The Nova Scotia Legislature

The House resumed on:
September 21, 2017.

HANSARD

NOVA SCOTIA HOUSE OF ASSEMBLY

COMMITTEE

ON

PUBLIC ACCOUNTS

Wednesday, May 12, 2010

LEGISLATIVE CHAMBER

Department of Service Nova Scotia and Municipal Relations

Land Registry System

Printed and Published by Nova Scotia Hansard Reporting Services

PUBLIC ACCOUNTS COMMITTEE

Ms. Diana Whalen (Chairman)

Mr. Leonard Preyra (Vice-Chairman)

Mr. Clarrie MacKinnon

Ms. Becky Kent

Mr. Mat Whynott

Mr. Maurice Smith

Hon. Keith Colwell

Hon. Cecil Clarke

Mr. Chuck Porter

[Mr. Howard Epstein replaced Ms. Becky Kent]

[Mr. Jim Morton replaced Mr. Mat Whynott]

[Mr. Allan MacMaster replaced Mr. Chuck Porter]

WITNESSES

Department of Service Nova Scotia and Municipal Relations

Mr. Kevin Malloy, Deputy Minister

Mr. Norman Hill, Director of Lands Program and Registrar General

Ms. Nancy Saunders, Director of Geographic Information Services

In Attendance:

Mrs. Darlene Henry

Legislative Committee Clerk

Mr. Alan Horgan

Deputy Auditor General

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HALIFAX, WEDNESDAY, MAY 12, 2010

STANDING COMMITTEE ON PUBLIC ACCOUNTS

9:00 A.M.

CHAIRMAN

Ms. Diana Whalen

VICE-CHAIRMAN

Mr. Leonard Preyra

MADAM CHAIRMAN: I'd like to call this meeting of the Public Accounts Committee to order. It's just a minute after 9:00 a.m. and we'd like to get underway. We're pretty formal here. The witnesses this morning are from the Department of Service Nova Scotia and Municipal Relations. Our subject today is the land registry system. We have with us several guests, but I'm going to begin with the introductions of the committee members and we'll go right around, for the record, including our guests today, so if I could begin with Mr. Smith.

[The committee members and witnesses introduced themselves.]

MADAM CHAIRMAN: Welcome to the witnesses and guests today. I wonder if you had an opening statement, Mr. Malloy, if you'd like to get us underway?

MR. KEVIN MALLOY: Yes, I do, and thank you very much. Good morning, everyone. Before going any further I'd like to reintroduce my two members of my senior team here. Nancy Saunders, on my right, recently took up a new role as Director of Geographic Information Services and she has been a significant member of the land programs for many years and our in-house expert. To my left is Norman Hill, Registrar General of Land Titles. He was appointed on January 18th of this year.

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I thank the members of this committee for giving us this opportunity to talk about the province's land registration system. Ten years ago government made a decision to enhance the protection of Nova Scotia's $74 billion real estate asset and improve the efficiency of real estate transactions and financing. A multi-million dollar investment was then made to put in place new legislation that would guarantee title on all land parcels and established an electronic land title system to replace the 250-year-old one patterned after the British registry. Over the years this investment has consistently proven to be a wise one for the province. The system is one that can be easily enhanced in a cost-effective and sustainable way to continue to meet the needs of Nova Scotians now and into the future.

In 2001 the House of Assembly enacted the Land Registration Act, which gave authority for land ownership and related interests in Nova Scotia to be guaranteed through a land title system. A gradual migration of Nova Scotia's 6,000 land parcels into the new system began across Nova Scotia in 2003. Today 40 per cent of land parcels have been converted to the land registration system and more are being added at a rate of about 30,000 per year.

Since its initial implementation, numerous improvements have been made to the system, such as the introduction of e-submission and e-payment methods, improvement of the standards for parcel descriptions, stricter requirements for easements, and the elimination of the ability for non-authorized users to record and remove interest. As a result, what we have in place today is a leading edge land registration system that guarantees ownership of land parcels to parties involved in buying or mortgaging real estate in Nova Scotia. This system is made possible because of an effective partnership between Service Nova Scotia and Municipal Relations and the Nova Scotia Barristers' Society. The province's guarantee of title is backed up by the authorized lawyer's certificate of title.

The system facilitates over $3.5 billion annually in property transfers and probably the same amount in mortgages and other secured financing transactions. Part of the process of modernizing the system has been to electronically scan, index, and make available on-line 250 years of land records. As of this time, 75 per cent of this work has been completed and 30 million images of documents are now available on-line.

Our world-class land registration system provides subscriber access to Nova Scotia's land records from any on-line location. It allows fast, off-site title searches and completion of transactions from anywhere in the province. In the past documents were registered in paper only and title searches required manually going through paper indices and documents at each county registry. In contrast, today, 75 per cent of all documents that enter the land registration system are submitted electronically, saving precious time for lawyers, their clients and registry office staff.

Today, when a property is sold, mortgaged or subdivided, the Land Registration Act requires that the land parcel be moved to the new system. Once these properties are migrated

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to the land registration system, future transactions can be conducted more quickly and the historic title search is no longer required, providing savings in legal costs and transaction closing time. The new land registration system has also helped government set new levels of efficiency in providing service to Nova Scotians.

For instance, the establishment of the e-registry has resulted in a dramatic and continual reduction in the space required for registry offices and has reduced the need for vaults to protect paper documents. In Halifax alone, this has meant a reduction in space requirements of around 10,000 square feet. Four land registration offices are 100 per cent electronic and 11 offices are partly electronic. The new system has also consistently resulted in greater efficiency in deed transfer tax collection on behalf of municipalities.

As you can see, the benefits of moving to this electronic system are great but perhaps the biggest benefit is that the new land registration system has made it easier, more secure, and more convenient for landowners and their representatives to facilitate the sale, mortgaging and development of properties. I would like to end by stating that Nova Scotia's land registration system today continues to be a working, living and growing system that is easy to use, cost-effective, and very efficient.

MADAM CHAIRMAN: Thank you very much, Mr. Malloy, and I think I should first introduce Mr. MacKinnon who has joined us - welcome this morning.

MR. CLARRIE MACKINNON: Thank you, Madam Chairman.

MADAM CHAIRMAN: We'll begin with our first 20-minute round with the Liberal Party. Mr. Colwell.

MR. KEITH COLWELL: I've got some sort of housekeeping questions that I would like to ask first and then I'll go on to some other ones. What does it cost to operate this system, just the land registration system, per year now?

MR. MALLOY: The annual cost was calculated back in 2002 when the initial rate was set and at that point in time (Interruption) we don't have the exact figure at this time. It was calculated in 2002 and at that time the fee was set such that the full cost of the system was recoverable from the transactions related to land transactions in Nova Scotia.

MR. COLWELL: So what's the total cost of running it or what's the total budget for running it now, year to year?

MR. MALLOY: The total budget is divided up between four of our units. There's a budget for the land registration unit, I think it's around $1.4 million. Our service delivery organization has about 480 people of which a fairly sizeable portion are related day in and day out to land registration transactions, but we don't have that segregated by program

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because of the integrated manner in which our people work. They work on a variety of different programs and so it's not possible to say that this individual is always working on a land registration transaction or motor vehicle transaction.

The other component of that cost would be through our technology group and the demand there is really dependent on the amount of new implementation or new technology changes as well as the day-to-day support activities. We would have to go through a fairly in-depth analysis to give you a precise cost on what it actually costs to run the system annually.

MR. COLWELL: Okay, I can understand that. Just the Property Online - any idea how much that costs to operate, that part of it?

MR. MALLOY: Once again, no, and the Property Online is the system that the lawyers interact with on a day-to-day basis. That is the front face of the entire land registration system.

MR. COLWELL: Are the operating costs totally covered by the user fees - on a yearly basis, that is?

MR. MALLOY: My understanding would be, based on the evaluation we did in 2002, the answer is yes. We've had some changes over the years in that we continue - the early plan was not to move into e-submission as aggressively and as quickly as what we've done. To move into the e-submission world we've been spending a fair amount of money to go back and scan the documents because you have to have all the documents and the subdivision plans and everything automated right back to day one to allow an office to go to full electronic search.

So the costs that we're incurring annually just to do that part of it is somewhere between $500,000 and in some years we have spent as much as $2 million. So, the cost, I suspect, is probably still going to be relatively high versus what we're collecting in revenue, they would be approximate.

The other factor that comes into play there is that the revenue tends to vary a bit year to year, just depending on the activity and the marketplace. Some years we have a lot more activity of purchase and sale of homes, remortgaging, that type of thing, it depends partly on the interest rates and the marketplace.

MR. COLWELL: The user fees, who typically pays the fees? Would it be law firms or banks? Who is your clientele, I should say?

MS. NANCY SAUNDERS: The client that the authorized lawyer is acting as agent for pays the deed transfer tax, the registration of the document fees and the law firm would

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pay a fee to access Property Online and that would probably be recovered through disbursements to clients as well.

MR. COLWELL: Is there any benefit, besides the obvious one, that helps pay for the whole system of user fees? Is that the main benefit you get from it, or is it easy to operate?

MS. SAUNDERS: There are several benefits to the new system if you compare it to the old traditional Registry of Deeds system, which really was inherited from the British system. It was paper based, you had to go to the location in each county to do the searches. A lawyer had to certify title to each citizen as the citizen acquired title to property, so there was a repetitive historic search that had to be done each time a new person purchased a property. This system was names based, all the indexing for the documents was done based on names associated with the documents. There were a lot of inherent issues with that, especially in Nova Scotia because of the many similar names.

The new system eliminated a lot of those errors or risks because it is parcel based. The title is guaranteed. The information about the title on any parcel is clearer. It is listed in what we call a parcel register, so the ownership on any outstanding interests that are current to that real time in Property Online is listed there. The government guarantees the title instead of a citizen having to have a lawyer certify title each time a property changes hands. We have eliminated the need to have that historic search done.

There are all kinds of spinoff benefits to the new system like the ability to share information and link land information in Property Online to other relevant data such as Crown lands, about information property assessments, outstanding tax balances, so the benefits are far reaching. The key ones are around the guarantee of title and the full electronic access to information for lawyers and the citizens benefit indirectly from that.

MR. COLWELL: Can someone off the street go in and access Property Online or do you have a system for doing that or is it possible for someone to access that, through the proper channels?

[9:15 a.m.]

MS. SAUNDERS: Property Online is a service that is provided to a whole range of different groups of users. In order to access that service, depending on the user group, you would have to meet certain qualifications and requirements, lawyers being the group with the highest privileges. An individual citizen can purchase the service of Property Online but are unlikely to because the service is really for more commercial users who have the need to access land information on a daily basis to close property transactions. So options available to a citizen would still be walking into any of our 18 land registration offices and they have access to a similar system. It is not Property Online but it is what we call MAC library module, and they can certainly search the same information that they would have always

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been able to search in the public land registry by using that system. We also have other options such as calling in and getting individual information per parcel, and they pay a fee over the phone to get that information. Most citizens find that the service to walk into the land registration office is most feasible for them, because they are only paying $5.94 for three and a half hours of search time in the land registry, so that typically is the option people choose.

MR. COLWELL: I can understand, that's pretty reasonable, indeed. Hopefully in that time they could find what they want.

I think you've already answered this question, but I have some of this basic stuff I want to get out of the way. How many staff are employed in the land registry system?

MS. SAUNDERS: Approximately at the Land Programs, the head office, the Registrar General's Office, there are 13 full-time equivalents, FTEs. Within the land registry offices, I don't have an up-to-date figure on that. I would say there are approximately 100 to 110 people who are delivering the services through the land registration offices. Within our IT section there would be three dedicated staff who look after the day-to-day production support for the IT infrastructure. Then there would be a sprinkling of resources throughout the department that support the program, the service delivery, and even the data centre would certainly have a portion of resources there who are supporting the protection of our data, and our applications, and the infrastructure.

MR. COLWELL: Do you have a breakdown of the staff members and basically what the structure is in the registry? Or can you provide it, maybe that would be easier.

MS. SAUNDERS: I can really speak more to the Land Programs Office. Within the Land Programs head office, which is really the Registrar General's Office, there are approximately three staff who are directly involved in the policy regulation development with the Registrar General. There are two staff members who work full time with the Department of Natural Resources on the conversion of properties into land titles, the conversion of those Crown lands.

We have a staff member who supports the RG, a legal services person, and an administrative assistant who supports the director role and the overall program office. We also have two positions who look after the registry data quality, and Property Online administration, which is a very important component of the RG's office as well. So roughly 13 is divided up in those areas.

Within the land registration offices, I can't give you a breakdown of the numbers, but we have registrars who oversee the document registration and applications for a given county, which is the land registration jurisdiction. We have senior property mappers who oversee the work of the staff who process parcel description applications, subdivisions, and

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anything to do with the boundaries of properties. Then we also have land registration officers who process documents on a day-to-day basis, and applications for registration, and property mappers as well, who do the work related to parcel descriptions and any documents related to extent of title. So there are about four areas within the land registry offices, areas of expertise or divisions of work.

MR. COLWELL: One thing that - I don't know if this is correct or not - they say if an error is made in the registry, when a lawyer or a law firm registers a piece of property, and there was an error made at that time, how difficult is it to correct, or is it correctable?

MS. SAUNDERS: There are lots of provisions in the Land Registration Act and Regulations to correct errors that are made in the land registry. If recording was removed incorrectly, we have a prescribed form that allows the authorized user, or the person submitting the document to correct that error. We have rectifications. Rectifications can be done by the local county registrar, by the Registrar General, and by the lawyer. So it could be a lawyer who made the error, him or herself; it could be a lawyer representing a client on a subsequent transaction who notices an error, who then initiates a correction to that error. There are lots of provisions in the Act and Regulations to correct errors in it, in a timely way, in the land registry system.

MR. COLWELL: You said earlier, and it is my understanding, that there is a guarantee of title. So if I bought a piece of property and I had this registered, and was all done to the book, as it should be, with all the supporting documents, and then someone comes along and says, I have a title to this land, here's the deed I had 400 years ago, how does that work?

MS. SAUNDERS: Well, without getting into the legal specifics because it would certainly depend on a lot of information around that transaction, anyone who suffers a loss as the result of relying on the title register, once a parcel is moved to the new system and they can prove that they have suffered a loss, is able to be compensated. Then the way that liability is divided up is the lawyer who certifies the title either on the initial migration or on subsequent revisions to that title, that land title's parcel, is on the hook for any error or omission that he or she caused for 10 years, either after the migration date or after the revision date. If there's an error or omission caused by a lawyer's negligence and that error is not uncovered until after the 10 years, and if the error results in someone suffering a loss, the government will pay out compensation for that loss. Then within the 10-year period the government is actually on the hook for any staff or system errors.

MR. COLWELL: Have there been any of those cases that have come through to test the system on that so far?

MS. SAUNDERS: We're still well within the 10-year period where government is not responsible for the lawyers' errors. We've had, I believe, two or three fairly small claims

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as a result of staff or system errors, and the amount totals under $40,000 since the implementation in the first county. Again, any other errors or omissions made by lawyers that would result in a loss within this 10-year period would be handled by the Lawyers' Insurance Association of Nova Scotia for the lawyers' insurance.

MR. COLWELL: So basically the system seems to be working quite well at this point and the guarantee hasn't been a real issue?

MS. SAUNDERS: No, and the reason we chose the 10-year period is because history tells us in similar jurisdictions that claims resulting from errors made in real estate transactions tend to be uncovered in that 10 years, and that's why we chose the 10-year period.

MR. COLWELL: And what would happen if within the 10-year period a law firm ceased to be or somebody moved away from the province and wasn't accessible to get compensation from if there was an error like that made? Would the province then pick up the bill for it?

MS. SAUNDERS: No, I do believe that the Lawyers' Insurance Association of Nova Scotia and the Barristers' Society would still be responsible for an error that a lawyer made who is now no longer practising.

MR. COLWELL: Would it be possible - not today, I know - to provide the committee with detailed reports on what has been spent, an estimate of what's being spent on this complete project, to provide that to the committee?

MS. SAUNDERS: I defer to Mr. Malloy.

MR. MALLOY: Yes.

MR. COLWELL: Thank you. During the last budget which was passed, there has been a directive put out by the Minister of Finance to cut costs. Will there be any vacancies not filled this year in this land registry that might have been filled in other circumstances or other cutbacks that you've managed to achieve to help the overall financial situation of the province?

MR. MALLOY: Yes, in this year the budget process did cause us to review all staffing requirements and as the, I guess the ebbs and tides of system developments impact a variety of our programs, I think we did reduce two FTEs in the land registration area out of the 100-some that we were talking about. The demand, though, in Service Nova Scotia and Municipal Relations, is such that we were able to move resources around, wherever the demands are, and we have a clear agreement with the Nova Scotia Barristers' Society. Nancy can talk in more detail on this, but there are turnaround times for processing transactions and

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if at any point in time we are in jeopardy of not meeting those timelines, we can move resources in to help us to make sure we're successful.

The big benefit, if I could just speak to this quickly, with the new system is there's something called the provincial queue, and the provincial queue allows us to put work into a holding area, for lack of a better term, and where you have some offices that are really busy and other offices that are less so. We're actually able to do work in Baddeck, for example, that was a transaction that might have been initiated in another office. So it has actually enabled us to spread the workload more evenly throughout the province and ensure that the smaller offices, that at times aren't that busy, are able to keep a nice even work flow for all employees across Nova Scotia.

MR. COLWELL: That sounds very positive. Lots of times that can't happen, so I think that's good planning.

MR. MALLOY: Yes.

MR. COLWELL: In the general process, are all of your programs in place and everything and up to what you consider to be sort of the final draft so that - I'm probably not asking this question properly - to ensure that your computer programs and the registry programs, are you satisfied that those are up to where they should be now, or do you think there may have to be more capital infusion in that to maybe fine-tune it better or to improve it in some way?

MR. MALLOY: There are always opportunities to improve technology, and we work in partnership, as I indicated earlier, with the Barristers' Society. We're implementing and have implemented fairly high standards of quality assurance and audit provisions. We're constantly reviewing transactions, and every time we do find an error within the system, we look to the technology to be able to improve the technology to ensure that that type of error can't happen in the future.

Another big benefit from the system is in the old days - I shouldn't say the old days, but 10 years ago a lawyer would have to fill out all the data on every form, so your name, your address, and all that type of stuff, and there would be a lot of mistakes made in that. Now when he brings up an individual land parcel, the system pre-populates the vast majority of the data in there, which not only allows the system to be utilized from an efficiency standpoint but helps to significantly reduce the number of errors, even in minor things, like address, postal code, and that type of thing. We don't want any of those types of errors in our system. So they're using the technology day in and day out to continually improve the process, to minimize the errors, and to improve the efficiency of the systems.

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MADAM CHAIRMAN: Thank you. Your time has elapsed now, Mr. Colwell. I would like to turn the floor over to Mr. MacMaster for the Progressive Conservative caucus for the next 20 minutes.

MR. ALLAN MACMASTER: Madam Chairman, my first questions will be about the integrity of land records. In my course of work as an MLA I've come across one person, in particular, who had an issue around incorrectly recorded documentation. I can only imagine all the details with land and with doing surveys, and land registry numbers, going back over 100 years in some cases, more than one person making a claim to a piece of land. It would be easy to expect there could be some clerical errors, or the assessment that was made would have been made based on the information available which might not have been ideal. Then, of course, there are other agencies that I think are involved, like Natural Resources and municipalities, that add another element to the integrity of the information that's used. Is there a paper backup for every electronic record, and if so, could you explain a little bit about how that works and where it's kept?

MS. NANCY SAUNDERS: Yes. When we go into any county and what we call convert the land records, which really involves a number of different ways that we do that - the historic bound books, which are the books that tend to go up to around the 1930s, the 1940s, those books - because we don't like to tamper with bound historic books, we digitize the images from microfilm that in most cases has already been produced for those historic books. For the documents that are more recent, typically the 60-year, most recent 60-year documents are typically in binder-type breakable books that are much easier to scan en masse. So we do scan those records from paper and then the historic plans and the newer plans, we also do large format plan scanning using the paper copies.

[9:30 a.m.]

We are very much responsible for all of those records. They actually are the foundation for the certificate of title that lawyers provide in the new system and we pay a lot of attention to that. So when we go into any county to convert those records, it's really an exercise of doing a complete inventory of every document that was ever recorded in that county and making sure that document is linked to the indices that lawyers and searchers use to find the document. It's a process that we hold as very important, it's probably one of the most important data-integrity processes that we have in place. That's currently overseen by the RG's office because it's so important.

In terms of the back-up, we not only have an image database that holds all of the documents that have been submitted electronically, or have been scanned in-house since 2002, because we no longer keep papers since 2002. As well, all of the documents that have been scanned, all of the historic scanning is held in what we call an image repository. So the image database is backed up, it's also sent off-site, it's also recorded on tape and stored off-site.

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The historic bound documents, we have an agreement with the Public Archives to hold those and they take over custodianship of those historic documents when we complete the digitization of the microfilm and move them out of the vaults. The paper documents that are in the breakable books are also kept in a proper facility with climate-controlled, environment-controlled atmosphere to protect those records for a very long time, as well as the paper plan. So we have the paper back-up, in most cases we have a microfilm back-up and we also have backed up our image repository of all those legal records.

MR. MACMASTER: When people use the land registry system on-line, can they have access to that information? Like, if they click on a property once they've paid the fee, do they get to see those documents that are already scanned?

MS. SAUNDERS: Absolutely, the documents that had been recorded under the traditional registry, they are linked directly to the grant or grantee index so you would just click on the image when you do your search and the documents that have been either converted or scanned in or e-submitted into the Land Titles Registry are all available in the parcel register. There's a tab that's called View Image. So anyone walking into the land registry would be able to view those or all the users who have access to Property Online also have access to those images. As soon as we load those images into Property Online they're available in real time.

MR. MACMASTER: Great, thank you. Can you explain the involvement of municipalities in the land registry system?

MS. SAUNDERS: Well, we actually work quite closely with the municipalities in terms of the subdivision approval process. The municipalities, of course, have the authority to approve subdivisions, either municipalities directly or planning authorities that represent multiple municipalities. The land registration offices are very much involved in that process, receiving the plans sometimes even before tentative approval, assigning pending parcel numbers to those plans so that municipalities can utilize that information in their building permit and urban planning tracking systems. We also work closely with the development officers on all of those requirements for subdivisions under the land titles registry, the subdivision trigger and making sure that citizens and surveyors who are submitting plans meet all of those requirements. We have a fairly close working relationship with municipalities.

We also supply a lot of information to municipalities relating to properties, the property records database, which is really maintained through the land registry and it's all that information about property linked to assessment accounts, information about ownership and address and all that is shared with the Property Valuation Services Corporation and in turn passed on to municipalities. There's a very close link with municipalities both through urban planning, the subdivision process and the taxation process.

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MR. MACMASTER: That would be true for historical as well. Are deeds kept at the municipal level?

MS. SAUNDERS: No, all the documents associated with title and interest in land have really been required to be deposited, recorded in the land registry since the beginning of the system in 1749. The official location for documents about land interests or that convey land interests is the registry.

MR. MACMASTER: What about the Department of Natural Resources? Can you explain their involvement in the land registry system?

MS. SAUNDERS: Well, the Department of Natural Resources, of course, oversees and manages the Crown land for the Province of Nova Scotia, and what I mean by Crown land is ungranted Crown land and reconveyed Crown land - so land that DNR has acquired back to protect for the citizens of Nova Scotia or to hold for the benefit of the citizens of Nova Scotia. So under the Land Registration Act, the Department of Natural Resources has the same benefits that a citizen has in terms of being able to convert the property that they oversee or that they manage to land titles in order to protect it against further claim or new claims that may be started by squatters' rights or whatever.

So since we implemented the system, we have worked with the Department of Natural Resources to bring all of those Crown lands - ungranted and reconveyed, we're starting with - into the land title system to ensure that the public lands are protected. As I mentioned earlier, there are two staff within the Land Programs office, the RG's office, who are working directly with DNR to get that done. We currently have 17 counties where all of the ungranted Crown land has been moved into land titles and protected.

MR. MACMASTER: Without having to go into too much detail, would you be able to explain generally the process for amendments and changes to property records?

MS. SAUNDERS: Sorry, the process for?

MR. MACMASTER: The process for making amendments or changes to property records?

MS. SAUNDERS: In the land title system, once a parcel moves into land titles, authorized lawyers are the only group of real estate professionals who are permitted to make revisions to the parcel register. So any revisions on title, what we call benefits or burdens, things like easements, are only able to be updated by authorized lawyers. There are some recorded interests that are able to be recorded by other groups. For instance, lenders are permitted to record security interests or release their security interests on land title parcels and government agencies such as the Workers' Compensation Board; there are some documents that are - only recorded documents that are permitted to be recorded by other

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agencies besides authorized lawyers. For the most part authorized lawyers revise the register and do the recorded interests, additions, and deletions.

MR. MACMASTER: There was a case, as I referenced earlier - and this is probably something that's typical, it has happened around the province - where you would have an original land grant back in the 1800s, and the land would have been passed down through the family. Years ago there might not have been real strict or real - on behalf of the family, there probably wasn't a great effort to try to maintain ownership of the land because it was theirs and they considered it theirs. Time marched on and we come to the present day, but to do it properly, to properly pass land down through a family, what would be the requirement to do that?

MS. SAUNDERS: I would like to refer that to Norman Hill.

MR. NORMAN HILL: That does happen quite often, especially in rural areas of the province. Land is transferred either by will or sometimes by family tradition, without the formality of wills or deeds, and how that relates to this land registration system is that in the event that a property like that is to be migrated or brought into the new system, a lawyer would, just as in the old system, have to be able to certify title to that property to say that the family owns it. We don't require that there necessarily be paper title in order to do that if the lawyer can certify through proper evidence and affidavits from the family members, whatever.

If he can satisfy himself that the family has good, what we call "possessory," title to that land, that they've occupied the farm or cut wood on the woodlot, whatever, for the requisite period of time, then he can certify title to the system based on possession and we accept that. The Act provides for certification based on adverse possession. That property can be brought into the system, and the lawyer, and subsequently the province, will guarantee that title in the same way as we do for paper title. So the system very much anticipates that type of situation you describe.

MR. MACMASTER: In this case there was a property, and probably it was the case that somebody made a claim on it, and I believe the claim was given to these new people and the heirs of the property lost title to it for a period of time. I can only presume in a case like that, that the people who made the claim on the land that got possession of it were able to prove to the department that they would be able to use that land. I think the best way to explain this, they had no previous title to it, they had no connection to it but they were able to gain title to the land. I think in this case it was considered Crown land at that point because the original heirs had not kept up to date with documentation. I think that's probably what happened, that that land was given to somebody else before the heirs, the original owners of the land, could lay claim to it or continue to lay claim to it. Is that something that happens?

[Page 14]

MR. HILL: I can't comment on the specific case because I'm not familiar with it. That type of thing certainly can happen and happens quite frequently The paper title is in the name of one person but a different party or family has actually possessed the land. In fact, inevitably, always in cases where there's a claim based on adverse possession, there's some kind of paper title somewhere or quite often there is, maybe way back in the original Crown grant a couple of hundred years ago, but there's some kind of paper title. Which often just kind of peters out, people haven't recorded proper deeds and it just fades away. It's perfectly possible to have one party, who has some kind of paper title to the property but a different party who has certifiable possessory title to the property and that property can be brought into the system, it can be certified to the system based on that possessory title.

Again, I don't know the specific situation you're talking about and couldn't comment on it if I did but it's conceivable that you could have two competing titles to the same property. If we have a situation where a party has good paper title on the record and another party who has possessory title and the property is brought into the system based, say, on the possessory title - lawyers have certified title to that property. Then another party says that they have paper title, well that would be a situation where there would probably be a claim made. We would have to determine whether that person, who lost their title, was entitled or if someone bought, for instance, from the paper title holder in reliance and another party bought based on a reliance on our certification of title, then it's conceivable we would have to compensate one party or the other. I can't say in your particular example whether that would happen but it's conceivable that that would be a situation where we would have to compensate a party.

MR. MACMASTER: Okay, that's very good, that helps to clarify it, I appreciate that. I guess a piece of land - and I hope I'm staying on topic because I realize there's more than one department that's involved in this and if I'm straying I apologize. If something becomes ungranted Crown land, I guess that essentially means that the province has taken ownership of it and it's no longer granted to any individual.

MR. HILL: I'm not sure what you mean when you say, becomes ungranted Crown land. Some parts of the province have never been granted, those remain Crown lands. Other parts have been granted by the Crown at some point to a private individual but have subsequently come back into the Crown. Either being deeded back or they could have escheated to the Crown, which means they return to Crown ownership by operation of law. There are a number of ways, it could have been expropriated, as an example of a way it can get back into the Crown. I'm not sure I understand what your question is.

[9:45 a.m.]

MR. MACMASTER: I think what happened in the case - and the reason I like using this case is it kind of helps me to keep a train of thought and it's what could happen to people in the province. In this case, it was originally granted to the original settler and then it

[Page 15]

became ungranted Crown land because there was a lack of documentation by the family of that original settler. Then later on, the Crown released interest in the land, so in other words, the Crown was no longer laying claim to the land. It's kind of a confusing situation but it's very important to the people in it.

MR. HILL: I think I understand what you're talking about. There is a situation provided for legislatively whereby the Crown can release interest in land to which the title is uncertain to allow a citizen to quiet the title under the Quieting Titles Act or certify title by adverse possession to our system. If there's some question of Crown ownership, there is a process, it's quite a long, involved and cumbersome process but there is a process whereby the Crown can be asked to release their interest, and will do so, if they don't feel they have any legitimate claim to the land. So there is a process for that and I expect that is the process you refer to.

MR. MACMASTER: Yes, and who is there to provide direction for people in Nova Scotia who might encounter this situation? Is it something that can be done at a municipal level? I saw in some historical documentation that a person was advised to contact a land registration office at their local municipality. Would that be the place for people to go or should they come here to Halifax, to speak with somebody here with your department?

MR. HILL: When someone is referred to the land registration office, that would be one of the registry offices that Ms. Saunders has referred to. There are 18 of them in the province. They are not municipal offices; they are provincial offices in the individual counties, often in the shire town of each county and that is the land registration office - that is where a person goes to get land information.

In terms of what I think was your question, which was how does a person get advice as to where to go - well land registration offices don't generally give advice as to how to clear the title to your land or how to deal with the land registration system. We refer people to private lawyers to do that - that is normally where advice as to how to proceed under the Land Registration Act comes from. We give people that sort of direction, but the land registration office nor the Registrar General's Office isn't in the business of giving legal advice, we leave that to lawyers.

MR. MACMASTER: Has the department ever considered coming up with a checklist or a little guidebook to help people? I know people can avail the services of a lawyer, legal representation, but is there a way that we could be making it easier for people if they have issues like this, to make claims, something that would help the average person understand what they need to do? You can imagine the emotional situation of a family owning a piece of property, it suddenly disappearing on them and then being told well, just talk to a lawyer.

It is a complicated issue and I'm sure that's why the lawyers are involved, but is there some way we could make it easier and more of a positive experience for somebody, if

[Page 16]

they encounter this situation, to be able to approach government and maybe feel a little more confident that if they have legitimate interest in the land, and it is legitimate, that they can see the light at the end of the tunnel?

MADAM CHAIRMAN: Mr. MacMaster, your time has elapsed. I think that might be a longer answer than a couple of seconds, so could we perhaps bring that question back in the second round.

I'd like to turn the floor over to Mr. Epstein for the NDP caucus, and I am sorry for interrupting.

MR. HOWARD EPSTEIN: That's okay. Thank you very much. I should confess right away that I'm a veteran of the registry system. When I was an articled clerk in 1973 I learned to search titles under my principal, a man named Richard Weldon, who was at one point a member of Dartmouth City Council and then a member of this Legislature. He took us to the basement of the Law Courts Building after our regular work day and we would go search titles and that's where we learned to do it. We learned the idea of going back to find a good route of title and then search the title forward in these books that Ms. Saunders referred to.

I should confess as well that I actually liked doing title searches and I liked the old system - I liked the smell of the paper and I liked the hunt that was involved in trying to make sure that there was a good chain of title that could be brought forward. It was a link with history. As well it involved the problematic skills of reading old styles of handwriting and getting used to the style of description that was used early on. It brought us into touch, of course, with the original land grants and the maps that were associated with it. You saw people's wills and you saw the details of their lives unfold historically. It was, in fact, quite a fascinating part of what I still think is some of the essence of law - that is, an understanding of the history of your community.

That said, though, I do have some respect for the new system and although I've been on the non-practising list of the Bar Society for a number of years, my contact with the new system has been mostly as a client, that is buying and selling real estate, so I've had at least some experience of that and have come to know it, but I haven't done it as a practitioner. So I have, I think, some little wariness, about it and like many people I'm trying to understand a bit about it. So at some point I do have, maybe, some detailed questions but I would like to start maybe with a bit of overview. I don't think I've heard what it cost to actually set up this system in the first place. As I understand it, there was an initial investment and I did hear, I think, that the ongoing costs are recovered so that there's not an actual outlay from year to year, but was there an initial cost involved in setting the system up?

MS. SAUNDERS: I was the project director since 2004, I wasn't responsible for the budget when the project was first launched. The information that I recall is that the entire implementation, including the operation, over a seven-year period, the project operation

[Page 17]

itself, the acquisition of the software, the hardware, the implementation of that and all of the expenses related to training all the different groups, et cetera, was around $14 million over a seven-year period. That's what was approved by Cabinet in 2001, I do believe, and around half of that was tangible capital asset funding that was put directly into the system, the infrastructure, the software, the hardware.

MR. EPSTEIN: Yes, so of that amount, I take it that's an amount that wouldn't be recovered from the ongoing fees that come in that are paid by the users of the system.

MS. SAUNDERS: No, not directly, no.

MR. EPSTEIN: So that was just an up front investment?

MS. SAUNDERS: It was an up front investment.

MR. EPSTEIN: Okay, that's fine. I guess what I would start by wondering is, I've heard you saying that the move to the new system, which I tend to think of as the Torrens system, it's the term that I've heard before, that overall it seems to have been a good thing to have done. So I'm just wondering if I can hear the summation again about what it is that was essentially good about this new system. What are the main virtues?

MS. SAUNDERS: Well, one of the main virtues would be the guarantee of title, so providing citizens with an ability to be compensated for any loss in the system instead of having to go through a lengthy and costly title dispute in the court system. The system provides for a much more efficient and effective process for closing property transactions, the efficiencies created through the electronic processes, not only just the access to all of the information to do the work in an expedient fashion, but also the ability to submit the transactions directly from the lawyer's desk. So that has reduced the cost and the time involved in doing subsequent transactions.

We have eliminated that cost, that repeated cost, of the historic search. In the old system, as you will recall, each person who acquired a property would have to have the opinion of a lawyer, the opinion would have to be repeated. So if a purchaser was hiring a lawyer to look after their purchase of a property, that lawyer would be repeating the historic search and providing their opinion to that one person, whereas in the new system, the lawyer's certificate is really to the government, to the person, and really to everyone impacted today and in the future in terms of the property transactions on that parcel.

So those are the key things but there are all kinds of other benefits in terms of some of the savings that Mr. Malloy mentioned earlier around operational savings because we can share work around the province. We have an electronic queue where work can be balanced and shared among offices. We have created significant savings in the reduction in space because we no longer require those specialized vault spaces to store and maintain all of the

[Page 18]

microfilm and paper. Basically we started with 22 million pieces of paper in our registries around the province that we were paying to store and provide access to, so significant differences in just that type of cost in running the system, and then the inherent issues with the names-based system. Again, that leads to some of those issues around title disputes, because there are 15 John MacDonalds in Cape Breton, or there are 50 of them. There are all kinds of issues with the names-based system that leads to difficult title work and some flaws in some of the decisions made around the assessment of title.

MR. EPSTEIN: Is it fair then to say that the parcel-based system rather than the names-based system is perhaps less susceptible to the possibilities of fraud? Is that also a point?

MS. SAUNDERS: Absolutely. The implementation of electronic submission and being able to shut down the opportunity for people to walk into a registry with a doctored-up paper document has substantially reduced our exposure to fraud, to real estate fraud, certainly against the system in Nova Scotia.

MR. EPSTEIN: I was interested in your point that it might be more efficient if there actually were a claim, to process a claim against the government guarantee, than it would be to process a claim against the lawyers insurance. Has that, in fact, been the case? I think you said that there have only been a few cases where there have been claims against the system so far.

MS. SAUNDERS: I think the only reason why we've had the instances where government has paid out compensation is those were particular cases where it was a staff error or a system error, so we are on the hook for those. Any other error that was caused by a lawyer error or omission in the title certificate or in the revision of the parcel register is the responsibility of the lawyers insurance in Nova Scotia for the first 10 years. Those are automatically the responsibility of the Bar Society or the lawyers insurance.

MR. EPSTEIN: Can you expand a bit about the idea of what the provincial guarantee of land ownership actually means? Can I just hear a bit more about what that essential idea is?

MS. SAUNDERS: Really what it means is anyone who has suffered a loss as a result of relying on a parcel register. One example may be that the parcel of land is burdened by a private easement over the back part. There's no real physical evidence of the easement, but it's a valid easement, and during the migration of that property, the easement was not shown on the parcel register and the information was clearly available in the required search period for the authorized lawyer. Later on, if a person purchased that property without the easement noted, they would have suffered a loss because their property is actually encumbered by an easement and it wasn't shown on the register. That would be presented to the Registrar General's office. There would be an investigation around was that a lawyer error, was that

[Page 19]

a government error, and there would be compensation paid if there was a loss sustained. That's one example.

MR. EPSTEIN: Can I just switch to another point? Various pieces of provincial legislation ask that certain, I would say, burdens on land that I wouldn't necessarily have thought of as traditionally being interests in land are nonetheless to be recorded in the Registry of Deeds. I have in mind things like subdivisions, of course, but then development agreements are another example, heritage designations are another example that occur to me. These kinds of provincially-imposed requirements are seen as essentially worthy of public notification, and the registry is seen as the system. Have all of these been migrated and included? How are these incorporated in the title information that you have in the system?

[10:00 a.m.]

MS. SAUNDERS: During the historic search before the migration from the old system to the new, during that period of time that the lawyer is required to search, any of those types of interests absolutely would have to be shown in the parcel register, depending on the type of interest that is enabled by that instrument. It could be listed as a recorded interest or it could be listed as a burden, and it would be up to the lawyer to determine which type of interest it is. After the parcel is in the new system, any new interests coming in on that parcel, in order to be valid interests, have to be recorded in the parcel register. So yes, those interests, in order to be defendable and be valid interests, would have to be recorded in the register.

MR. EPSTEIN: Yes, they would show up on your system. What about judgments? How are judgments treated in this system, if at all? It was always part of the traditional paper search of a title that one would try to check to see if any judgments had been entered against a vendor.

MS. SAUNDERS: Judgments are still done in a names-based roll. During the consultation that we did province-wide around the Land Registration Act and the proposed Land Registration Act, it was the desire of judgment creditors and the practising lawyers to keep judgments in a names-based roll so that they wouldn't be required to record them against parcels in every county and try to proactively add them to parcels that debtors would acquire in the future, so we retained the judgment roll as a names-based roll. They are still recorded in a judgment roll and they have a three-year judgment renewal process. We went from a 20-year judgment to a five-year judgment with the ability to renew that judgment three times.

MR. EPSTEIN: Very interesting, thank you. I think my colleague Mr. Smith has some questions.

MADAM CHAIRMAN: Mr. Smith.

[Page 20]

MR. MAURICE SMITH: Thank you very much, Madam Chairman. This is your lucky day, you have two non-practising lawyers on this side. I just wanted to tell you that I was with Legal Aid for my last 34 years and just got elected in October. When your program came in, I jumped for joy because it meant that all my relatives and friends who used to get me to do their title searches, I didn't have to do them anymore because I wasn't one of the trained lawyers to do that. I think there are very few Legal Aid lawyers who have that specialized training now to work the new system. From my point of view, it was a real benefit to see you fellows come on stream.

The local lawyers initially were very disgruntled, unhappy, didn't like it, that kind of thing. Was that just sort of the knee-jerk reaction to change or have they settled down and are lawyers now happier with the system? Whoever wants it.

MS. SAUNDERS: We rolled the Land Registration Act, or the implementation, out by county first and then by region. Colchester County was the first county to deal with the system, we first implemented it there in 2003. Absolutely, there were a number of things that would have had an impact on lawyers taking some time to get used to the system. The initial system didn't have all the efficiencies and enhancements that it did, for instance, when we completed the rollout. There was a fairly significant learning curve and although lawyers were provided with mandatory education and a lot of technical training around using the system, it was a huge change for lawyers. There was an uncomfortable feeling around all those changes, some of them having to use a computer for the first time, for instance.

That quickly changed once we moved into other counties. Even the fees started to level out very quickly once lawyers working in an electronic system could work in any county. So all of those initial problems, or things that were raised as issues, quickly did settle down. We don't hear that much any more about those kinds of issues.

MR. SMITH: You had told us in your initial talk, I think, that there are 18 land registries in Nova Scotia. Did we lose any with the transfer? Are there still 18? I know there were some sort of sub-registries and that kind of thing, are they all still intact?

MS. SAUNDERS: Yes, we started out with the implementation of the Land Registration Act with 18 county jurisdictions and we still have 18 county jurisdictions.

MR. SMITH: I've always been interested - you talk about one of the advantages as being kind of the downside because you don't have to have the paper on site and that sort of thing. Where did all these books go?

MS. SAUNDERS: I mentioned earlier the Public Archives take over custodianship of all the historic bound books as we scan the records, so for four of our land registration offices now, the historic bound books are presently at the Public Archives on the corner of University and Robie. The more recent paper documents that we scanned from those

[Page 21]

breakable books, as we move to a new site where there is no vault, those paper documents are stored with Security Services Canada at 10 Ragged Lake Boulevard in the Ragged Lake Business Park.

MR. SMITH: Okay, so just in dead storage space?

MS. SAUNDERS: In climate controlled storage, proper storage, and an inventory system where we can gain access to those very quickly.

MR. SMITH: They wouldn't be accessible by the public though?

MS. SAUNDERS: No.

MR. SMITH: Now, the ones at the Public Archives, would they be available to researchers?

MS. SAUNDERS: The original hand scribed bound books are protected from further public use and the microfilm is available for public use at the Public Archives.

MR. SMITH: You said that four of your registries were sort of fully electronic now. Is Antigonish one of those?

MS. SAUNDERS: Yes, it is.

MR. SMITH: How did we get into this? What prompted this sort of long-term planning and why did we go down this road initially, who was asking for it?

MS. SAUNDERS: Well, actually the vision for a land title system in Nova Scotia was actually born a long time ago, I would say a few decades ago, even with the formation of the Council of Maritime Premiers who were really overseeing the completion of provincial property mapping and geographic information, holdings and services, and mapping services, et cetera. That was really where I would say the first big push towards preparing for a land title system began, was in the early 1970s. In the late 1990s there was a lot of momentum from all professionals and users of land information to look at the antiquated registry system and look at all of the related agencies in government, levels of government and private sector who use that information, and look at how can we modernize that.

So in 1997-98 there was a process that took place called the business area analysis that involved representatives from all stakeholder groups who would be interested in land information in general but particularly focused on the land registry. What came out of that was a real kind of groundswell from the stakeholders to really look into the modernization of the land registry and to move away from the traditional antiquated Registry of Deeds. Some of what happened before that was, of course, all across Canada most jurisdictions are

[Page 22]

already land titles. Ontario had moved from a traditional registry system to land titles and New Brunswick just before Nova Scotia had implemented a land title system. So there was a lot of momentum from that as well and a lot of lessons learned.

MADAM CHAIRMAN: Ms. Saunders, I'm going to interrupt you if I could because the time has elapsed for that round of questions although, Mr. Colwell, you may want to continue to hear the answer to that question, but I turn it over to you. Our last round of questions will be 14 minutes each. Mr. Colwell.

MR. COLWELL: I'm going to go a little bit different track here. You indicated that it's less likely now for someone to fraudulently put information in to gain property, or whatever the case is. I've dealt with a constituent and they had a right-of-way issue that was brought forward. I know you can't talk about specific cases, and I wouldn't ask you to do that, but there was a drawing created by the person who wanted the land and gave it to a lawyer and said, you know, this is a good little drawing here. Indeed, the drawing isn't, from what you can tell, if you looked at the information I've seen from the deeds that the individual had. It has caused a great deal of difficulty. How is that addressed, if that's proven that this is a fraudulent document, how is that handled?

MS. SAUNDERS: I would like to refer it to Norman.

MR. HILL: I'm not entirely sure I understand the specifics of the case. I was talking in a little more general way about that but what you described as a sketch by the sounds of it, which doesn't sound like it was a registry document.

MR. COLWELL: No.

MR. HILL: So I don't know in that example how that would come to create a problem with the system. I mean if someone, you know, there's always the risk of that type of fraud. If somebody, for instance, we talked a little earlier about titles based on adverse possession, well, it's conceivable I suppose that somebody could falsely swear affidavits as to possession or produce a type of document, an old sketch or an old document that might substantiate a claim for adverse possession that might be false. I mean that is a risk of certifying a title based on adverse possession that the evidence on which it is based can be false, I mean that's a risk that is inherent in that type of title.

But when the system was instituted that was considered to be an acceptable risk in order to allow the very many titles in this province that could only be certified based on that adverse possession to come into the system. So, yes, certifying titles based on possession, certifying titles based on anything other than properly recorded documents does, by its nature, have some inherent risk. But it is necessary risk in order for the system to work in a province like Nova Scotia where perfect paper title is just not always a possibility.

[Page 23]

I don't know if that answers your question, I'm only trying to address it in a general way. But, certainly, there is a risk that whenever titles are based on anything but properly recorded documents, that someone could falsify title, that is a risk.

MR. COLWELL: What happens if, indeed, it is proven that the individual did falsify documents? What process happens then?

MR. HILL: Obviously, there are elements of criminal law that come into effect here. If someone has committed a fraud, it could be reported to the police In terms of our system, if a title registered in the system, if a title is migrated or converted into the system and we're guaranteeing the title, we draw a curtain over anything in the past and we guarantee the title. If someone in reliance on that parcel register says that Joe Blow owns that piece of land, if someone relies on that and it turns out to be in error, that is the situation that may give rise to the use of the compensation provisions under the Act.

So the Act does provide for compensation to an individual who has lost an interest as a result of reliance on the parcel register. That may be a situation where that would arise.

MR. COLWELL: If indeed, say, that did happen and it was a perfect world and they come and say, this was either fraud or a mistake or whatever the case was, how does the compensation work? Does it work on the value of the property that has been lost by the individual? How do you establish that?

MR. HILL: It is based on the value of the interest lost. It is not based on assessment necessarily, but it would be like any time someone makes a legal claim alleging they had suffered a loss, you would have to quantify that loss. So, we would have to investigate the claim and determine what was fair compensation in that particular situation. There is no formula for how the compensation is calculated. It is based on, I believe, without consulting the Act, I believe the provision was something to the effect of the value of the interest lost. So if a person loses an interest in land that would have to be quantified in the same way that it would be in a claim in the court. You would have to demonstrate the value of what you lost.

MR. COLWELL: Who would make that decision?

MR. HILL: Well, in terms of adjusting with the party making the claim, it would be me. I would have to look at the claim and determine what the value was.

MR. COLWELL: How would you do that?

MR. HILL: Based on whatever evidence the person could provide, I suppose. It would depend on, it is just that there are so many circumstances that I could conceive of, but I assume evidence like the sales of recent properties in the area, the same way you would

[Page 24]

ever calculate the value of land, I mean you can calculate the value of an interest lost based on those sorts of calculations, it would just be a fair resolution of it.

[10:15 a.m.]

MR. COLWELL: So you don't have any really laid down defined way to do that?

MR. HILL: Not really. It is the same way that the courts who traditionally have always arbitrated sorts of disputes, there is no hard and fast rule for how these things are calculated. You have to determine the value of the loss and compensate.

MR. COLWELL: Yes, so it's one individual doing something different than the courts because then lawyers could make arguments on both sides and the judge would make some kind of a determination based on all the information they have, but where it is an individual or a department making this, probably you would consult with your deputy minister or whoever else before you would make the final decision. But there should really be a system for doing that shouldn't there? Should you use appraisals or some independent appraiser or something that would come to a decision. I think, especially with a government department, there should be some rules laid down on exactly how you would conduct that.

MR. HILL: It's a fair point. There is no provision in the legislation for a formula for calculating a loss; there is no provision in the Act for a hard and fast formula for calculating that.

MR. COLWELL: Is there a policy in the department for doing that?

MR. HILL: With respect to claims, this is a relatively new regime, obviously, and as Ms. Saunders referred to there have been very few claims fortunately, so how claims are dealt with is very much a work in progress - there have been so few that we haven't had to come up with a complex regime of how we deal with them. They are dealt with much the same way any other claims against the province are dealt with; we use the same sort of system. We use the Department of Justice lawyers to defend claims and give us legal opinions on claims, but we haven't had to institute a very rigorous protocol for dealing with claims because there have been so few, so that's very much a living thing as to how we deal with claims.

MR. COLWELL: I hope there are never any more.

MR. HILL: So do I.

MR. COLWELL: I'm sure you do - and I know your staff does a really good job, but unfortunately some of these things probably would come from outside the department,

[Page 25]

probably 99 per cent of them. Hopefully lawyers are still around and hopefully you can still get compensation back for the province.

It seems strange you don't have some kind of a procedure laid down, that we do this and this and this to arrive at this - and you may be able to make variations in it, depending upon the circumstances.

I'm looking it as an MLA, and then I call you up and say, look, I've got a constituent at my office here who is so mad and all upset - you know the routine - and I would just like to be able to tell them some kind of a system that you use, you know if you had a formula that said this is what it is, you use a private appraiser or a couple of appraisers and you get the value on the property, whatever. I don't know what the proper procedure would be. You could tell me, based on your experience, a whole lot better than I could but something that you could say to somebody, that this is the process, this is the way it works, and this is what you've got to do in order to access this - and know at the end of the day, which I have no question about, that they would be treated fairly. You know what the opinions are on that when you are dealing with land.

I wouldn't want to be in your shoes in those situations, but just something that is there and sort of laid out that people feel comfortable at the end of the day that they've been treated well. And I don't doubt they would be by the department, I'm not saying that, but just a process. Then if they figure they're not treated well, even though they probably would have been, then what recourse they have, if any - that sort of thing. I see this so much every day in my constituency office, and I'm sure all my colleagues see the same thing - not with this but with everything else we deal with.

MR. HILL: I'm not sure this adds a whole lot to whatever he said - but not just in this program but all across government there are hundreds of claims every year made against government in any of a wide variety of claims, anything from being run over by a government vehicle to almost anything you could conceive of. I don't think in any situation there's sort of a hard and fast means of calculating the claim. It is dealt with much like any sort of claims in the legal system are dealt with - it is evaluated, attempts are made to settle it, and hopefully it is resolved.

I appreciate your point and it's a good one, but there is no sort of hard and fast formula to calculate the amount of these claims any more than there is in almost any other government program or area where government faces claims. In many other areas of government there are a lot more claims and they are dealt with the way such claims are dealt with in the legal system.

MR. COLWELL: One reason I ask that is because in the Department of Transportation and Infrastructure Renewal, if someone gets a broken windshield when construction is going on, it is one major headache to get it resolved - one major headache.

[Page 26]

Typically the individual, at the end of the day, isn't very happy with what transpired, besides the damage that was done. The department struggles with trying to make it fair, but yet not being - how should I put it? - too generous. There is a fine balance there.

MR. HILL: Well there is and we are very mindful of that balance. We're mindful of the fact that while we do have a mandate to compensate parties that have suffered a loss, we're also mindful that this isn't our money we're spending. This is tax money from the citizens of Nova Scotia, so obviously we have to be extremely careful about paying out claims and make sure we're not being too free with money that's not ours to give out.

MR. COLWELL: I totally appreciate that. It's just that this is a little bit different than a broken windshield in a car - you hit a pothole and you break a wheel and stuff like that that we deal with all the time. When you start dealing with land, people's eyes sort of light up and you're dealing with a whole different person at the end of the day. I've seen that happen many times when they think they own something, and maybe they don't or they've lost it and they think they should have it. You know the routine - you've seen it lots and lots of times. People seem to lose the value of common sense at that point. It's a very emotional thing, especially if it's a piece of property that has been in the family for a long time. It just seems to me you should have a structured system of some kind, that you have some leeway with, that you can adjust with different circumstances, because every one of them would probably be different.

I don't mistrust your judgment on this. Again, I'm really pleased that I don't have your job, because some day you're going to have some major issues that you're going to have to make decisions on that won't make anybody happy, but you'll have to make them - and that's fine, but that's an issue. How much time do I have left?

MADAM CHAIRMAN: Just 30 seconds.

MR. COLWELL: Can somebody register a document without being a lawyer - say, a plot plan?

MR. HILL: That's a "depends" type of answer. Certain types of documents can only be registered by authorized users, which are for the most part lawyers. Other types of documents can be, in certain limited circumstances, registered by other parties. For instance, Ms. Saunders referred to financial institutions can register security interest and in certain circumstances releases of that, but it depends on the document - some can be, some only lawyers.

MADAM CHAIRMAN: The time has elapsed, so I'm going to turn the floor over to Mr. MacMaster for 14 minutes.

[Page 27]

MR. MACMASTER: Before my last section of questioning expired, the question I had asked was, have we ever considered a guide or a checklist to be made available for Nova Scotians? One thing I'd like to mention is, I've seen it happen where the department might send out a letter and they'll say, you should contact a lawyer if you want to pursue this further. I think what the department is trying to say is, get somebody who is familiar with this type of approach who can help you because it's complicated and it's going to require some legal advice. When somebody gets that in the mail, sometimes they think it means, oh, the province is picking a fight with me or something, which I don't think is what it's intended to be at all. That's, I guess, my precipitation of asking this question, of trying to make the experience more positive so that people don't get their backs up and they understand there's a process that they can go through. I'll let you answer the question.

MR. HILL: I appreciate the point you're making, and this sort of dovetails with the other question about the emotional nature of land. We're very sensitive to that, that land issues are more emotional for people than almost anything else, land that has been in the family for years or whatever the situation may be. I'm not sure that the sort of checklist you've described really exists, but certainly in the process of rolling out this land registration program, and as it has gone on and changed and morphed over the years, the government has provided a number of information pamphlets and brochures. I believe a sample of it might have been given to you in the package that we provided, and there are many more like that. They're written in very plain language, something that's very easy for people to understand. They weren't sent out to every Nova Scotian or anything, but they're at land registry offices, their lawyers pass them out, and it's quite accessible information about the way the system works.

People who are involved with the system certainly have access to those types of user-friendly information pamphlets and brochures. We also have an extremely good Web site, which describes the system and how it works. Through that site there is access to most of the printed material that we can provide, so there is that type of material out there. We walk a very fine and dangerous line between providing the public with information and giving legal advice. That is something we try very rigorously to avoid doing, because that is not our role, and we wouldn't be able to do a very good job at that, that is for lawyers.

We certainly do have a number of - I'm not sure if I would call them checklists - but certainly a number of pamphlets, and information, and Web site pages that provide the type of information people would need to understand and appreciate how the system works. Quite often when people have a difficulty with the system, we can point them to a particular pamphlet or publication that explains precisely what their problem is. For instance, a very common misconception about the system is that it guarantees where your boundaries are, and it doesn't. We guarantee title, but we can't say precisely where the property is, or what the boundaries are. That is just not possible with the current system to do that. It is something that we dream one day of possibly being able to do. Other provinces are able to do that, because of more modern survey fabric and that sort of thing, but we can't do that.

[Page 28]

The members of the public often find it very confusing - well, you are certifying title but title to what? Quite often difficulties people have with the system relate to that. There are certainly a number of printed materials and materials available on our Web site that explain that, that the system doesn't guarantee your boundaries, it only guarantees the title, the ownership of the property, and certain other information with respect to interests.

So yes, that kind of information is available - not in the exact form you described, but it is available. We are very mindful that this stuff is confusing and emotional to the public and we've tried to provide useful information.

MR. MACMASTER: Thank you. If I may, I don't know if that's reviewed from time to time, but if I could just make the comment, if there's anything that we can do - anything the government can do to help people better understand the process, I think that's a good thing. I can appreciate there is information that does exist, as you've indicated.

MR. HILL: We consider it very much part of our mandate to educate the public about the system. To answer your question about updating it, our Web site is constantly being updated. The printed materials are updated when they become significantly out-of-date, but because the system has constantly changed - there have been amendments, there have been changes in policy and the way it is applied, we do try to keep our information up-to-date so that the public has access to good information.

MR. MACMASTER: That's great, thank you. What is the - and this kind of relates to a question and I hope we're not just rehashing stuff here - but what would be the best way, in your mind, for families to keep their land registry in good standing? I often think if I bought a piece of property, I wouldn't really have to do anything - once I buy it, I own it, it is registered in the system. Is there anything over the course of 50 years say, if somebody bought a piece of property today, that they would need to do every so often, just to make sure that it remains on the public record in good order?

[10:30 a.m.]

MR. HILL: The simple answer is no, there's nothing you have to do. We're assuming this property has been migrated to the new system - even under the old system there's not much you'd have to do, but if it has been migrated to the new system, it's a land registration parcel. There's a parcel registered that is accurate at the time it was brought into the system. Nothing has to be done to maintain that. That's a permanent record, and as long as the property is never conveyed, there is nothing that would have to be done.

It is important, obviously, if there is any change, if someone dies, if the property is transferred to a different family member or something like that. This has, traditionally, always been a problem - say with the family farm for instance, the patriarch passes the property down to his son, but no deed is ever recorded. Well we emphasize to the public that

[Page 29]

it is extremely important if there is a change in title, to change the parcel register, to get a deed on, or to probate the estate, and ensure that the parcel registry reflects the current ownership. Other than that, if you buy a piece of property and 50 years later you still own it, there is nothing you have to do. The system maintains that ownership and it will always be there, nothing that a person has to do.

MR. MACMASTER: Okay, thank you for that clarification. I know when people had owned properties from land grants there had to be some proof of use. I think there was a number, if 40 years went by and people didn't prove that they had used that land, then they might be subject to losing the land and it might revert back to the Crown, but I think you've clarified with your answer that going forward, as long as a piece of property is registered, people don't have to worry about that. I could buy a piece of land in rural Nova Scotia and not do anything with it for 50 years, and as long as it has been passed down to my heirs, or if I'm still living at that time, that still belongs to me. So I think you've clarified that with your answer.

MR. HILL: I mean, I might want to clarify that just a little bit. I didn't appreciate that this is what you were referring to, but in the traditional registry system before this Act was passed, yes, there was always a risk there. If a squatter was out on your land, built a camp on your land and occupied it for 30 years, you are at risk of losing a piece of the land. Without going into the legal aspects of the Act in any great detail, that is much less of a risk under the new Act. You are protected to a very large degree from squatter claims.

MR. MACMASTER: Okay, that's great, and that would be the land registry bill, Bill No. 156?

MR. HILL: The Land Registry Act.

MR. MACMASTER: It's the Act now, of course, yes. Could I give you an opportunity just to give a little bit of background on what that has meant for Nova Scotia? I think we've kind of discussed it already, but are there any points you would like to make where that Act has made things better?

MR. HILL: I think Ms. Saunders addressed that, and I'm not sure I can add a whole lot to what she had to say. The main benefit which we continually emphasize is this guarantee of title, which eliminates the need for constantly doing historical searches every time a property is transferred. That's a huge benefit, and the other principal benefit, although there are many others, is the e-registry, there's an electronic scanning of documents, and the availability of documents on-line has made it much easier to search historic records and to determine the ownership of parcels of land. Those probably are the principal benefits, although there are others which Ms. Saunders alluded to.

[Page 30]

MR. MACMASTER: Sure, thank you. I just have one last question, so I'm probably going to have a little extra time here, but I just was curious to know what type of technology is used to put the information up on to the Internet for use by the public?

MS. SAUNDERS: Well, I'll first admit I'm no IT expert, and Property Online is really the Internet-based application - that is, the external application. So it allows external users to view, and certain privileged users, such as authorized lawyers, to interact with the system through document e-submission and applications related to migration. The internal system has electronic forms as well, and our data is in an Oracle database, which is a state-of-the-art database, and the infrastructure that supports that would be at the required provincial standards in terms of security and proper backups and all that. Application servers, production servers, are all housed at the CITO Data Centre on Young Street.

MR. MACMASTER: Great, thank you very much. Madam Chairman, I will conclude my questioning with that.

MADAM CHAIRMAN: Thank you very much, Mr. MacMaster, and we'll turn to the NDP caucus. Mr. Smith is beginning, I believe.

MR. SMITH: Thank you, Madam Chairman. It sounds to me like the system that's in place is a pretty good one. Have you folks any idea in the sense of what you would like to see in improvements or are there any other changes that could be made to it? Are you looking for any additional sort of changes in the system or anticipating any?

MS. SAUNDERS: We have a constant list that is being prioritized and reprioritized in consultation with our partners, especially the Barristers' Society, with the staff who use the system. So there is always opportunity for anywhere from a very small, minor change to a significant change. Each year we plan and usually are successful in implementing some small enhancements. This upcoming year we have on the schedule some improvements to the Parcel Description Certification Application, which was defined through consultation with the surveyors and the Barristers' Society.

We also are implementing some enhancements to electronic submission. One is a form that currently can't be e-submitted and that is holding up or blocking the ability to submit other documents, which is the electronic Form 45. We are also looking at implementing e-submission sometime this fiscal year. Currently lenders have to submit their security interests, and releases of those interests, in paper, so we're always attempting to move the system forward. It's always a balance between the resources required to manage the program on a day-to-day basis with the resources required to continue to move it forward but we try to balance both.

MR. SMITH: You already told us, I think, that all of the papers are now housed in Halifax in one spot or another and that, in fact, you are able to move the work around. For

[Page 31]

instance, I think there was a reference that if Baddeck isn't as busy, some of the work, I guess the electronic part of it, can be dealt with through that office. Is there any movement afoot to move everything to Halifax? Could you have one central registry in Nova Scotia that looked after all of the counties?

MS. SAUNDERS: No, not at all. In fact the system, because it's electronic and because the staff can access that queue and process documents from anywhere in the province, that actually provides the benefit to allow offices to remain open in the smaller towns and to retain staff in those possibly lower volume areas, but also to offer other services out of those facilities. It actually allows us to distribute that work and to keep facilities distributed as well. There is no plan at all to do that.

MR. SMITH: I presume wherever they're working, you'd still need the same manpower, basically.

MS. SAUNDERS: Yes, the system has really become - we have moved from virtually very much a front-counter operation where we used to accept paper documents and index it at the front counter and hand the document and the receipt back to the lawyer, to almost completely a back-office function where the staff could literally be anywhere but there's no need to group them all in one place. They can be working from any location and still process documents.

MR. SMITH: I'm very pleased to hear that. That's a positive thing, as far as I'm concerned, to keep these offices open in each of the jurisdictions. I think that's the questioning I have.

MR. LEONARD PREYRA: Thank you very much for being here today. It's a really important topic. The use and possession and title to property is one of the building blocks of our communities and so many transactions. It's important that we have an effective, efficient, accessible, affordable and fair system of establishing titles.

I had a question about the guarantee of land ownership itself and I understand that it has, in fact, quieted a lot of previous complaints and clarified it and so overall it has been a great benefit. I heard the list of benefits and I think it's just wonderful. I do have some questions about adverse possession. Over the last couple of years, in my constituency in particular, there have been a number of questions that have come up where you have good neighbours essentially saying, okay we'll share a common driveway or you can park your car here over the winter or you can build your shed and the overhang can come over the property line, then all of a sudden someone else moves in and it becomes a property dispute.

Now these questions have always been there before the land registry and they'll be here after, but I'm wondering, is there a kind of good, neighbourly, sensible, low-cost way of dealing with these issues without going through costly litigation?

[Page 32]

MR. HILL: In a word, no. The system doesn't allow for the adjudication of those types of disputes in any way differently than they've traditionally been adjudicated by the courts. The system provides for the Certificate of Title, you can have this property certified and the property next to it certified but they can still fight over where the boundary is and people will. That type of dispute, there's just no way that we could become involved in resolving that. I mean, it would be nice if there was a simpler system and maybe that's a goal down the road for this program, or some other, but for now it's the courts that have to resolve those disputes if the parties can't resolve them themselves. So no, we don't have a system to resolve those types of disputes at all.

MR. PREYRA: Just to follow up on question from the member for Inverness, what would a property owner need to do to make sure that those issues are clarified and dealt with better in the future. If they are not facing a claim at the moment or any kind of dispute, what should they be doing to clarify that, especially as older people move to other places, those kinds of conventions disappear and there isn't any proper paper trail?

MR. HILL: That's a very good question. One of the things, of course, that they can do to protect themselves from those sorts of claims is to migrate their property into the land registration system voluntarily if it hasn't already been triggered by a transaction, because of course, the Act does provide for some protection against those kinds of squatters' claims and adverse possession claims, so that is the first thing they can do.

The other thing is that complementary to this process of migrating title and having your lawyer certify title to the system, the person can get a survey. A survey can often reveal these sorts of problem before they arise. If a surveyor comes in and does a boundary survey of the property and says oh, by the way, it appears that your neighbour's driveway encroaches on your land by 15 feet, well then you know that. Our system doesn't have any way of informing someone of that, but surveyors, as they always could, can uncover those sorts of issues.

The best way to protect against that kind of concern, for instance, if a person is buying a property that might be subject to those kinds of concerns or potential disputes, the answer would be to not only have the title certified to the system but also to have a survey done so that you could uncover those sorts of issues. Surveyors are very good at determining things that might become a legal dispute, saying there is an encroachment here or the boundary appears to be something different than what a fence would indicate, that sort of thing. That is really the way a person can protect themselves against those types of claims and disputes, to not just deal with the title of the property, but also get a proper survey and determine what that reveals.

MR. PREYRA: Another set of issues, at least one that I can recall clearly is the public's access to shorelines and parks and waterways, where historically people have walked back and forth across properties and then all of a sudden someone puts up a fence and

[Page 33]

says no, that was always part of my property and you can no longer use it. How do you deal with those issues where there is a public interest and a community interest and probably a well-established property right as well?

MR. HILL: The Act provides for those types of interests to be dealt with. When a property is migrated to the new system, there isn't an immediate bar against any such claims. I won't get into the legal detail, but if those claims pre-exist, the property being brought into the system, there is a limitation period, a fairly long one, during which someone can enforce those types of interests.

If there is, for instance, a right-of-way, private or public, across a beach and that beach is migrated by the owner, as long as someone doesn't let that limitation period pass, they can still enforce that interest within a period after the property is migrated. So the Act does provide for those kinds of interests to be enforced, notwithstanding migration of the property.

MR. PREYRA: Is there an agency that defends the public interest in cases like that, I understand that individuals who have historically used it can raise the issue, but is there a public agency that says hold on a second, that beach was always accessible and that has been around?

MR. HILL: There is no agency that specifically deals with that, that I am aware of, but there is an Act that I am not intimately familiar with, called the Beaches Act or something like that, which does provide that if something is a public beach, it can be protected from public use. Other than that, I'm not aware of any agency that makes it its business to enforce citizens' claims to beaches.

[10:45 a.m.]

MR. PREYRA: Just a couple of other questions, do I have two minutes?

MADAM CHAIRMAN: You certainly do.

MR. PREYRA: I wanted to ask about access to information, I know that the member for Antigonish asked earlier, but what access will historians and academics and students and people who are interested in heritage or family genealogy, what kind of access will they have and will it be on a cost-recovery basis?

MR. HILL: Citizens have always had, and will always have, access to land records for those types of purposes. A lot of the traditional use of our traditional, paper-based registry offices was by genealogists and historians who would come and look at those historic documents and, you know, do whatever research they do.

[Page 34]

All that information is still available, much more conveniently obviously, but it's still available. A person who is doing research not for title purposes but for historical or genealogical purposes can still access that information in much the same way they always could. They don't have to be a subscriber to Property Online, that's mainly lawyers, real estate and other professionals. A member of the public can go to a registry office, the same registry offices they would traditionally have gone to for this purpose, and pay a very small fee. I don't know the exact amount. I think Ms. Saunders referred to $5.95 or something, it's relatively low, for a number of hours and can search those records. There was always a small fee just intended to cover part of the cost of the assistance that person might get from staff and the use of the facilities. They pay a very modest fee. They're entitled, on payment of that fee, to access records in the same way they always could.

MR. PREYRA: Thank you very much. I believe my time has expired.

MADAM CHAIRMAN: You actually have two more minutes.

MR. PREYRA: Oh, perfect, I will take them then. You've talked a lot about the Barristers' Society and lawyers. What kinds of responses are you getting from real estate agents and financial institutions? We had asked earlier about where the system will go next and what kinds of things it should be doing. What have you found in the system that you would like to see changed and, you know, where would you like to go in the future?

MR. HILL: Ms. Saunders might be better able to answer that question.

MS. SAUNDERS: Well, again, we're always looking to the future to make small, medium or large changes in the system. Some of the things that have come up in the last few years, especially around discussions related to real estate fraud for instance, is layering some of the access to certain information in the system to general queries. So one of the things we have considered and Bill No. 156 actually has enabled us to do that, is to control certain access to information that the public don't need to have access to any more, or even general query users, such as realtors.

For instance, signed documents that are enabling those interests in the parcel registry, the parcel registry very clearly says that Nancy Saunders is the owner of that property. A general query user does not need to see the document that substantiates that ownership, for instance. So we are looking at small changes to restricting certain access to information related to the title register. We're constantly looking at improving e-submission, bringing on more documents to - we hope to get to about a 95 per cent or 97 per cent e-submission for all documents in the land registry. Some of the other things that we've been looking at are digital signatures, kind of a public key infrastructure associated with document submission to improve the authentication around document submission. So those are more long-term items but there's a list that we're always working on and working towards.

[Page 35]

MR. PREYRA: Just if I can understand the technical issue on migrating property, as I understand it, the first time it's done there is a fee for transferring the deed and registering it but in subsequent transactions that cost will be significantly less, is that how it works?

MS. SAUNDERS: The legal fees associated with revising a parcel register no longer include the need for that historic search. So that's eliminated from the fee that a citizen would pay or an entity would pay related to a property transaction once the parcel is in the system.

MR. PREYRA: Thank you very much, that's all of my questions.

MADAM CHAIRMAN: We have a little bit of time left. I know that there has been a request for one piece of documentation. I'll just have a look here. I think Mr. Colwell asked for the detailed spending report, I think was what was mentioned, and I also would like to ask, and again with the committee's approval, just to see if we would like to get more information.

The question was asked around the original $14 million, I think it was you, Mr. Epstein, you asked about the initial cost over seven years. I, personally, think it would be good for the committee to see a wrap up of that and I would imagine, again our committee is the Public Accounts Committee, we like to look at historic spending and how programs have gone. If it's available, I would like you to look back, if you could, Mr. Malloy, to see if we could get the $14 million - just were we on budget, were there any overruns or savings and how did that work out?

The other question I would have would be around the user fee. Mr. Malloy, you mentioned that you had looked at it initially in 2002 when it was justified. Could we look at that, that cost accounting when you take, even though you have staff who are working on a number of different projects, they also do this land registry work, you could, say, assign 30 per cent of their time to that and determine how the actual cost is for managing the system. I don't know if you have that in the department, but hopefully you do, and we could have that for the committee? That would be two requests that I have, again with the indulgence of the committee.

MR. PREYRA: Just to be clear, what we're asking for is what Mr. Colwell was asking for in terms of the actual costs associated with both the start-up and the operation of the land registry system - and you're including now, in that, operation staffing for that unit?

MADAM CHAIRMAN: No, not quite, I'm looking for the total cost accounting for the provision of the service. We have a user fee assigned to that and I think all members of the committee understand that users fees are supposed to be at least roughly in balance with the cost to deliver. I'm just asking that the witnesses today are able to provide that to us.

[Page 36]

MR. PREYRA: So you're asking for revenues as well as expenses for the system?

MADAM CHAIRMAN: I'm not asking for the revenue directly; I'm asking for the cost to deliver right now. Anyway, it's just a furtherance, really, of the questions that Mr. Epstein asked, in addition to what Mr. Colwell asked for, and I think it's important that we keep our eye on the historic spending as well, as you've often said, and in following the conversation I felt that would be additional information which will be of use to us here at the committee.

MR. PREYRA: I don't think we have any problem with that; I just wanted to get some clarity on what the question was.

MADAM CHAIRMAN: Mr. Malloy, are you clear on what I'm looking for?

MR. MALLOY: I think so, yes. We'll work with Darlene to make sure that we're providing the committee the information they're looking for.

MADAM CHAIRMAN: Well that would be great, thank you very much. We can certainly talk further about the details of it. With that, I'd like to give you a moment to close, if you would, if you have any final comments for the committee.

MR. MALLOY: Thank you. First of all I'd like to thank staff here today. There's the whole public accountability and transparency of government that is vital to these types of initiatives. I'd also like to thank the committee for their questions today. I thought it was a very good use of our time.

The system has been in play now for a number of years and I really hope that the committee has a sense of the good judgment and the work that has gone into bringing the system into such a strong state of being. The point being clearly made - I don't want to go home tonight and have someone else living in my house. I'd like to know that when I go there that I still have the keys to the door and I'm the one who is getting in and, if I'm not, I have a process in place to be able to rectify that. I think we heard here today that that clearly is the case, and stronger for Nova Scotians. I think that is what the mandate of Service Nova Scotia and Municipal Relations is all about - continuing to improve service to Nova Scotians.

I'd like to thank the committee for their time this morning and, Madam Chairman, thank you for your time.

MADAM CHAIRMAN: Thank you very much for being with us today. We have no real new business, but there is a copy of our upcoming agenda for each member of the committee - you've received a copy of that. The good news is that we're fully confirmed through until June 23rd, so we have our year end all planned now. So thank you very much.

[Page 37]

With a motion to adjourn, we shall do so.

MR. MACKINNON: So moved.

MADAM CHAIRMAN: Thank you very much.

The committee is adjourned.

[ The committee adjourned at 10:54 a.m.]