The Nova Scotia Legislature

The House adjourned:
October 26, 2017.






Tuesday, November 8, 2005


Marine Atlantic Inc.

Printed and Published by Nova Scotia Hansard Reporting Services


Mr. Michel Samson (Chairman)

Mr. Brooke Taylor

Mr. William Dooks

Ms. Judy Streatch

Mr. Howard Epstein

Mr. Charles Parker

Ms. Marilyn More

Mr. Wayne Gaudet

Mr. Harold Theriault

[Mr. Gerald Sampson replaced Mr. Wayne Gaudet]


Mrs. Darlene Henry

Legislative Committee Clerk

Hon. Cecil Clarke

Minister of Energy


Marine Atlantic Inc.

Mr. Gordon MacLeod

CBRM Councillor (Former Marine Atlantic Inc. Manager)

Mr. Gerard Bradbury

Local President (CAW)

Mr. John Whalley

Manager of Economic Development - CBRM

Mr. Darren Bruckschwaiger

CBRM Councillor (Regional Caucus Chairman, UNSM)

Mr. Wayne Busnik

President CAW (Local 1992)

Mr. Tim Hackett

President (ILA)

Mr. Jamie Guthro

President - (BPILA)

Ms. Debbie McLaughlin


[Page 1]



9:00 A.M.


Mr. Michel Samson

MR. CHAIRMAN: I'll call this meeting of the Economic Development Committee to order. This morning we have representatives from both the CBRM and from the union involved with Marine Atlantic. Before we get started, I would appreciate it if either Councillor Gordon MacLeod or Councillor Darren Bruckschwaiger - I apologize, Darren, I'll call you Darren - would introduce the people with you. Then we'll have the committee members introduce themselves, and then we'll invite you to make some opening comments at that time.

MR. DARREN BRUCKSCHWAIGER: I'll have to leave that to Gordon. They're mostly Northsiders, and I don't know them all.

MR. CHAIRMAN: Councillor MacLeod.

MR. GORDON MACLEOD: Mr. Chairman, I sympathize with you, I was the chairman of committees Darren was a member of, and I had problems with the name and I ended up calling him Darren. I want to, first of all, express our thanks, as the delegation here today, to you and to the committee members for having us come here to Halifax to present our case to you. It's an extremely important thing to us. We certainly appreciate Hon. Cecil Clarke being here this morning, among us - it's his riding this is in. Minister Clarke has been very supportive of us in our efforts - and, also, Brooke Taylor, who came to North Sydney, to a public meeting there, and suggested we come here. We really appreciate everything the provincial government is doing in trying to hear our case and have us present it to you in all its entirety. We appreciate that very much.


[Page 2]

I want to begin by introducing, to my right, Darren Bruckschwaiger, who has worked diligently with me, as my colleague on council, on this file, and also as a member of the UNSM. They have certainly been behind us as well, and we appreciate their support. On my left is Gerard Bradbury, President of CAW, Local 4285, which represents a great portion of the union personnel on the vessels and who has been a very strong supporter in helping with our efforts to get this thing turned around. We also have the president of the ILA, Mr. Tim Hackett, with us. We also have the vice-president, James Guthro, and we have Wayne Busnik, President of the CAW, Local 1992, which represents the mechanical people at the terminal in North Sydney. And we have John Whalley, who is our economic development officer. I want to tell you he's a walking computer. If you have questions about statistics, traffic figures and things like that, John has them right at his fingertips. He has been a tremendous help to us in compiling information and documenting things for you, and he's responsible, in great part, for the report that you have in front of you.

There's a couple of things I want to clarify before we start. I want to define what a drop-trailer is. With the exception of Brooke Taylor on the committee side, you probably don't know what a drop-trailer is. We have worked with them every day, and we know what they are. It is a tractorless-trailer, a trailer. Many companies see the economics of (Interruptions)

Before I go any further, there are a couple of union representatives I neglected to introduce, and I apologize for that. We have Debbie MacLaughlin over here, who is the regional representative for the Public Service Alliance of Canada. She represents some management personnel at the terminal in North Sydney. And we have Thomas Spindler, from the Canadian Merchant Service Guild, who represents ships' officers. I apologize, Mr. Chairman, for not having made those introductions.

MR. CHAIRMAN: I'll ask the committee members to introduce themselves before we get started.

[The committee members introduced themselves.]

MR. CHAIRMAN: We also have Darlene Henry here, who is our clerk, and who I'm sure, Councillor MacLeod, you'll be familiar with. We are going to be joined - it's my understanding - by Ms. Marilyn More, the member for Dartmouth South-Portland Valley, a little bit later this morning. We also have the Honourable Cecil Clarke, who is joining us here today as an observer, I am told, who I'm sure has a great interest in the subject at hand. With that, Councillor MacLeod, I invite you to finish your definition of a drop-trailer. I can tell you my brother is a long-haul truck operator, so I'm familiar with what a drop-trailer is but, by all means, I encourage you to explain it to the rest of my colleagues.

[Page 3]

MR. MACLEOD: We would also like to thank Darlene for all her help in organizing this. Thank you very much, Darlene.

A drop-trailer is a trailer that comes to the terminal with a tractor attached to it. They go through the ticket booth, and they get a bill of lading issued for that particular unit. Most times they carry a lot of dangerous goods. They declare their dangerous goods, and all the paperwork is done there. That driver is probably at the terminal half an hour. He goes in, he gets his work done, he takes the trailer, he places it under the direction of the parking lot attendant, somewhere on the property, and he goes and he picks up another unit for his company. Then he's out the gate, and he's gone within half an hour. There's no waiting for vessels or anything like that. That's probably the most effective manner in which a transport company can operate, in their operation. They see it as being efficient for them. That's ever-increasing in our figures, and as we go through our presentation we'll show you that.

My qualifications - in my previous life, I spent 42 years working with CN and the companies that became Marine Atlantic. I was a supervisor for 32 of those 42 years, and my last 17 years were as a manager of the terminal in North Sydney. I was the one responsible for all the activities at the terminal in North Sydney. I was in on the design of the present terminal; I was in on the design of the Smallwood and the Caribou. I was a member of a committee of three who picked out the Atlantic Freighter and brought it into service in Europe.

I'm quite familiar with the operation there. When I speak on that particular subject, I'm very well qualified to do so, having been introduced to Judge Green, an arbitrator, as an expert in the loading and unloading of vessels. That was confirmed by the union. So we'll get that over with, and we'll go onward to our presentation. You have a copy of the presentation. There are some things I want to highlight, and then we'll try to answer any questions you may have.

Marine Atlantic is a Crown Corporation, and it's mandated to operate the constitutionally-required ferry service between North Sydney and Port aux Basques, as well as the seasonal service between North Sydney and Argentia on behalf of the Government of Canada. This ferry service is an extension of the Trans-Canada Highway. In recent years, the corporation's operating expenses have increased significantly, while passenger numbers have declined. In the period from 2002 to 2004, Marine Atlantic's total government funding increased by 55 per cent, $28 million. That was under the tenure of Captain Sid Hynes, who was both chairman of the board and CEO of Marine Atlantic.

This is the rationale for a poor review of the company's operation. You'll see some traffic figures there, and you may have some questions about that later on that we can answer. The Transport Minister, Lapierre, formed the Marine Atlantic Advisory Committee in November 2004. The committee's mandate was to identify long-term strategies for stabilizing the company's ferry service operations. The committee consisted of three

[Page 4]

members and was chaired by Captain Sid Hynes, who is the same Sid Hynes who was chairman and CEO of Marine Atlantic from 2000 to 2004. He's accompanied on the committee by Emile DiSanza and Mr. Roger Jamieson. There were no members of the advisory committee representing Nova Scotian interest.

The advisory committee organized a stakeholders' consultant meeting on January 13, 2005, in St. John's. Fifty stakeholders participated in the section. I was the only Nova Scotian stakeholder who was asked to participate in that, and that was because I had given a presentation to the board the previous June. I then wrote a letter to Premier Hamm, and it was Premier Hamm's intervention that increased the number of Nova Scotian stakeholders included in the process. I wanted the UNSM involved in it, and Darren became involved through that. Hon. Cecil Clarke was there, as was Russell MacKinnon, and John Nash, representing the Chamber of Commerce. So we had nine people representing the area.

Of all the presentations that were submitted to the advisory committee, none of the submissions discussed the elimination of the drop-trailer service. Some of the submissions proposed a separation of commercial and passenger service. Those stakeholders who did address the issue of drop-trailers specifically recommended the need for a dedicated vessel on a year-round basis. The advisory committee's representative, Captain Hynes, did not ask stakeholders to consider and comment on the impact of eliminating the drop-trailer traffic. The advisory committee's report was released on May 6, 2005. The report contained 41 recommendations, including the following; the one we want to focus on and zero in on, in this venue with this group, is the elimination of the drop-trailer service. It's characterized in the report as being fundamental to the success of Marine Atlantic.

[9:15 a.m.]

Benefits Identified in Advisory Committee's Plan. Here they are using some math, I don't know, it must be new math. It says, operating cost savings in excess of $340 million between 2006 and 2020. With all that technology today we had difficulty forecasting the weather for the weekend. These fellows have forecasted operating savings in excess of $340 million between 2006 and 2020. They have also identified a 15 per cent rate reduction to users in 2006 and a 44 per cent cost recovery to the government. They have also identified rate stabilization for the next 15 years.

On the next page we have the Advisory Committee's Comments Specific to Drop-Trailer Service. The bottom bullet says: "The majority of the committee's recommendations hinge on the discontinuation of the drop-trailer service. Reductions in both rates and government subsidies as well as increased vessel utilization can only be achieved if the drop-trailer service is discontinued." Thus sayeth the advisory committee.

[Page 5]

Look at the traffic figure on the next page, I'm going to draw your attention to that. This shows the growing importance of Marine Atlantic's drop-trailer traffic to the corporation, and you're going from 2000 to 2004 and you will see that it is increasing. Drop-trailers now comprise more than 21 per cent of Marine Atlantic's total annual traffic and it constitutes 50 per cent of the commercial traffic. So it's a fundamental part of Marine Atlantic's business.

The things that you have to consider regarding the drop-trailer service are: eliminating the drop-trailer service appears inconsistent with Term 32 of the Terms of Union. That says that the Terms of Union guarantees that Canada will maintain a ferry service in "accordance with the traffic offering".

In 1949, when Premier Smallwood walked the tracks from Port aux Basques to St. John's in Newfoundland, trying to garner support for joining Canada as a province, the Canadian Government guaranteed a ferry service to operate between North Sydney and Port aux Basques, Newfoundland with all traffic offering. This seems to me to be inconsistent with that promise.

In the financial comparison of the status quo and the three-vessel scenario, which includes the elimination of drop-trailer service in 2006, the advisory committee does not appear to incorporate reductions in revenue associated with significant reduction in commercial traffic, nor do they show the impact of the 15 per cent rate reduction beginning in 2006. When they gave their forecast on the financial situation, they didn't take into consideration that there would be $20 million a year revenue from the drop-trailers that they wouldn't be getting. Also, they reduced the other traffic by 15 per cent and that wasn't taken into consideration.

There was no significant discussion of other options, including the importance of increasing commercial traffic. Instead, the focus of the report is on eliminating a substantial portion of the corporation's current and future traffic. What I can compare that to is someone not feeling well and going to a doctor, the doctor examining them and saying, the only thing that is working well on you is your right arm and my prescription for a cure is to cut off the right arm, that's what's happening here. The only part of Marine Atlantic that is growing is the drop-trailer units and the prescription from that committee is to eliminate that. That's going to cure the service and I compare that to a doctor doing the same thing.

The report makes note of the competitive realities that exist. Starting in Spring 2005, Oceanex - which is a Quebec-owned, private direct water carrier - is expected to increase its capacity between Montreal and St. John's by over 50 per cent with a second ro-ro container vessel between Halifax and St. John's adding 44 per cent of that service. The committee believes that some of the MAI or Marine Atlantic's commercial traffic, may be diverted, particularly from Halifax to the St. John's service, in fact, I think that's where they are driving it.

[Page 6]

Oceanex generates more than $100 million in revenue annually, based upon commercial traffic to and from Newfoundland and Labrador. The company experienced volumes of a 4.2 per cent increase in 2003 and 4 per cent in 2004. Again, this reinforces the view that commercial traffic offers significant growth opportunities for Marine Atlantic. Again, why would Marine Atlantic want to get out of the only part of their business that is growing and producing $20 million revenue per year?

Let's look at the economic implications of eliminating the drop-trailer service. This committee with their math figures, again, estimates that 38 employee positions will be eliminated due to their recommendations. The loss of employment will be equally divided by North Sydney and Port aux Basques and if I have my math right, that's 19 on each side of the Gulf. Of course, the committee believes that the reduction in staff can be accommodated through attrition and retirement. How often have we heard that in the last 15 years? Oh, there's not very much to it, it's only going to be a few people and we can accommodate them through attrition and retirement. That's not going to hurt the economy in either place.

The committee also admits - another red flag going up here - the future operations for Marine Atlantic will likely result in more efficient personnel uses. What else do they have planned? However, eliminating the segment of current activity that accounts for 21 per cent of the corporation's annual business suggests that employment impacts will be far greater than 38 employees and will encompass all areas of the corporation's labour force. Certainly, a 10 to 15 per cent reduction in total employment at Marine Atlantic is not unreasonable if the committee's recommendations are implemented.

Let's look at this from the perspective of a terminal manager at North Sydney and you have no more drop-trailers coming in your gate. I have been terminal manager in North Sydney for 17 years. If that situation happened to me, there are 15 tractor operators and here is the company's list of employees and bulletins, they have 81 employees there. Now let's start seeing what we need if we have no drop-trailers. There are 15 tractor operators and that's what they do, they take the tractors on the vessel, they take the tractors off the vessel, they shunt them into the yard; so they're gone.

Six freight checkers, the freight checkers are the ones who ensure that the right trailers go to the right places with the dangerous goods and so on, given the right stowage that the federal government requires.

Five parking lot attendants, there would be no need to lash anything down.

Three traffic clerks, those traffic clerks work up in the office. They are ones who keep track and ensure that the dangerous goods are placed on those vessels in accordance with what they're carrying and the regulations that go forth with it, and it requires extensive training for these traffic clerks in order for them to know what the regulations are and where

[Page 7]

they should be placed on the vessels. Some dangerous goods require an open deck, some of them require separation by decks, some of them require separation by spaces. These traffic clerks are the people who do all that and the company trains them. They must be qualified in order for them to make those kind of decisions. They are the ones with the radios who are telling the traffic director and checker where to put these and they, in turn, tell the tractor operators.

Seven ticket clerks. If you have tractorless trailers you don't have to make out bills of lading, you don't have to make out dangerous goods forms, you don't have to do all of these. Now 21 per cent of your traffic has disappeared, it's gone, you don't need the ticket clerks.

Then we go over to the machinists and maintenance people that Wayne is representing here today. Their function is to carry out preventive maintenance and repair to your 10 tractors operating in the terminal. Those tractors are production machines. When you have a vessel in loading, if you only have five out of 10 tractors operating, then you're down 50 per cent in production. They're production machines and they all have to be working and they all have to be working well in order for you to turn around that vessel, and that vessel turnaround time, when you're operating a vessel, is extremely important, and you must have your machines working. That is what these guys do. They are in the maintenance shop and they're keeping these tractors operating and they know what they're doing. If you have no tractors and you have no tractor-trailers, guess what? You don't have anybody to repair them either, they're gone out the door with their lunch can and not coming back.

So the total potential reduction in wages associated with these positions will exceed $3.2 million annually. Compare that to something. What do you compare that to? Well for comparison purposes the amount exceeds the total annual wages paid to provincial employees in the CBRM in the Departments of Tourism, Culture and Heritage; Energy; Agriculture and Fisheries; Natural Resources; and the Office of Economic Development. How would you like to be the Premier and go to Sydney and make that kind of announcement today, that you're going to take all those people out of there. Well, that's what this is doing.

Let's talk a little bit about the ongoing review that they have. The federal Transport Minister requested MariNova Consulting - and they're based here in Halifax - to prepare an analysis of the socio-economic implications of the elimination of the drop-trailer service on the affected community. Jim Frost is the guy who did this, he and his associates. I know Jim Frost, I worked with him, he was marketing manager with Marine Atlantic when I was terminal manager in North Sydney. He came to the Civic Centre and met with John Whalley, myself and a couple of other councillors from the Northside, John Nash, Chamber of Commerce, and others.

[Page 8]

[9:30 a.m.]

He asked me a very interesting question. He said to me, if we decide to move the trailers from North Sydney and put them at some other dock in CBRM, in Sydney Harbour, they'd still be in CBRM. So what was he thinking? I said, I don't understand the question, and I'd like you to clarify it for me. If you're asking if the federal government was to give the Atlantic Freighter to some shipping company - Sid Hynes is in the shipping business, give it Sid's shipping company - and they would operate out of Sydport or the dock in Sydney or Sysco, how would we feel about it? Well, we'd be pretty angry about it. But that's one of the questions he asked me, so that's the way he was thinking.

This analysis has been prepared and is currently being reviewed by the officials of Transport Canada. I asked Jim Frost if he had the report completed. He told me it was completed on September 15th, and he sent it to the Minister of Transport. They didn't like some of the wording and they sent it back. They probably didn't like what they were reading, and they sent it back and told him what to say. I don't know.

Now, correspondence from the minister's office in Ottawa tells me that the Province of Nova Scotia has also been involved in this review. I have a letter here to Darren Bruckschwaiger, and I want to quote from it. This is from the representative of the Minister of Transport, on behalf of the honourable Jean C. Lapierre. It says, "This being the case, the department has undertaken a study on the impacts associated with the elimination of the drop-trailer service. The Province of Nova Scotia's Department of Transportation and Public Works is partnering with Transport Canada on this undertaking." We also have that to the Deputy Mayor Claire Detheridge. I don't know what partnership they're doing. I'm not aware of any. The minister tells us that they are partnering with them.

Given the importance of this decision to the future of our region, we believe that the report should be made public so that all stakeholders can provide informed comment. I think it's important to the stakeholders that they know what's in Jim Frost's report, and that they have a say in it before it goes public. That's what I'd like to see.

Contrary to the views expressed by the advisory committee's report and based upon all available information, eliminating drop-trailer service from Marine Atlantic seems to be really wrong-headed. To me it certainly seems to be the wrong direction. When you take the only growing part of your business and not offer it anymore - not that it's not being used, not that it can't increase, none of those things - just, sorry, we're not going to offer that service anymore.

Certainly the potential negative impact of the elimination of drop-trailer service is very significant to the employees of Marine Atlantic, the Port of North Sydney and all of eastern Nova Scotia. I've tried my best to point that out to this committee, that this is a tremendous blow to the economy of our region. Once commercial traffic finds an alternative

[Page 9]

service, perhaps through another province - Jim Frost has also worked with a firm that's trying to start up between Belledune, New Brunswick and Cornerbrook, Newfoundland - it's unlikely that Marine Atlantic in North Sydney will ever recapture the traffic and associated benefits from that.

Now Premier Hamm and the Government of Nova Scotia played an important part in the protection of the Caribou-Wood Islands ferry service earlier this year. I have a news release from the Premier's office dated March 10, 2005. "Premier John Hamm is calling on Prime Minister Paul Martin to step in to prevent reductions in the vital ferry service between Caribou, Pictou Co., and Wood Islands, P.E.I. In a letter sent today, March 10th, Premier Hamm told the Prime Minister any reduction would have "a serious, negative impact on tourism and commerce in eastern Nova Scotia".

I want to tell this committee that any elimination of drop-trailer traffic in North Sydney will have a very negative impact on what happens there. Now, I would like to have seen the same sort of interest - and I understand that Pictou is in the Premier's riding, but the people of North Sydney, Nova Scotia deserve the same kind of treatment that the people of Pictou do. His intervention to the Prime Minister resulted in a very positive thing for the Caribou, P.E.I. service, and the same thing should apply to our service in North Sydney. I would like to see the Premier intervene with the Prime Minister on that particular issue.

I want to take this opportunity to thank you people for diligently listening to us. You'll hear from union leaders here today. This is a tremendously important thing to us, in our little part of the world that we exist in here in Nova Scotia. Our local member worked very diligently to help us, as did others, and we appreciate your bringing us here today and your listening to us so attentively. I thank you. If you have any questions, I'll do my very best to answer them. If not, we'll have answers for you. Thank you very much.

MR. CHAIRMAN: Thank you, Councillor MacLeod. I have Ms. Streatch first on the list.

MS. JUDY STREATCH: Thank you very much for your presentation this morning, Councillor MacLeod. I certainly take my responsibilities as a provincial member of government extremely seriously. I respect, tremendously, the jurisdiction of the federal government of this country. So, as I understand, this is a very serious situation. I also understand that this is very much a federal issue. The Department of Transport and the federal Government of Canada are really who you need to listen to you.

I'm wondering, what are your two Cape Breton Members of Parliament, Mark Eyking and Rodger Cuzner, doing about this very serious issue?

[Page 10]

MR. MACLEOD: Well, my understanding of it is that both of them have made representations to the minister. Maybe you could speak more on that, Gerard, because he was in on some meetings with them. I might add here that the federal Minister of Transport took the time to go to Port aux Basques, Newfoundland, to spend two hours with the mayor and town councillor of Port aux Basques, but chose not to come to North Sydney. I invited him there on behalf of our mayor and council, and he chose not to come. We really feel slighted in all of this. Maybe Gerard can answer that. He has certainly been in meetings with them, and he has been dealing with Mark and Rodger on this issue. I thank you for the question.

MR. GERARD BRADBURY: Last Thursday evening I had a meeting with Rodger Cuzner in Ottawa. He got hold of somebody in the Transport Department, because I was pretty adamant that we wanted answers, why the delay and the push-back from October 15th for the release of this report. The answer that came back is, as Gordon just stated, the minister didn't like the numbers that came forward from Frost, and they were correcting the figures and confirming the figures that were in it. That's all that was told to me.

During that meeting it was also relayed that the report would be released shortly. I suspect shortly would be within the next week to two weeks. As far as their help, from a union point of view - I'll come right out, I said it in the newspapers and so forth - very little. I had a problem with Mark Eyking coming out and taking responsibility and saying that he was the one who went to the minister to have this impact study and so forth done. I found it incredible to take responsibility after the fact; if you're running for political office, you want to be front and centre and say, look I did this, I'm out there fighting for you, but not after the fact.

It became a shouting match between the union and the local MPs, which it shouldn't have been, but I had no other choice because I represent 600 workers aboard the vessel. I think it's just the tip of the iceberg, the recommendations coming from Mr. Hynes in this report. I think we will be the big losers, aboard the vessel.

Again, why Mr. Hynes was even appointed to this position, I go back to the Gomery Inquiry, the man was there for four years, had every opportunity to act and implement whatever he put in this report and never did it, he took the money and ran. He took a wage, he took expenses, he took everything he could out of the company for a four-year period and did nothing, he watched it go downhill. To put Mr. Jamieson there to represent his own interests on this committee was just unbelievable.

Mr. Jamieson testified against the unions in St. John's two years ago on essential service, that it should be an essential service. For him to be appointed to this committee to take care of his own interests, is incomprehensible, I can't believe that these two people were there and the union has been fighting compassionately over this right from the beginning. We have had no answers coming from the federal government and I think that's why we find

[Page 11]

ourselves before this committee today, to look for help and maybe direction to question the federal government on their motive. It's not just only the jobs.

If anybody visited Port aux Basques lately in Newfoundland, it's a ghost town now. We had a big announcement on fisheries in North Sydney, that they're going to lose a big part of the workforce. If we take these federal jobs and the spinoff jobs created by them, we're just going further downhill, particularly on the Northside. Again, it's not all Mark Eyking, it's Mr. Cuzner, also, because a good portion of our workforce live in his riding. It's alarming, this whole thing of what's going on and how very little has been put in the newspapers. We have very little support from local merchants. I don't know if they're just used to the fact of closures through the steel plant, mines and so forth, but I have tried to embarrass people, I've tried to get answers. In Ottawa last week, I had a chance meeting with Roger Cuzner at the airport, he took 15 minutes to meet with me.

We have had more help - honest to God - from Peter Stoffer in Sackville-Musquodoboit Valley-Eastern Shore than from anybody locally. That is almost an embarrassment to say but it's true. Peter Stoffer has been on the phone, I met with him last week again in Ottawa, the man takes every opportunity, he tried to come down to a rally we held. Again, I must thank Cecil Clarke for his help on this, he showed up in St. John's, made a very passionate plea on behalf of the workers at Marine Atlantic and his constituents before this task force. But I knew right from day one, when it was announced who was on this task force, that the employees of Marine Atlantic were in for a fight.

The problem I see - not to jump all over the board here - is if anybody knows Marine Atlantic from November 1st to the end of March, usually deck utilization on the vessels is only run at 68 per cent. If we lose this drop-trailer traffic, we could very well lose 50 per cent of that business during that time period. We run two vessels during that time period with a crew of 86 individuals. If we don't have the traffic offering there will be no sense to run two vessels during that period, it would be a waste for the federal government, it would be a waste of taxpayers' money. We need the drop-trailer traffic, we cannot divert it to Halifax or to Montreal, we have had enough diverted from Cape Breton now and we can ill afford to have anything else diverted out of Cape Breton. We need the drop-trailer traffic.

Like I said, that is only one shift, 86 individuals, and I think the cuts will go far deeper than that even for shore personnel. We are up against it here, we can ill afford to lose anything else out of North Sydney. Like I said, we had a major announcement on Clearwater, we don't need a major announcement for more job losses.

[9:45 a.m.]

At Marine Atlantic, in my union, I'm under the understanding that through technology and new vessels that we'll have to lose jobs, I'll be the first to admit it. If we get new vessels there is not the requirement that is needed now for deck and engine room

[Page 12]

watches. But don't go out - as in this report of Mr. Hynes - trying to get Marine Atlantic to lobby the federal government to lower safe manning requirements.

If anybody has crossed the Cabot Strait during the Winter months, we're understaffed as it is, we need everybody we presently have working. To keep cutting the subsidy and cutting the subsidy - and Mr. Hynes was there, he went overseas and bought the Leif Ericson and included it in our annual budget of $10 million a year to be repaid to the federal government out of our subsidy. That's why our subsidy looks like it bounced up a pile of money. I think when he came in we were at a $38 million subsidy, and on his departure I think we were down to about $26 million or $27 million. He bumped that up with a $10 million-a-year loan back to the federal government for the purchase of the Leif Ericson. This thing spent more time at the dock broken down than not.

The other concern, again, is being diverted to Oceanex and so forth. These are privately-owned companies and I'll tell you right now if there was a ferry available on the world market right now, Belledune would be up and running and we would be in serious jeopardy right now of the drop-trailer traffic being diverted through that route. That's my spin on it, that's my union's point of view, and that's the CAW's point of view of where we're at with this. Thank you.

MS. STREATCH: Mr. Chairman, if I could, one final comment on that note. Councillor MacLeod, absolutely no disrespect intended, certainly a devastating figure to even imagine, $3.2 million annually in potential reduction in wages. However, I would suggest that it would be the Prime Minister who would be ashamed and who would stand in Cape Breton to make that announcement and have to wear that, more than I would say the Premier of Nova Scotia. The Prime Minister should be ashamed with that type of number staring him down the throat.

MR. MACLEOD: Where I was going there, Judy, was comparing it to if the Premier had to go to Cape Breton to announce all the employees in the departments that I spoke about would be taken away, that's what it equates to. Yes, the Prime Minister is certainly responsible for that, that's why I would like to see a letter from the Premier to the Prime Minister in that regard.

One of the things I want to add is that at the beginning of that consultation report or the stakeholder's report, or meeting in St. John's, Newfoundland, Sid Hynes stood up for a question from Councillor Bruckschwaiger about the privatization, and he said there would be absolutely no privatization recommended by this committee. And Darren wanted him to go out and make that phone call to the Transport Minister at that time and he wouldn't but he said, the stakeholders here in this room do not want privatization and we will not be recommending privatization. So what does he do? We're not going to offer the service, which is the same thing as privatization. Myself, I think, the minute that that hit the Transport Minister's desk, he should have rejected it for that reason. Thank you.

[Page 13]

MR. BRADBURY: If I could just say something regarding the Prime Minister and you saying it would be an embarrassment for him. I was on a local talk show when he happened to be in Cape Breton for announcements at the time. He admitted on the talk show that he had no knowledge of what was going on at Marine Atlantic or what was taking place at Marine Atlantic.

MS. STREATCH: That seems to be his favourite statement these days. Thank you.

MR. CHAIRMAN: Mr. Parker.

MR. CHARLES PARKER: Good presentation, Councillor MacLeod, very informative, I'm learning a lot. I just wanted to make a comment on the last part of your presentation around the Caribou-Wood Islands Ferry. Coming from Pictou County I was very much involved with that and our fight there to save our ferry from P.E.I. to Nova Scotia and the Caribou terminal is in my riding of Pictou West.

I would say there was very strong community support that really helped us turn that around. We had public meetings on both sides of the Strait, in P.E.I. and in Pictou County, and had very strong support from the tourism sector, the chamber of commerce, businesses, the union, from really everybody who was affected by this. I think it was the strong public support that truly made the difference. The political people got involved as well and that sure didn't hurt.

The other side of the water, in your case, is Newfoundland. I'm interested in knowing what support or what is going on over there. Is there public support? Are there rallies and political support?

MR. MACLEOD: Charlie, it's good that you raise that particular issue. I wrote to Mayor Sheaves, and I have copies of letters in my briefcase that I wrote to her, wanting to partner with her on this particular issue. They don't seem to want to partner with us on this and I don't know what's going on. I don't have a crystal ball, but I do know they're not making a big noise about this.

The Transport Minister went to their area but didn't come to ours, so all of those things raise red flags with me as to what's really going on. The fact that when this task force was first assembled, the stakeholders were all from Newfoundland, with the exception of this lone Cape Bretoner. The only reason I was there was because I had made a presentation to them once before and they had my name somewhere along the line. It was Premier Hamm's intervention that brought more people on board but up to that point, I was going to be the lone fellow, "The Lone Ranger" in St. John's.

[Page 14]

MR. PARKER: Are there any plans to have community support meetings, to rally to get the public onside in Cape Breton or in Newfoundland at this point in time?

MR. MACLEOD: I will let Gerard speak to that because they have been working on those issues.

MR. BRADBURY: We had one back in February and again, Mark Eyking wanted to speak first because he had this great announcement that was forthcoming, that hasn't come yet, I guess, that Marine Atlantic was safe, there was nothing really going to happen, that there would be an announcement to that effect coming. We had approximately 350 people, business owners and so forth at the local fire hall on that night and with invited guests who spoke, from all political Parties, and it went over good, but unless you keep this thing going - we had another rally, I believe, September or October in the Archibald Wharf Park in North Sydney with a great turnout.

In Newfoundland and Labrador, no, it's hard to get any kind of publicity in that end of the province. They're not going to send TV crews and so forth there and they have a problem getting the word out of that end of the province. If it happens in St. John's, it's going to get coverage.

MR. PARKER: Just to change focus here to another question, Gordon, you raised the rhetorical question there in your presentation of why Marine Atlantic is doing this. Is it strictly the bottom line, cost savings or is there more to this agenda than we can read at the moment? Why are they doing it, do you think?

MR. MACLEOD: It's difficult to know what the agenda is, Charlie, but I think Marine Atlantic, when I was there, we were very competitive and wanted to have vessels that were on time. We wanted good public relations with our customers and we've had ratings of somewhere near 98 per cent in a service industry, especially a service industry that has a monopoly, to be extremely good. So I don't know why the focus has changed so drastically.

The morale of the workers at Marine Atlantic in North Sydney is at an all-time low. They had an employee survey done a couple of years ago and it was so bad, it was six to eight months before they would release the details of it, and then they didn't release all of the details. So why they're doing that, Charlie, I can't tell you, I don't know what the agenda is. But I think the agenda is to take that lucrative portion of the traffic that is growing and say, look, we can take that, and somebody has an interest someplace else to put that, and there's nothing clearer in my mind than that's what's taking place. They want to funnel that service, that traffic that's growing.

[Page 15]

They know that statistics tell you that within the next eight years, tractor operators are going to be a very scarce commodity. They're going to look at more efficient ways of doing things, and the most efficient way for something like that, and to make the best utilization of your drivers is to drop your trailer and be on the way. Don't have them sitting in a parking lot, waiting. I think that somewhere along the line, the underlying thing of all of this is to get that traffic out of Marine Atlantic and privatize it. There's somebody waiting to take it right now, wherever it may be.

MR. PARKER: That certainly raises a question about an idea or proposal behind it, why they're doing it. I have one final question, Mr. Chairman. You mentioned, under the terms of Confederation, Term 32, that that may well be violated, that not all traffic is then, therefore, going to be allowed. Do you have a legal opinion on that, that the Act will be broken or is being broken if this were to happen?

MR. MACLEOD: I don't have a legal opinion, no. The term doesn't seem to be ambiguous to me. They're there to take all the traffic offering. I can remember us working with CN in North Sydney. You have private enterprise running a service out of Montreal and Halifax and things like that, they could refuse the high-cube and the low-density traffic. By that I mean carloads of potato chips or carloads of wool batts or carloads of tissue paper, things that are high cube but low density. Private enterprise could refuse to carry that stuff, but CN couldn't because they were governed by the traffic that was offered. If you wanted to take horseshit and package it according to the tariffs, they had to take it.

They don't take dynamite along the waterfront here, I've worked on the waterfront, I supervised the Marine Atlantic operation out of here for three years. They won't take dynamite here, but they'll take it in North Sydney.

MR. PARKER: I guess my question was, would a legal opinion coming down on your side, saying that they are violating the terms of Confederation, strengthen your hand?

MR. MACLEOD: I'm sure it would.

MR. PARKER: Is that something you're considering or would think about?

MR. MACLEOD: Yes, it's something I certainly would consider and think about.

MR. BRADBURY: The Constitution reads that all that has to be met is traffic offering. So if there's a vessel available to meet traffic offering, then the federal government feels that their part of the Constitution is being upheld. So if we have no traffic to offer, they're meeting their obligation. If we have one vessel that has to be sailed every two days, then they're meeting their obligation.

[Page 16]

To get back to the tractor-trailers, this is the only profitable side of the business at Marine Atlantic, millions of dollars. All you have to do is go back to the two people who were appointed to this committee, one owns one of the biggest shipping companies on the East Coast, Sid Hynes; the other, Roger Jamieson, owns one of the biggest tourism attractions in Newfoundland. They want this as a tourist destination only. I mean, all through this report all they did was fulfill their own wishes. They completely appointed the wrong people to this committee. There are experts out there who would have done this, looked at it and laughed. And there are experts out there who are laughing at this report. But the federal government doesn't want to listen to them, doesn't want to hear them.

It's completely mind-boggling. We were promised in August, the unions were meeting with this task force or Frost, who was doing the impact study on the loss of the drop-trailer traffic. One union was contacted for a two-minute conversation, and us not being one of them. Upon that promise in that meeting in August, the CAW took it upon themselves to put together a comprehensive report that could be presented for this impact study, we have yet to receive a phone call. I asked that question of Rodger Cuzner last week in Ottawa. The Transport Department didn't have an answer. Then he referred it back to ACOA, whatever they have to do with it, I don't know.

[10:00 a.m.]

I'm so dizzy dancing around this, I'm ready to fall to the floor any minute, to be honest with you. It really is sickening. To hold the livelihood of 1,200 people at bay, and then put it off for another month? This committee is probably our last avenue to put pressure on the federal government, to show the importance of the communities involved, particularly the Northside.

MR. CHAIRMAN: Mr. Theriault.

MR. HAROLD THERIAULT: Thank you for your presentation. I really only had one question. Gordon, I believe you answered it a few minutes ago. It's all about privatization, it's all about the rich getting richer and the poor getting poorer, and it's all about the free trade that Mr. Mulroney brought to this country a few years back. The present Prime Minister is just doing what Mr. Mulroney put on the order paper for this country. That's what's going on. It's going to happen. You have it right in your notes, ". . . Oceanex, a private direct water-carrier company, is expected to increase its capacity between Montreal and St. John's . . ." They will stop that drop-trailer, because there will be no need to bring them here, because most of the merchandise that's coming to Newfoundland and this area is coming from the Montreal area.

That's what's going on. Oceanex is going to do it, and free trade and big business is going to allow it to happen, and this government is going to allow it to happen. We're under free trade. This isn't new. This has happened in western Nova Scotia. This has happened to

[Page 17]

our Yarmouth boat, privatized. We've lost that, that's gone. That worked good, didn't it? The Digby boat, we just got notice down there that they're cutting back, and I got inside notice that that boat might be gone, too, for good, this Winter. Another great move, privatization. And you're going to see the same damn thing happening everywhere until somebody can get it right, to make it happen, so it's profitable. Some company somewhere will do it. They haven't done it in western Nova Scotia yet, by privatizing.

I don't have a question. You answered it a while ago, Gordon, when you said that's what's happening. I don't know how you can stop it. How can you stop what's going on in this world? Big business controls it all, and government's allowing it to happen, and it's all because of free trade. I don't have a question. Thank you, Mr. Chairman.

MR. CHAIRMAN: Mr. Taylor.

MR. BROOKE TAYLOR: I want to thank all our guests for coming in here this morning. I'm sorry you had to come to Halifax to raise the public awareness of this very important issue. I don't want to point fingers at anybody here today. I know what the member for Cape Breton North, the Minister of Energy, is saying. We know what the Constitution says. We know what CBRM's position is by way of a resolution and by your dedicated vigilance to this issue. We know what the union is saying. Gordon, I take your numbers, they're closer to 71 than 38, 19 on this side. We know what management at Marine Atlantic is saying. And we know that the process has been allegedly flawed. There is a perception of conflict of interest. I think that's information that's out in the community at large. We know what the Atlantic Provinces Trucking Association is saying, that there is a profound shortage of truck drivers and it's only going to get worse.

We know that this is one component of Marine Atlantic that is very profitable, it's growing, and we know the infrastructure is in place in North Sydney. If the drop-trailer service is lost, that will be a devastating blow to North Sydney. In fact it will be extremely difficult for them to sustain.

Now, Gerard, you said that you feel this committee is perhaps your last hope. I don't know if that's the case, but I would like to think that we could do something constructive on behalf of the delegation that came here this morning. Perhaps as the hearing progresses, we could give consideration to a motion, maybe a letter, we could possibly tell the MPs for Cape Breton and the Minister of Transport that drop-trailer service in North Sydney isn't negotiable. We could somehow craft that in a very blunt but honest statement. We could also look at the fact that, I believe, if this was happening anywhere else, say just outside the window, there would be a hue and cry so loud that it would be resolved very quickly.

I have been told and, again, people can get confirmation of this, that the provincial government, through the Department of Transportation and Public Works has also asked for that study and hasn't had any involvement in the process since July 7, 2005. Transport

[Page 18]

Canada will not give the Department of Transportation and Public Works any information on the content of the study and has advised Transportation and Public Works that we will receive the report when it's released to the public. That is what I have been told and again, that can be confirmed or perhaps denied, but I think it will be confirmed.

I would just like to think, Mr. Chairman, that we give this some thought, get our heads around something relative to some communication to those appropriate in the federal government so they understand that we are united in our stand and I know the community, the union, and management are and everybody on this side of the equation sees it as a no-brainer, quite frankly, it just absolutely makes no economic sense, no social sense, it certainly makes no common sense.

Gordon, thank you for your diligence on this file, if anybody can speak from experience, you can. I will also say that I have used the drop-trailer service on occasion, I still have an account with Marine Atlantic and from a practical point of view, it makes absolutely no sense. The men and women who work to secure the vehicles and do the type of job descriptions that Gordon spoke of, they do it in an excellent and courteous manner always, I'm telling you.

So perhaps I'm like Junior, I don't actually have a question but I hope that we can put something together, strongly worded, in support of the people who are with us here this morning.

MR. MACLEOD: I think, Brooke and Mr. Chairman, if I may, our last hope is our provincial government to help us here. I would like to see us form a committee to go to the federal government to present our case to the federal government with regard to this important issue. I think, somewhere along the line, if we can do something like Brooke is advocating, it would be a tremendous thing for our community, for Cecil's riding, and it would give the people of our area some hope that our provincial government cares about what is taking place, and I'm sure you all do, but it's something that we want to have a common ground on and all want to work together here to go to the federal government.

Mark Eyking and Rodger Cuzner will be with us 100 per cent on this and I think that there are enough of us here, and there are enough brains around the table here to come up with a plan and a strategy that is going to accomplish our purposes here. I think we just have to - as Brooke says - get our heads around it and get something formulated. Thank you.

MR. CHAIRMAN: Mr. Sampson.

MR. GERALD SAMPSON: I'll begin by thanking my colleague, Wayne Gaudet, the member for Clare, for allowing me to sit in on this committee this morning because of the importance of it in my area. I thank the members for coming.

[Page 19]

Gordon, you've been around long enough to see what's happening here. There is some planned obsolescence built into this system and I'll begin with my last, first, to support what Brooke said, my last line to you when I gave my presentation was going to be, what do you want us to do? Where do you want to go from here? It's no good for you to come all the way to Halifax and go home thinking, gee, we did a great job, we did a great presentation and then that's as far as it goes. This has to grow a leg that is going to go somewhere and that's my intention for being here this morning.

You've been around long enough, the same as I have, to see the French boat gone from North Sydney, way back when. All they wanted was a hydraulic ramp and now it's here in Halifax. The steel plant, they took the wire, nail and plate mill and moved it to the mainland and left the part down there that was becoming obsolete and eventually it closed. You see the same things with the coal mines, so the writing is on the wall, but there is a jewel here in this drop-trailer traffic.

I know Brooke said there is no common sense to it, there's all kinds of common sense to it if you're going to be the recipient of this drop-trailer traffic, it's good for you, it feeds the need and the greed. They don't care about the 1,200 jobs in North Sydney, so we're the ones who are going to have to take this to the federal level. I have all kinds of notes here, and whatnot, that I would like to touch on.

You were around also when young David MacDonald was the Mayor of North Sydney. They took a Stena boat from Marine Atlantic to Halifax - God, that must be 20 years ago - and I said to him, did you give permission for that? He said, yes. I said, don't you dare. He said, well, I was only going to try it. I said, that's the beginning of the end of those boats. This stuff is planned way down the road, some of these younger fellows weren't even around then to remember that, but they were feeling it out and that's what's going on.

So there's a lucrative business, the trucking business, they are better salesmen, they are more proactive, they're out hustling for everything and the rail traffic is kind of dying. Marine Atlantic, with the development of the Laurentian Sub-basin could combine that sub-basin development with the railroad, and Marine Atlantic, and be there.

My take on it, after being a Marine Atlantic employee and sailing across that Gulf for six years, that's the liquid portion of the Trans-Canada Highway, that's what that is. The Trans-Canada Highway is supposed to connect this country of ours from coast to coast. It has always been in North Sydney, but somebody sees a profitability thing there and Newfoundland is not going to get upset if they're going to be the recipient of it. So what is it you would like us to do, because almost everything else has been said by the wisdom of this gentleman here, to my right. So what is it you would like to see us do as a result of today? You don't need to answer that now, you can answer it at the end when other people have finished. Mr. Chairman, rather than ask questions, I just gave my summation of what I see is taking place.

[Page 20]

This business of these reports, when they bomb an area now they call it collateral damage. Well, it doesn't seem so harsh as people being blown apart and murdered. It is the same thing here, there are not going to be any effects, there's flowery language, but the bottom line is the multiple millions that are going to be lost to the economy of Cape Breton and that has to stop. I think this is where we have to have municipal, provincial and federal, and raise pure hell if we have to.

I attended your rallies but that's on a local level and as you said, the Prime Minister probably wasn't aware of that stuff. Well, let's take it with the media and go right straight through to the top and show that we are a part of Canada and a part of Nova Scotia that counts. We have our Minister of Energy here with us today, I'm really pleased to see him here, to show his clout. It's political, fellows, don't think it's not. It is all politics and if we don't have the political clout and we don't join forces to do what has to be done, it won't get done. So think about that and answer it before the meeting is over.

MR. DARREN BRUCKSCHWAIGER: I guess, if I could, I'd like to say that I'm encouraged by the conversation that is happening here today. I think what we are looking for is a move-forward plan. I also represent the Union of Nova Scotia Municipalities as the regional caucus chairman. As a member of that union I introduced a resolution that was passed unanimously by the board and at the conference. So the kind of co-operation we need, I think, is completely across the province and I think this is a good step. It shows that we're not just concerned about our own areas and I think that's very important in this whole process.

What you have heard today, and I refer to Mr. Bradbury, especially - well, Councillor MacLeod to start with, his experience far outreaches my age with Marine Atlantic, he has been there forever. I think you have to notice and pay attention to the stress that's in the voice of the employees and I think that is throughout that community of the North Sydney area. We have a couple of different problems there now, we have Clearwater.

[10:15 a.m.]

Although our region has been making some strides to move forward, we keep getting hit with these hits. This Marine Atlantic situation would be very devastating for our area, in particular the Northside, so it's very important that we try to figure out a move-forward plan.

I'm not clear on this letter that I did receive from the minister and I want to read that whole paragraph, Gordon touched on it. It said:

"At the outset, allow me to assure you that Transport Canada recognizes the economic importance of the services provided by Marine Atlantic, as highlighted in the Advisory Committee's report. Indeed, the department understands the important contribution that Marine Atlantic makes to

[Page 21]

communities in Newfoundland and Labrador and Cape Breton. This being the case, the department has undertaken a study on the social/economic impacts associated with elimination of the drop-trailer service. The Province of Nova Scotia's Department of Transportation and Public Works is partnering with Transport Canada on this undertaking."

Until I received this letter, I was really more hopeful. I'm getting something from this that the province is involved with the federal minister on this and I'd like to know if anybody has anything that they can add to this letter, because it sounds to me like they're working on this thing as far as the impacts. It sounds to me like this is a done deal by this letter, those are a little bit of the vibes that I get from it and I think you can understand that by listening to it. So I'm just wondering, provincially, does anybody have any ideas on what that would mean? I ask that question to anybody, Mr. Chairman.

MR. TAYLOR: Mr. Chairman, can I respond to that?


MR. TAYLOR: To my way of thinking, Darren, we did attend - when I say "we" I mean the Department of Transportation and Public Works - a stakeholder consultation session on the future of Marine Atlantic in St. John's, Newfoundland and Labrador. That was about a year ago when this whole process started.

We presented a submission in January 2005 - and I think you have a copy of that submission - to Marine Atlantic. In June the department met with Transport Canada in Halifax to discuss the recommendations in the report and have subsequently asked for the report and that was July 7th, that's the information I have. We asked for the report and were told that we wouldn't be receiving the report until its release to the public, and have had no further involvement. Now that's the information I have, Darren, and if there's other information out there, it's certainly unbeknownst to me, that's the chronology as I understand it.

MR. BRUCKSCHWAIGER: It's just the letter, for me, is highly suspect that there is something there that's . . .

MR. TAYLOR: Yes, I can understand your concern.

MR. BRUCKSCHWAIGER: . . . and that concerns me somewhat. Again, I think if there's a willingness - and it sounds like there is - by the committee, with a suggestion that Councillor MacLeod said, that something can be formed or something can be agreed upon between the group on a move-forward plan, I would really like to see that happen.

[Page 22]

MR. TAYLOR: Mr. Chairman, something Councillor MacLeod did indicate earlier, and he used the example of the situation with the Prince Edward Island service, I know the Premier is very concerned about this situation. I think if the committee was inclined, we could, probably by way of a missive to the Premier, ask him to communicate directly to the Prime Minister. Gordon, is that something you had implied or would that . . .

MR. MACLEOD: Well, Premier Hamm and myself have had correspondence over this. I know, personally, that Premier Hamm is extremely concerned about this. I know him personally and I have talked to him many times on this particular issue and I have communicated with him on this issue.

One of the things that I think needs to be done is clarity. There are things here that aren't clear, in the report that the review committee made, and one of them was the numbers of employees who were going to be affected. Somebody mentioned just a short while ago here, there's not much to it, it's not going to have much effect - I think it was Gerald - that there's only going to be 19 employees and most of those can be taken by attrition or retirements and we'll get a package together for them, and there won't be any effect at all.

I think that needs to be clarified. I think some of the things that Jim Frost had to say need to be clarified. The fact that he never discussed the economic impact with the unions is a huge flaw that needs to be brought to the attention of the Department of Transport. They had no input in something that affects them. The impact on them is tremendous. In their working agreements, if there's any change that adversely impacts the workforce, they have a right to know all about it. Here, Jim Frost made out this economic impact study and didn't consult the major players.

Those are things that need to happen. I think somebody from this committee, along with the committee of the union and CBRM, has to go to Ottawa to bring our case to Ottawa. I think we need to bring our case to Ottawa. And I think we need the support of Premier Hamm. I know the support from Premier Hamm is there. We need that support, we need the support of this committee, we need the support of all Parties in the House of Assembly here in Nova Scotia to bring this to the office of the Transport Minister in Ottawa, and we need to be there. We have a great case here. They're trying to do an injustice to us, and we have to overcome that.

You talk about a free market and free trade and all of those things, despite the best efforts of competition, Marine Atlantic still grows their drop-trailer business, and the people who are using that service like it. The Atlantic Provinces Trucking Association, when they want to move something to Newfoundland and they want to get it there quickly, they move it through Marine Atlantic because they know they're going to get it there. There's a need in the transportation industry in the Atlantic Provinces to have that. That highway has to be doubled to Cape Breton and it has to be doubled to Newfoundland.

[Page 23]

When I was a boy in North Sydney, somebody said, how long has MacLeod been there, he has always been there. They were throwing lines ashore from one of the vessels one time, and the guy said to the mate, how long has that MacLeod been here, and he said, oh, he was always here. One day I was there and a guy was surveying, and he was down by the fire hose, right where the William Carson came in, and I said, what are you doing, and he said, I'm setting the end of the Trans-Canada Highway right here. I said, well, what happens to it there? He says it comes in here every evening at five o'clock.

So, yes, it is the liquid part of the Trans-Canada Highway, and despite the competition and everything else, Marine Atlantic still grows that traffic, Marine Atlantic users still want to use that route, and we should not be taking it away from them. This Government of Canada should not be saying we're not going to offer that service to you anymore. That's wrong, and this province has to come on board. We have to go to Ottawa and bring our case to the minister's office.

MR. GERALD SAMPSON: Mr. Chairman, I just want to reply to Gordon. In conclusion, we sat on the Law Amendments Committee and put forth an amendment to Fisheries. They were trying to do something for 30 years - the lending agencies would not recognize a fishing licence as collateral for a loan. Big business was and are buying up all the licences and owning the fishing industry, forcing the little guy out. With that amendment, it gives the province some clout to walk up to the federal guy and say, here's what we've done, now you do your part.

What I'm saying is the time for action is now, at the conclusion of this meeting, whether it's a resolution or a motion or whatnot, we need to give Premier Hamm the tools - we have an all-Party committee here - so he has some clout when he approaches Ottawa. Maybe through his office, if he can't get as far as he wants, then he can open the door for this committee to meet with the feds, or why not ask these federal officials to come here, why should we have to run to their door? My motto is bringing government to the people. Let's bring them down here.

MR. MACLEOD: It makes no difference to me, Gerald, whether they come, all I want to do is see them.

MR. GERALD SAMPSON: But we'll have to do something. To try to read through the gobbledegook and all this stuff, you've been around long enough to see what's going on behind closed doors. It's big business coming in, and if we don't move to some action, especially before the federal election, then your opportune time is gone. You have to strike while the iron is hot. I think you're going to find that you have the support of all Parties here today.

[Page 24]

MR. BRADBURY: If I could add just one thing, Mr. Chairman, approximately two weeks ago I had a telephone conference with Geoff Regan, the Fisheries Minister, over this issue. The thing that kept coming up in the conversation, and it comes all through the report, is the on-time performance. Sid Hynes just loves to pound at that all through his report. The Fisheries Minister questioned me on that.

The problem we have in both Port aux Basques and North Sydney is the docking facilities. We have four vessels, one dock in Port aux Basques and one and a half docks in North Sydney. The vessels cannot be on time when you're trying to accommodate four vessels with one dock, it just doesn't work. You cannot schedule the vessels. For example, people coming through Nova Scotia going to Newfoundland, their time of arrival. When I worked on the vessels, I have been there 33 years, and I have never seen the likes of what goes on there, particularly during the tourist season.

You get a tourist going on a vessel in North Sydney, departing North Sydney at three o'clock in the afternoon and is scheduled to arrive in Port aux Basques at 8:30 p.m., announcements keep going on the vessel for a two-hour period, until that vessel docks in Port aux Basques at 10:30 p.m. Here are these people with reservations and so forth either to drive through to Corner Brook, Stephenville, Deer Lake, wherever it may be in that province, that can't get through and don't want to drive at that hour of the night because of moose and so forth on the road at that time of year. This is one big thing that has been ignored here, we need the infrastructure at both ports in order to perform. Unless we have it, this is going to continue to decline and go downhill.

The federal government is talking about building three new vessels for Marine Atlantic. Three new vessels will not carry the traffic that we carry year-round. We need four vessels in order to carry both the drop-trailer traffic and the tourists, and to keep the tourists going to Newfoundland in the Summer months, particularly with the Argentia run.

My fear is that there is a big announcement by the federal government coming before Christmas. This panel was announced before Christmas, everybody is in a happy, jovial mood and ignore much of what is going on and that's, I think, why we reached the point where we are at today. We have to get that report out, we have to insist, and this is part of the economic development, to get the docks in place and the infrastructure in place so at least the Marine Atlantic employees can perform their duties to the best of their ability. We need the infrastructure. Until the federal government is willing to invest in it and the provincial government pushes them in that direction, I believe that's the road that we have to take. Thank you.

MR. BRUCKSCHWAIGER: Mr. Chairman, if I could, as maybe a suggestion, if we could move forward, I'm wondering if this would work. If we could possibly get a public statement by the Premier regarding Marine Atlantic. Secondly, a letter to the Transport Minister and Prime Minister, a request from the committee. Third, a delegation to Ottawa

[Page 25]

led by Minister Clarke and maybe as Gerald said, either we go there or they come here or whatever. That is a suggestion as a move-forward plan, those three items, because timing again is important here, as Gerald mentioned. Something could happen here within a week.

I don't know exactly the way your committee works from here and how you have to go back, sir.

MR. CHAIRMAN: We will certainly take that into consideration and we can probably have some discussions around the end, but I still have Mr. Epstein who wishes to make some comments.

MR. HOWARD EPSTEIN: First, I wonder, Mr. Chairman, can we have a copy of the letter that the councillor quoted from?

MR. CHAIRMAN: Yes, I was going to request that, myself.

MR. EPSTEIN: The other is, it sounds as if we have a lot of agreement around the table and I wonder if you're ready for a motion. I have a draft motion I would be happy to put forward, if there are no other questioners, I would be happy to do that. Are we ready for that?


MR. EPSTEIN: The draft suggestion is:

Whereas this committee of the Nova Scotia Legislature has no faith in the findings and recommendations of the Marine Atlantic Advisory Committee which reported in November 2004; and

Whereas elimination of the drop-trailer services from the Marine Atlantic offerings would be a very serious negative impact on the communities of the CBRM in Nova Scotia and Port aux Basques in Newfoundland and Labrador; and

Whereas that elimination would be of dubious legality under the Terms of Union, Term 32(1) between Canada and Newfoundland and Labrador;

Therefore this committee calls on the federal Minister of Transport to reject the said recommendations and also calls on the Premier of Nova Scotia to use the best efforts of his government to persuade the federal government not to act on the recommendations of the Marine Atlantic Advisory Committee.

[Page 26]

[10:30 a.m.]

MR. BRADBURY: Maybe you could add Labrador with Newfoundland.

MR. EPSTEIN: Yes, the formal name of the province is Newfoundland and Labrador.

MR. CHAIRMAN: If I could just ask one question. Out of all the talk on the drop-trailer service, do we know, does Marine Atlantic make money off the drop-trailer service? I haven't heard that mentioned yet, I'm just curious.

MR. MACLEOD: I mentioned it, Michel, their revenue derived from drop-trailer traffic annually is somewhere around $20 million.

MR. CHAIRMAN: But what are the expenses? I guess the question is, are they making money off this service? I know you said it has grown and everything else but I haven't heard yet as to whether Marine Atlantic actually makes money off this service. Does it profit from it or do we know that?

MR. MACLEOD: Does it profit from it, I couldn't answer that honestly because I don't know. All I can tell you is what they do make and I do know that they have a subsidy and the subsidy is being reduced, so as the revenues come up the subsidy comes down. The fact that if they didn't have the $20 million coming in annually on the drop-trailers, plus the money that they're getting for handling the dangerous goods there per trailer, it would impact their bottom line severely. Of course, as I say, the expenses would also be hit because you wouldn't have the employees that they had. I don't think they're in business to make money, they are in business to provide a service, under the Terms of Union, and they want to have the most safe and efficient service they can muster, to the satisfaction of their customers. I think that is what they are providing and their annual revenue there is around $20 million and it's one of the parts of the service that is growing and they are making money on it, or they are increasing their revenues.

MR. CHAIRMAN: But we don't know what the subsidy is at this point?

MR. BRUCKSCHWAIGER: Apparently the data is not available and they won't release it, they have tried but they can't get it on that particular part of it.

MR. GERALD SAMPSON: If I might just add, I had a phone call from a Marine Atlantic worker to inform me that they were working very diligently from 11:00 p.m. until 7:00 a.m., loading the drop-trailer traffic in a very fast and efficient manner, to increase the turnaround time for the ships. When somebody saw the efficiency that was being created, they intentionally changed that and now they load the drop-trailer traffic in the day. As you heard here, you have passengers landing in North Sydney at 11:00 p.m., where do they go, they're getting off the boat, they are tired and they have to travel God knows where to get

[Page 27]

accommodations, so according to this employee, it was done purposely to upset the travelling public and cause delays in turnaround times and whatnot. Here you have passengers sitting in the lot while they are loading a ship with drop-trailers, rather than just the opposite, accommodating the passengers and then the traffic. So there are behind-the-scenes things being done to negatively impact the service to make it look bad, so when someone private moves in with the big bucks, they change it around and make a profit at it.

MR. BRADBURY: If I could, maybe this is one of the reasons why the federal government is looking at cutting it, as was previously stated, it may be political.

During the Summer months the Atlantic Freighter runs and it strictly takes only drop traffic, it takes a hundred and some drops. It's licensed to carry up to 12 live trailers. We only go with an approximate crew of 19 or 20 during the Summer months. The drop traffic is the only profitable arm at Marine Atlantic. Whether this is one of the reasons that they want to see it go to private enterprise, they see it could be run better, I'll get back to Mr. Theriault's comments that this may be one of the reasons.

During the Winter months the Atlantic Freighter is tied up cold, the crew is laid off. We used to have two positions on it before, now it is tied up cold, antifreeze put to it and tied up alongside until it is needed again the next Summer. All this drop-trailer traffic is then carried on passenger vessels, on the Smallwood and the Caribou during the Winter months. That's why I'm saying, if we lose that drop traffic, when we're currently probably only going about 75 per cent to 78 per cent, if that, during the months of November, December, January, February and March, five months of the year, if we lose that percentage of business, there's no sense in running these big vessels, that's just my opinion. This is where the federal government is looking at saving money.

Right now the Atlantic Freighter, during the Summer months, brings in big dollars to the federal government.

MR. CHAIRMAN: Thank you.

MR. MACLEOD: One more point, Mr. Chairman, that I wanted to make and I neglected to, was my conversations with Jim Frost as he was carrying out this study. He talked to me about the advisory committee's report stating that drop-trailers interfered with the turnaround times of the vessel in North Sydney; therefore, they couldn't maintain their schedules.

I reminded him that I was terminal manager there when the Caribou began her maiden year. At that time she made four trips a day to Port aux Basques. Her port time was 45 minutes in each port and during that 45 minutes, we unloaded and loaded the vessel and we had eight drops on each crossing, so we handled a total of 64 drops on those four sailings, so that wasn't a factor. When I told him that he wouldn't include it in his report.

[Page 28]

Again, I'm talking about clarity. I'm talking about what's being said in the report and what I know to be fact because I experienced it. I was there when that was happening and I know what took place. That's not in the report. What's in the report doesn't show what actually happened and I wanted to make sure I made that point.

MR. GERALD SAMPSON: One final comment, Mr. Chairman, if I might. The lack of federal involvement is evident in what I refer to as the federal yacht club in Dartmouth, when I look at all those big red and white ships out there. I couldn't believe, after being stuck on the ice on the William Carson for a week way back in the 1960s, and then this past Winter the Caribou is out there stuck in the ice for three days and we have the federal yacht club over here with the icebreakers that should have been there to meet it. As I said, we plow the Trans-Canada Highway in a storm, the icebreakers should break a path to and from Newfoundland, and those ships should not be out there for two and three days, allowing them to lay there costing a fortune and upsetting the travelling public.

MR. MACLEOD: Were you on the Carson when she was stuck on the ice that time? I hope you behaved yourself. (Laughter)

MR. GERALD SAMPSON: Perfect, Mrs. Sampson's little boy.

MR. TAYLOR: Mr. Chairman, may I speak for just a moment?

MR. CHAIRMAN: Yes, please.

MR. TAYLOR: Just for a second. I'm wondering - and maybe it doesn't belong in the motion but I think based on the conversation here and the ones that have taken place in North Sydney that we would be doing North Sydney a favour by requesting that the Marine Atlantic Advisory Committee come in and appear before the Standing Committee on Economic Development? Would you agree to that, because they would obviously have to have the blessing of Transport Canada, I would expect. I don't know if we have the same powers as we do with provincial . . .

MR. EPSTEIN: Don't we have an agenda-setting meeting coming up?

MR. CHAIRMAN: We have some matters to deal with at the end of this committee meeting.

MR. TAYLOR: The concern - and it is related to the motion - with the trucking industry, the Atlantic Provinces trucking industry is on record as stating there would be a big increase in the cost of moving freight to and from Newfoundland, and there would also be a big increase regarding trucks on our highways. For all those trailers, if all the trucks were going down there taking those wagons or trailers across the Gulf, then, in fact, the drops

[Page 29]

wouldn't be there, the trucks wouldn't be as efficient, so consequently you would have to have more rigs on the road if they are going to stay with their trailers.

Sears, for example, has a carrier in Newfoundland that delivers all the Sears trailers to those little communities all through the Province of Newfoundland and Labrador. Consequently, you would need more drivers - and there's a driver shortage now - more rigs would be on the road so it's a no-brainer all the way around. The motion is a good motion and I still think an organizational meeting may probably be more appropriate, Howard, but we may get to the crux of the matter behind the decision here.

MR. CHAIRMAN: Is there further discussion on the motion?

MR. PARKER: Do you need a seconder?


MR. PARKER: I second it.

MR. CHAIRMAN: Seconded by Mr. Parker. Do we have any further discussion on the motion? Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried. We will take the subsequent action.

One of the other matters raised by Councillor Bruckschwaiger, regarding the letter from the federal minister, it appears that there is some confusion as to what involvement the Province of Nova Scotia has in this. It doesn't appear clear to myself, as chairman, as to how much involvement the province has had in this or if they are involved in discussions. The letter seems to completely contradict some of the information Mr. Taylor has provided us with. So I'm wondering if the committee would allow me, as chairman, to write to the Premier asking for clarification on the remarks made by Minister Lapierre about the province's involvement in the study that's taking place and any ongoing discussions around this terminal?

MR. EPSTEIN: Could we see the letter, this is one of the reasons I asked for the letter.

MR. CHAIRMAN: We'll have copies of that letter made for all committee members.

Is it agreed that we write to the Premier asking for clarification of the province's role on this issue?

[Page 30]

It is agreed.

Other than that, I want to take this opportunity on behalf of the committee to thank both the CBRM councillors and the union representatives. You have certainly given us a better appreciation of the issue at hand and the impact it could have not only for the communities of North Sydney and Port aux Basques, but also for Cape Breton and for all of Nova Scotia. I believe that from this meeting you've seen that there is all-Party support to maintain this service and that we're more than prepared to entertain whatever initiatives we may be able to undertake, whether they're in conjunction with Minister Clarke or with any other member of government.

Unfortunately this committee does not have a budget that allows us to be able to send representatives to Ottawa or anywhere else on different issues. It would require an incentive from the government, to allow such an effort to take place. Hopefully we'll be having further discussions on that matter. Again, I want to thank you for taking the time to travel here to bring this matter to our attention. Hopefully we'll see further progress being made on this issue in the days and weeks ahead.

MR. MACLEOD: I want to thank you, Mr. Chairman, on behalf of all of us who came here today with our case, for your diligence, your courtesy and your attentiveness to our plight and the action you've taken. Certainly we'd like to get a copy of the motion that was passed here. Once again, I can't thank you enough, from the bottom of my heart, for what you've done for us here today. We really appreciate it. We thank Minister Clarke for coming and for his ongoing efforts in trying to help us in our plight. Brooke and Cecil, as a result of that public meeting, recommended that we come here, and I thank them both, publicly, here today for their caring ways and for guiding us and directing us to you today. Thank you very much.

MR. CHAIRMAN: Committee members, we have some matters to deal with regarding upcoming meetings. Do you want to deal with those right now or take five minutes? (Interruptions)

We have a request from the Guysborough Regional Development Authority to meet. The next available date would be Thursday, November 24th, in the morning. If it's agreed, we can schedule that meeting right now. You'll be getting notice from Darlene, but right now 9:00 a.m. is the time that's available. I had the opportunity to speak with Gordon MacDonald this morning and he indicated they would be more than happy to come in at that point to meet with us. Hopefully that won't conflict with the Law Amendments Committee which, hopefully, will either not meet that day or will be meeting in the afternoon.

Is it agreed?

[Page 31]

It is agreed.

Mr. Taylor, you raised an issue, asking this Marine Atlantic Advisory Committee to appear before us. How do you wish to proceed with that?

[10:45 a.m.]

MR. TAYLOR: In the interest of trying to further address the concerns the delegation made today, we, at this committee at least, do sometimes bring both sides relative to any given matter to the guest box, so to speak. I'm just thinking there were allegations - or claims, more appropriately - about Captain Hynes and the other two people on that advisory committee, their perspective may be a bit different than what we have heard here today. Myself, perhaps I'm fairly of a predisposition, I'm really close to the drop-trailer service, I can't understand in good conscience how they could do it. Maybe other members don't see any value in bringing them in and trying to find out why that would be in their list of recommendations, that that important component of the service be removed.

SOME HON. MEMBERS: Bring them in.

MR. TAYLOR: I think we have to help North Sydney out.

MR. WILLIAM DOOKS: Put the wood to them, a job is a job, bring them in. Ask the simple question, why are they doing it?

MR. GERALD SAMPSON: Look at the impact to the province, just in taxes alone that these people will pay, let alone the blast to the economy that will be lost.

MR. TAYLOR: Mr. Chairman, is it possible, with the concurrence of the committee, that we try to bring them in as soon as we can?

MR. GERALD SAMPSON: I think we should bring them in, if it is possible, for the next meeting because time is of the essence with this. There are things moving ahead . . .

MS. STREATCH: You're right, Gerald, time is extremely important.

MR. DOOKS: Bring them in.

MR. PARKER: How quick can it be done, I guess, is the question.

MR. CHAIRMAN: The only way I see is to make a request to the federal minister, if he can instruct that advisory committee to appear before us. He would be the minister who would instruct the committee and who could provide them with some sort of instructions.

[Page 32]

That is the only thing I can think of as chairman, to write to the minister asking if we could have them appear before us.

MR. DOOKS: Before Christmas.

MR. CHAIRMAN: I think as soon as possible will probably be the language that we will . . .

MR. EPSTEIN: We don't even know if they're in Nova Scotia. We would only have power to compel their appearance if they are in Nova Scotia, I don't even know where these people live.

MR. CHAIRMAN: And all indications of what we heard today is that they're from . . .

MR. TAYLOR: Well Captain Hynes resides in Nova Scotia.

MR. EPSTEIN: Does he?

MR. TAYLOR: So I have been told when I was in North Sydney. Does he not, Mr. Chairman?

MR. CHAIRMAN: My understanding is they are all from Newfoundland and Labrador, that's what I got from the presentation, that it was all Newfoundland and Labrador. They said there were no Nova Scotia interests, so . . .

MR. TAYLOR: I thought he had a business in Sydney, when I was down in North Sydney they were saying that but did he have a business?

MR. CHAIRMAN: I'm assuming that they're all based in Newfoundland.

MS. STREATCH: Owner of the biggest shipping company but I don't think he indicated that he was a resident of Nova Scotia.

MR. CHAIRMAN: And with the name Hynes, from local knowledge of that name, that's certainly from Newfoundland and Labrador. I'm assuming they all reside in that province and secondly, I don't see how we could compel them to appear without the minister's approval. I think our only way is to make the request to the minister and then he'll react accordingly and we'll see what response we receive.

MR. TAYLOR: It's certainly worth the effort.

[Page 33]

MR. GERALD SAMPSON: But if the letter went to the minister, couldn't we copy it to - is Sid Hynes the chairman of that committee?


MR. GERALD SAMPSON: If it's cc'd to somebody then the minister has to act, kind of thing, where you have two people knowing it rather than one, so if it laid on my desk for six weeks, I'm sorry, I got to it late but if it's cc'd to somebody else, it's going to make me act, I better not dilly-dally because he knows about it too and it will be raised politically.

MS. STREATCH: Mr. Chairman, can I ask, does anybody know what the position of the Newfoundland and Labrador Government is on this?

MR. GERALD SAMPSON: There's a good question.

MR. TAYLOR: There is testimony - in some of the information we have they're not quite as annoyed or upset, I guess, with the . . .

MS. STREATCH: Could we expect any co-operation from the Newfoundland and Labrador Government?

MR. CHAIRMAN: Without prejudging what's going on in Newfoundland and Labrador, when one looks at the committee's recommendations, I believe the drop-trailer service may be viewed in Newfoundland and Labrador as a trade-off. For example, the recommendations suggest that the head office move from North Sydney to Port aux Basques. I think due to some of the recommendations the Government of Newfoundland and Labrador may be a bit more quiet on such issues in light of some of the other recommendations. Again, that may be completely wrong on my part but . . .

MS. STREATCH: Well would it hurt to send some type of a letter to the Government of Newfoundland and Labrador, indicating the concerns we have after what we heard today, the results of the report, et cetera? Would that be of any benefit?

MR. EPSTEIN: That would be a good idea.

MR. CHAIRMAN: Did you say a good idea or bad idea.


MR. CHAIRMAN: We can certainly write a letter to the Premier and ask the Premier to indicate what their position is on this issue based on what we've heard today, our concerns, and to see what the position is of the Government of Newfoundland and Labrador.

[Page 34]

MR. TAYLOR: One of the things I heard, Mr. Chairman, was their concern about the delivery times for perishables, when you take them down and drop the trailer, obviously it doesn't get over as quickly as if you stayed connected to it. There are some concerns about that, which on the surface seem rather legit, but the fact is if you have a lot more tractor-trailer units sitting there, then it takes a lot more space in the boats. You only have so many vessels and docking facilities. (Interruptions)

MR. CHAIRMAN: Okay, I think we've got everything. The motion has been passed. We'll send a copy to our presenters who were here, a letter to the federal Minister of Transport, asking for that committee to appear before us, also a letter to the Premier of Newfoundland and Labrador asking for their position on the drop-trailer issue, and a letter to the Premier asking him to clarify what involvement the Province of Nova Scotia has had with the federal government on this issue, based on the letter from the federal minister that we all now have a copy of. Plus, the main resolution, as to what action the province is prepared to take as a result of the motion passed today.

MR. GERALD SAMPSON: Mr. Chairman, would the letter to the Government of Newfoundland and Labrador have more clout if it came from the Premier rather than coming from the committee?

MR. CHAIRMAN: Are you trying to say the Chairman of the Economic Development Committee does not carry the same clout as the Premier of Nova Scotia? (Interruptions) Mr. Sampson, I realize you're only standing in on this committee, but I think such statements . . .

MR. GERALD SAMPSON: Having taken the high road and joined political life rather than being a lawyer, I just thought I'd throw that out. (Laughter)

MR. TAYLOR: Mr. Chairman, I would say, and I know we agreed to send that letter to Newfoundland and Labrador, that we should, in my way of thinking, be very careful who we share that with. I think it's going to muddy the waters. From all the information I've received on it - Nova Scotia is my concern, Nova Scotia is your concern, and Newfoundland and Labrador, it's nice, but I'm telling you, I won't prejudge the response, but you have to be careful sometimes what you're asking for. I would just point that out.

It's every bit legitimate to ask Newfoundland and Labrador for their position, but I can tell you the truckers over there see this as more jobs, they see it as produce coming in quicker, they see it as better roads subsequently, they see more infrastructure. This is the feedback, honestly, that I've been getting. That's all I'm saying. But when we get it, if it becomes a public document then people are liable to say what the heck are you guys crying about over in Nova Scotia. What we're crying about is jobs and our community of North Sydney. I will tell you, they're looking at the counter side of this, and Gordon will tell you

[Page 35]

that they see this - and Mr. Chairman, you pointed it out, they're not making too much noise about it.

MR. DOOKS: Well, bringing the committee in will serve the same function, then.

MR. CHAIRMAN: We'll ask and we'll see what the response is, and then we'll react accordingly.

With that, we're adjourned until November 24th at 9:00 a.m.

[The committee adjourned at 10:53 a.m.]