR. CHAIRMAN: Excuse me for just a moment. First, we have another point of order I have not dealt with yet. Let me just say with respect to the first point of order that I don't think in any way can we interfere with the honourable member's rights to draw conclusions or express his opinions as part of his questioning and proceedings in front of this committee. So there is certainly no way we can suggest anything about that, but there is another point of order now raised.

MR. MACKINNON: Yes, on that point, Mr. Chairman, I think it is highly inappropriate to even engage in that level of discussion or debate and to treat any witness with such contempt before this committee. It is unprecedented, let alone inappropriate.

MR. CHAIRMAN: I am not sure I am in a position to say it is unprecedented. On the other hand, it was certainly a strenuous point. I wonder if the honourable member has more questions or is yielding now to one of his colleagues?

MR. TAYLOR: I do have a couple more questions and I take issue with the honourable member for Cape Breton West trying to suppress any member's thought in the Legislature, but the thing has been a fiasco. I guess what I would like to know is why, today - well, I guess what we should ask - a contract was entered into with TRACC and the Resource Recovery Fund Board, an agent for the Department of Environment, initially to establish a tire recycling plant and now we have a new proponent, ARR, that has entered into a contract. I would like to know what initial provisions have been put into that contract when compared to the original one to give Nova Scotians some confidence that this tire recycling plant will value add Nova Scotia tires and they will see some return on their tire tax?

[Page 28]

MR. CHAIRMAN: Mr. Firth, can you help us with that?

MR. FIRTH: I think we have really touched on that already. They have made a $3 million to $4 million investment in the plant already in Nova Scotia. They are going to make another $4 million to $5 million investment in Nova Scotia in a liquid nitrogen plant that will produce excess liquid nitrogen to their requirements and will be sold to other users within the Province of Nova Scotia and will therefore, in fact, be import substitution, I guess. They have created close to 20 jobs there now. So, I think that we have already answered that question.

MR. TAYLOR: I guess maybe Nova Scotians might be more comfortable than I am with the current proposal although I do know Mr. Steve Benison and I feel that he is certainly very qualified regarding tire recycling. I don't think there is any question about that, but I find it a little difficult and troubling, Mr. Chairman, that that same individual now has been approved, so to speak, by the Resource Recovery Fund Board to erect a tire recycling plant when in the past apparently it seemed at least that his plan and his proposal was not good enough even though he wanted to establish it in the Colchester County area, which is geographically quite centrally located for transportation concerns. So, I guess I am not sure after some of the debate this morning, what the differences are between the previous arrangement and the past boondoggle.

I hope, Mr. Firth and Mr. Hiltz, for Nova Scotians' sake that they will finally see some benefit for their tire tax because I firmly believe that the $12 million that has been collected thus far, or whatever the figure might be out of that $25 million pot, and I know there are some other initiatives that are most commendable. I am not suggesting otherwise, but the tire recycling issue in Nova Scotia still goes on. Nova Scotians have been told and told again, well, don't worry, be happy, you know, we will see some good value-added products when, in fact, we have not. So I have difficulty, gentlemen, quite frankly, with you folks coming in, and I appreciate your coming to the Legislature, but coming in and telling us, again, don't worry, be happy, we are going to have some tire recycling and value-added products and Nova Scotians can rest comfortably.

In closing, I would say of the $12 million that has been collected thus far, I would like to see some accountability for that money to see if it really did go towards tire recycling initiatives.

MR. CHAIRMAN: Thank you, Mr. Taylor. Your caucus actually has two more minutes. Does anyone there wish to ask questions? Mr. Langille.

MR. WILLIAM LANGILLE: First of all, I would like to congratulate the former government for this initiative. Although I don't agree with a lot of their initiatives, this was one of their better ones. Having said that, I don't have too much confrontational. What I

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would like to go into is the Adopt-a-Highway Program. You stated in your opening remarks that you fund this initiative?

MR. FIRTH: We fund a portion of that initiative, that is correct.

MR. LANGILLE: Could you expand on that, please?

MR. FIRTH: I think their annual budget is about a little over $50,000 a year and we provide one-half of that funding. The Adopt-a-Highway Program was designated by a former minister as an approved program under the regulations.

MR. LANGILLE: And do you consider that a success in the areas that it is being used now?

MR. FIRTH: In the anti-litter initiative, yes, I think it has been a success and it is something we are going to try to build on in the future as well with some further anti-litter initiatives.

MR. LANGILLE: Having stated that, I believe that is the way to go because I am very concerned about the litter on our highways, especially the 100-Series Highway. There are tourists coming in, we are promoting Nova Scotia, and then seeing the litter and so on on our highways. I want to just jump into the new facility in Kemptown. That was all privately-funded money, is that correct?

MR. FIRTH: That is correct.

MR. LANGILLE: Yes, and I congratulate that company. When will that be opening? Is there a date set on that?

MR. FIRTH: There has not been an official date set yet. As I said in my opening statement, they are fairly close now to being able to produce crumb and when they are at that stage, there will be an official opening of the plant.

MR. CHAIRMAN: Sorry, Mr. Langille, we are through the first rounds of 20 minutes each. Given that we are going to have a short discussion at the end about agenda setting, I think we can have second rounds of about seven minutes each. Mr. Dexter.

MR. DEXTER: Mr. Hiltz, you are the chairman of the board of directors, are you?

MR. HILTZ: That is correct.

MR. DEXTER: How are you appointed?

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MR. HILTZ: I am appointed by the Minister of Environment. There is a due application process through the Public Accounts Committee.

MR. DEXTER: And what remuneration do you receive for your participation on the board?

MR. CHAIRMAN: I think that would be the Human Resources Committee, sir, not the Public Accounts Committee.

MR. HILTZ: I am sorry. The Human Resources Committee, I apologize. I receive an honorarium of $4,000 a year.

MR. DEXTER: And your Board of Directors, how are they appointed?

MR. HILTZ: There are three appointed by the minister: the chairman, a representative from the Department of Environment and Labour and one from the Department of Finance. The Union of Nova Scotia Municipalities appoints a member, the solid waste regional chairmen appoint a member from their group of seven or eight and the board appoints the remaining members.

MR. DEXTER: Which is how many?

MR. HILTZ: Right now, I believe there are nine in total. The board is short . . .

MR. DEXTER: The majority of the board is either appointed by the government or are employees of the government. Is that fair to say?

MR. HILTZ: The majority, no. There are three appointed by the government, of which happen to be employees of the government, so it is one-third right now with nine members, but we are short because we can have up to 15 members.

MR. DEXTER: So there are three appointed by the government, two of which are government employees?

MR. HILTZ: That is correct.

MR. DEXTER: And you said the other ones are appointed by - why don't you just run through that again for me?

MR. HILTZ: Okay. After the three there is one appointed by the Union of Nova Scotia Municipalities, one is appointed by the regional chairmen of the solid waste regions, which happen to be elected municipal people, and then the remainder are appointed by the board itself.

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MR. DEXTER: Your governing legislation is how old now, 1996 is it?

MR. HILTZ: The board was created in 1996, so yes.

MR. DEXTER: Mr. Firth, you said you were hired in 1996?

MR. FIRTH: That is correct.

MR. DEXTER: Would you mind indicating what your remuneration is?

MR. FIRTH: My remuneration now?

MR. DEXTER: Yes.

MR. FIRTH: It is $70,000 a year.

MR. DEXTER: And how does that differ from 1996?

MR. FIRTH: Well, in 1996 I was not the Chief Operating Officer, I was hired as a management information and finance officer. I believe it was about $42,000 at that time.

MR. DEXTER: So, your salary has increased by about $28,000 over the last five years?

MR. FIRTH: That is correct.

MR. DEXTER: I have one little area of exploration I would like to examine with you and that has to do with coffee cups. I guess we have heard this discussion going on now for some time because as Mr. Langille pointed out, you see a great deal of litter around. A large amount of that is coffee cups. We have a coffee culture in this province; in fact, I would say in the Atlantic Provinces, probably to a greater degree than I have seen anywhere else. But at present there are no deposits required on those containers.

MR. FIRTH: Not at present.

MR. DEXTER: I am just wondering what the rationale for that is. I mean, it is hard to understand what the difference is when you buy a carton of 2 per cent milk for my son when I go to Tim Hortons, I pay a deposit on it. At the same time I buy a cup of coffee for myself and I do not pay on that container. Hard to understand what the difference is.

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MR. FIRTH: I really cannot answer that question. We have just done a public opinion survey, as a matter of fact, with respect to a levy on disposable beverage cups to gauge the opinion of Nova Scotians, and the results came back and it was split right down the middle: 49 per cent were in favour and 49 per cent were against.

MR. CHAIRMAN: I am prepared to offer my colleague the present of a mug. (Laughter)

MR. DEXTER: It certainly would be best, but at takeouts they do not usually give you glass mugs to take out, not without considerably increasing the cost.

MR. FIRTH: Certainly at Tim Hortons, if you take your own mug in they will fill it up. They charge you less for that than they do for the disposable cup.

MR. DEXTER: I guess the question I had is just recognizing the realities of what we see on the highways and what we see from people - and I am not sure how the question was asked in your survey - but if you were to suggest that money was to go directly back into recovering those particular coffee cups. I mean, you cannot walk across a parking lot anywhere in this province, I would bet, without finding coffee containers. You cannot drive down any highway without seeing them. They have become ubiquitous. I am sure if in years to come when archeologists dig up remnants of our past, they will want to know exactly what it is - Tim Hortons or Robins or whatever - were to the society because it is just so present everywhere. I guess my question really is, despite your survey, is there any plan now to push on with that kind of initiative or where is that going?

[9:30 a.m.]

MR. FIRTH: Well, we were certainly disappointed when the industry group that we had been negotiating with for a number of years broke off negotiations over that very issue. We estimated - a very conservative estimate - there is about 300 million disposable beverage cups that are used in Nova Scotia every year.

MR. DEXTER: 300 million?

MR. FIRTH: That is a conservative estimate. So it is a significant problem and we had hoped that industry would have come along on a voluntary basis as some of the other industries have such as the dairy industry and the sharps industry. That was going to be the thrust of the program with that industry, an anti-litter campaign starting in their stores and going from there.

Unfortunately it has not worked out that way. I am not sure what the next step will be in that process. It is going to be up to the government of the day, I think.

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MR. CHAIRMAN: Excuse me, Mr. Dexter, I am afraid the time is up. I would like to move to the Liberal caucus and Mr. MacKinnon.

MR. MACKINNON: Thank you, Mr. Chairman. Gentlemen, with regard to the proposed paint regulations. If I understood you correctly, they are in the process of being drafted presently?

MR. FIRTH: The regulations have gone out for public consultation and that period is over and I understand now the Department of Environment and Labour is working on a final draft for those regulations.

MR. MACKINNON: Is there an anticipated timetable when they will be ready?

MR. FIRTH: We had hoped for this summer for the start of the program. We have been involved in negotiations with industry. Those negotiations have taken a little longer than we had anticipated to sort of finalize some of the details of the program so that may get delayed a little bit, but it should be by the fall at the latest.

MR. MACKINNON: Okay. Are there any other anticipated initiatives similar to the paint recycling program that you anticipate coming on stream? We have the pop cans and bottles and milk cartons and so on and now we are looking at paint containers. What about any other initiatives?

MR. FIRTH: Certainly as I mentioned, used oil, including the oil itself, the containers and the filters. We are looking at a program similar to what is . . .

MR. MACKINNON: So will there be a similar type deposit on oil cans as well? That would be a different regime, obviously, but there certainly would be, like a recycling tax?

MR. FIRTH: Yes, it would be a cost built in. Not really a tax but a . . .

MR. MACKINNON: Or a deposit or whatever terminology you wanted to use. There would be an additional fee over and above the market?

MR. FIRTH: That is correct.

MR. MACKINNON: And what is the time frame on that?

MR. FIRTH: Again, it depends. If you go by past history, most of these negotiations take three or four years. I mean, they do not happen overnight because you are asking industry in most cases to come forward voluntarily. The oil industry, we have had some initial discussions with them already. They are certainly onside with the program, they

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support the program out West, they support the same program in Quebec, so I think that one could move fairly quickly.

MR. MACKINNON: Would municipalities be involved in that as well?

MR. FIRTH: They could be involved, operating some collection facilities.

MR. MACKINNON: I raise that as a flag because I understand that in terms of soil remediation municipalities are exempt from the regulations and terms of depositing contaminated soils. They can put contaminated soils in their landfills without an environmental permit, whereas the private sector has to have an environmental permit, and they have to do remediation and so on. If I had bought land where an old service station was and then found that the soil was contaminated, I would have to get that cleaned before I could do anything. I could transfer that contaminated soil to a soil remediation plant, but if I didn't have one handy, I could have that shipped off to the local landfill. I raise that flag, if you are having discussions and maybe a policy initiative.

One final question, before I turn to my colleague. With regard to the 10 per cent, I am going to use the word clawback, I am not sure if that is the right terminology, that the Department of Environment takes from the RRFB, has there been any discussion on increasing that percentage?

MR. FIRTH: No, none whatsoever.

MR. MACKINNON: They are satisfied getting the extra $500,000.

MR. FIRTH: Certainly the incentive is there on the part of the province with that 10 per cent in there to move ahead with industry stewardship agreements that do generate additional revenues from the Resource Recovery Fund Board because they would, in addition to the municipalities, be one of the beneficiaries.

MR. MACKINNON: They get it indirectly, like, for example, the paint tax.

MR. FIRTH: Yes.

MR. DOWNE: My colleague from Colchester-Musquodoboit Valley used the comment that hindsight is 20/20. I note with interest, on April 4, 1996, the member made the statement that in The Chronicle-Herald on March 28th, an article stated that there are no jurisdictions in North America where existing curbside systems remained viable after deposit systems were introduced, so why will Nova Scotia be any different? Clearly, he has been wrong, and his 20/20 vision has been corrected.

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The fact is the curbside program has worked and worked very well. We are the flagship for North America. Although the comments made, in my view, were a little derogatory toward the members here, I want to say the opposite. I think you have done an excellent job, and I want to congratulate you, but not only you, the many volunteers on the board who are working very hard to try to do the right thing. Many Nova Scotians who have actually committed to having a better environment, the moms and dads and parents and family members who have supported that as well as the young people, they deserve the credit as well.

In closing, I want to say that the funding program for the municipalities is always an issue of interest to us all. Those dollars have gone back to the municipalities, invariably have gone into capital investments or investments where the facilities are actually enhanced or supported. Is there any new area where recycling facilities will be built over the next period of time? I am thinking specifically of the Valley area. Is there any municipality looking at doing some more work or expanding that opportunity, expanding their facilities across the province?

MR. FIRTH: I am not aware of any at this point in time.

MR. DOWNE: The issue of Cape Breton, and Sydney in particular, is there any work going on there with regard to curbside, and where they are in regard to the overall project across the province?

MR. FIRTH: Again, I would probably have to defer to someone from the Department of Environment and Labour who are much closer to that situation down there. I know they have established a materials recovery facility, and I know they are looking at curbside programs down there. I think curbside programs have been implemented, to what extent I couldn't really answer the question.

MR. CHAIRMAN: We will move now to the PC caucus, and start with Mr. Carey.

MR. JON CAREY: Our time is limited. In looking at your operating expenses, perhaps you could clarify and give me a little information. There are certain areas that sort of jumped out at me. The board fees and expenses are almost doubling. Computer support is going to be up 200 per cent, approximately. Public relations up about 100 per cent and salary and benefits up about 25 per cent. Could you maybe just give some background as to the reason for that happening?

MR. FIRTH: Board fees and expenses will vary depending on the number of meetings we have, generally we have four scheduled meetings a year but usually if there are issues going on or programs introduced the number of meetings can increase. When Darrell first started there were a lot of meetings that went on with respect to the tire program and so that will vary. We also want to be able to have a look at what's happening in other

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jurisdictions to find out whether there are things that can be brought into Nova Scotia to keep moving our initiative forward.

The second one you mentioned was . . .

MR. CAREY: Computer fees.

MR. FIRTH: We have invested very heavily in technology at the Resource Recovery Fund Board. Right now we operate all of the programs with a staff of 11 people at the moment. Most of that is due to the fact that we did make that initial investment in technology and we have continued to make that investment in technology. We started off with an old DOS-based system, with an accounting program that talked back and forth to each other, the supplier of the accounting program went into receivership, we've had to replace that program and we're also trying to bring the system into the Windows world of today by converting it from DOS to Windows. Certainly our intention is, we think once we have that finished - and we're probably about 90 per cent through that conversion process now - we will have a system that we will be able to market to other jurisdictions.

MR. CAREY: Public relations was another issue, it looked like an increase of about 100 per cent.

MR. FIRTH: Again, it depends on the initiatives that are going on within the Province of Nova Scotia. For instance, we want to be able to work with people like the Eco- Efficiency Centre in Burnside, who have developed programs for the IC&I sector and that's one of our main thrusts this year. We want to work with Clean Nova Scotia on anti-litter issues and things like the great Nova Scotia pick-me-up that's held every year. We want to work with groups like Bluenose ACAP to develop a green event program so that the major events that are held across the province can be set up so that they are entirely green and all the materials either recycled or composted that are generated at those facilities. So that's where that money goes each year.

MR. CAREY: My final one was, salary and benefits seem to be increasing about 25 per cent.

MR FIRTH: As I just stated, we have 11 people right now, we have a couple of positions that have been vacant, one, our Director of Marketing and Business Development, that position works with the municipalities to find markets for the materials that are collected, not just through our programs, but through the municipal curbside programs as well and also works with the private sector in trying to develop new industries in Nova Scotia to make use of those products. That position we hope to be able to fill and there's another position within the communications sector as well, where we had contracted out in the past with a provincial education partner and we're going to bring that service back in-house.

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MR. CAREY: Thank you, I'll pass to my colleague.

MR. JOHN CHATAWAY: Good morning, I certainly find this a very good conversation and I would like to thank Mr. Firth for his report. Being that it has been very successful over the years, for six or seven years, and I know before that I had municipal experience and basically you are always going in the right direction and I'm sure that there were some very basic problems and we certainly heard about some of them this morning. I don't think that they were for ever and ever. They basically worked out and the direction you're going is very successful and I think part of the reason is because of the awareness that you're spending money on, making sure that the people are involved, that is all Nova Scotians are very glad that this campaign is going on. It isn't a dictatorial sort of thing, it's everybody joining this cause because we have to, as we already have, 50 per cent diverting from solid waste landfills, that's a great record and I think we're all glad that you're going in that direction.

Long story short, I was just wondering what future challenges do you see coming up, because I know you basically solved some. There are obviously new challenges coming up. Do you have an opinion on what is the worst now or what is most potentially dangerous, or are there things that we should be dealing with. Also, there may be some comment you have with other provinces or other international people who get up and say we would like to know what you people are doing because you are doing so darn well here, could you help us out? What sort of rapport do you have with other jurisdictions?

MR. FIRTH: Certainly since I have been acting COO, chief operating officer, I have tried to improve relationships with the other Atlantic Provinces. We are a very small portion of the market in Canada for beverage containers or tires or any other material and we present a much stronger case if we can all work together. I have had meetings with the Minister of Environment for Newfoundland. I have met with my counterparts at the Multi-Material Stewardship Board which is similar to the Resource Recovery Fund Board. We have met with P.E.I. and Newfoundland and certainly what we are trying to do in those cases is to bring in similar type programs.

For instance, we all operate deposit/refund programs in which the beverage distributor has to register with four different provinces. We are looking at a mechanism whereby they can register once and that will be taken care of. We are looking at developing sort of generic type standards for the operation of depots, be they in Newfoundland, New Brunswick or Nova Scotia. So I think there are a lot of areas where we can work together with the other provinces to help make this a success, and certainly the other provinces are looking to Nova Scotia as the leader in solid waste management.

As to where we go in the future, as you say, we have achieved the 50 per cent, but I mean there is still 50 per cent, I think, as Mr. Hiltz has said on different occasions, that we still have not gotten to yet. As I mentioned earlier, we still have some regions of the province

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that have not achieved the 50 per cent and we certainly want to work towards getting all areas up to that 50 per cent level and then we will continue to look at different materials to divert them away from the waste stream. If you look at what has happened in Europe and places like that, they have a Green Dot program in Germany that covers all packaging. We are not there yet, but hopefully we will be there at some point in time in the future.

MR. CHAIRMAN: We actually have 30 seconds. Mr. DeWolfe, did you have a quick point?

MR. JAMES DEWOLFE: Thank you, Mr. Chairman, and welcome, gentlemen. I guess I don't have time for - I need 20 minutes for what I want to ask. I wanted to talk about the coffee cup take-out issue, and certainly the restaurant throwaways is the next big challenge we are going to face in this province. I would suggest don't start a gathering program until you secure a market. Also, I hope you take the time to sit down with Minas Basin Pulp and Power in Hantsport, because they are Nova Scotia's premier recycling entity and they recycle about 90,000 tons a year from Nova Scotia waste. So I will leave you with that thought. Also any portion of a tax or a levy that is collected, I want to make a point that you ensure that some of that gets back to the municipalities. I will leave you on that note and I hope to have you back again so I can continue my questioning.

MR. CHAIRMAN: An interesting discussion. I thank members of the committee. I thank, of course, Mr. Hiltz and Mr. Firth for having taken the trouble to attend before us today. It was a helpful discussion. So thank you very much.

Members of the committee, we have a few procedural matters to turn to. You will, I believe, have received a memorandum from the committee coordinator's office. I will draw your attention first to the letter received from the Minister of Transportation and Public Works in response to a request for a list of exemptions to the procurement policy. You will see that the minister is promising to have his staff provide that within the next few weeks, so we will follow up on that.

The next item is a question of scheduling. Let me draw your attention to the fact that next week, April 4th, we will not be meeting in this Chamber, we will be meeting over in the Committees Office and we will have a discussion about recommendations for the 2000-01 Annual Report.

The next scheduled meeting will be on April 11th, at which time we have representatives of the Department of Justice coming to speak to us on the procurement of legal services. The problem that we now have to deal with is what ought to form the focus of our deliberations in future meetings of the committee. You will see that the committee has agreed that it would like to look at Nova Scotia offshore exploration in some form. The committee coordinator is reminding us that we need to have suggestions of possible

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witnesses. I don't know if members are prepared to make suggestions today. If not, I will remind you that we need to do that very soon. I will return to that in a moment.

The next item that we have agreed to is the testing and monitoring of drinking water as carried out by the Department of Environment and Labour. I gather the committee has decided to wait until after the Standing Committee on Resources deals with that matter, which won't be until after early May. We do have some opportunity to perhaps deal with other questions. That said, I will throw it open, perhaps focusing, if we could, on the question of offshore exploration. Do any members of the committee have suggestions at the moment as to possible witnesses? I hear the name of Mr. Livingstone being mentioned, but I think we have heard from him on previous occasions.

MR. DOWNE: There are so many activities going on offshore. I think it would be appropriate if we had PanCanadian, where they are now doing the billion dollar play offshore. I think there are some important questions, one of which, my concern, is, are they going to have the processing offshore, for example, on a rig vis-a-vis on land, where the jobs are. Things of that nature would be appropriate to ask. I think that would be an interesting one. It is a good play, but it also has some questions about it.

MR. CHAIRMAN: Mr. Downe has suggested the possibility of looking to witnesses from PanCanadian. I noticed Mr. LeBlanc, from PanCanadian, was appointed just yesterday to be on the board of Nova Scotia Business Inc., perhaps a potential witness. Any comments from anyone else?

MR. LANGILLE: That has been approved for in the future, has it?

MR. CHAIRMAN: Indeed. It was a suggestion from your caucus that Nova Scotia offshore exploration be a topic, and it was approved at a previous meeting.

MR. LANGILLE: You mentioned Nova Scotia Business Inc., but that board has just been appointed. So I don't think they would be in a position to comment on the offshore at this time.

MR. CHAIRMAN: I am sorry, I couldn't have made myself entirely clear. All I said was that Mr. LeBlanc, who was appointed to the board of Nova Scotia Business Inc., came from PanCanadian, that is his background. That is where he works.

MR. LANGILLE: That was clarification then.

MR. CHAIRMAN: The suggestion is we look to PanCanadian. Are there any other suggestions? Certainly PanCanadian is the current new operator on our offshore. That is certainly an interesting suggestion. Do I hear any other suggestions on this?

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MR. DOWNE: One suggestion would be OTANS, which is really the body that represents the industry across the board. It really covers all the different sectors involved in the offshore, whether they are doing treaties, seismic or they are actually pipe manufacturers. I think that organization would be really important to have to give a broad approach to what is actually happening, economically what is happening, what industry is saying about the future of the offshore for Nova Scotia. Maybe that one would be appropriate to have first, to give the broader view from the industry's perspective of the potential in opportunities in the offshore for Nova Scotia.

MR. CHAIRMAN: Are you suggesting two sessions, then?

MR. DOWNE: I think it would be appropriate.

MR. CHAIRMAN: Can we leave it this way? Can we ask our committee coordinator to explore with OTANS and with PanCanadian whether they have representatives that they could make available to come speak with the committee, and could we hear back from the committee coordinator as soon as possible about that? Can I also leave it that if members of the committee have suggestions about other aspects of offshore exploration, and particular companies or people they would like to hear from, that they relay through the committee coordinator details of that? Would that be an acceptable way to proceed? All right.

Let's now turn to other areas. Are there other areas that we are now in a position to either approve for our further deliberations or particular suggestions of people that we might want to call to the committee?

MR. MACKINNON: It may seem like a bit of a lightweight when compared to some of the ones we are dealing with, but what about museums in Nova Scotia?

MR. CHAIRMAN: Is this on the list of previously recommended topics?

MR. MACKINNON: I think it would be a very interesting one. It affects all members, because I believe just about every member in the House of Assembly has a museum or some type of historical institution within their confines. I think we should be looking at that, they have never been examined by any committee of the Legislature and in terms of . . .

MR. CHAIRMAN: I do see from the list previously submitted by the Liberal caucus in January . . .

MR. MACKINNON: I believe there are 26 in the province. Anyway, it is just a pet peeve, I guess, of mine.

MR. CHAIRMAN: Can I ask if this is a topic that the rest of the committee is interested in pursuing? I don't see that it was previously voted on.

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MR. MACKINNON: I so move, Mr. Chairman.

MR. CHAIRMAN: It is now moved. We actually have a motion in front of us that we move to this topic. (Interruption) Well, there is a motion and I am inviting comment.

MR. MACKINNON: If the Conservative caucus wants to take it under advisement, that's fine.

MR. CHAIRMAN: Do I take it, that what you are saying, Mr. DeWolfe is you would like to discuss it among yourselves?

MR. DEXTER: I think it is a useful topic and I know that last night I attended the annual meeting of the Cole Harbour Heritage Society, who operates the Cole Harbour Heritage Farm in my riding, and funding through the government agencies that fund the museums was part of the discussion that took place there. So it is something that is being talked about in communities because there is a struggle going on, with funding being what it is these days, and I think there is probably quite valuable information for committee members out there, just to hear from the public. It is not just professionals involved in museums, there are a lot of coordinators who coordinate an awful lot of volunteers who work in these institutions to help make them run.

MR. CHAIRMAN: Perhaps I can sum up where we are on this: we have an organizational meeting next week; the week after that we are going to look at the Department of Justice; we have asked our staff to look at the possibility of setting up two sessions on the offshore; and we have decision pending on whether we will look at museums. So that seems like satisfactory progress for today. I would ask the PC caucus to let the committee coordinator know as soon as possible on what their view is on proceeding to look at museums. So unless there are any other procedural matters, we can declare ourselves adjourned for the day and I thank all members - oh sorry, Mr. Downe.

MR. DOWNE: The meeting next week is on what?

MR. CHAIRMAN: It will not take place in this Chamber, it will be across the street in the Committees Office and it will be a meeting where we discuss our draft report for 2000-01.

We stand adjourned.

[The committee adjourned at 9:59 a.m.]

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