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HALIFAX, FRIDAY, APRIL 25, 2003

COMMITTEE OF THE WHOLE HOUSE ON SUPPLY

9:09 A.M.

CHAIRMAN

Mr. Brooke Taylor

MR. CHAIRMAN: The honourable Government House Leader.

HON. RONALD RUSSELL: Mr. Chairman, would you please call the estimates of the Minister of Community Services.

MR. CHAIRMAN: We will continue with the estimates of the Minister of Community Services.

The honourable Leader in the House of the Liberal Party.

MR. WAYNE GAUDET: Mr. Chairman, could you indicate how much time is left, what time my hour will expire?

MR. CHAIRMAN: I will get that information to the member shortly, if he'd like to begin.

MR. GAUDET: Again, yesterday as we left the minister's assessment, we were talking about special needs. One individual at home that is currently living in public housing receiving no disability pension, strictly living on income support from Community Services. This gentleman was receiving $384 a month. Out of his $384 in total that he has to live on a month, this gentleman has to pay $204 for his rent and heat which leaves him $180 for his personal allowance. When we left off last night, I was indicating to the minister that this individual needed some dental work and was advised by his caseworker that he needed to pay some of the dental bill. As this individual had indicated to me, trying to stretch his $180 to make ends meet, where is there any leftover money in order to help pay for this dental bill?

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Speaking about this individual, again, he had the choice to appeal the department's policy. This individual apparently tried to appeal the department's decision, but he indicated to me that it was for him and for those at the meeting, a complete waste of time. If these hearings are only to rubber stamp the department's policy and the caseworker's decision, then this individual could not understand why the minister or the department is not being up front with him and others and telling them before they go through this appeal process that they don't stand a chance with their appeal.

So, this is a very, very frustrating experience. Again, if the appeal process is simply to rubber stamp the department's decision, then there's really no need for individuals to go through that process.

I want to start off this morning looking at Page 4.9 in the Supplement, Income Assistance and Employment Support Services, I want to focus a little bit about return to work initiatives. The department has some money budgeted for training. I know the department tries to help individuals with training in order to try to get them back in the workforce and off social assistance. I'm trying to understand what the department can offer in terms of options for training. What kind of assistance is available to help these individuals pursue some form of training? Maybe my first question to the minister this morning is, what options does the department offer to these individuals that are looking at doing some training or retraining?

MR. CHAIRMAN: Just before I recognize the minister, I would advise the member for Clare and the Liberal caucus that the member has until 9:50 a.m., approximately 41 minutes from the time we began this morning.

The honourable Minister of Community Services.

HON. DAVID MORSE: Good morning, honourable member. Before I get to your question, there are two things left over from yesterday. You touched on one, which was the dental and I appreciate your concern for your constituent. I guess that everybody would like to be able to do more, but with reference to the amount of support that is going into dental from the department, since we brought in the new Employment Support and Income Assistance Act, I know that just in a one-year period there was almost an increase by one-third in the amount that went into dental. I'm advised that even though we don't have the numbers for the years previous, there was a substantial increase again when we brought in the new regulations on August 1, 2001. While I acknowledge the member's point about 20 per cent still being a difficulty, yet, there is more money going for that purpose now under the new Act and regulations.

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[9:15 a.m.]

Also, the member opposite was asking about employment support services yesterday and the success that we've had in assisting clients to make that step to independence and working towards a career. I had committed to bring him the numbers for the past number of years and in fact, this goes back to 1991-92. I would like to table this and perhaps if you could also share that copy with the member for Clare.

The member for Clare was asking about the Employment Support Services aspect of Community Services which is an exciting new development that came in on August 1, 2001. He was asking just what sort of initiatives are in place that I feel have led directly to the reported drop of 9,000 cases from the Community Services Department. Of course, those people primarily, I would suggest have gone on and have started careers and been empowered to now make a contribution to society and generally better their circumstances.

With regard to that, first of all I would point out that there's provision for adult education. It's interesting that you asked that question because I just came back from the Parker Street Food and Furniture Bank this morning and was shown some of the work that they're doing with the community college in terms of adult education. It's really wonderful because as the member opposite would know we do have a significant adult literacy problem, I'm going to say in the western world, we have to focus here on Nova Scotia. Community Services' clients also fall into that group, some of them, and the work that's being done by either volunteers or people that have come to work for them for less than market wage because of the great satisfaction they derive from helping people - this is just one example of the adult learning program.

The member opposite would be aware that the community college system is an integral part of our education system. We do support clients with a specific plan to go back to the community college and acquire an education that lends itself directly to employment. We have a good working relationship with HRDC in that. They often step in and pay the tuition, although I would point out that in this case, the largest share of the bill is the ongoing support of the clients. It is a good working relationship with HRDC and it's wonderful to be able to provide those sorts of services to clients.

In addition to that, some of the obstacles, previous to the introduction of the new Act, such as the inability to get affordable child care, have been provided for with the $400 a month. Also we provide a travel allowance, we also will assist with buying workboots, gloves, all types of ways to empower the client to be able to take that step into employment. We extend their Pharmacare coverage for a full year after they get off of Community Services and sometimes that can be crucial. If you have the misfortune of having some sort of expensive medical condition such as diabetes that can run up to over $300 a month, sometimes you're not able to afford to leave Community Services because you're not able to afford to lose the Pharmacare coverage. This is a way of allowing people to gradually

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transition and hopefully get to an employer that has a group plan that would continue to cover for them.

Also, I would advise the honourable member that the good people in Employment Support Services will often work with employers to tailor a plan for that special client that suits their needs in their business. We will assist the employer in that regard until they are up and on their own and earning their own way.

These are just some of the initiatives that I'm aware of. Of course, the Employment Support Services counsellors would be able to go into a lot more detail, but I hope that gives you some sense of some of the good things that are happening within the Department of Community Services.

MR. GAUDET: Mr. Chairman, I thank the minister for his information. Just a couple of questions as a follow-up. I'm looking for information about the travel allowance. How is the travel allowance decided? What's available? I know with some of these individuals, Community Services does provide them with an allowance. Is that, pretty well, province-wide, the same rate applies to everyone? Maybe he could give me a little bit of information on the travel allowance that is available to these clients.

My second question would be, as a follow-up, I understand that HRDC does assist individuals in getting back into training, but at the same time I'm quite sure that in order to qualify for the HRDC assistance, you need to be on unemployment, but quite often some of these individuals don't qualify for the HRDC training or the seats allocated to some of these individuals. I guess my question would be, does Community Services provide any assistance with tuition to allow these individuals to attend community colleges?

MR. MORSE: I thank the member opposite for his questions. I would tell you, Mr. Chairman, they are good questions, they show that he obviously cares and is concerned that the appropriate supports are out there to give Community Services clients every opportunity to make that transition. I would like to start by sharing some information that is a follow-up to the previous question that might be helpful with regard to his two current ones. I have some numbers here which I would be prepared to photocopy and share with the two critics, if that was your wish.

The total number of clients participating in Employment Support Services, 10,311; which is a very exciting number, because that means that 10,311 people have been given the hope that they're going to be able to make that transition and all that that means to them and possibly their families, if they have children. Of that, there are 1,401 who are involved with academic upgrading, 3,114 in skills training, and 2,550 in employment starts. I am sure the honourable member would welcome that news, as I do. It's certainly an indication of some of the reasons why we've had that very successful transition over the last number of years,

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from Community Services to Income Assistance to work, through the Employment Support Services.

I also want to mention on that point that it does become more difficult as some of the more able clients move off, those who are left behind may have greater barriers to getting back to work, and therefore some of these other programs become more important to them as we try to give everybody that opportunity.

You asked about the travel allowance. It's $150 per month, and that is something that would be worked out between the client and the caseworker, as the caseworker would work on their individual plan, or it could be the Employment Support worker, specifically, and that would be through the co-operation of the client and the caseworker. You were also wondering about whether clients have to be on employment insurance in order to qualify for HRDC, there is a reach-back agreement that we have with HRDC so that people who were previously on EI and are now on Community Services can still access this.

Again, I want to express my appreciation to the Government of Canada and the people at HRDC for working with us. It's really a good partnership with them. We enjoy the participation. I would also like to say to Minister Stewart how much I appreciated meeting her. I thought her a genuine caring person, recently on my trip to Toronto, and clearly we share many of the same goals.

MR. GAUDET: Mr. Chairman, I thank the minister for providing us with that information. Could the minister provide us with a contact in the department, so we could maybe do a follow-up to get some information on this reach-back, someone who was on EI the previous year who basically now is strictly on community benefits. I am just looking for more information on how individuals may qualify on this reach-back program. Could you indicate to us a contact with the department, so we could do a follow-up?

MR. MORSE: Mr. Chairman, the contact person would be Sandra Spencer. Her name and telephone number, and position, is on the bottom of the sheet that I just gave to the Page and asked to have photocopied for the honourable member, the critic, in fact, from both Opposition Parties and one to table for the committee.

MR. GAUDET: Mr. Chairman, again, going back to the Supplementary Detail book, Page 4.9, we see there has been a reduction of almost $6.5 million in Income Assistance payments. As the minister indicated yesterday, the number of caseloads is dropping. The Income Assistance payments are declining. The income assistance rates are probably already inadequate to meet basic needs. My first question would be, why is the department not re-investing that saving of $6.5 million back into the system?

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MR. MORSE: Mr. Chairman, the member opposite asks an appropriate question, and I hope that he would find this an appropriate answer. While the Income Assistance payments may have dropped some, and that's because people have been able to move off assistance and find work, the member opposite would note that Employment Support Services, Return to Work Initiatives, Employment and Training, these are things that are in fact going up. It's a better use of resources. I think it's better for the clients, and I think it's better for the province. We are doing this.

However, I think that if the member opposite is perhaps referring back to the struggle that some people still find, living on income assistance, that I would make mention, as was discussed the other day with the NDP Critic, we are doing a review of those rates. It has now been a year and a half since we brought in the new regulations, and we are reviewing them for adequacy. Specifically, the shelter component is perhaps the one that was the catalyst for this, because as the member opposite would know, there are parts of the province where the rental market is getting tight, and when the rental market gets tight, rents tend to go up. If you're of limited financial means, you're not always able to absorb those increases.

[9:30 a.m.]

That is not the only area that we're reviewing. The basic personal allowance and everything is under review. That may have been a little bit more of an answer than what the member was looking for, but perhaps I anticipated what the next question was going to be.

MR. GAUDET: Mr. Chairman, this minister is good. That was my next follow-up. In terms of looking at the savings of $6.5 million, my question was, is the department looking at re-investing that savings back into the system for training or for shelter component or even trying to look at their personal needs. I want to move on to housing, because I don't have that much time. I want to go to the Estimates Book, Page 4.9, Housing Services.

I'm trying to understand how much money is being spent on housing this year. I see that the federal government has increased their funding to $69 million, the municipalities are spending $5.8 million in housing. How much is being collected in rents, and how much is the province putting into the housing budget this year?

MR. MORSE: Mr. Chairman, that was also part of the reason why I was out this morning to the Parker Street Food and Furniture Bank, because of the very concern about affordable housing that the member is bringing up and that the member for the NDP was also making reference to yesterday. The member asked about the amount of rents that come in through Housing Services, it's $48.1 million. The federal subsidies are $69.4 million, now some of that would be the money that would flow through from the agreement that was effective October 1, 1997.

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What happened there is that the federal government wanted to get out of housing at the time, and it signed agreements with each of the provinces. What took place there is they committed to honour all their existing agreements and to pay them out. That goes to 2035, but what it means is their ongoing contribution diminishes every year. Actually, over the term of it, they end up saving something to the tune of about $1.3 billion. What has happened here is that it was a good decision to allow the provinces to administer the programs, because certain savings have come in and, indeed, because of the interest savings, which is not something that's so much a function of good management but the change in the cost of money, significant surpluses have built up in the Housing Corporation, plus the province augmented that in 2001-02 with an additional, I think it was, $4.75 million, and an additional $5 million for 2002-03.

So there is a surplus called the deferred federal contribution account in the Nova Scotia Housing Development Corporation. The federal monies flow from Central Mortgage and Housing Corporation to the Nova Scotia Housing Development Corporation, and then those that are required by Housing Services to fund the many programs that we support flow from the Housing Development Corporation. So there is a surplus there. The $69.4 million federal contribution would be, in part, those declining federal payments, not only to the Province of Nova Scotia but to all provinces and territories, in combination with the surplus that we have built up in that account through cost savings and additional appropriations in past budget years. The direct provincial subsidy is $7.4 million, but again there is a surplus in the Housing Corporation which would augment that amount. I think that probably answers the member's question.

MR. GAUDET: Could the minister explain - municipalities make a contribution of $5.8 million to Housing Services - two parts, the first question is, do all municipalities help with the housing costs, and secondly, exactly what is this money being spent on?

MR. MORSE: Mr. Chairman, I'm having to use a little deduction in order to answer your question. It would be, I would suggest, subject to the municipality having public housing, because what we fund is a percentage of the deficit after you take off the rents. There's a fairly significant operating deficit, because it is to provide affordable housing, so basically we have a subsidized housing program. The municipalities are responsible for 12.5 per cent of that deficit that would accrue within their jurisdiction, and that's the deduction. I'm surmising that to be the case because I would think the municipality would not make a contribution if, for whatever reason, they had no public housing within their boundaries.

MR. GAUDET: The next budget line says Less: Recoveries - Other, $4.3 million. Could the minister indicate what this budget line represents?

MR. MORSE: Mr. Chairman, we believe that the major component of that would be the mortgage interest on the mortgages that we provide lower income Nova Scotians. As long as the member brings it up, it's good to point out that under certain circumstances, the

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province will finance 100 per cent of the cost of purchasing a home through Housing Services. Of course, that's not open to everybody, it's if you meet the qualifications, and the general mission of Housing Services is to provide affordable housing. It's not for everybody, but for those special people who might not otherwise be able to get a mortgage.

MR. GAUDET: Mr. Chairman, I want to turn to public housing. I'm looking just for general information if the minister would undertake to provide us with some information. I'm looking to find out how many public housing units we have in the province, how many people are living in these units, and would the minister provide us with the breakdown per county?

MR. MORSE: There are 12,454 units. Those are broken down between senior units, family units and rent supplements. That's another way we provide affordable housing - sometimes if there's no unit available, we'll supplement the rent. In other words, we cover a portion of the rent so that the citizen is able to afford the apartment or the house.

In terms of a breakdown by county, would the honourable member accept a breakdown by housing authority? If that's agreeable, we can provide that and we'll ask the Page to make the appropriate photocopy. Would the member be asking more questions in that area before I give the Page the sheet?

MR. GAUDET: We often hear there are vacancies, that not all public housing units are being occupied. Does the department have some indication how many vacancies we have across the province? And, exactly where they're located. So, if the minister could provide us with some indication to that, please.

MR. MORSE: Mr. Chairman, the member is asking about the location of vacancies across the province? Vacancies are a natural part of turnover. We welcome turnover in a sense because quite often turnover may mean that the tenant has perhaps improved their circumstances and ideally, moved on to home ownership. We should never lose sight of the fact that in many cases the best possible situation is home ownership. Affordable housing tends to lend itself more to the rental market where low income families or seniors are able to get into units for a percentage of their gross income. Depending on the amount of the gross income, it could be 30 per cent, it could be 25 per cent. In terms of the vacancies, as the apartments turn over, clearly the member would expect that the appropriate renovations are done so that the units would be ready for the next occupant, and depending on the condition of the unit, that will affect how quickly it can be turned over. The number of tenants that are moving in and out at any given point in time is going to affect the ability of the various housing authorities to turn them over quickly.

MR. GAUDET: I'm trying to understand if there is actually a significant number of public housing units that are empty for any given time. The reason I want to try to get that information, I also understand there's long waiting lists for different areas around the

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province. There's a shortage of public housing in other parts of the province. Would it be possible to get some information as well in order to have a better understanding, to try to understand how significant this problem is in some areas around the province.

MR. MORSE: I guess that I want clarification, perhaps by a nod, whether the member opposite is asking about vacancies which would be sort of like a snapshot in a point in time or waiting lists for the various housing authorities? Okay. The member opposite would like both. We would endeavour to get the member that information.

As long as he brings that up, I made reference . . .

MR. CHAIRMAN: Order, please. I wonder if we could have a little more order in the Chamber. It's getting quite noisy. Thank you. The Minister of Community Services.

[9:45 a.m.]

MR. MORSE: Mr. Chairman, I made reference to the fact that the federal government made an announcement in - I think it was 1993 - that they wanted to move out of housing and it was concluded with the transfer from Central Mortgage and Housing to the Nova Scotia Housing Development Corporation in 1997. There were substantial savings to the federal government by doing this. It is nice to see them coming back with the affordable housing initiative now 10 years later recognizing that there is a significant shortage of affordable housing across the country and to take some of those savings that were generated by their withdrawal from housing and providing it for the creation of new units through the affordable housing initiative. I was very pleased that my predecessor, the honourable member for Bedford-Fall River was one of the first to sign that agreement. That will provide an additional $37.26 million for affordable housing. The federal government, in the last budget, has added another $320 million to that making it a billion dollar commitment. The details on that one are being worked out.

In fact, I was in Winnipeg at a Housing Ministers meeting - federal, provincial, territorial - just last week. We were talking about some of the details as to where they would be targeting those monies. So, the member opposite basically recognizes that there's a shortage of affordable housing. I concur. It's good that the federal and the provincial governments are moving ahead to try to address this as a team.

MR. CHAIRMAN: I'd like to recognize the Government House Leader and member for Hants West on an introduction.

HON. RONALD RUSSELL: Mr. Chairman, I'd like to introduce to the House this morning eight Grade 12 students from Cape Breton Highlands Academy. They're down visiting us today with Mr. John MacKinnon and Denise Murphy. Minister MacDonald, the Minister of Tourism and Culture would like to send you his greetings, unfortunately he is

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engaged in the other Chamber with his estimates at the present time. So I would ask the House to welcome these people from Cape Breton Highlands Academy. (Applause)

MR. CHAIRMAN: Yes, indeed. Welcome to our guests in the gallery. Presently we are doing the budget estimates for the Department of Community Services. The Leader in the House for the Liberal Party is placing questions to the Minister of Community Services. As well, in the Red Room, which you're certainly permitted to visit, the estimates of the Minister of Tourism and Culture are going on as well. Welcome to all our guests in the gallery. The member for Clare.

MR. GAUDET: I, too, want to extend a warm welcome to our visitors up in the gallery. I know my time is running short, but I want to go back to the new five year affordable housing agreement that was signed back in September - $37.26 million over five years. At the time the agreement was announced, the minister indicated up to 1,500 housing units would be created or renovated. Several questions - how much funding will go into building new housing units? We saw in November just past that 15 housing units will be built in Middleton so I'm wondering how much funding will go into building the new housing units? Is the funding going to be spent in specific areas around the province? How much will be allocated for new housing units in rural Nova Scotia or will rural Nova Scotia not qualify? Could the minister indicate how much funding under this five year agreement will each county receive? Thank you.

MR. MORSE: Mr. Chairman, I would suggest to the member opposite that was a question of some substance. I would also suggest to the member that I look forward to giving him a full answer and I understand that it's going to be coming forth from Housing Services in the form of a recommendation in the very near future. By the very near future, I understand that it could be a matter of weeks. I very much look forward to their recommendations and I know the member opposite does likewise.

You have asked how much money in this budget is going towards that program, provincial monies. There is an additional $1 million that is in the budget, plus the member would be aware that additional increments have been paid into the Nova Scotia Housing Development Corporation. So there are monies there. The first opening, I understand, is tentatively scheduled for May 31^st, but that is just the tip of the iceberg because we look forward to many new units coming on. In the meantime the distribution of those units will be determined based on the recommendations that come from Housing Services.

I would also like to digress on that just a little bit, if you would allow me. One of the interesting things that I learned in my trip to Manitoba, in fact to Winnipeg, was that the federal contribution has to be matched by either provincial, municipal, or other organizations, it does not have to specifically come from the provincial government. It was interesting that the City of Winnipeg just signed an agreement with the Manitoba Government that provides for $17.5 million to put into affordable housing.

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This morning I was out with Mayor Kelly, in the inner city, and they're also very concerned about the state of homelessness and affordable housing in HRM. It tends to be a bit of a magnet for all of Atlantic Canada - displaced youth tend to gravitate towards Halifax as opposed to some of the other cities in the area, compounding the problem. So we're not only trying to care for our own, but perhaps also for those of our neighbours. They're all precious, and we should not in any way disregard that responsibility.

That is something that I would like to share here today, that it does not have to exclusively come from the province, and I anticipate that that will be reflected in the recommendations that come forward from Housing Services. Now I am not sure I answered all the member's questions, but I hope that I gave him some encouragement that good things are going to be coming forward over the next few years.

MR. CHAIRMAN: Order, please. That concludes the time of the Liberal caucus. We will shift to the NDP caucus.

The honourable member for Dartmouth North.

MR. JERRY PYE: Mr. Chairman, through you to the minister, I must say time goes by rather fast, and although we are four hours into your budget there is still a lot because your department is the third most expensive department within the province because of the number of varied programs and services that you provide to a multitude of agencies and organizations. It simply requires a great deal of time to get that kind of information through the budget process.

Now I want to go to the Estimates Supplementary Detail, Page 4.3. I am looking at Income Assistance - Child Care. I see a drop of approximately some $800,000 I believe. I am wondering if the minister can explain why there has been a drop in Child Care in Income Assistance?

MR. MORSE: The funding for this can come through the early childhood development and it can come from other sources, including the Employment Support and Income Assistance Program. So it may not show in that budget line but, with reference to the $800,000, you can also look to other parts of the estimates to find out where additional support is going for child care, through the various programs that we offer through the department.

MR. PYE: Mr. Minister, I don't think that's a good enough answer. The reason I say that is simply because Income Assistance - Child Care is one of the initiatives to move people to self-reliance and independence, and that in fact child care was a part of that program. If that program is going to be costed, then you would assume that that money would be designated in that particular budget because it's for a specific need, it's to address a specific need. I am wondering, can the minister elaborate?

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MR. MORSE: I'm just getting a few numbers to hopefully help answer the question. There's $4.9 million in Income Assistance that goes for child care, and $1.5 million of that comes from the early childhood development initiative. I wonder if that, perhaps, better answers the member's question.

MR. PYE: Mr. Chairman, no, it doesn't answer my question better. I'm trying to explain to the minister that there's a single entity here, and the single entity is that we've decided that we would move people from welfare to work and make them self-reliant and independent. Along with that would come some funding set aside for child care, because many of the individuals are single parents. One would have hoped that would have been a line item itself and that it would have been identified specifically for that. That's the reason why, when I look at the Income Assistance - Child Care, I would want to know why it dropped some $800,000. Now you're telling me there is a mix or blend, it's transferred through the other child care programs that are offered and that it's not necessarily contained within the Income Assistance - Child Care. Is that correct?

MR. MORSE: The $1.5 million that the member is referring to is just an allocation towards the $4.9 million, but I am advised that in the recent past the allocation was only $900,000 and that it has in fact grown almost fivefold with the new Employment Support and Income Assistance Program.

MR. PYE: Mr. Chairman, in his initial speech there are some 325 new spaces, and I believe there are some 200 subsidized portable spaces. Now I know the minister is aware that there's a long waiting list for subsidized daycare spaces, so I am wondering, can the minister inform the House just exactly what the situation is out there with respect to daycare spaces?

MR. MORSE: There are 2,650 subsidized child care/daycare spaces in the province. As part of the initiative with the federal government, we will be adding more subsidized child care spaces, and again this year there will be an increase in that number.

MR. PYE: Mr. Chairman, does the minister have a list of the numbers out there who are waiting for subsidized daycare spaces, and I am wondering if that's available through his department, if the minister can table it? Also, if the minister has that information, what is his government doing about it?

[10:00 a.m.]

I know that in March he had met with the minister in Ottawa with respect to a comprehensive child care program, and I am wondering if, in fact, he has impressed upon Ottawa there needs to be additional monies to at least meet the demand of subsidized daycare spaces in Nova Scotia?

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MR. MORSE: I did meet with Minister Stewart recently in Toronto, along with the other provincial and territorial ministers. I would say that Minister Stewart is a wonderful advocate for children in the country, and I think that the Prime Minister will be remembered, as well, for his caring in that area - he may not be remembered well in all areas, but I think that's one area for which we have to give him some recognition. Minister Stewart was able to convince the Prime Minister and the Minister of Finance to make a commitment for additional monies for early learning and child care. Indeed, the member opposite is quite correct, we look forward to those monies flowing into, amongst other things, more subsidized child care spaces.

It should be pointed out that this five-year agreement is heavily back-loaded; in fact the amount of additional monies that are coming to Nova Scotia for this fiscal year - and I am doing this from memory - I think it's only $749,000 in this year, it goes to $2.3 million next year, and it rapidly escalates in the third, and fourth, and fifth years - that is in addition to the early childhood development initiative, which is now coming in at $15.1 million, from the federal government.

MR. PYE: Mr. Chairman, how much of the early childhood initiative funding that comes through, both from the federal government and your department, goes into the salary enhancement plan and the grant stabilization programs? Can you tell me how much money goes into each?

MR. MORSE: I would advise the honourable member, first of all, that I was off by $1,000 in terms of my answer last time, it is $748,000 in additional early learning and child care monies. With reference to his question about the stabilization grant, I am not able to give him that answer here in terms of this fiscal year, but I can tell him that in the two previous fiscal years an additional $7 million has been channelled into that area, and we will get him the information for 2003-04.

MR. PYE: Mr. Chairman, I also asked the minister for the salary enhancement plan, as well. The minister's predecessor assured the daycare industry that in fact there would be salary enhancements and there would be the opportunity to reach the level that they felt was being requested by those people employed in that service, so I am wondering if the minister could also tell me how much money has been put into the salary enhancement plan for this year, and if there is projected years for the salary enhancement plan as well?

MR. MORSE: I would like to clarify that the $7 million that has been put in is not only for stabilization but that's also salary enhancement. The problem here that the member opposite is alluding to is that it was difficult to keep qualified people in child care, so this program was brought forward in conjunction with the federal government, to try to bring some stability to that sector. So the $7 million was stabilization and salary enhancement, because it's through salary enhancement and, of course, the investment in the child care

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workers that brings about some stability. That's where the stabilization comes from - salary enhancement is a means to stabilization.

MR. PYE: Mr. Chairman, I just want to bring to the attention of the minister - and I am sure the minister is aware of the Halifax Association for Community Living and the Halifax Preschool Development. The minister has had some letters with respect to their application for funding. Now the Halifax Association for Community Living and Preschool Development is an organization that assists individuals with disabilities. They provide child care, a special child care service for those individuals with disabilities. They had made an application for funding, which has been denied, and I am wondering if the minister can explain why that application for funding has been denied, when some of those dollars were designated for persons with disabilities?

MR. MORSE: I would like to advise the member opposite that it has been, shall we say, an interesting process, finding ways to fairly allocate these new monies that have flowed in through this agreement with the federal government. It was not an easy process under the stewardship of my predecessor, the honourable member for Bedford-Fall River and the staff. I would suggest that a lot of points were brought up by the sector as to what was the appropriate allocation, whether it should be a full-time daycare or a part-time daycare. There was quite a considerable number of variables, all of which were legitimate but, in trying to make the allocation, you do not please everybody.

A program was put together after extensive negotiation, and the program is in place as to a specific application. Yes, periodically I get letters from people who, perhaps, have not understood what the parameters of the program are and are disappointed by the answer. If the member opposite has a specific child care provider and he would like more information, I would encourage him to, perhaps, approach me afterwards and I will try to get that information for him.

In terms of children with special needs, there is a $750,000 ongoing annual allotment, and the idea here is of course to promote inclusion. It's really important that children get off to the proper start before they go to school. That is part of the program because, as the member opposite would be aware, those are the formative years, and the success of the child in school, and then with their career when they become an adult, begins before they're old enough to go to Primary, so it is a critical time in their life.

MR. PYE: Mr. Chairman, the minister is quite right, it's a critical time in a child's life - and for children with disabilities. I want the minister to know that I did send a letter off to Ms. Virginia O'Connell, the Director of Child Care and Early Intervention Services, with respect to this very issue - simply because this very issue is near and dear to my heart, it's extremely difficult to find early child care spaces for children with disabilities - because they provide some excellent services, and what they wanted the funding for, Mr. Minister, was

[Page 519]

for the implementation of ramps, lifts, and the purchase of specialized equipment and playground renovations for these children with disabilities.

That's the concern that I had, and it was such a great concern that I decided to draft a letter myself. I'm just wondering, since the minister may not be able to deal with this on the floor of the Legislature, if the minister could give some reconsideration to this application, have a serious look at it, and then come back to me, through correspondence, and to the Halifax Association for Community Living and Halifax Preschool Development with some sort of an answer that can satisfy me and them as to why they were denied this particular grant.

MR. MORSE: I would be pleased to ask staff if they could provide me, and through me to you and the applicant, the assurances that the proper procedures were followed in dealing with their application. I'd be pleased to do that. I'm not able to guarantee the outcome of this, but my concern is that when we set up programs that we follow the guidelines and that everybody is dealt with in a fair and impartial manner. So I'd be pleased to follow up with the member privately afterwards.

MR. PYE: I want to go to Page 4.7 in the Supplementary Detail and talk about the Transition and Safe Houses. There appears to be a drop in this budget again this year. The minister is very much aware that last year under his predecessor the budget line item for transition houses and the women's centre, and men's treatment program was cut by $897,000 last year. After much public pressure their funding was kept at approximately the same level in 2001-02 - they have been budgeted slightly less this year in the 2002-03 budget and this year's budget is $4,662,100. This does not allow for staff wage increases, increased heating oil, increased insurance, et cetera. These organizations have no stability - where are they to go for the additional dollars?

MR. MORSE: I thank the member opposite for his question. There are a lot of budget numbers here to look at. The commitment was to continue them at their 2001-02 funding levels, which in fact we have done and exceeded by $24,200. I think the member opposite is making reference to the fact that the Forecast for 2002-03 is slightly less than the Estimate for 2003-04. I would advise the member opposite that sometimes emergency situations come up and we may go in on a one-time basis and that could account for that discrepancy.

With reference to future funding, a commitment was made with the transition houses, the men's treatment centres and the women's centres by the former minister. One of the key points in this is that we would maintain the funding at the previous level, that being the 2001-02 level, while we worked forward on coming up with a plan that would provide service right across the province.

[Page 520]

MR. PYE: So when you say that you're going to look forward to a plan that will provide service right across the province, are there assurances that after this year, which happens to be an election year, that the government will continue to fund transition homes and women's centres? Will they see the projected increase, or is this just a stop-gap for now while this might be an election year?

MR. MORSE: The commitment is there from last year, not this year, signed by my predecessor while he was still minister. I have forgotten the date of the letter, but I have read the letter, and it seemed to lay the critical groundwork for moving ahead on this. The concern of the government, of the department is that people - particularly women and their families - who are in need of services will receive them regardless of where they live in the province.

[10:15 a.m.]

We're not sure that there's that comparable service available everywhere, the number of transition houses are not clearly in every community, and of course we wish that there was no need for transition houses. We wish that people would not abuse their spouses and their children; that would be the long term goal, I'm sure, of everybody - to eliminate spousal abuse. We are working towards some sort of provincial vision and that's our goal. I'm not sure if I've answered all the member's questions, but perhaps he could point out anything that I've missed in my answer.

MR. PYE: If you are working towards some provincial vision, are you working with the directors of the transition homes and women's centres across the province with respect to providing their input into this vision?

MR. MORSE: There is a committee that's in place and it's not only the women's centres and the transition homes, but it's also the men's treatment centres. This is to try to assist men who have a problem to overcome it, so hopefully they can be better persons. There is a committee in place and they're working on this and I am expecting to hear back from them through the middle of this year.

MR. PYE: I do apologize for missing the men's treatment centres as well, but the most important thing here is that the government and the minister's department is consulting. Your government's blue book had indicated that you would be consulting with people across the province when there may be changes made by your government, so that's important to hear and it's important to know. I certainly hope that the input from those individuals will at least be recognized by the government.

I also want to go to a report that I recently received called Social Assistance Reform in Nova Scotia: Is It Working For Women? It was sponsored by the Antigonish Women's Resource Centre, Every Woman's Centre in Sydney, and the Pictou County Women's Centre. It was released in January and it identified a lack of information for women on

[Page 521]

assistance regarding programs and services to which they are entitled. Caseworkers often do not tell clients about their rights to access special needs, et cetera. Many participants reported instances where they were denied a service and not informed of what they were entitled to because the caseworker had no knowledge of such a policy existing - and that was just part of their findings.

As a result of their findings and working with these groups, there were 11 recommendations in that report. I'm wondering if the minister has had the time to read the report and if in fact he has acknowledged all or any of the recommendations?

MR. MORSE: I thank the member opposite for following up on that report and the 11 recommendations. I know that the department appreciated the report from the women's centres. Actually, the member allows me to point something out that we are now doing in the department which may not assist every applicant for Community Services, but it is an attempt to try to be more open and transparent. The regulations are on the Web site and I understand that this is something that came in with the new Employment Support and Income Assistance Act, so we are trying to empower our clients or any potential clients to be able to get that information. Again, I recognize that may not be helpful to all of them because they may not have access to the Internet or they may not know how to use the Internet, or there may be other obstacles that prevent them from making use of it, but I would suggest that the member opposite would welcome that initiative, that we are trying to be open and transparent and make that information available.

Sometimes if you have a concern in a specific area, being able to research it assists your own case. I know the member opposite often helps out his constituents when it comes to appeals and I suspect that he is familiar with that Web site.

MR. PYE: The unfortunate part of it is that I may be, or my office may be, familiar with that Web site and we may use it frequently, but many of the citizens who are on income assistance and many of the people who need social assistance in this province, many of those individuals do not have computers, as the minister indicated earlier. There's some 9,000 people who moved off income assistance into, hopefully, self-relaince and into meaningful jobs. The minister and his department will be very much aware of those, but I'll bet you every one of them did not have a computer system within their residence or own a computer.

So, I do know that I did some years ago - and I believe that was a recommendation out of this report as well - in budget estimates, I asked the then-Minister of Community Services to provide brochures to clients indicating their entitlements - what they were entitled to, the programs and services that were available to them, and this would go a long way.

I guess when I go through this report, again I want to say that this same report identifies some wide discrepancies in caseworkers' policy, interpretation and implementation. Often women are put in vulnerable positions to do subjectivity or

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interpretation of policy and that's simply by the women themselves, and if the women's centres weren't there, if their MLA's office wasn't there, many of these individuals would be left alone not knowing what to do or how to access or how to even understand the policy that may be available to them.

Again, Mr. Minister, you didn't tell me if you read the 11 recommendations, read the report or if you have endorsed any or all of the recommendations yet or if you're still reviewing it, so I guess my question is are you doing that, and has your department considered making it easier for individuals on social assistance to understand the department and its policies?

MR. MORSE: I thank the honourable member for his two questions. To the first one, I was briefed immediately after they delivered their report. It is within the department and normally when these things happen, it's taken under consideration, it's given study. As we discussed yesterday, there is a review going on in the department of the new program. With the release of the new program and the regulations, there was some information that was made available. The member opposite was talking about brochures, but unfortunately the complexity of the regulations do not lend themselves well to a brochure, and that's why the Internet is a better vehicle - we can constantly update the Internet so that it can always be current.

The member opposite is quite right - there are other organizations, including the local MLA's office that should be able to breach that gap when a constituent is having difficulty understanding the regulations and perhaps their eligibility for assistance or various programs. I would also point out that through the CAP site program the Internet is available - again for those who are able to access the Internet - and that is not everybody, but yes, the MLA's office is another area where people can go for assistance. I know the member opposite has provided those services and I know that all members of this House would be providing those kinds of services to their constituents.

MR. PYE: I certainly hope the minister gives some serious consideration to the report, Social Assistance Reform in Nova Scotia: Is It Working For Women? I know the minister's department will. I don't know if the minister has responded to those participants such as the Antigonish Women's Centre, the Every Woman's Centre and the Pictou County Women's Centre yet; he may not have responded with respect to their report. I certainly know the minister or his department will respond and I certainly hope that out of the 11 recommendations there are some - I'm not prepared to point out here today, but I do know there are some very good recommendations in there, and I think it will go a long way in assisting the department in providing clients on social assistance with access to social services' programs which are essential and needed by those clients.

[Page 523]

I want to go to the area of persons with disabilities. I do know that the minister receives a report from LEO, the League of Equal Opportunities, on an annual basis. I believe they give you an annual report. There has been a recommendation by LEO with respect to a technical aids program. Now I asked the previous minister to introduce such a pilot project on technical aids because as the minister is very much aware, technical aids are very important to those individuals - many times individuals are left in hospitals simply because the technical aids are not available to them; they're at home and they cannot move out of their home environment because the technical aids may or may not be available to them. So what happens is that they're restricted with respect to their mobility. A technical aids program would be an exceptionally good program - and administered I would say as well by individuals with disabilities, because they best know how to deliver that sort of a program or project. I'm wondering if the minister has given any serious consideration to a pilot project with respect to technical aids in Nova Scotia?

MR. MORSE: Again, I thank the member for asking the question, and it's interesting that you asked that question because prior to receiving that information from LEO, League for Equal Opportunities, I met with our executive directors on the Disabled Persons Commission and apart from discussing with her the name "Disabled Persons' Commission" and wondering whether perhaps it should be the commission for people with disabilities - because I think we should focus on the abilities and not the disabilities - we had this conversation and it always pleases me when my staff are ahead of me.

We did talk about various ways of facilitating the sharing of these devices that are so critical to the life of people who have to live with disabilities, whether it's a wheelchair or braces or whatever device that they need in order to live, work, play, and generally have a full and productive life. To answer the member's question, this is something that we are looking at within the Disabled Persons Commission. Judy Hughes, who you would recognize is the Executive Director is very interested in this and so am I, and we hope that with the assistance of the folks from LEO that perhaps we can do something with this.

MR. PYE: It's not my hope that you can do something with this - I believe that it should become a reality. I've been in this House for approximately five years and each year I have brought this to the Department of Community Services through budget estimates and through Question Period. It seems as though it takes a very long time for government to move on what seems to be a very important issue. I do know, Mr. Minister, that you are compassionate and you're caring, and your department is compassionate and caring and certainly wouldn't want to see these individuals immobile and would in fact encourage the mobility to be sped up so that these individuals could go out and be full participants in the community, and that they would not have to stay in hospital as a result of not having technical aid, services provided to them.

[Page 524]

[10:30 a.m.]

Mr. Minister, the most expensive items to some of those individuals are braces, wheelchairs, it might be special oxygen tanks that they need to take around, a whole host of issues. For us to continuously talk about what we're going to do and that sometime down the road or somewhere in the future we see this happening is simply not good enough. If you're a disabled person you know how important that is to you. You know how important it is to be mobile. You know how important it is to be a part of the community, and how restricted you are when you don't have the services provided to you to be a part of the community.

My question to the minister once again is, if you stand here and tell me you are looking at it, do you have a date in mind? What kind of a service will you provide, will it be a pilot project to start with, will it be run and operated by persons with disabilities? What kind of a department or project are we looking at?

MR. MORSE: Mr. Chairman, I thank the honourable member for his question and I thank him for his passion to assist those who are less able in society. I would start by saying that before he started asking his supplementary question on this, I had asked if we could get a follow-up with the director from the Disabled Persons Commission on where we are in that proposal. The specific details of what would be in there will be contained in her recommendations, and where she is the spokesperson for various disabled organizations and disabled people in the province or, more aptly, people with disabilities in the province, I am sure the points the member opposite brought out will likely be reflected in her recommendations, at least I hope so, and I will be looking for them.

I did want to speak on the availability of some devices to assist people with disabilities that are currently available through either Employment Support and Income Assistance and also the Employability Assistance for Persons With Disabilities Program, which Minister Stewart has extended by an exchange of letters with the various provincial and territorial ministers, which actually flowed out of our meeting in Toronto. This is a case where the federal and provincial governments cost-share 50/50 the cost of providing these devices to assist people with disabilities to be able to pursue gainful employment. Sometimes if it's the need for a wheelchair or some other device which otherwise would be prohibitively expensive, it may well be available through this program. There are certain circumstances under special needs with the Employment Support and Income Assistance Program that may also address those areas.

I am sure the member opposite would agree that that is not necessarily where we want the main focus to be, because those people with disabilities also have a right to be full members of society and, in order for them to do that, they do need this extra assistance.

[Page 525]

MR. PYE: Mr. Chairman, I want to tell the minister that I have tremendous respect for the previous Executive Director of the Nova Scotia Disabled Persons Commission, as well I have tremendous respect for the present Executive Director, Judy Hughes. I have met with Judy Hughes and Charlie MacDonald on a number of occasions to speak about these very important issues that go forward. My concern is that there are many recommendations put forward by the Disabled Persons Commission of Nova Scotia, as well as recommendations put forward by LEO, and a number of other disabled organizations throughout the province.

Many of those recommendations have to deal with transportation of disabled persons, some of that transportation being used by seniors, and often disabled persons are not able to access it because it's available to someone else. This, particularly, is in rural communities where the transportation service provides a myriad of services to individuals such as seniors, disabled persons and the like. So there really isn't a comprehensive transportation service set out for individuals with disabilities across the province.

Another big issue with them, as well, is building code standards and so on. Does your department look at the issue with respect to building code standards, the building of subdivisions, the building of not only public buildings but of private buildings as well that people must access? Does your department do an ongoing review and assessment of how provincial/municipal building inspectors and bylaws are affecting the persons with disabilities mobility; that, in itself, is very important.

There's a myriad of recommendations that come to your government and your department, Mr. Minister, from the Disabled Persons Commission, as I've said, along with LEO and others. I'm wondering if you keep a report card yourself, maybe the commission doesn't or maybe the agencies don't, but do you keep a report card yourself on how many of those recommendations have been adopted by your government?

MR. MORSE: Mr. Chairman, the honourable member made reference to building codes specifically, and I'm pleased that he brought that up, because in my former role as Minister of Environment and Labour, I was on that committee of ministers that meets with the Disabled Persons Commission. One of the things that came up at that time was, in fact, the building code, and also concerns about making sure the appropriate protections are there for people who may be confined to a wheelchair, in the event of a fire. Then we get into the fire marshal. In fact, this was discussed with the Disabled Persons Commission. A lot of good ideas and initiatives flowed out from that meeting.

To say that I'm aware of just exactly which ones have been undertaken, I would defer to Judy Hughes and look to her to advise me where we are in terms of a scorecard on that one. I concur with the member opposite that she is a wonderful presence as executive director, and I think the member opposite would be aware that Charlie MacDonald has taken

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another position within the Department of Community Services, so he contributes in a new capacity and we're very fortunate to have him.

MR. PYE: Mr. Chairman, I want to go to housing now and the minister responsible for housing, which is the Minister of Community Services. I want to note that in 1995-96, I believe there was a federal-provincial agreement to see the province take over social housing. The federal money was given to the province. I am wondering if you can table the department's documents, in housing, outlining where all that money went each year?

MR. MORSE: Mr. Chairman, what I would like to do is get you a list of the ongoing federal commitments, and it shows how they decline eventually to zero in 2035. What happened, I think it's October 1, 1997, when Central Mortgage and Housing Corporation passed over the responsibility for the housing stock to the Nova Scotia Housing Development Corporation is that they committed to live up to all their existing agreements, but implicit in that statement is the fact that there were no anticipated new agreements, which would mean that the federal government eventually was extricating itself from public housing. Again, this is from memory, because I do not have that briefing note in front of me, but over that period of time, without the new affordable housing initiative that has now come forward from the federal government - and I'm pleased that they are getting back into public housing with the provinces and territories - the net loss to Nova Scotia was something in the tune of about $1.3 billion over that period of time. I would like to provide that stream of commitments from the federal government to the honourable member until it expires in 2035 and I've asked staff if they could please locate that table.

MR. PYE: Mr. Chairman, I'm not necessarily interested in the table. I know that when the federal government got out of the housing business in 1997, that through CMHC they sent down a bag of money to the Province of Nova Scotia to maintain the existing housing stock which the federal government would have been responsible for. What I want to know is if the department can table documents outlining how that money was spent from 1997 onward to 2003?

MR. MORSE: Mr. Chairman, I thank the member opposite for his question and the further clarification. I would advise that there was a small additional amount that recognized that some of the loans were in trouble and so provision was made in that sense, basically in anticipation of bad debts, so the transfer would be a fair one. But over and above that, as it has been explained to me, the ongoing federal monies are the commitments that they had made in signed agreements, the last of which expires in 2035, and when that one is gone - and that's just the last one because there are many already beginning to expire - then what we have is a gradual withdrawal of the federal government from public housing until, to their credit they step back in the affordable housing initiative which has now been increased to $1 billion across the country. I think it was the right decision on the part of the federal government and we, as a province, have signed on and committed to either match those funds provincially or see that there are matching funds so that we can go ahead with the initiative.

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As long as we're on that subject - and the honourable member for Clare also brought this up earlier - I think it might bear pointing out that the federal government's concern was to add additional units. There was an interest on the part of the provinces and particularly the Atlantic Provinces, to address some of the major renovations that we feel need to be made to the public housing stock, and we felt that as a result of a minister's meeting with the former minister, Gagliano, that that could be accommodated in the bilateral agreements. In actual fact that was not followed up by Central Mortgage and Housing, so it has left us in a situation where the money pretty much has to go into new housing units. It might have been better if we could have split it between making major renovations to the existing ones, perhaps putting in things like elevators, wheelchair ramps, and other things to make them more accessible.

MR. PYE: Mr. Chairman, I will come back to the housing component of the minister's portfolio later, right now I will pass my time on to the honourable member for Hants East.

MR. CHAIRMAN: The honourable member for Hants East.

MR. JOHN MACDONELL: Mr. Chairman, I want to thank my colleague, the honourable member for Dartmouth North, and I want to thank the minister and his staff for allowing me some time.

The first thing I want to get to is the issue around Rick Osborne. I wonder if the minister can tell me why it is that he has not been allowed to go back to Link House? He was slated to go back on Wednesday past, and on Tuesday your department said that they wanted to reassess him. I would like some explanation as to why has he been stalled again from going back there?

[10:45 a.m.]

MR. MORSE: Mr. Chairman, I believe the gentleman is a constituent of the member and, as such, if the member wishes to get a more detailed explanation he would know that the floor of the House is not the place. He asked me a question during Question Period yesterday and, as best I could, I tried to give him some indication of what was going on without betraying the confidentiality which I'm bound to uphold as minister.

I would say that our primary concern is the health and safety of the people in the minister's care and when somebody has a serious medical condition that affects their health in a dramatic sense, and is possibly deteriorating quickly, we would want to make sure that when living up to any decisions by an appeal board, we did so in a manner that never forgets the health and safety of the person in care.

[Page 528]

If you are looking for me to get specific with regard to a particular person in care, I would invite the member to speak with me privately afterward and I will do all that I can to assist him, but I will not be speaking about a case here on the floor of the Legislature.

MR. MACDONELL: The rules in the Chamber apply to the Red Room and they have no problem talking specifics in the Red Room, so I don't know why it's a problem here, Mr. Minister. I'm going to talk specifics if you can't.

This individual suffers from ALS, not only is he a constituent - or a former constituent because now he has moved to Truro - he's also my second cousin. The family has no problem with me raising this on the floor of the House or anywhere else, as a matter of fact they're asking me to do that. So what I want to tell the minister is that the family went through hoops put in place by your department. Your department advised them to appeal their decision and said your department said that they would support the appeal decision.

The argument put forth by the appellant is that just because he had a G-tube inserted he should not be considered requiring more care than a group home is licensed to provide. The argument put forth by the department, which is your department, they argued that as a result of the appellant having a G-tube inserted he no longer met the classification criteria for placement in a group home. Now the decision: The board grants Mr. Osborne's appeal in finding that after the insertion of the G-tube he should correctly have continued to have been classified for continual placement in a group home. Group homes are licensed to provide the care that Mr. Osborne required before the insertion of the G-tube and continues to require after its insertion. The function and care of a G-tube does not require nursing services.

I was told this morning that your department told the care provider that they had to have 24-hour LPN care for him; that is not necessary according to this appeal decision. Your department said it would support the appeal decision and I want to know why they're not supporting it, because this was a requirement that they put into place in January and the appeal occurred after that. I want an explanation as to why your department is stonewalling and keeping him from going back to a place that he considers to be his home. The appeal says he doesn't need that level of care, so I want to know who your specialist is that says that he does need it, because there's a list I can give you of physicians who say he can be cared for well under present circumstances there.

MR. MORSE: Mr. Chairman, the member opposite can make specific reference if he chooses to about a constituent, or former constituent or a relative, in asking questions here on the floor, but I would advise the honourable member again that I'm not able to discuss specific cases. I have already given the member the assurance that we are endeavouring to honour any decisions that are made as a result of an appeal and that is the policy of the department and we will continue to do so. But if you try to engage me in discussing the

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specifics of an individual in the care of the minister, I'm not going to do it here on the floor of the House.

AN HON. MEMBER: Hear, hear.

MR. MACDONELL: Hear, hear.

AN HON. MEMBER: Well it should be.

MR. MACDONELL: Well if the honourable members would take the time to check Hansard on previous budget estimates debate, they will find they're full of specific references to constituency issues and constituents. We've been doing this - I've been doing this for five years, this is not new on the floor of this House.

HON. TIMOTHY OLIVE: It doesn't make it right.

MR. CHAIRMAN: Order, please. The member for Hants East has the floor.

MR. MACDONELL: Thank you, Mr. Chairman, and maybe I can echo the honourable Minister of Natural Resources, what this minister is doing doesn't make it right either.

Mr. Minister, you haven't even given an explanation in general terms. If you don't want to use the specifics, then give me an explanation in general terms of why your department is overturning an appeal board ruling. Give me an explanation of that. Why are you overturning an appeal board ruling for anybody who goes to appeal, why are you doing that?

MR. MORSE: Mr. Chairman, I believe the member opposite is a compassionate person. The behavior that he's exhibiting here today is out of character for him. I think the honourable member has dealt with me before on other occasions and, if he truly wanted to assist this person, he would deal with me privately and I would do all that I could to assist him, but I will not discuss it on the floor of the House.

MR. MACDONELL: Maybe the minister would remember our private discussion before we went into the presentation for the Black Business Initiative a month or so ago and the minister promised me that day that he would take petitions to the Premier that had been gathered in support of this individual, so I want to know if the minister took those petitions to the Premier.

MR. MORSE: I do remember the discussion and the honourable member would recognize I think that I was well-apprised of that case and share some of his concerns. I remember giving the Premier petitions - and I'm assuming that you gave me the petitions that

[Page 530]

day, or they came through to me - for something and I believe that they were the petitions from the people who were expressing concerns in this matter.

MR. MACDONELL: The petitions were left with your staff at the last meeting that I attended with them and the family but, Mr. Minister, I spoke to you and you hadn't received them at that point, and that was probably 10 days or so after that meeting, so I was a little disappointed that your staff hadn't delivered them to you by that time. I would like to know, because the day that you and I spoke in private, you assured me that the appeal process would go through and that your department would honour it. I'm not finding that today, so maybe you could tell me, if you want to encourage me to speak to you privately, I would like you to assure me that what you tell me in private is something you will back up, because you're not doing that today.

MR. MORSE: I would just make reference to the fact that when I say something, I follow through on it.

MR. MACDONELL: Mr. Chairman, then I would like to speak to the minister in private on this and I would like his assurance that he will follow through.

MR. MORSE: I would welcome that opportunity.

MR. MACDONELL: Mr. Chairman, I want to move to group homes in my area, to the Lantz group home in particular. The group homes there have not had a change in budget, or actually they haven't had a budget approved since 1993-94. They have run overdrafts at the bank and sometimes they have a shortfall of $50,000 a year. The department has come forward and cleaned off the debt for them . . .

MR. CHAIRMAN: Order, please. The member's time for debate has expired - I actually gave you a little extra time there.

The honourable Leader in the House of the Liberal Party.

MR. WAYNE GAUDET: I want to continue where I left off, a few more questions on housing. I want to go back to the existing social housing programs. I'm sure, Mr. Chairman - as you're aware and probably as everyone in this House is aware - constituents are always looking for information on housing programs. We know that there are many low-income families and many seniors who need funding with repairs or with adaptations to help them stay in their own homes, and the department has a number of housing programs available to help these individuals. My first question to the minister would be, how much funding is given out in the department's budget to each four regional housing offices for home repair assistance?

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MR. MORSE: Yes, thank you, honourable member. I do not have the breakdown by region, but I do have the program budget. I can give you the breakdown on that, I can talk a little bit about the future, some of the negotiations that went on last week in Winnipeg, and the assurance that I feel I got from the federal minister and the new Secretary of State responsible for CMHC. With regard to the size of the program budget, it continues at $8.7 million. It's a 75/25 federal-provincial plan - the federal subsidy would be $6.9 million and the provincial subsidy is $1.8 million.

As a result of the program review that was done in conjunction with the provinces and the territories - and I would advise the House that Nova Scotia was a participant in that and the former minister actually was definitely a champion of continuing that RRAP, and we are very pleased that Minister Collenette was able to convince his federal colleagues to continue it - the continuation is for three years and there was no increase in the amount, and when it actually came down I would say I had concerns because applying the 3 per cent to the total amount it looked like there might be a cut in the Nova Scotia allocation and, in fact, with some of the federal briefing material that was contained in my package last week there was mention of a per capita which is not good news, because the member opposite would know how difficult that has been for the Atlantic Provinces as it pertains to health care in particular.

I feel that we do have it on the record from the minister and I do appreciate the support that I got from my provincial and territorial colleagues to continue to focus on that need, so I take it from that that we can expect the same allocation in the next three years as we received in the past, but it is an area where there is sorely needed more attention. Last year we were able to assist about 1,000 homeowners.

MR. GAUDET: Mr. Chairman, I'm trying to, maybe more specifically, find out how much money does the Western Regional Housing office in Middleton have to spend on RRAP Programs and other social housing programs, so could the minister indicate how much funding the Valley regional office has for social housing programs?

[11:00 a.m.]

MR. MORSE: I would just want to confirm that I think the member is asking for a good deal more than the RRAP program. We will endeavour to get that information for the honourable member, but it certainly would be nice if there was a larger RRAP component for all the regional housing services offices.

MR. GAUDET: Mr. Chairman, I welcome the minister's commitment to provide us with that information. As you're aware and I'm sure the minister is fully aware of the waiting lists for people applying for assistance with household repairs. We are constantly told by a lot of people. I know there are a lot of people, not just in my constituency, in our county but across the province who really depend on these housing programs. I am just curious if it's

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possible to find out because quite often an answer that these individuals are being provided is that right now there's not enough funding or the funding has been spent on the existing programs, and these individuals are put on waiting lists. So when new funding becomes available, of course, more applications will be processed.

I'm guess I'm trying to find out, if it's possible - I don't want the list of who is on the waiting list - some general idea in terms of how much of a backlog there is on these waiting lists? Are we looking at a few, are we looking at many hundreds or thousands even? Could the minister indicate, in terms of waiting lists on these programs, what kind of waiting lists do exist?

MR. MORSE: Mr. Chairman, I want to thank the member opposite for an excellent question. In fact, this was really the Nova Scotia case that I carried forward last week in Winnipeg, Wednesday of last week, and the whole concern about not going to per capita funding revolves around your concern, because the waiting list is far too long already. In Nova Scotia, the percentage of homes that are in need of major repairs that would qualify for RRAP is 15 per cent; well, nationally, it's 8 per cent. So you can imagine how devastating it would have been to those homeowners who have already waited far too long to come to the head of the queue if we had gone to per capita funding. Again, I was very appreciative that my provincial and territorial counterparts accepted that argument, and I feel that I got the assurance from the federal minister, in the minutes, that they would not be going to per capita.

But that does not answer the member's question. That just assures the member that we are aware, and perhaps this minister is aware that we don't want the lists to get any longer. As long as I'm talking about Winnipeg, the member opposite would welcome some news but I think he would also recognize the same concerns that I had about this. As part of the review process they were planning on doing some things like eliminating the $6,000 loan requirement for RAP applications; in other words, you can get up to $12,000 and then you can borrow another $6,000. Well, the problem is with the other $6,000 is that some of the applicants are not in the position to make any loan payments. As a result of that, they're looking at raising it to $18,000, which is good news if you happen to qualify, but if you happen to be on that waiting list and your situation is not as urgent as perhaps the person who is at the head of the list, you may not welcome that news because it means that you're going to be pushed that much further back.

This is one of the things that I brought forward to the federal minister and his Secretary of State, expressing concerns that this type of announcement is going to greatly increase the public's expectations and unless a commensurate amount of funding is made available to augment the existing budget, the waiting lists would grow disproportionately longer.

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The honourable member and I share these concerns, and basically we're looking at years, depending at where you are on the list. Basically, emergency repairs go to the top of the list. I can relate entirely with what the honourable member is sharing with me, because I know the honourable member does good constituency work. I can say that because I know that he writes me letters expressing concerns about his constituents, and it's a good reflection on the honourable member.

I would tell the honourable member I have encountered some of the same frustrations recently this winter. During the start of the cold snap, I had a constituent whose chimney blew down, and without the chimney it meant that they were depending on a little heater. I could go on about all the complications of trying to heat a house with an electric heater when it's -20 degrees out. In this case, through the Emergency Repair Program, they did fix the chimney. But by fixing that chimney, it may mean that somebody else had to wait longer because their repairs were not deemed to be an emergency, although they would clearly qualify for the program.

I guess I'm giving the member opposite some empathy, but maybe not the assurance that the additional monies will be forthcoming in this budget year although the federal minister was encouraged to please do anything he could to augment the program. I assured him and I assure the honourable member that, provincially, we will do all we can to put in the provincial 25 per cent.

MR. GAUDET: Mr. Chairman, I guess I will be more specific. Is it possible to try to get some numbers in terms of how much money the Valley Regional housing office receive for the Provincial Housing Emergency Repair Program? How much money do they receive for the Emergency Repair Program?

MR. MORSE: Mr. Chairman, with reference to my previous answer, honourable member, we will just try to provide a further breakdown as it pertains to the western region. I think you're looking for all the regions' budgets. Are you looking to compare what we're getting in the west to the other parts of the province? I see no reason why you should not have it for all four regions.

MR. GAUDET: Mr. Chairman, I thank the minister for his commitment to provide us with that information. I just have a couple of areas remaining in housing. Earlier today, the minister talked about housing units for families. In Clare there's a very small number of family units available. I heard the minister talking earlier this morning about where there's a housing shortage that housing provides a rent supplement to help families. Just a quick few questions. How does one go about getting assistance? Who do you contact for information? How do you qualify for assistance? I will repeat the questions again. How does one go about getting assistance for a rent supplement? Who do you contact? How do you qualify?

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MR. MORSE: Actually, member, you will be receiving in your mail, I trust, any time now, this from me with a note from Vicki Fraser, who is on my Communications staff. The member opposite is acknowledging it, and maybe that's the reason he asked the question. In fact, I wanted all MLAs to have that information so, first and foremost, they can be a source of information. The local housing services regional office would be the place to call in terms of the programs. If you're interested in obtaining affordable housing, you have the seven Regional Housing Authorities. I'm not sure if I've answered the member's question, but I appreciate his allowing me to point out that this is available and has been distributed to all honourable members.

MR. GAUDET: Mr. Chairman, I did receive the information, the brochure that the minister has forwarded to us. I will be doing a follow-up with the local housing office to get some information and details on that rental supplement.

I guess my last question on housing, Mr. Chairman, there are several public housing complexes in my riding. One in particular, the Foyer Gabrielle that's located in Saulnierville - I did forward a letter to the minister - this public housing unit is two story, there are 15 units I think, seven on the first floor and eight units on the second floor. Just recently there was an 80 year old lady who broke her foot. Of course, there are only two stairways at each end of the building to access the second floor, there's no elevator. I understand there are a couple of people who are in their 90s, still in good health, living on the second floor. Actually, the day that I was over, I helped the lady who had the broken foot to get down, she had a doctor's appointment. I can't even start imagining every time this lady wants to leave, she needs to make some arrangements with some other people to help her get down to the first floor.

At the same time, with these eight residents living on the second floor, every time they have to bring groceries in or take stuff upstairs or downstairs, they have to use the stairs. My question to the minister is, is there funding available to help install elevators in senior housing units?

MR. MORSE: I do recall him writing me and encouraging me to provide elevator services for Foyer Gabrielle - merci - and the concern here is that we have about 9,000 seniors in 476 buildings throughout Nova Scotia. Where there are mobility problems we try to put them either on the ground floor or in units that have elevators. Having said that, as time takes its toll, those who may be mobile in a unit that requires the use of stairs when they first go in may not always be. This may well be the case with the honourable member's constituent.

But, 85 per cent of them are accessible - either ground accessible or through elevators. We do endeavour, based on need, to allocate monies across the province for various renovations - elevators being one. But the vast majority are accessible and it would cost, I'm advised, $22 million to make it 100 per cent accessible by elevator. That's a fairly

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significant sum and we would probably want to look at the whole stock of affordable housing and other competing demands for housing services in making those determinations.

MR. GAUDET: With the recent five year affordable housing agreement, will there be funding in this new agreement to help these senior complexes to maybe access some elevators? I understand that Foyer Gabrielle is not the only senior complex in the province without an elevator. I guess my final question is, maybe the minister knows, maybe he doesn't know - he indicated earlier these recommendations will be forthcoming to his office very shortly - what the priorities will be, where the funding will be spent. I guess my last question on housing is, does the minister have some indication if there will be some money available in this new five year agreement to help some of these seniors' complexes to install elevators?

MR. MORSE: That was the wish of housing services, that there could be some flexibility in those monies, but as I understand it, the agreement that ultimately was signed between the province and the federal government is directed towards new units. While we welcome the additional housing stock, I concur with the member opposite that it might have been good to have some flexibility there. However, the federal government is putting up 50 per cent of the cost and that is significant. We certainly welcome their participation in public housing again and if they choose to do it by encouraging provinces to build new units, then I think we've got to work with them.

MR. GAUDET: I want to move to another very vital section of this department. It's about children's services. In 2001 the federal government announced a $2.2 billion agreement over five years to fund early childhood development programs. The share for Nova Scotia will be $66 million. I'm wondering maybe if the minister could indicate - is this new funding cost-shared or if it's strictly federal funding. At the same time, does the province have to provide some accountability to the federal government on where exactly this federal funding will be spent in Nova Scotia over those five years?

MR. MORSE: I thank the member opposite for his question - it's a very good question. I'm going to go to the accountability aspect. The federal government is augmenting provincial monies that are going into family and children's services. The total budget for family and children's services is $148,159,000 which includes a federal component - $15.1 million through the early childhood development initiative that the member is referring to that my predecessor signed with his federal counterpart. I would tell the member opposite or I'd advise the member opposite that the federal government was not entirely comfortable with the way that all the provinces and territories invested those monies that were provided for them. As part of the early learning and childcare initiative which further augments that program - and we've spoken about that earlier - there was a condition for greater accountability in terms of where the monies could be spent, it had to be either provincially or territorially regulated programs. There is an expectation of accountability on the part of

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the federal government and I think that there should be. Nova Scotia is happy to work with them.

MR. GAUDET: As I indicated, this agreement started out in 2001-02. In the first year of the agreement, the Province of Nova Scotia received $9.1 million, in the second year, 2002-03, the province received $12.1 million. Would the minister undertake to provide us with a complete list for the last two years of where this federal funding has been spent?

MR. MORSE: The honourable member would already have Page 4.3 which gives a summary. I think he's looking for some greater detail which is not available to me here today, but staff is making note of the member's request and will endeavour to provide that for him.

MR. GAUDET: Mr. Chairman, could the minister provide us with a preliminary list of where this year's funding will be spent? This year, from the agreement, Nova Scotia will be receiving $15 million. I suspect this funding has already been identified throughout the department to where the money will be spent. Would the minister provide us with a list of where this year's funding will be spent?

MR. MORSE: The answer, honourable member, is yes. I'm advised that, in fact, a full report for previous year's expenditures is at the proverbial printers, and I look forward to sharing that with the honourable member and all interested parties.

MR. GAUDET: I'm looking at the budget estimate, the Supplementary Detail, Page 4.7, under Family and Children's Services. Being aware that the federal government will be spending $15 million this year, I'm just trying to find out where in the budget estimate or what budget line is this funding listed under?

MR. MORSE: Mr. Chairman, if he looks at Page 4.3 he will see a breakdown of the allocation of the $15.1 million plus the $748,000 from the new Early Learning and Child Care Initiative that was agreed to back in March.

MR. GAUDET: Mr. Chairman, could the minister indicate if this is strictly federal funding, this $15.8 million, is there provincial funding added to the federal funding that will be spent on early childhood development this year?

MR. MORSE: Mr. Chairman, the funding shown on Page 4.3, $15,848,000, is the federal component of the provincial Family and Children's Services budget of $148,159,000. So it is set out specifically to answer your question and those who would have the same question.

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MR. GAUDET: Mr. Chairman, I'm just looking for clarification here. In the Budget Speech that was delivered earlier this month, Page 19, "This year we will add $3.7 million to child-care and early-learning initiatives." My question is, is this $3.7 million out of the $15.8 million? If not, where is this new provincial funding listed?

MR. MORSE: Mr. Chairman, excuse me, I was just conferring with staff on the previous answer and I'm wondering if the honourable member would repeat his question.

MR. GAUDET: Mr. Chairman, again, in the Budget Speech that was delivered earlier this month, Page 19, it indicates, "This year we will add $3.7 million to child-care and early-learning initiatives." My question was, where in the budget is this $3.7 million listed? At the same time, is this $3.7 million listed in the federal spending on Page 4.3? Could he clarify where this $3.7 million is listed?

MR. MORSE: It is listed under the Early Learning and Child Care Programs. The thing that should be pointed out there is that there was a portion in 2001-02 that was not spent which skewed the expenditures in 2002-03, so you have to net that out to determine that in fact there was an increase in the budget for 2003-04. I think that's what the honourable member has picked up on, and, in anticipation of his next question, perhaps I could provide him the answer ahead of time.

MR. GAUDET: Mr. Chairman, coming back to the first year, maybe the minister could indicate whether under the five-year agreement, in the first year it was $9.1 million, that $9.1 million was spent entirely in that year or was there any leftover that was carried over in the next year? Let's start with the $9.1 million.

MR. MORSE: Mr. Chairman, because of the timing of the announcement and the appropriate decisions that had to be made to best invest those monies, in fact only $4,414,800 was spent in the 2000-01 year, which was carried over, and the balance of the $9.1 million was actually spent in 2002-03. That's why it appears to skew the figures. I want to assure the honourable member that our concern was the provision of the best possible child care and time did not allow it to happen all in 2001-02.

MR. GAUDET: Mr. Chairman, I thank the minister for clarifying the funding for the first year of the agreement. I just want to make sure that for the second year of the agreement, 2002-03, $12.1 million plus the balance that was carried over from the previous year was spent last year. Could the minister confirm that?

MR. MORSE: The short answer, Mr. Chairman, is yes. I think if the member opposite was to add the two, the actual and the forecasts, he would find that it comes to $21.2 million, which is exactly the appropriate amount. So for the two years combined, it comes up to $21.2 million. If you take the totals, down at the bottom, for 2001-02 - $4.3 million - so the estimates, which is basically the federal contribution, is $9.1 million plus $12.1 million. So

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those two added together make $21.2 million. Then if you look at the actual and the forecast, I think you find that it comes up to exactly $21.2 million.

MR. GAUDET: Mr. Chairman, I want to move on to daycare spaces. A press release that was issued August 8, 2002, indicated that $1.6 million in funding for new start-ups and expansions will go to 22 non-profit childcare organizations across the province resulting in more than 400 new full-day and part-day child care spaces. My first question to the minister is, how are these 400 new child care spaces distributed across the province? Do centres have to apply for them or are they divided up per county or by population base?

MR. MORSE: Mr. Chairman, the various centres would be sending in those applications, and they would be scrutinized by staff. There is criteria set up to try to address these, based on need, across the province. Staff tries to match the applications with the policy.

[11:30 a.m.]

MR. GAUDET: Mr. Chairman, so the 400 new daycare spaces are divided up based on the need and based on the applications received, and, at the same time, they had to meet the criteria. Could the minister indicate how many full-time child care spaces we have in the province either in commercial or in non-profit centres?

MR. MORSE: Mr. Chairman, could I get a clarification of whether you want to know the number of approved full-time child care spaces or subsidized child care spaces?

MR. GAUDET: I will come back to the part-time in a minute. My first question is, how many full-time child care spaces do we have in the province that are being subsidized in commercial or in non-profit centres?

MR. MORSE: Mr. Chairman, I believe the answer is 2,650.

MR. GAUDET: Mr. Chairman, could the minister indicate to us how many part-time child care spaces the government is subsidizing around the province?

MR. MORSE: Mr. Chairman, I have not been given the number of subsidized spaces, but I can give you the total number of spaces for full-time and part-time but not as to whether they're subsidized or not. There are 7,966 spaces in the full-day child care sector. There are 3,700 child care spaces in the part-day sector.

MR. GAUDET: Mr. Chairman, I thank the minister for providing us with that information. We often hear that there is still not enough daycare spaces in our province, subsidized daycare spaces. Does the department have an idea of how many daycare spaces are needed?

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MR. MORSE: Mr. Chairman, I would suggest that we need more daycare spaces. We also need more subsidized daycare spaces. In terms of the absolute number, as the member opposite would appreciate, people find all kinds of ways of caring for their children while they're presumably at work. This is just one answer. I think, clearly, there's a demand for more.

MR. GAUDET: I agree with the minister that there is definitely a need for more. I was trying to find out if the department had some idea in terms of how many more would be needed. Going back to the subsidized seats, how do single moms or low-income families find out where these subsidized daycare spaces are located? How do they go about accessing these daycare spaces?

MR. MORSE: Mr. Chairman, actually, the honourable member has made an excellent point by way of his question, and I suspect he knows well the answer and that's why he asked the question. Through the early childhood initiative I believe we are investing $450,000 this year to provide that sort of information service, in fact, to assist parents in finding suitable child care for their children.

MR. GAUDET: Mr. Chairman, to be more specific, there are single moms, there are low-income families who are in need of these subsidized daycare spaces. My question was, how does one go about finding out where these subsidized seats are located in order to help these families?

MR. MORSE: Mr. Chairman, I have been advised that I gave the right number for the new child care resource and referral allocation for this year. I think what the member is saying is that until that is up and in operation what does a parent do in the meantime. To answer the member's question, a parent can approach a child care centre and enquire about availability. They are a wonderful source of information in this. They can also approach one of our Community Services offices for information. The member is basically highlighting the need for this initiative, and it is a good initiative and it's good to be working with the federal government to provide that service.

MR. GAUDET: Mr. Chairman, I just had a couple of questions on the portable daycare spaces. I'm looking at the Nova Scotia Baseline Report, Page 16 to be specific. It talks about the number of allocated and portable spaces by region. Data was from May 2001. I'm just wondering, could the minister provide us with current data in terms of how many subsidized portable daycare spaces currently exist in the province?

MR. MORSE: Mr. Chairman, the answer is 200.

MR. GAUDET: Mr. Chairman, I want to go back to the Budget Speech, Page 19. I want to talk about the Wood Street Secure Care Facility. On Page 19, it says, "Very soon, Mr. Speaker, the Wood Street Secure Care Facility in Truro will open for young clients who

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are experiencing severe difficulties . . ." My first question is how much did the care facility cost?

MR. MORSE: Mr. Chairman, I believe the question was for the capital cost of building the Wood Street Secure Care Facility, and it's $4 million.

MR. GAUDET: My next question, has this project come in on budget as was planned?

MR. MORSE: I'm advised that it came in on budget.

MR. GAUDET: Mr. Chairman, this new centre will provide highly-specialized care, specialized services for many of our children. There is no doubt that having these children closer to their families will be appreciated by all. Maybe the minister could indicate to us when he anticipates that the centre will open its doors?

MR. MORSE: Mr. Chairman, I'm pleased to advise the member for Clare that it's anticipated that that will open in mid-June. I was there a couple of months ago and I met the manager and, at that point in time, they were just concluding the process for hiring the clinical services manager, then, at that point in time the process for hiring the clinical services manager, and then at that point in time the rest of the hiring was going to take place. Of course that's a critical component of this, because it is the staff that obviously makes the centre - well, the staff and of course the youth. The staff is the critical component. I would advise the member that Mark Donerty, who was hired as the manager, has come from a similar-type facility in Saskatchewan, and he strikes me as a wonderful caring person who is doing this for all the right reasons, he has the right attributes for this job and I think he is a very good choice for the centre.

MR. GAUDET: Mr. Chairman, could the minister indicate to us, once the centre opens in June, will we still have some of our children placed outside of the province for care?

MR. MORSE: Mr. Chairman, the difficulty in answering that question is that it's a snapshot in time. The last number that we're aware of is 29. These are, of course, the special cases that are in need of services that we are currently not able to provide in the province.

MR. GAUDET: Mr. Chairman, if I understand this correctly, currently we have 29 children from Nova Scotia who need specialized care. Do we have 29 children outside the province?

MR. MORSE: Again, that would be an approximate number, because more children require that type of care and then hopefully as they leave the province they get the care and they are able to come home.

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MR. GAUDET: Mr. Chairman, my final question to the minister on this centre is, is it the intention of the department that all children who are currently outside the province in need of special care, will they be placed in this centre? Once the centre opens - I just want to find out - will Nova Scotia still have some of our children placed in homes for special care outside the province?

MR. MORSE: Mr. Chairman, I think it's important to understand that the Wood Street Secure Care Facility is a stabilization program. The idea is that youth who are having difficulties at home or in a group home or wherever they may live can be sent there. We try to stabilize them, put some sort of plan in place that would allow them to go back to their own community. The anticipated length of stay is 30 days, but clearly that's going to vary, depending on the child. It's just the nature of the service. This is not going to eliminate the need for sending children out of the province. It will greatly assist it, it will reduce the number who have to go out of the province, but it will not completely eliminate it. There are some cases that are so specialized that we just do not have sufficient population in Nova Scotia, I could probably say Atlantic Canada, to provide that type of specialized service for every single child. It's a tremendous improvement over where we have been.

MR. GAUDET: Mr. Chairman, I agree with the minister, this is certainly a step in the right direction. I want to just touch on foster parents for a minute. We've been hearing one of the key issues with foster parents is the per diem rate. We've also been hearing that recruiting foster parents in certain parts of the province is becoming increasingly difficult. My first question is, is the department planning to address some of these concerns that foster parents have raised?

[11:45 a.m.]

MR. MORSE: It is also another critical area for the Family and Children's Services Division. It is certainly preferable in many cases to place a child in foster care rather than some sort of other accommodation. It more closely resembles the family structure. There certainly are challenges out there for the foster parents. We are working with them. There's a new program that the member be aware of, called PRIDE, which basically encourages foster parents to take courses to improve their ability to care for the children, accompanied with that program there is compensation that comes with it for taking the course. That is where we're directing our efforts now, when working with the foster parents. There are other challenges, and we are working with the Federation of Foster Parents to address them.

MR. GAUDET: Mr. Chairman, could the minister indicate how much funding is currently budgeted for foster parents? And where would you find this funding in your budget?

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MR. MORSE: On Page 4.7, Maintenance of Children would include that component. I think that what the member may be getting at is that not only is it a much better form of care for many of the children in the care of the minister but it is less costly than group homes or, certainly in the case of children with extreme behaviour problems, having to send them to special facilities, sometimes out of the province which is where the member started with this line of questioning. I would anticipate the member might like to have a breakdown on the Maintenance of Children line. I have asked staff to provide that breakdown.

MR. GAUDET: Mr. Chairman, I guess my final question on foster parents would be, how much funding is currently spent on foster parents in this year? At the same time, is the department planning or considering putting additional funding for the Foster Parent Program?

MR. MORSE: The exact breakdown will come with the information from staff on the Maintenance for Children. In terms of additional resources going into it, there is a commitment with the Federation of Foster Parents, through the PRIDE Program, that does see additional monies directed towards assisting foster parents in the care of the children. I think it's important to make the point that foster parents do this because they're special people and they care for the children, it's not intended to make it a paid occupation. Clearly, it should not be at the expense of the foster parent, and I think that maybe the honourable member would agree that today the foster parents may in fact be shouldering some of the cost of the care of those children. We are working to address this through the federation.

MR. GAUDET: Mr. Chairman, I agree with the minister. Nova Scotia is truly lucky to have some caring individuals out there who have, for years and years, provided a home to many of our children in Nova Scotia. I am sure that they are not doing it for a full-time job, they're doing it because they love to work with children and provide for the needs that they have. Again, there's a number of concerns that foster parents have raised, and I'm just hoping that the department is spending some time addressing some of these concerns.

Mr. Chairman, I know my time is coming close to an end. I want to spend the next couple of minutes on the National Child Benefit program. On Page 4.9 in the Supplementary Detail, this year, Nova Scotia will be providing $30.7 million to provide child benefits to low-income families to help them raise their children. My first question to the minister is, do you know how many children in Nova Scotia receive this benefit?

MR. MORSE: Honourable member, I do not have that in the notes in front of me, but I'm quite certain the number is 60,000. That's the best efforts on the part of the minister - the number.

MR. GAUDET: Mr. Chairman, the recent stats showed in July 2002 a little over 60,000 children in Nova Scotia were receiving this benefit, so I am just looking for an updated number. Anyway, at the minister's convenience, would he undertake to provide us

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with that information? Also, I would be interested in finding out, because it's very difficult to get these numbers. Of course, the child benefit is based on the income of the family, depending on whether you have one child or more. Would it be possible for the minister to provide us with a breakdown of these benefits to families and children who are receiving the child benefit in Nova Scotia?

MR. MORSE: Mr. Chairman, that's a really important area, because what the member opposite is dealing with is the child poverty issue and how we're working, in conjunction with the federal government, to try to reduce the number of children who are living in poverty. Between, I think, the year 1999-2000, there was positive movement in that area, from 18.1 per cent to 17.6 per cent. Not good enough, honourable member, I am sure you would agree, but at least it's encouraging to see that it's moving in that direction. With the incorporation of that $30,700,000 into the National Child Benefit program with the federal government, the $30,700,000 being the Nova Scotia component, we are targeting the children in greatest need.

For any families where their household income is below $16,000, they receive the full Nova Scotia Child Benefit, which starts at $435 for the first child. With the second child, it goes to $645, and then with each child thereafter, it goes to $720. The reason that it increases is because the Canada Child Benefit component of the National Child Benefit reduces with each subsequent child, so what we've done is we've made up the difference because, really, those funds, I would suggest, are directed for the basic necessities of life that follow the child. It costs really no more in shelter costs to have another person in the family, if you know what I mean, it's not going to increase the heating bill, it's not going to increase the electrical bill significantly, but this is basically for food and clothing. So we've tried to match it to that. I'm going to sit down so the honourable member can get in one last question.

MR. CHAIRMAN: The honourable member has 20 seconds to wrap up.

MR. GAUDET: Mr. Chairman, very quickly, the minister is aware of a report that was done in April 2002 by the NSGEU, Caseload - Overload: Ready to Explode. I'm just wondering, is the department doing anything to address this concern that was raised by these child protection workers?

MR. MORSE: Mr. Chairman, in fact, I got a report on that only a couple of weeks ago, and there is a standard that we try to achieve and we're talking about the number of caseloads per each child protection worker. My recollection is that it's 20, and in fact we are meeting that standard.

MR. CHAIRMAN: The time for the Liberal caucus has ended.

The honourable member for Halifax Fairview.

[Page 544]

MR. GRAHAM STEELE: Mr. Chairman, I just have two brief points that I wanted to ask the minister about. I'm not going to take much of the committee's time. The first question is, somebody said to me recently, the most senior people in the department used to be social workers and now I know the deputy minister is a lawyer and the new associate or assistant deputy minister is a lawyer and you're accompanied today by your finance officials, which is fine, this is the estimates and I expect you to be accompanied by accountants or financial people, but I'm just wondering, now the senior ranks of the Community Services Department seem to be filled with lawyers and accountants - who is the most senior social worker, trained social worker, in the department and what position do they hold?

MR. MORSE: Mr. Chairman, I guess if he would forgive me a little indulgence, I would like to point out to the honourable member that lawyers do bring an important perspective not only to the department but also to the Legislature by times. Would the member agree? I'm not sure that he agrees but the honourable member is a lawyer by profession. There are a number of social workers in senior positions in the department. Tracey Williams is somebody who would be well known to the members of the Legislature, and another would be Jane Fitzgerald, who occupies an absolutely critical position in the department. There are a number of senior people who are social workers within the department. I would make reference to the fact that they are focused on program delivery, the administration and the overall management of the department. Yes, we do have a lawyer for a deputy and an assistant deputy and, clearly, in the finance area, we are very pleased to have a CA.

MR. STEELE: Mr. Chairman, one of the things that frustrates me about the place is even the most simple questions can't get an answer. I'm going to ask the minister again. I know there are social workers in your department, Mr. Minister. My question is simple. Now I hope the minister listens to the question carefully this time. Who is the most senior social worker in the department, and what position do they hold? I don't want a list of social workers, I want to know which social worker holds the most senior position in the department.

MR. MORSE: The answer is that the most senior positions held by social workers are the executive directors of the department, which the honourable member would recognize are the people who are crucial to program delivery. If you want to have a breakdown of the organization chart with the exact titles, I have asked staff to provide you with same. That is the most senior positions held by social workers. I have given you an example of a couple of people who are crucial to the operation of those divisions.

MR. STEELE: Mr. Chairman, the second thing that I would like to know is in relation to the RRSS strike. One of the figures that I haven't heard from either side in the dispute is a very simple one or should be a very simple one, it's not a state secret. I just don't have the facts that would allow me to calculate it myself. The question is this, if the

[Page 545]

department were to agree to the wage demand of the NSGEU, what would the annual cost to the department be?

MR. MORSE: What the NSGEU is asking for is to use a group in the health care sector - their choice of a group in the health care sector - as the comparator instead of the 5,000 people who provide care in the Community Support for Adults program. So they want to use 32 that they have chosen in the health care sector instead of the 5,000 who are actually providing those services.

[12:00 noon]

But to answer the member's question, it amounts to about an additional 33.5 per cent wage increase, and I can tell him that because we fund the sector it would have ripple effects all over the place. We're talking about over $100 million.

MR. STEELE: Mr. Minister, that's - it's probably unparliamentary to say stupid - that's a stupid answer.

MR. CHAIRMAN: Order. Order. The member for Halifax Fairview will retract that statement.

MR. STEELE: Yes, I will retract the word "stupid" and say that was a ridiculous answer, Mr. Minister. The 240 strikers are not asking for $100 million, and I'm not asking you about the ripple effects. I'm asking you a very straightforward question - if those 240 strikers received what they're requesting, what would be the annual cost to the department? I would just like a straightforward, factual answer to that question - what would be the cost?

MR. MORSE: The member did not like my first answer. I explained that there would be a ripple effect right across the sector and that we'd be looking at something in excess of $100 million. He does not like the answer; he's entitled to his opinion.

MR. STEELE: I'm sorry, another member was talking to me when the minister was giving the answer. Did the minister give a dollar figure? Mr. Minister, did you give a dollar figure just now?

MR. MORSE: Yes.

MR. STEELE: What was the dollar figure?

MR. MORSE: With the ripple effect, over $100 million.

[Page 546]

MR. STEELE: Mr. Minister, I know that you delight in not answering straightforward questions, but I'm going to ask you the question again. Without the ripple effect, just for the 240 workers, what would be the cost to your department?

MR. MORSE: Honourable member, that of course is the point here. Number one, we are not the employer, we fund the sector, and we fund the sector based on per diems. The FTE that was agreed on some four years ago, when this came forward, put $13.70 as being appropriate for the services and the training that's required by those careworkers. That is made available right across the sector, not just for the 178 people that are in the care of RRSS, but in fact the 4,900 residents right across the province. We would do the same for them; we're committed to geographic wage equity - that was part of the agreement and the cost would be in excess of $100 million.

MR. STEELE: Okay, let me do a little bit of math out loud for the minister then. Here's the way I figure it, they're asking for an increase of about $5 and a few cents an hour. So let's suppose a working week is 40 hours - in different sectors it can be a little more, a little less than that - that's an extra $5 over 40 hours, $200 a week. Call it 50, 52 weeks a year, so about $10,000 per person, and there are about 240 people in the sector, which would be $2.4 million, except for one thing - only about one-third of the work force is full-time - the majority of the work force, not quite two-thirds of them, is part-time, so it wouldn't actually be $2.4 million. The one fact that I'm missing, that I would need to calculate how much it is, is how many hours are put in by the part-timers.

I know the minister knows that and I know the officials sitting on either side of him know that, I know that his deputy and his assistant deputy know that, and it's not a state secret. I'm sure the union knows it - and I guess maybe I'll go and ask the union - all I'm looking for is a dollar figure. Now it would be $2.4 million if all of the 240 of them were working full-time, but they're not, so I'm guessing that taking into account that two-thirds of the workforce is part-time, the total cost to the department would be a little bit less than $1.5 million a year. Can the minister confirm that the total cost to the department for paying these workers what they're asking for is in the neighbourhood of $1.5 million a year?

MR. MORSE: We've gone over this area repeatedly the last number of weeks, but I'm going to refer to some of the answers that I gave yesterday. Back before we brought in the standardized level of care and the training expectations across the province, the average wage of the careworkers was about $16,000 - it went to $28,500, and that represents a 78 per cent increase.

With that there were other expectations in terms of training. I think that it was an appropriate decision to support the sector to that level. Additional monies have been put on the table, they're substantial. The member opposite knows that the union in this particular dispute with RRSS has asked for 33.5 per cent increase and that you cannot just take

[Page 547]

something in isolation. The ripple effects are considerable and the total cost, once you've factored in the ripple effects across government, would be in excess of $100 million.

MR. STEELE: My last question for the minister is this, just how long are you prepared to let this strike go on?

MR. MORSE: That is not a decision of this minister, or this department, or this government. That is something to be negotiated between the employer and the union.

MR. CHAIRMAN: Thank you, Mr. Minister. I'd like to recognize now the member for Dartmouth North.

MR. JERRY PYE: Mr. Chairman, to the minister. I want to thank the minister and his staff for appearing before the Legislature on budget estimates. I do know that there are many other issues that we could discuss within the Department of Community Services budget estimates, but also there are a number of other estimates that have to come before the House as well. Having said that, thank you, Mr. Minister, and staff for your budget estimates before the House.

MR. CHAIRMAN: Thank you, member for Dartmouth North. Mr. Minister?

MR. MORSE: I want to say that I concur completely with the member for Dartmouth North. I would have very much enjoyed being able to extend this for quite some considerable period of time. I would like to recognize that the NDP and Liberal Critics asked pertinent questions, they were insightful, and I felt that they covered a lot of the important areas such as time permitted. I appreciate the way that they conducted themselves throughout the estimates. I have a little bit of a closing statement, very brief, so that the next budget estimates can continue for Finance.

I appreciated the opportunity to review our department's budget in this forum. I'm pleased to have had the chance to respond to the questions and concerns raised during the debate. It is always important to remember that although these are numbers on a page they represent programs and services that have a profound impact on people and communities across Nova Scotia.

I would like to thank the staff of the department and I have to recognize Clem Hennebury and George Hudson for being here with me today and yesterday. Many staff members have put many hours in developing a budget that reflects the cares and concerns of Nova Scotians. I would also like to thank the network of service providers across the province - our critical partners in delivering services to people in our community.

[Page 548]

As evidenced in our budget, we have many exciting initiatives coming in the year ahead. Our department is proud to provide programs and services that support some of our most vulnerable Nova Scotians, including children who have been neglected or abused, people with intellectual disabilities, Nova Scotians in need of safe and affordable housing, and people who need support to move towards greater independence.

I would add that the critics all recognized that and, quite appropriately, directed many of their questions to those areas. Together with our partners across this province we will continue to take steps to develop and enhance programs that meet the evolving and unique needs of our communities.

Mr. Chairman, I would like to move Resolution E2.

MR. CHAIRMAN: Thank you for your closing remarks.

Shall Resolution E2 stand?

Resolution E2 stands.

The honourable Government House Leader.

HON. RONALD RUSSELL: Mr. Chairman, I move that the Committee do now rise and report progress. (Interruptions) We're going to Finance? Oh, we're not through until 1:00 p.m. Oh, well, okay. Would you please call the estimates for the Minister of Finance.

MR. CHAIRMAN: We will be debating the estimates of the Minister of Finance.

Resolution E8 - Resolved, that a sum not exceeding $1,062,316,000 be granted to the Lieutenant Governor to defray expenses in respect of Debt Servicing Costs, Department of Finance, pursuant to the Estimate.

MR. CHAIRMAN: I invite the honourable Minister of Finance to make some opening comments.

HON. NEIL LEBLANC: Mr. Chairman, I am very pleased to be here today to present the estimates of the Department of Finance. I am also responsible for other parts of the budget in regard to the capital spending of the government, Nova Scotia Resources Limited, the Nova Scotia Gaming Corporation, the Municipal Finance Corporation, and I probably have a few other ones that I haven't listed here. When we do our resolutions, I will do them one at a time and I will make sure that all members are apprised of that.

[Page 549]

My staff joining me here this afternoon is the deputy minister of our department, Howard Windsor. Howard has taken over from Mr. Bill Hogg, who was my deputy for the previous three years. Mr. Hogg did an exemplary job as deputy minister and has retired. He's an individual whose reputation is known throughout Nova Scotia, and indeed throughout much of Canada, and we will miss his talents, not only in the Department of Finance but throughout government. I am sure that he will serve in many different capacities in his community in his retirement, as I can't imagine Mr. Hogg retiring for very long. His talents are vast, and I am sure that many people will be asking him to contribute to Nova Scotia's way of life, both in business and in the community.

We have Mr. Windsor, who has taken over the helm. He's done an excellent job in the few months he has been here - I think he's probably lost a bit of hair since he started. He's found the job very challenging, but I should say that he's done an excellent job meeting that challenge.

On my left, we also have Ms. Elizabeth Cody, who is the assistant deputy minister of the department. Prior to this, she was the Executive Director of Fiscal and Economic Planning. She is filling in as assistant deputy minister of the deputy, and she has been there for approximately five or six months and has also done an excellent job. She filled in for Mr. Ramsay Duff, who was the previous ADM, who has moved on to Saint Frances Xavier University. Mr. Chairman, in succession planning, I guess we couldn't have done any better. We have two very capable people who are serving the people well, and also me as minister, and indeed the province.

First of all I want to point out that we're debating the estimates of the Province of Nova Scotia, and this is the second time that I stand in my place defending or explaining our estimates that we have tabled a balanced budget. The fact of the matter is that when we took office in 1999 one of the reasons that we became government was due to the fact that people wanted some stability at the helm of our province. Our Premier and our Party put forward a four-year plan to deal with bringing about what we considered to be fiscal sanity to the operations of the province, to allow us to make logical decisions which will have a long-term benefit, and balancing the budget was the first step in that plan. We told Nova Scotians that we would do that in three years, Mr. Chairman, and we achieved that last year. We are very proud as a government that we did so.

[12:15 p.m.]

That was not without any challenges; it was a difficult process, and we find ourselves in the second stage saying that we would repeat that in year four and we would also give income tax relief to Nova Scotians in that year. We find ourselves in a situation where we have achieved what we set out to do, and we believe it's very important that Nova Scotia develop a reputation, both to its people but also to the many creditors who hold the debt of the Province of Nova Scotia and are looking to Nova Scotia as to whether or not their trust

[Page 550]

in us, in holding our bonds, is justified. Hopefully the fact that we've been able to achieve the goals outlined in our platform will give them confidence to improve both our credit rating and also their confidence in our province that they should trust in us.

Mr. Chairman, in the previous year, 2002-03, we tabled a budget that anticipated a $1.3 million surplus based on an approximately $5.4 billion overall budget. We ended that year, with the forecast included in the budget, with a surplus of $14.5 million. That's approximately $13 million higher. Obviously the books are not yet closed on last year, that will happen early in the Fall. The situation is that we as a government said we would manage that $1.3 million surplus throughout the year and we would make adjustments, if required, throughout the year based on the situations that presented themselves. We did exactly that. We indicated that we would manage that budget and Nova Scotians could rest assured that when we finished year we would end in a surplus.

So where do we find ourselves this year? Well we find ourselves, in the fiscal year 2003-04, with a budget being tabled with a surplus of $2.8 million. Now, Mr. Chairman, we have achieved that and at the same time we have increased spending to many of our critical departments. Obviously one that is foremost in the minds of Nova Scotians is our Department of Health. In that department, we've increased our funding to the extent of $140 million. We've increased our spending in Education, which is also a major concern to Nova Scotians, to the tune of $55 million. Also we've increased our spending in Community Services, and I don't have the number in front of me here but I believe it's in the range of $13 million to $18 million. I can get that number for the members' edification. The other two I can quote a little faster. (Interruptions)

The member for Halifax Atlantic is saying that I'm doing it for their edification, but I'm doing it for your benefit, it will make it a little plainer. (Interruptions) Being French, sometimes I use these big words to explain it. Anyway, I just clarified that for the member.

We have also increased some of our other departments' spending, all along government, but most of the major increases in the three departments that I just outlined. Mr. Chairman, this budget that we've tabled, we consider to be a very positive budget. It is all about meeting the commitments we made in the areas that I just outlined, in Health, Education, Community Services, and Transportation, but we also looked at it as a budget that will grow the economy or continue the growth in the economy of Nova Scotia, and that is something which I think is very positive in the sense of where we go from today to the future. Not only have we increased spending in this budget, because we have done so to the tune of almost $200 million, but we have also lowered taxes, and that is a commitment we made to the people when we went to the polls back in 1999.

[Page 551]

Mr. Chairman, in this budget we are providing for income tax relief to taxpayers, people who pay income tax. How have we done that? We have done it in two forms. The first one will be a cash refund to taxpayers who have paid income tax in the years 2001, 2002, and 2003. Those who have paid income taxes in those years will receive an equal amount of a refund to the tune of $155. Approximately 438,000 Nova Scotians will receive this refund, and the cost of this is to the tune of $68 million. We believe this is very important in the sense that it will insert cash directly into the economy. We've talked about growing the economy and we think this will be a catalyst to continuing that growth. That is something we're prepared at any time to debate, and it has been some source of debate already in this Legislature, as to the way that we've given this income tax reduction.

The second part of the income tax relief is in the form of a formal change to the income tax system which will take effect on January 1, 2004. For people who do pay income taxes, there are three different brackets that people pay income tax on, the more money you earn, the more brackets that you will fall within. All three of those brackets have been affected to approximately 10 per cent, which falls in line with the commitment that we made as a government.

Now, Mr. Chairman, there are those who may say, well, why are we lowering taxes? I said in this House and on debate in previous days and I'll repeat again this day, we have done so to remain competitive. There are those who may argue that it is not necessary to lower taxes to remain competitive. I've had members of the Opposition Parties question as to whether or not that is an effective tool. I point out that over the last four years every province in Canada with the exception of one had lowered its taxes, and they had done so to remain competitive with other jurisdictions; every single province in Canada except one, the one province who had not yet reduced their taxes was Nova Scotia.

The fact of the matter is that we are now in a position to do so, as we said to the people of Nova Scotia when we asked for a mandate in 1999. The fact of the matter is, Mr. Chairman, you may say why did we wait? First of all, we told Nova Scotians that they would maintain the level of taxation at the levels that they were when we came into office until such time as we balanced the budget and we could provide that tax relief. Have we done that, the answer is yes. We maintained the income taxes for Nova Scotians at the rates that they were when we took office in July - actually it was August 16, 1999 when the Cabinet was sworn in, and subsequent to our balancing our budget and balancing it again, we have given that tax relief.

We really believe that these changes are very positive. I should also mention that for people in the lower income levels, 3,500 people who do pay taxes today will no longer pay any taxes at all because of these changes. Those people will fall off the tax rolls altogether. Of the changes that we've made in the brackets, though they are all approximately 10 per cent, the highest reduction has been in the lower income levels, which we feel is fair. Overall, all three brackets will receive approximately 10 per cent in their income taxes.

[Page 552]

We feel that lowering taxes is a fair but effective way to implement a system which will ensure that our province here in Nova Scotia is competitive, especially the Atlantic Provinces, but also will grow our economy. You may ask why am I so concerned with the Atlantic Provinces? Mr. Chairman, I do not stand here today and tell you that Nova Scotia can be as competitive as provinces such as Alberta. That is financially unachievable for our province. But for us to remain competitive in the Atlantic Provinces is very important, and that was one of the fundamental reasons whereby we indicated that we would be lowering taxes.

There are those who may say that you only have lowered your taxes to keep the promise that you made in 1999. I say today, as I've said in previous days, even if the commitment wouldn't have been made in the platform that we would be lowering taxes in this budget because the fact of the matter, as I have outlined before, every jurisdiction in Canada has lowered their taxes in order to remain competitive and we believe that's very important.

I look at Ontario, where the ongoing program of tax reform has included personal income tax reductions of 30 per cent since 1996. In 1992 they said that those reductions establish a more competitive personal income tax system that it is more attractive to both highly-skilled workers and investors. Those especially are the areas we want to make sure that Nova Scotians are competitive not only in attracting people to our province, but retaining the workers that we have today.

I stand in this House today in the year 2003, I was first elected in 1984. Today, people are much more transient than they ever were. I have a young lady who lives in my riding who was an airline stewardess. She went to Taipei to work. I don't know how to tell you this, 19 years ago for a young lady in my riding to say I'm going to work in Taipei was unheard of. Today, young people are looking at the world as being very much closer than it was when I first was elected. So we have to ensure that we make Nova Scotia attractive for those young people who have good skills who can find employment anywhere. By lowering taxes we will make Nova Scotia more competitive.

That is not the only thing that will help drive the economy. Some of the other investments that we have made - and I've mentioned them before in health and education and also in roads - are all part of a four-pronged approach to growing the economy, stabilizing health care, investing in education, especially in our community college system which is something we had not made investments in for a long period of time, but also investing in our infrastructure and also tax cuts, to me, encompass a package. One, by itself, does not stimulate the economy, but I believe all four of them together are all part of a plan and that is one of the reasons that we've done that.

[Page 553]

I talked about the fact of Alberta doing that, but let's take a look at B.C. Provincial income taxes were cut by about 25 per cent by the new Premier in the year 2001. That same year, Saskatchewan introduced tax cuts, said it would lower taxes there by at least 11 per cent in all brackets by this year. In Manitoba, tax reductions amounting to $181 million annually have been recorded since 2000. As I mentioned in this House earlier this week, they've announced another reduction in income taxes for middle-income earners. They're saying so because they are of the opinion that it will stimulate the economy. Those are Greg Selinger's own words, he is the NDP Finance Minister for the Province of Manitoba. We also looked at the fact that even Quebec has lowered taxes 20 per cent since 2000.

Mr. Chairman, let's get closer to home. Even New Brunswick, New Brunswick has undergone an aggressive plan that includes both personal income tax reductions totalling $130 million since 1999. That is one of the reasons that we recognized very early on, even before going to a mandate, that we had to remain competitive and that taxes should be reduced.

Let's take a look at where we're going from here. First of all, recognizing why as a government we should be prudent fiscal managers and why it was important to bring sanity to the finances of Nova Scotia. We set out on a plan. I can say when we tabled the first budget in this House - which is basically a budget that I inherited from the former member for Lunenburg West, Don Downe - we tabled here with a deficit of approximately $500 million. One of the things we didn't do as a government is say we've looked at the books, things are different and because of that we have changed our plan. I can tell you I've probably heard that story 100 times over the years. I know the member for Halifax Fairview who is going to be speaking subsequent to my comments is listening, even he has to nod that we've heard that many times, that people have said exactly that. We've looked at the books and it's much worse and, because of that, we've altered our plan.

I will say with great pride that our Premier, myself as Finance Minister and a member of our Cabinet, and our caucus did not change the direction that we set out in 1999. We did not use any excuse to say we've changed the time schedule and we're going to do this in five years hence. We stuck to our guns and we made difficult decisions. I can say in all sincerity the decisions were not easy. There were many challenges we faced as a government, and many challenges that came up on a day-to-day basis that we had to make which were difficult.

I mentioned in the past that we made difficult decisions such as removing ourselves from a steel-making industry in Sydney. I can say that it was not an easy decision for government to make, but I think all Nova Scotians felt that it had come to the time that we had invested enough and the fact of the matter is it was not going to change and we had to start focusing on the areas that we as a government wanted to invest in. What is important? Is it important to be in the steel-making industry or is it important to provide proper health care to our children, to our people and to our seniors? Are we concerned with the education

[Page 554]

of our children and those who are older who need upgrading? Or, is it important to help those who are in need who are receiving help from social services?

Mr. Chairman, we made that decision. It wasn't controversial and we didn't get a whole lot of support from the Opposition Parties when we did them. We also looked at other areas which were of risk. I will point out, as minister responsible for Nova Scotia Resources Limited, we said that though NSRL was set up to be the catalyst of a gas and oil industry, that it had come to the point where there were people in this province who had deep pockets, their own money, not the money of government, to invest in that industry. When you're looking at investing in wells in deep water that cost sometimes $60 million to $80 million, sometimes U.S., does government have a role to play in that?

[12:30 p.m.]

When you're in the private sector and you drill a dry hole, the advantage that they have, they also have taxable income in other areas that they can apply those losses against and recover part of their investment. Well, I don't know if you've checked lately, Mr. Chairman, but we don't have a whole lot of taxable income as a province. We don't have those types of benefits, so the circumstance is that we said that we would move out of the gas and oil industry. I can say that both Parties opposed our decision, they said that we should remain part of it, and we would probably receive very little for it. Well, you know, government actually did something right, we sold something at a time it had value and we received well in excess of $350 million for it. Before it's total, we will receive close to $400 million for those assets.

That means that's $400 million that we don't have to borrow. That's $400 million that we didn't have to go back to the markets for. I think that Nova Scotians are now looking at that and saying that this government is controlling its risks. They're looking at the areas where there are risks and they're removing themselves from it. I think it's very important that we do that.

With regard to my own department, I'll just try to go through a few points here. My department is made up of six divisions. It also has debt servicing and it has a net funded staff of about 160 people. The budget for our department is $13,235,000 in net program expenditures and it has $1 billion in debt servicing costs. I'd also point out to the members of the committee that $1,062,000,000 in debt servicing costs is a gross debt servicing cost. When we talk of debt servicing costs we speak of the net amount. So that number would be net of the earnings that we make in our sinking funds. That means that the amount of debt servicing costs that we have for this year will be $893 million. For the benefit of those listening, the sinking funds are funds that we provide, we invest money and we earn interest on it. The reason, you may say why would we invest money, that's to ensure when our issues of debt come up that we're in a position to pay them off on time. It's very important that the province meets every time schedule for the money that it borrows. If we don't do that, there

[Page 555]

will be consequences and they will be serious for the province, so we ensure that through our department we are always in a position to pay that.

Mr. Chairman, I want to go back to a few comments here. The fact about growing the economy, we've talked about the fact that in this budget we have a GDP growth of approximately 3 per cent - it's actually 2.9 per cent that we're using. I've been questioned on different occasions as to whether that number is reasonable. I've read different articles, even one from the Daily News where they felt that was over-optimistic. I will say that in our budget documentation we have listed in there the private forecasters' estimates for the growth in our economy. We pretty well fall in the middle of that. I look at the situation that we've received, the upgrades, from both CIBC and Scotiabank and I think they substantiate where we are.

I should point out that we're still concerned about the situation, especially in the United States. The growth there is supposed to start in the second half of 2003. That is always a concern. We're keeping an eye on that. I've recently been asked as to whether or not even the SARS situation in Ontario may have an impact on the equalization that we receive. It's very early to say how long this situation will continue. We're all very hopeful. I'm sure all members of this House are hopeful that within a week or so that this may wrap up, and we're all praying and hoping for the many people who are involved that occurs. I'm sure for the many families who have been affected, it's been very disruptive and a lot of worry to them. We've been very fortunate in Nova Scotia that that has not appeared in our province. We're hopeful, and our prayers go out that will be the case going forward.

Mr. Chairman, I look at the changes that we've made in this budget with regard to increases in the capital budget. I just want to touch a little bit on that. We have increased our spending this budget to $250 million, and some of those increases are especially in the Department of Transportation and Public Works. We indicated in our platform last time that we would increase our spending in the Department of Transportation, another $31 million. We've done that over the last three years, and this year an additional $11 million will be added to that. There is an additional $5 million that we have specified with regard to the bridge replacement program. I think the members of the House are all very much aware there is a huge problem in repairing or replacing some of our bridges. They've been around since, I'm not sure if it's Confederation, but some of them probably go back almost 100 years. So we're undertaking to embark on a replacement program which I think will well serve the people of Nova Scotia.

We've also increased our spending, another $1 million. That is with regard to the two cents that we put in place last year. Mr. Chairman, we said we would do that. I believe, at the time, it was $23.5 million that it added to the capital budget. For every two cents that we collected, that money went directly into the Department of Transportation and Public Works. What happened there is, money went towards repairing and rebuilding our roads. We gave a commitment to Nova Scotia that all the money would go. In this budget there was an

[Page 556]

additional $1 million, and that's the adjustment as to what we actually collected versus what we paid. So that makes up the increases that we had with regard to the Transportation Budget.

There was a substantial amount being spent in the Department of Education with regard to school replacements and major alterations, I believe it's in the vicinity of $80 million. Mr. Chairman, I should point out that there is a lot of work to do in this area. The list is long, we've been working very closely with the regional school boards to identify their priorities. I should point out that the list is longer than what we'd provided for in this year, but we are making progress and we will continue to work closely with the school boards to make sure that we can move this agenda forward.

Two years ago, the deficiency list, to fix it would have been somewhere in the vicinity of $500 million. I should point out there are still schools which will not be built this year, there will be some disappointment. I want to point out again that we are making progress and we are moving forward on it. Many of the most pressing schools will be advanced this year and the Minister of Education will be making that list available relatively shortly as to where we're going. I caught the attention of some of the members on the other side, and that's very good.

Overall, I should say there's been a few changes in the department. I just want to point out for the members' information that the Human Resources function has been transferred from the Public Service Commission. The employees associated with this system will be working in the Corporate Information Systems Branch. This group will be a valued resource in the implementation of the SAP Human Resources net pay module. That is something that we're rolling out within government. We're also working with many of our outside partners, and I refer to school boards, we are working closely with them to implement the SAP. We also have some municipalities which are also involved in that.

Mr. Chairman, those are some of the brief comments I'd like to make in my opening. I do know that we're moving closer to the end of estimates, and I am more than willing to entertain questions from the members opposite.

MR. CHAIRMAN: Thank you, Mr. Minister.

The honourable member for Halifax Fairview, with one hour on this new resolution.

MR. GRAHAM STEELE: Thank you, Mr. Chairman. I believe I'm right in saying that we have something in the order of 31 minutes left today?

MR. CHAIRMAN: That's correct.

[Page 557]

MR. STEELE: I'd like to start with an item that I'm having trouble finding in this year's Estimates Book - I'm sure it's there somewhere, I just need some help finding it - and that is what in previous years has been referred to as restructuring. I wonder if you could point out where in the Estimates Book the restructuring line item is, this year, please?

MR. LEBLANC: Restructuring is on Page 1.7 of the estimates. I will endeavour to get a little more reference to it to the member. It is showing here $21,624,000.

MR. STEELE: Mr. Chairman, I really did mean that as a genuine question. I just wasn't sure where it was, so the minister has helped me find it. What restructuring covers, among other things, is provision for contract negotiations, like the negotiations going on right now with the Regional Residential Services Society. So, $24.9 million has been set aside for, among other things, government-wide negotiations of collective agreements. Does the minister have an estimate of how much it would cost to settle the RRSS strike?

MR. LEBLANC: Mr. Chairman, in regard to this specific item, I would not have that estimate. First of all, I think for us to be saying how much we feel it would take to settle the strike would not be appropriate for me to be speculating on. Obviously we are involved in negotiations. The provisions that are put in the Estimates Books are for restructuring for contracts which will come up in this year. In the past I have been asked questions by members opposite as to the breakdown of the restructuring, and it's always been our position that the restructuring account is not broken down because it is made up of different issues or items which are in there and, to divulge that first of all would indicate to parties who would be negotiating with the province exactly how much we have put aside for negotiations, which, basically, would not be in the interest of the Province of Nova Scotia.

As to how much specifically it would take to resolve the one negotiation which is currently around the House, because they've been here for some time - and it is with some concern, I think, if I remember correctly, I was listening to the Minister of Community Services earlier on, I believe part of the problem he was indicating is that this is not one - stand-alone negotiation. Oftentimes what will be settled here will have impacts on other types of negotiations that are going on. I am not as well informed as the Minister of Community Services is or even the Minister of the Public Service Commission. With that, that's about as much as I can shed light on this issue.

MR. STEELE: Mr. Chairman, earlier, when the Minister of Community Services was speaking, I put the figure of $1.5 million out to him, because although he treated it like a state secret, the actual amount it would cost to settle, on the union's terms, which may or may not happen of course, it just simply depends on the wages that are being asked for times the number of hours that the workers work. The only reason we're not able to calculate that ourselves is two-thirds of that particular workforce is part-time, and we don't have the information on the total number of hours that they work.

[Page 558]

I would suggest to the minister, I did suggest to the Minister of Community Services that $1.5 million per year would do it, and he didn't disagree with me, although that particular minister, not this one, takes a perverse delight in not answering straightforward questions. I would suggest to this minister that if this particular strike is settled for whatever amount it is settled that it's the restructuring fund that it would come out of and that there is many times more than enough money in there to settle, if the government chose. The minister stood up and said it was under negotiation, but I would point out to him that it's precisely not under negotiation. That's the problem, it's not being negotiated. Nobody is talking to anybody, but the money is there.

Mr. Chairman, another item that I had difficulty finding this year, although the minister claims that it's still there, is the item that in former years was referred to as the provision for doubtful accounts, which was formerly a stand-alone line item and, as far as I can tell, this year is not. My question to the minister is, where is that item in this year's budget?

MR. LEBLANC: Mr. Chairman, while my staff are getting the pages out, it is in there. Part of the reason the member opposite is saying that it's a little more difficult to find is that there has been a change. One of the changes is that we've moved from the Department of Economic Development to a new format which is called Nova Scotia Business Inc.; also the Office of Economic Development, its department is reported under Public Service vote. So it is confusing in that sense.

Mr. Chairman, in regard to Nova Scotia Business Inc., there have been provisions made in this year's budget of $2 million, and in the Office of Economic Development there have been provisions made of approximately $0.5 million. Collectively, for the province as a whole, with other departments, and I should point out that there are other lending agencies, such as the Farm Loan Board, the Fisheries Loan Board and we also have housing development, whereby we're providing some financing to low-income families and so forth, and I think the total is in the vicinity of about $3.4 million that we made provisions for in this budget.

I appreciate the member opposite saying that it is difficult sometimes to find it. We will get the pages out and I will refer them. I anticipate that the member has found the Office of Economic Development, am I correct in that? (Interruptions) All right. We will find those pages, I will list them and then we will go through them one at a time.

[12:45 p.m.]

Going back to the previous question that he was referring to, I should point out that in regard to the employees who are having negotiations, they are not provincial employees, they are employees of an entity. I don't disagree that the province, obviously, is involved with it because the province is a funding agency. I should point out that the concern that was

[Page 559]

brought up by the Minister of Community Services is that obviously to look at any one series of negotiations in isolation is probably not the way to do it. There are many different organizations which will be coming forward also.

So the fact of the matter is that this negotiation may very well have impacts on other negotiations that are going forward, and that may lend itself to where the minister was referring to the magnitude of it being higher than the approximately $1 million that the member for Halifax Fairview was quoting. I want to say that I am not fully briefed on this issue, but I am just pointing that out for the member's information. I will get those pages for you.

MR. STEELE: Mr. Chairman, I look forward to getting those page numbers because try as I might, searching by hand, searching electronically, I couldn't find that line item in this year's Estimates Book. It has disappeared. Now it's been a bit embarrassing to the minister in the past and I don't blame him necessarily for removing an item that in the past has been embarrassing to him, but I don't think he's heard the last of it because it's going to be embarrassing to him again, or whoever the next Finance Minister happens to be because of the very large loss on account of Orenda in Debert.

This is a company that the government, first the Liberal Government and then the Conservative Government said was doing just great. It was doing just great, whenever any questions were raised about it. Even though they said they were going to create over 100 jobs and the local paper up there was able to point out that at any given time there were no more than half a dozen cars in the parking lot the government always said it's just a great company, it's just about to turn the corner, even after it appeared that the government knew that was no longer the case.

We had the spectacle of the Minister of Economic Development praising the company four weeks after it had shut down production. Either the minister didn't know something that he should have been informed of, or he knew what was really happening and said the opposite thing. Either way, we have a problem. This minister has a problem with the provision for doubtful accounts and I don't blame him for removing it completely from this year's Estimates Books.

Mr. Chairman, I would like to move from the past events of Orenda to an event reported in today's paper, which is somewhat disturbing for us. It appears that the Parti Québécois Government, or the former PQ Government, came into some information from the federal government in the midst of their recent election campaign and chose not to report it to the public, even though it had a very significant impact on the provincial finances, anywhere from $500 million to $1 billion. They were informed they were going to see a reduction in federal transfer payments, and the PQ Government chose not to report that to the people of Quebec. In today's papers they're giving all kinds of excuses about why they thought they didn't need to report it, but nevertheless it's a fact.

[Page 560]

My question to the minister, is the minister aware today of any information, any advice of any kind from the federal government indicating that Nova Scotia will receive less money in transfer payments than its forecast in this year's budget documents?

MR. LEBLANC: Mr. Chairman, before I answer that question, I do have some notes coming down from our staff that talk about the two different provisions. Nova Scotia Business Inc. is apparently being provided for on Page 15.13, and Economic Development is being provided for on Page 15.16. I don't have my Estimates Book here in front of me. If you refer to those two pages, that will give you the breakdown of the $2 million and the $500,000. If it does not, I will double check that with staff and go through it, but that should give you the two provisions that I referred to specifically. Page 15.13 and Page 15.16. (Interruptions) I will get the details. My staff sent me down this note and I have no reason - but we will go through them.

Mr. Chairman, in regard to the second question that was brought forward by the member for Halifax Fairview, the situation in Quebec is in regard to the census report that was put out in 2001. Quebec has had a depopulation and has, in a sense, a difficulty in that regard. I should point out that the census is not yet finalized. Those numbers will only probably be finalized perhaps a little later on in the Fall. The information is coming forward bit by bit.

I should point out that when the last census came forward, and that would have been in 1997, our numbers originally showed that Nova Scotia had a small decrease in its population, and when the final adjustments came through, basically they came up. In this series of census that we have just received, our initial numbers show that our population in Nova Scotia has decreased slightly. Our anticipation is that when we get our final numbers they will be comparable to what happened in 1997, and our population will basically be level with what it was in 1997.

The situation in Quebec is a little different situation. I do realize that they've been concerned in regard to this. There are two things that are going on. First of all, the federal government has not indicated how they're going to be treating the situation in regard to a decrease in population in regard to the census. I should point out that there are provinces, especially in Canada - and I will point to a very specific province which is located very close to Nova Scotia - especially Newfoundland and Labrador where we have had a huge out-migration of people, they have been concerned with the long-term effects of the depopulation in regard to equalization as it refers to Newfoundland.

The federal government as of yet has not made a determination as to how they're going to be handling the changes in census as to whether or not they will make any adjustments retroactive or whether they will go forward. That information will be known a little later on. In regard to our budget, we're comfortable with the numbers that are going forward. Probably the final changes in regard to the census won't be known until the Fall.

[Page 561]

I should point, in regard to the problem in Quebec, especially with their numbers, is that they're concerned with the initial census reports that they received and how that may affect their equalization, especially on a go-forward basis.

MR. STEELE: Mr. Chairman, just going back to the provision for doubtful accounts, the page references that you gave me, Mr. Minister, for example Page 15.13 is just one number for Nova Scotia Business Inc. I have no doubt that somewhere buried in the $29,215,000 is a provision for doubtful accounts. My point being only that that line item which used to be in the budget has disappeared from the budget documents, and I have no doubt that it's somewhere else in NSBI's documents, but it's not in the documents given here. The same goes for the reference on Page 15.16.

We will leave that aside for now, and I am sure the minister can provide those items and which agencies have provisions for doubtful accounts. I am simply expressing a concern that that item, which has proven to be embarrassing to the government in the past, has been dropped entirely. I am not saying there is no provision for doubtful accounts, clearly there is, what I'm saying is it has been dropped from the budget documents given to this Legislature.

I would like to move back to this problem that Quebec is facing now. I would like, if I may be permitted, Mr. Chairman, to read two sentences from today's Globe and Mail, and my question is going to be, the minister, did something similar happen with respect to Nova Scotia? So from today's Globe and Mail, Page 8, it says the following, "At the end of March, in the middle of the provincial campaign, the federal government advised Finance Minister Pauline Marois that Quebec would be getting much less than expected in equalization and transfer payments. In her pre-election budget, tabled March 11^th, Ms. Marois had projected that Quebec would receive an extra $788 million from Ottawa for the 2003-04 fiscal year, but instead Quebec was told it would receive $294 million less, leaving a $1.08 billion shortfall."

My question to the minister is - hanging around politics for a while has given me a good training in reading between the lines - has Ottawa informed Nova Scotia of a change in population that will impact on federal transfer payments, or has it not? Yes or no.

MR. LEBLANC: Mr. Chairman, in regard to the March 27^th supposed notification that came through, we have not been notified that our equalization will be going down. I should point out that the census and the final numbers may have an impact on revenues of the province. I should point out that is the case. There was also a determination yet to be made by the federal government in regard to how they will treat especially provinces that have had huge depopulation problems, and I referred to Newfoundland and Labrador especially. They are the most severe province that is being affected by it, also the Province of Quebec. I can't understand why their numbers would have gone up $780 million in this

[Page 562]

year. I'm not privy to all that information. I'm surprised the member said they were going up that much.

I do know that in this year, overall, from forecast to forecast, our equalization basically is actually going down from last year from estimate to estimate, because we had anticipated $1.3 billion in equalization last year, $1,320,000, and this year we're anticipating almost $80 million less than that. One of the reasons that is occurring is that our economy is doing better. To go back to specifics in regard to Quebec, it's not really appropriate for me to speculate as to what's going on in that regard. I do know that our population, by the census, is anticipated - when we have the final numbers coming in - to be relatively stable with our previous one. As to whether or not that will have some impact on equalization in this year it is too early to tell because we don't know first of all how Ottawa will react to the examples I've given you, they may very well react differently.

I should also point out that equalization is not only made up of census, it is also made up of literally hundreds of different variables which go into it. Part of the problem we have is estimating the amount of equalization that we should receive. The member opposite brings up a good point, that census results or outcomes may potentially have an impact on the amount of equalization that we have. As such, if there are adjustments, we will have to treat it, but we are not aware of the situation in regard to that similar to Quebec.

I go back to the previous question that you asked. I just want to clarify, you were saying why didn't we divulge the information. I just want to point out that since we've made the changes to the Department of Economic Development, that now is Nova Scotia Business Inc., which is an entity which is under the direction of an independent board, and we have the Office of Economic Development, they are no longer departments, they are now public sector votes, and, as such, they don't receive the level of detail that they did when they were departments.

The member opposite is correct, the information that was present there before that you could look at and see the line and say how much have you provided for allowances in this year perhaps of bad debts, you could have seen that line. The fact of the matter is the departments have changed their format, and because of that they're no longer in the same format. It is more difficult for the member opposite to find that level of detail. Obviously, you will have to ask specifics of how much in that number is included for a provision for doubtful accounts. I have indicated that within the Department of Economic Development it is $0.5 million, and within the Nova Scotia Business Inc. it is $2 million. Those are the specifics in regard to those different entities as to what provisions have been made in the budget that I tabled in the Spring.

MR. STEELE: Mr. Chairman, back on the issue of federal transfer payments. It really worries me when I heard the minister splitting hairs, which I feel he is doing today. I feel that my antennae are tingling on this one. I hear the minister kind of splitting hairs on the specific

[Page 563]

words that I choose to ask the question saying, well, no, it didn't happen exactly that way. What I appear to be hearing, if I read between the lines, is that yes indeed Nova Scotia has been advised of certain census figures that show a slight drop in Nova Scotia's population, and that yes indeed if final census figures confirm that drop, there will be an impact on the federal transfer payments, but because those figures haven't been finally confirmed, the minister is not going to say what that drop is anticipated to be, although the very same information the minister has is becoming the first scandal, post-election scandal, in Quebec. It will be interesting to see what happens here in Nova Scotia.

Since I know that however I ask the question the minister is likely to split hairs I am going to move onto a different topic. That is the topic of the 3,500 tax filers who are going to be dropped off provincial income tax rolls as a result of the tax cuts. My question to the minister is, of those 3,500 people, what is the very highest amount that they are currently paying in provincial income tax?

[1:00 p.m.]

MR. LEBLANC: Mr. Chairman, the member is asking a question that we've never really gone through the calculation to do it. Everybody's situation varies. It depends on what types of tax credits they have, whether they're married, whether they're single, whether they have circumstances of disability or not, or dependents. The problem comes in as a bit of a hypothetical question. The amount will probably not be a significant one, however the fact of the matter is they will fall off, but for me to give you a number, I would probably just be guessing. I don't think that's very fair for me to do. I have asked the staff whether they could give me one and they have a lot more experience in doing this and they would be hard-pressed to come up with a number. The number will not be literally in the hundreds of dollars, I'm not disputing that, however, these are people who did pay provincial income tax in the past which will not pay in the future.

MR. STEELE: Mr. Chairman, 3,500 people getting dropped off the tax rolls is great, that's a good thing. So, good for the minister for doing that, paying attention to the tax bracket that needs the help and can most use the help, believe me they can most use the help. I would like to point out to the minister that 3,500 people is 0.5 per cent of the tax filers in Nova Scotia, or something very close to that; one in every 200 tax filers. I would like to suggest to the minister that these are people who are now paying in the range of $10, $15 in provincial income tax, people who are paying so little in provincial tax that the smallest of cuts is going to reduce their $10 or $15 to zero. Now, I'm sure his staff can get that figure, and I will look forward to receiving it but I would be very surprised if any one of those 3,500 people is today paying more than $10 or $15 in provincial income tax. As my friend and colleague, the member for Cape Breton Centre, might say, don't hurt your hand patting yourself on the back over that one.

[Page 564]

I would like to move on to the question of pensions. As is well known, I think, the thing that rescued this year's budget from a deficit, actually not just a little bit of a deficit but a huge deficit, is the fact that the government has again changed the way that it reports pensions. I think it's also well known that the last time they changed it was just after they came into office, because they discovered that if they changed the way they valued pensions they could make the outgoing Liberal Government look as bad as possible. So they did that four years ago and, now, when the same method, the very same method that they've used for the past number of years that they've been in office would plunge them into a serious deficit, they discovered that maybe, just maybe it's time to change it back to the way that the Liberals were doing it before they lost the last election.

I asked this question on Budget Day, and I was promised by your hardworking staff, Mr. Minister, that I would probably get an answer the next day, and I know there was a lot going on that day, and I haven't received that answer but I still want it, I am still looking for an answer to this question, if the province had not changed the method of pension valuation, what would have been the impact on this year's budget?

MR. LEBLANC: Mr. Chairman, in regard to that, staff actually indicated that you had asked the question and, as to whether or not we would go out and prepare an answer, I should point out that one of the things we did is when we prepared the financial statements this year, we looked at pension accounting and how we were going to (Interruptions) When we prepared the budget this year, one of the things we looked at is how we're going to be accounting for our pensions. The member opposite is well aware that pensions have lost value in this year, especially the last year and a half to two years. We examined that and we said, well, how does the Province of Nova Scotia want to deal with this in regard to our pensions?

We have been making changes to our financial statements and how we prepared them since becoming the government, and we have made some significant changes to how we present the financial statements. One of the first things we did upon becoming government is move to Generally Accepted Accounting Principles. We moved toward managing our pension plans in a different manner, whereby the unfunded liability was included within our books. Also, the situation was of even moving towards tangible capital assets and how we would purchase assets and set them up and also depreciate them over the useful life, which is a major change from the previous administration's form of accounting. When I say the former government, I should point out that these changes have been in place for a long time. I'm not trying to be critical of anyone in that regard, but we do believe that the method that we've moved to is something that's very positive.

In regard to how we dealt with the pensions, I should point out that we have looked at that and we made some refinements in this year as to how we would deal with them, one of which is called smoothing. What that does is it deals with the gains and the losses of our pension valuation over a longer period of time. You may say isn't that the way that it should

[Page 565]

be handled? We don't manage our pension funds on a year-to-year basis. In other words, Mr. Chairman, whatever gains we have would show up in one year and whatever losses we have it would show in one year, because we manage them over a long period of time. Anybody who has experience in regard to managing pension funds doesn't try to manage them within a 12-month period, they look at the prospects over a much longer window, then, by doing so, they can make much more meaningful and much more logical investment decisions.

In regard to how we proceeded, we hired an actuary to look at our pensions and to come forward with a recommended option as to how we should account for them. When we did so, there had been some modifications that happened in this year. The member opposite has asked what the changes would have been if we had not made the changes and how much more we would have been basically adding to this year's financial statements. In order to achieve that, we would have to go back, hire the actuaries and do it over again. I'm not prepared to do so. I don't think that is a proper expenditure in regard to the Province of Nova Scotia.

I will point out that the member is accurate that if we had not changed it we would have been adding some additional expenses to this year's financial statements. That is a matter that I am more than prepared to stand here and confirm. I will say that I think more and more we have to invest for our pension valuations in a manner that is even longer term than we had done before, so that's why the changes were made.

I should point out that the changes that have been made are within GAAP. When we looked at it we didn't come up with a new accounting methodology that is outside of the Generally Accepted Accounting Principles. We felt it was very important that we maintain that, but we also want to ensure that when we make decisions in regard to our budgeting, that huge swings, both positive and negative in regard to our pension valuation, doesn't start affecting how we make day-to-day decisions within government. I should point out, to give an example, as much as you look on the negative side, if there was a positive side whereby we received an additional $50 million or $75 million on the positive side, we could go out and hire additional staff that the following year, if it was the other way, we would very well be laying them off. We're looking here to have a smoothing effect whereupon these decisions will be made in the long-term benefit of the province.

Mr. Chairman, I think you're indicating that my time is up for today. We will be returning on the next day and I will follow up on the questions of the member, and I am sure he may ask some additional ones that I will be more than prepared to answer.

MR. CHAIRMAN: Time for today's estimates have expired.

The honourable Government House Leader.

[Page 566]

HON. RONALD RUSSELL: Mr. Chairman, I move that the committee do now rise, report progress and beg leave to sit again on a future day.

MR. CHAIRMAN: The motion is carried.

[1:09 p.m. The committee rose.]