HALIFAX, THURSDAY, APRIL 28, 2016
COMMITTEE OF THE WHOLE ON SUPPLY
Mr. Keith Irving
MR. CHAIRMAN: The honourable Deputy Government House Leader.
MR. TERRY FARRELL: Mr. Chairman, I would ask that the committee resume consideration of the estimates of the Department of Business.
MR. CHAIRMAN: The honourable member for Truro-Bible Hill-Millbrook- Salmon River. You have approximately 38 minutes left for questions in this round.
MS. LENORE ZANN: Thank you very much, Mr. Chairman. Am I allowed asking questions directly to you? I think I am. Do I direct to you, again? Okay.
MR. CHAIRMAN: Please direct all questions through the Chair. Thank you.
MS. ZANN: Thanks. I wasn't quite sure about that in this room.
I'm to gather that above the additional $11.5 million provided to Nova Scotia Business Inc., in total NSBI will receive close to $40 million from the government this year. So my first question is, what requirements are given to NSBI from the province to assure accountability of these funds that go out to the various businesses?
MR. CHAIRMAN: The honourable Minister of Business.
HON. MARK FUREY: Thank you, Mr. Chairman, and I thank my colleague for the question and acknowledge her gesture earlier. I, too, will go through the Chair.
Just a couple of points I'll make and they're captured in the business plan, for my colleague's reference, on Page 50, Outcomes and Performance Measures, Page 51 and Page 52. There are three areas where that focus really of accountability would be: Trade, Investment/Payroll, and Nova Scotia's business climate.
One of the components that we've introduced for the first time in government in Nova Scotia is outcome agreements and alignment agreements, outcome agreements with the Crown Corporations. So another lens of accountability to ensure that the Crown Corporation, whether it's NSBI or any one of the others that they're aligning the work they do with the priorities of government, and it really is about ensuring the work that we all do across government is focused on the priorities, and that outcome agreement with Crown Corporations is one of the tools that I believe will be the most significant in ensuring that the work being done is focused on the priorities, with an inherent level of accountability built into that.
So, in a general term, general way, with regard to the $40 million that my colleague has referenced, that would be the policy oversight. My colleague may have questions that are more specific to components within NSBI that I may be able to expand on an answer.
MS. ZANN: Thank you. The minister referenced a few of the operations that are receiving funding, and I do remember that there a number of banks that are receiving some funding for their wage, salaries for looking after their workers. One of them is the Royal Bank of Canada, one of them is the TD, and the other one is the Butterfield Bank, I believe it's called. Butterfield - it's an offshore bank and I'm just wondering, what is the reasoning behind giving those particular banks funding from the department of the NSBI?
MR. FUREY: In general terms, the purpose of the payroll rebate is to provide incentives in the form of rebate for eligible payroll for new jobs. My colleague has referenced in particular three financial institutions. I just want to take a moment to really explain what the payroll rebate is intended to do and how it's managed, and I think there has been some confusion, Mr. Chairman, into the actual responsibility of the payroll rebate, itself.
The rebate is not paid out until the company, itself, demonstrates that it has actually created new jobs, and of course this is administered through NSBI. They actually provide the incentive, and it's up to the company to create those jobs before they earn the incentive. And, in very basic terms, in this case, the financial sector, the monies identified for payroll rebates in the jobs that they create - bearing in mind that no money is paid out until the job is created - and there's an audit process to confirm those numbers, only then is the money expended. And in every case with payroll rebates, based on the percentage of return, the 5 per cent to 10 per cent that we talked about on Tuesday with my colleague's in-House Leader, the tax revenue generated from the jobs created always exceeds the amount expended through payroll rebates.
What it also does is it identifies a focus on not only job creation, so investment attraction, job creation, the job retention, and the average numbers that I'm hearing just in HRM, the average employment growth in HRM is earmarked around 6 per cent.
The employment growth in the financial services sector, so this would include those recipients of payroll rebates, the three financial institutions that my colleague has referenced, is in the area of 24 per cent. So we're seeing that the payroll rebates are financially sound; they identify a 5 per cent to 10 per cent component; they are creating jobs, and they are creating jobs well above the average here in HRM where we are being identified - HRM is being identified really as a financial services sector that is becoming quite significant. So the payroll rebates, in very general terms, are supporting those objectives.
MS. ZANN: Mr. Chairman, I thank the minister for that explanation. I'm curious though, so why would a Royal Bank of Canada, which is one of the highest-grossing banks in Canada, need our incentive to be able to create these jobs when it seems like government is questioning other industries about incentives and about payroll rebates when really the Royal Bank of Canada is doing so well and so is TD - I'm also very curious, why would we be funding a bank that's in Bermuda? That's a couple of questions there.
MR. FUREY: Mr. Chairman, I can't speak for the financial institution, but I think what I can identify is reasons why anyone in the financial sector may look at Nova Scotia. I think in general terms they would pick locations where they're able to establish or continue their business, or expand. And for them to compete successfully, they obviously look at factors such as our skilled labour from our academic communities, both the university and community college areas; supplies, transportation, or communication linkages. But I think it's important not only for my colleague and the question that she has advanced, but I think for everyone in this Legislature to understand payroll rebates are not solely for financial institutions.
I think one of the best examples of that really is Oxford Frozen Foods in Oxford, Cumberland County, who represent the best choice of location to be competitive. They chose that area, Oxford, as the best location for them to be competitive on the world stage, and they have applied for and they have been successful in payroll rebates. I know my colleague is focused on the financial institutions, but payroll rebates are available to other sectors of our economy, and we're seeing others access those monies to create jobs, to advance economic growth, and to see rural Nova Scotia be successful as well.
MS. ZANN: Mr. Chairman, while I appreciate his response about places around rural Nova Scotia, again, I didn't really hear an answer to my question about why very, very successful banking corporations would be needing incentives such as this in order to create jobs in Nova Scotia - and, also, I'm extremely interested in why we are providing payroll rebate to a bank, an offshore bank, in Bermuda.
MR. FUREY: Mr. Chairman, a two-part question and I apologize, it was not my intent to avoid the answer.
I think the first part of it is, why would a government, through a payroll rebate, support a successful financial institution? That's part of the competitive world that we live in. All provinces and states throughout the U.S. are offering incentives to incent industry, in this case financial institutions, to their communities, and it is because of the jobs that they create. So the investment attraction, the job creation, the job retention, and the high retention of those jobs, as I indicated earlier in the employment growth the numbers that are referenced in this sector.
My colleague has spoken about the Butterfield Bank as an offshore bank. Butterfield and any financial institution, to qualify for payroll rebates, have to have a Nova Scotia presence, they have to have a Nova Scotia footprint - and Butterfield has that. If it were not for their presence in Halifax they would not qualify for the payroll rebate. So they are certainly a much larger financial institution, but they do have a Halifax presence.
MS. ZANN: A couple of things, Mr. Chairman. One is in hearing the minister talk about these rebates for these businesses and to create incentive to create jobs and keep jobs here and to be competitive - well, that sounds exactly like what the Film Tax Credit was designed for and why in fact we did have that here in Nova Scotia. I would suggest that - I would like to ask, do these three banks provide 3,200 jobs or 1,600 full-time jobs?
MR. FUREY: Mr. Chairman, I appreciate the question from my colleague. I do want to speak to the numbers that my colleague is using, and I know those are the numbers that the film industry is presenting and advancing in many discussions, and I think what's important to recognize is government and the industries still differ on what those numbers are. I'm not so focused on the numbers as the Minister of the Department of Business, I am focused on multiple sectors and how we can grow a variety of sectors to ensure that the numbers that my colleague refers to are numbers that we're able to achieve and exceed across multiple sectors. That's our objective in growing the economy of Nova Scotia.
I think for my colleague's benefit I do want to identify the difference between the Film Tax Credit and payroll rebates, and I think that would be valuable for many who are listening. They're similar in that both function like grants based on amounts that are paid for labour, and I've said this before - I think we have to deal with the facts.
The former funding formula that preceded the Nova Scotia Film and Television Production Incentive Fund was a labour subsidy between 50 per cent and 65 per cent. Now, I know there are individuals who take exception to the number "65," and it wasn't every production that would experience a 65 per cent labour subsidy. Depending on where they filmed and for how long they filmed, there were incentives that would take them above and beyond 50 per cent and could creep into 65 per cent. The payroll rebate, as I indicated earlier, is a 5 per cent to 10 per cent component that usually averages somewhere in the area of 8 per cent.
So, as I said to the Leader of the Official Opposition on Tuesday, a very distinct difference between a 50 per cent and 65 per cent labour subsidy and an 8 per cent incentive. That's important. The payroll rebate is based on a percentage of eligible payroll for new jobs, and the rate is set to be less than the expected provincial taxes - so I explained this in very general terms earlier - and they're paid by the new employees somewhere between the 5 per cent and 10 per cent mark.
There is an overall budget allotment which we can plan, and we publicly release that agreement with the company and the regular updates on our accountability website. We expect employment to continue after the payroll rebate is finished, and that's what we're seeing with the numbers I referenced earlier.
The former tax credit, as I have referenced, was paid based on a percentage of allowable labour expenses ranging between the 50 per cent and 65 per cent area, which is above the expected provincial taxes paid by people covered by the tax credit. The qualifying labour portion included such things as the labour part of meals and accommodations because the tax credit was project-based; it was not expected that most of the employment would continue unless there was another project with another tax credit. Publicly, only a total amount of the tax credit could be released. Since it was managed through the tax system, it made planning difficult as there was no overall budget.
So what we've done, responsible for Nova Scotia taxpayer dollars, in continuing to support the film industry, was to establish the Nova Scotia Film and Television Production Incentive Fund that continues with a 25 to 32 per cent all spend, and there are various components in that where we would see the return vary. So 25 per cent is the base for a production in Nova Scotia; if it's outside of HRM, there's an incentive; and if it's beyond 30 days, there's an incentive - a number of components that would allow a producer to attain the 32 per cent level. So I hope that's a little helpful in responding to my colleague's questions.
What I would like to do, Mr. Chairman, if it's appropriate if I could ask one of our very pleasant Pages to copy this document and I would like to provide a copy to my colleague. It is basically a payroll rebate fact sheet that I think may be helpful.
MR. CHAIRMAN: Could I ask the honourable Minister of Business to table the document?
MR. FUREY: Yes.
MR. CHAIRMAN: Then, copies can be made.
MS. ZANN: I thank the minister for the fact sheet that he's going to be tabling and he is going to be giving me a copy. I appreciate that.
I'm still very interested about the Butterfield Bank, and I'm wondering if the minister is aware that that particular bank has apparently been involved in some scandal in the past. The Panama Papers is something that has come to my attention, and I'm just wondering if he's aware of anything like that.
MR. FUREY: Mr. Chairman, the name of the financial institution certainly has a history that preceded our government and I even believe the previous government. There have been a number of purchases and sales within that financial institution, and these were questions, in fairness to my colleague, that I posed as we were going through the briefings on the payroll rebate for Butterfield. The research that has been completed clearly demonstrates that the financial institution that we are speaking of today, Butterfield, is no way now, or have they ever been, connected to the scandals that my colleague has referenced in a period that preceded I believe both our governments.
MS. ZANN: Mr. Chairman, I appreciate that response. I'm also aware and I'm wondering if the minister is at all aware or concerned that the former executive director of NSBI actually worked at that Butterfield Bank many years ago, then he actually came and took a job here and was executive director of NSBI and recommended payroll rebates to that company, I believe, while our government was in power, and now I see that he went back there again. I'm not sure where he is now. So I'm wondering why we are continuing and how did this happen - and does the minister have any concerns about the, perhaps, incestuousness of this relationship?
MR. FUREY: Mr. Chairman. I don't know who the individual is that my colleague is referring to, but as I indicated earlier, when I was being briefed on the payroll rebate for this financial institution, I probed on the history of the connection to I think a financial institution that had a previous payroll rebate in the province, and it was through that probing, through the work that NSBI did relative to this file, and the feedback and evidence that they were able to present to me that I am completely satisfied with the integrity of this particular financial institution.
I am very confident in the work that NSBI did in securing the information that I requested relative to any connections and allowed me to make an informed decision that this financial institution has high reputation, has integrity in the industry and, to my colleague's question, I have no concerns around this financial institution as a recipient for the payroll rebate through NSBI.
MS. ZANN: I'd be curious to know just how many jobs have actually been created by the payroll rebate funding to these three banks.
MR. FUREY: My apologies, Mr. Chairman, I was speaking to one of my colleagues. Could I ask my colleague to repeat the question? Thank you.
MS. ZANN: I was wondering how many jobs have actually been created by the payroll rebate funding to the three banks.
MR. FUREY: The question that my colleague has posed, I don't have the specific numbers relative to those three financial institutions at this stage in that payroll rebate, but we can certainly attempt to gather that information for my colleague and share it with her. What I will say in general terms with regard to the success of the payroll rebate program, from 2007 to 2012 Gardner Pinfold had completed an analysis on the economic impact of Nova Scotia Business Inc., and over the period of that review showed provincial support through NSBI helped to support the creation of at least 6,700 full-time equivalent jobs through the payroll rebate program. So it has demonstrated itself to be a very successful program. That's why we continue to invest in that investment attraction and the opportunity to create those jobs with a high rate of retention at very, very good pay scales.
My colleague has just been able to determine that specific to the Royal Bank they have created 150 jobs through the payroll rebate over the last year, but we'll get those numbers for the other two financial institutions for my colleague.
MS. ZANN: Mr. Chairman, I'd appreciate that. I'd like to know exactly how many jobs have actually been created by this.
Also, I'd just like to note that in Hansard, November 7, 2012, I noticed that the Premier actually mentioned that he had mixed feelings about the need to use payroll rebates to attract employers here to Nova Scotia. He said, "The benefit of this tool is that companies actually have to create the jobs to receive the benefit . . ." but it worried him at the time ". . . that our economy is so uncompetitive that we need to use these tools to bring employers here." Also, he mentioned that these payroll rebates ". . . are being used to help an out-of-province company compete for, or poach, talent from Nova Scotia businesses. Businesses expect to have to compete with other companies for talent, but they shouldn't have to compete with the government subsidized companies for talent. That's an unfair advantage and that's the government picking winners and losers."
That is actually what was said on November 7, 2012, by the Premier. So I'm wondering, again, why is the NSBI so focused on creating jobs in this fashion?
MR. CHAIRMAN: I'll request the honourable member to table the document with the quotation from the Premier, please.
MR. FUREY: I think without being blunt, because I have the utmost respect for my colleague. My colleague referenced 3,000 jobs earlier, a number that we'll agree to disagree on, but quite clearly the payroll rebate program between 2007 and 2012 created 6,700 jobs. The other component that is valuable for me, and I continue to use the phrase and the terminology around evidence-based decision making, Tom Traves completed a very thorough report within the very recent past - I'm going to say the last two or three, maybe four years - where he clearly identified the strength of the payroll rebate program. That was an independent review done to determine the strength of programs, in this case payroll rebate, and I value that type of advice.
I think the outcomes that we've demonstrated - not just this government, but the previous government and the government that preceded them - around the success of the program, we've all played a part and recognized the value of payroll rebates and I think the outcomes that we're seeing, the strong financial sector that we have traditionally here in Halifax because the support mechanisms are around them. They have the academic community that is able to provide young, new graduates with the appropriate academic accreditation to fill the jobs and roles that they create. I would say it's safe to say that the program's success speaks for itself.
MS. ZANN: I'd like to know how many jobs are forecasted to be created in this year, 2016-17, by the Nova Scotia Film and Television Production Incentive Fund, and in what region of the province.
MR. FUREY: Mr. Chairman, I wouldn't have those numbers, what numbers of jobs would be created, and I think that's a variable that we wouldn't know until such time as productions are actually functional. What I can say is there have been 16 productions approved under the Nova Scotia Film and Television Production Incentive Fund. That equates to about a $12 million spend in the Province of Nova Scotia. That draws down on about $3.3 million of the Nova Scotia Film and Television Production Incentive Fund, and each of those productions varies both in financial support and I anticipate inherently the size of the production, I think it's safe to say those productions that have smaller funding amounts would see a nominal number of jobs created and I think those productions with larger funding amounts would see an increased number of jobs created. So to the point of my colleague's question, I can't give her an exact number because I just don't know.
MS. ZANN: I believe there were just two productions that were done in the last year, and I believe if there are 16 more coming, how many jobs is he aware of that were created by helping out with the two that were already shot here and the 16 that have been approved for funding?
MR. FUREY: Mr. Chairman, I don't have those numbers.
MS. ZANN: Mr. Chairman, perhaps he could provide me with those numbers in the near future. I'd be very curious to know exactly how many jobs we're talking about here.
Moving on to another fund, which is the Eastlink fund, when will money be available through the Eastlink fund for productions that are needing their bridge financing for their projects?
MR. FUREY: If I may just go back to the previous question where my colleague asked for those numbers. I think those numbers would only be available once productions have commenced and completed and we know from each one of those productions the numbers of people employed within individual productions. So it will be some time before those numbers are realized and we certainly, through whatever medium we can in our work with the industry, will determine those numbers and share them with my colleague.
Now, you'll have to forgive me because I forgot the question. If I may beg of my colleague's assistance again.
MS. ZANN: Certainly. One thing I would like to say is that the two productions that have already shot we should already know what the numbers are, but I have no idea so I would like to know what those are if he can find out.
One would think that in order to get the funding that these films would be telling the department how many jobs would be created in order to be approved by the fund. So perhaps he could look into that for me.
My next question was about the Eastlink fund. When will money be available through the Eastlink fund for the productions that need it?
MR. FUREY: As we speak, NSBI is working diligently with the CRTC for certification as an administrator of the Eastlink fund. The information that I've been provided is we anticipate that process to be completed, and NSBI certified to administer that fund by the end of May.
MS. ZANN: So, basically, NSBI is not certified to be able to provide funding from the fund is what I'm hearing - is that correct?
MR. FUREY: At this time, that's correct. We anticipate that certification will be completed by the end of May.
MS. ZANN: So was the government aware that when they cancelled out Film and Creative Industries Nova Scotia who actually provided the fund that they would no longer be able to be certified to provide the fund so that all of our film industry and television programs could actually access it?
MR. FUREY: I do want to clarify one point. The Eastlink fund is not available to the broad film industry; it is limited to animated or live-action TV series. The certification that NSBI is advancing now is a required component, a required process to administer that fund. I can't speak to what preceded the Nova Scotia Film and Television Production Incentive Fund because that's the mandate that I've been given, and part of that process is to ensure that we have a body, in this case NSBI, certified to administer the Eastlink fund.
The other point that I will make specific to the Eastlink fund, Mr. Chairman, is that the Eastlink fund, itself, is application based, so there are no guarantees that any one producer or production will receive funding. I want to emphasize that because I think people are drawing conclusions because the fund is available, there will be money for productions, and that's not the case. It differs from the Nova Scotia Film and Television Production Incentive Fund where there are criteria laid out versus this application process - I want to be able to differentiate the two.
MR. CHAIRMAN: Order, please. The time has expired for questioning from the NDP caucus. We'll now move to one hour of questions from the Progressive Conservative caucus.
The honourable member for Kings North.
MR. JOHN LOHR: Thank you, Mr. Chairman, it's a pleasure to go back to this discussion. I know it was a few hours ago, but where I left off in asking questions of the minister was on Page 4.2 of the budget document, under Senior Management: last year's estimate was $3.346 million; last year's forecasted actual, $2.67 million; and this year's estimate, $3.61 million. I know the minister two days ago and a number of hours of questioning before said that there was in that estimate for this year $1.1 million of amortization for the Halifax Convention Centre.
I would like to ask the minister if we were to go to the Crown Corporation Business Plans document, which is unnumbered - I know he has promised to number that, I believe - the financial summary for the Halifax Convention Centre, does that $1.1 million in senior management show up in the Trade Centre Limited financial statements?
MR. FUREY: It would not; that's the short answer. Two separate entities, Trade Centre Limited and Halifax Convention Centre - I'm not sure if my colleague is aware. I explained the other day the asset, the footprint as it sits there. Yes, the Halifax Convention Centre is the convention centre component to which the capital amortization is related; the larger facility, including the office space and retail and hotel, is the Nova Centre; and the existing facility as we know it, Trade Centre Limited, is responsible for the World Trade and Convention Centre, Scotiabank Centre, and Ticketmaster.
MR. LOHR: I know this is in the Crown Corporation Business Plans, this is the business plan document for Trade Centre Limited, if you look at the financial summary, halfway down the page it says Halifax Convention Centre and it says revenue from grants. It shows a big jump in revenue from grants. This is what we're talking about: the Halifax Convention Centre. It also shows depreciation for the Halifax Convention Centre. My question is, the depreciation that's showing there, is it the same number as the depreciation or amortization you mentioned on the Senior Management line in the Estimates and Supplementary Detail book?
MR. FUREY: Just a couple of points for my colleague's benefit. The Department of Business has the amortization as captured in the budget document, and Trade Centre Limited, Halifax Convention Centre has the depreciation and other costs.
The reason the Halifax Convention Centre is captured in the Trade Centre Limited business plan is the Halifax Convention Centre Act was not introduced and proclaimed until April 1st, so that is the first day of the next fiscal year. Those circumstances relative to the Halifax Convention Centre are captured in the business plan for the 2015-16 fiscal year, up to the end of March 31st.
The other piece that may be helpful to my colleague here is the Halifax Convention Centre revenue from grants for 2016-17 includes a capital grant of $3 million for smallware, so that may be the difference that he's looking at.
MR. LOHR: It's my understanding, Mr. Chairman, that there's effectively no difference between amortization and depreciation from an accounting point of view; they're essentially the same thing. Why would you have depreciation in the Crown Corporation Business Plans document of $1.1 million and then have amortization under Senior Management for the same thing - $1.1 million?
MR. FUREY: The amortization that we're speaking about is for the Halifax Convention Centre. The depreciation that I've referenced and is captured is for the World Trade Centre - two different things.
MR. LOHR: Yet, in the Crown Corporation Business Plans document, it says it's for the Halifax Convention Centre. Is it stated incorrectly there?
MR. FUREY: Mr. Chairman, I think my colleague has that page in front of him, the financial summary, where he's referring to depreciation in the amount of $1.545 million - it follows the line, operating income loss before depreciation. The line immediately above that, Net Halifax Convention Centre, $152,000 - the budget for 2015-16 - that is the end of the reference to the Net Halifax Convention Centre. The operating income line and the depreciation line below is actually relative to that area on the page that precedes reference to the Halifax Convention Centre.
I don't know if that helps my colleague or not, but I'll acknowledge as it's presented that you would think the Halifax Convention Centre would be included in the Halifax Convention Centre when, in fact, it's not.
MR. LOHR: Coincidentally, the number is $1.1 million in both cases. I don't really want to spend much more time on this subject, except to say that I believe that - I believe what I heard you say about the $1.1 million in the Senior Management line was it represented $550,000 of depreciation in January 2017 and March 2017. And next year it was expected to be $7 million, or whatever $550,000 times 12 equals - not quite, something around $7 million.
I guess my comment on that is kind of bafflement that the $1.1 million would be included in Senior Management this year and not simply in the Crown Corporation Business Plans. I would say I highly doubt that next year you would show Senior Management as having another $6 million charge against it for the $7 million of amortization, so I believe it is misleading in this statement, the way this is presented. I'm just wondering - and I know that sometimes in business and financial documents they will publish an errata paper and insert it into the document. I feel this is misstated, stated wrong, so will you make a correction to your document? That's my question.
MR. FUREY: Believe me, I don't profess to be an accountant by any stretch of the imagination, but I will say that the financial statements, the business plans as they are presented are completed by those in the accounting profession. They're subject-matter experts; they compile this as they do other financial documents throughout the course of the year, and in these circumstances for the sole purpose of a provincial budget and available to the public and all members of this House for purposes of discussion and Budget Estimates. I have full confidence that the work that has been completed reflects the expertise of the profession, and I would suggest that this is a professional presentation of that accounting process. Unless I'm told by those subject-matter experts that there is a concern with how that's being presented, I would suggest that how it has been presented is how the profession would expect it to be presented.
MR. LOHR: With all due respect, Mr. Chairman, I would beg to differ with that analysis.
I would like to move on. I want to ask a question about the - and I know the minister delved into the Nova Scotia Jobs Fund considerably in his opening remarks and he stated that he could not mention any companies specifically but did mention two companies that went bankrupt in the past year, accounting for the $44 million charge of the Nova Scotia Jobs Fund. I'm just wondering, what is his level of confidence that the $35 million figure of this year in estimates is correct, given that last year's estimate was $37 million and last year's actual was $44.5 million? How confident is he that projecting an almost, I think, $9 million drop in the cost of the Nova Scotia Jobs Fund - how confident is he of that number?
MR. FUREY: The Nova Scotia Jobs Fund has a long history of variables. The $35 million that my colleague has referenced is the best estimate that our employees or staff have been able to compile for this particular budget. We recognize that there are many variables that could impact that estimate: it could impact it in a constructive and positive way, or it could impact it in a negative way. If any one of those businesses experience financial difficulty or closure, or the other side, if any one of those businesses are able to repay earlier than the commitment required. That's just a couple of examples of variables that that fund could experience. But I'll say this: I have full confidence in the work that has been completed in getting us to this number. I want to qualify that. Circumstances beyond the control of anyone involved in bringing the estimate to where it is - there are variables that could impact that going forward. This fund has a long history of that, and I anticipate we will see some of those variables in the future.
MR. LOHR: I understand what the minister is saying about the Jobs Fund. I don't really want to dwell on it any more than that at the moment.
Operational Leadership, Coordination and Alignment shows 395 per cent growth, I believe it is, to $6.7 million. Could the minister just enlighten me what that line item is for?
MR. FUREY: I think to ensure my colleague is most informed, Operational Leadership, Coordination and Alignment have a number of responsibilities under their area. They coordinate and align organizations and projects within government and with external stakeholders to support and build awareness of the government's framework for private-sector growth. They lead and coordinate for government the rural high-speed Internet initiative and the Halifax Convention Centre. So in these circumstances, the question my colleague is posing is specific to the high-speed Internet commitment in this budget. They also support the work of the alignment agreements with government that I mentioned earlier in discussions with my colleague from the NDP.
They will lead the development of an engagement plan and coordinate the implementation, recognizing building awareness of the framework of private-sector growth, promoting better alignment around it, and reducing overlap to enhance integrated focuses. So it is about, for the first time, through these outcome and alignment agreements, government-aligned departments and Crowns individually aligned with the priorities of government.
We've seen and heard in the past about silos. We've seen departments compete for money amongst each other. Those days are gone, and the Operational Leadership, Coordination and Alignment group will be responsible for ensuring that oversight is provided to both the outcome and alignment agreements and that the work that we have proposed, the objectives that we have laid out, and the priorities that we have identified as a government are all supported across individual government departments and individual Crown Corporations.
MR. LOHR: The $6.1 million increase - I believe there was a $6 million announcement for high-speed Internet; is that the same money? Is that the money that was announced for high-speed Internet?
MR. FUREY: That is the money for high-speed Internet.
MR. LOHR: High-speed Internet is of great concern to rural Nova Scotia, and I know the minister may - we all read allNovaScotia.com and may have seen the comments just in the last day or two from Eastlink about the immense difficulties and the cost of getting high-speed Internet to rural areas, not just Nova Scotia. I'm just wondering if the minister can tell me about the anticipation of how this money is to be spent, and what areas will this $6 million service in particular?
MR. FUREY: I think what's important to recognize, and we've said it publicly, and I know my colleague understands, as do colleagues in this Legislature, is the solution around connectivity and high-speed Internet is both challenging and expensive. My colleague made reference to a hearing yesterday with CRTC, and the evidence that was presented by one service provider does demonstrate that.
The $6 million that we have identified in this budget, we are in the early stages of determining how that money will be expended. We've just completed a significant amount of work. We contracted Ernst & Young to do a jurisdictional scan, needs assessment, gap identification, types of technology that are available within the industry, within the sector, that could be utilized in providing and finding solutions for Nova Scotians. We're very early in the stages of how that money will be spent.
We continue to meet internally within our department, recognizing that the cost will necessitate a long-term plan. We've engaged municipalities, stakeholders, and individual communities that have been very active in advancing the concerns around the availability of quality high-speed Internet.
We have two challenges: there are those who are not yet connected, and there are those who are experiencing poor speeds with the service provider they have. We continue to engage multiple service providers, recognizing that it will take multiple solutions and varied models of technology and service delivery across the geography of Nova Scotia to achieve that objective of maximizing the availability of high-speed Internet and connectivity for as many Nova Scotians as possible.
MR. LOHR: Has the Ernst & Young report been made public yet? I have not seen it.
MR. FUREY: It has not at this point. We want to align the content of that report, the recommendations of that report, with the work we're doing. As we pull next steps together, we will release both the report and the steps the government will take going forward in an effort to maximize high-speed availability and quality high-speed Internet services for Nova Scotians.
MR. LOHR: I don't want to spend too much more time on this, but what I think I heard you say, Mr. Minister, through you, Mr. Chairman, is that you have $6 million allocated, but you don't have a specific plan yet for that; it depends on certain things going forward. I would like to suggest that a year goes by remarkably quickly. There isn't that much time to decide these things. You surely must have some sort of specific plan on how you're going to spend this $6 million if it's a line item here.
MR. FUREY: What I want to share with my colleague and share with all Nova Scotians is, we recognize the importance of high-speed Internet in rural Nova Scotia. We have been very diligent and will continue to be diligent in managing the expectations of Nova Scotians and also in meeting the expectations of Nova Scotians. We will take appropriate time internally within the department to address both the short-term and the long-term needs and solutions. But what we won't do is rush into a service without the appropriate work and level of confidence we need to advance this particular project.
We saw that in 2007 with the high-speed Internet program launched at that time by my colleague's government. I recognize he wasn't part of that government. There was no research. There was no background. There was no analysis done to determine technology, models of delivery, and long-term outcomes.
We've engaged many stakeholders, many municipalities, residents, industry. We have communicated in discussions with them the challenges that we face, and they all recognize those challenges. We will be diligent in ensuring that the work we advance meets the short-term needs and the long-term needs for the extended future. We don't want to be back two, four, six, eight, or 10 years from now, having the same discussion because government rushed into a decision that was not based on any evidence, was not based on sound judgment. We're very conscious of that, and Nova Scotians are telling us that. They're telling me that personally when I engage them in this discussion.
To my colleague's point, we will continue internally. We will continue to engage stakeholders, homeowners, municipalities, and others so that we are moving this project together. It will be a partnership - necessary. We know that the federal government has a Connecting Canadians program coming up soon. Municipalities have expressed interest in partnering. Quite honestly, it will take a partnership between all levels of government and individual communities to ensure we achieve the objective. We'll do that with both short-term and long-term objectives in mind.
MR. CHAIRMAN: To the member for Kings North, I wonder if we may take a couple of moments of your time to make an introduction.
The honourable member for Cole Harbour-Eastern Passage.
MS. JOYCE TREEN: Mr. Chairman, I would like to draw everybody's attention to the east gallery. We have members here from the THR!VE Education program. They're visiting us from Dartmouth. I ask if everybody would show them the warm welcome of the House. (Applause)
MR. CHAIRMAN: The honourable member for Kings North has the floor.
MR. LOHR: What I hear the minister saying is the $6 million will be spent on consultation and discussions. I'm just wondering if the minister can tell me how many Nova Scotians can expect to have better - can you give me a number of Nova Scotians who will have better high-speed Internet? Is there any actual number of people whose lives will be improved for this $6 million? Or will it be all consultation?
MR. FUREY: I do want to suggest to my colleague that that's not what I said. We're not going to spend $6 million on consultation. We will do the necessary work to address short-term needs and demands with a long-term strategy to ensure that we achieve the objective of connecting as many Nova Scotians as possible to quality high-speed Internet. That's going to take time, and it's going to take work. We will continue with that effort. It's quite impossible to identify a number that we may achieve. We want to maximize the numbers. The $6 million identified in this budget will go towards that work. I'm optimistic that we will see additional communities and additional homes connected.
This is a long-term strategy, and I encourage my colleague to engage some of the municipal leaders who are leading this, particularly in Annapolis County, Queens County, Lunenburg County, and Shelburne County. They understand the challenges, and they're prepared to work with our government to advance both the work and our collective ability to achieve those objectives.
MR. LOHR: It's hard to drop the subject; we could continue on that one. But we'll leave that and go to the Sector Development and Entrepreneurship budget line. It was $5.349 million in 2015-16 actual, and it's projected to be $13 million this year. Is there $5 million in there for Invest Nova Scotia? That's my question. What does account for that approximately $8 million increase?
MR. FUREY: The Sector Development and Entrepreneurship line I think is what my colleague has referenced. There is an existing $2 million for Invest Nova Scotia and an additional $3 million identified, for a total of $5 million. There's an additional $590,000 for the capital investment incentive and just shy of $1 million for internal transfers within that area of responsibility.
MR. LOHR: Can the minister tell me what the capital investment - I probably didn't even get the whole title. That capital investment, could he give me the title of that program again and tell me where that money is being spent and how much it is again?
MR. FUREY: The capital investment program is a legacy program from the former Department of Economic and Rural Development and Tourism. That was closed to applications April 9, 2015, which was the last budget. Obviously we continue to honour the terms and agreements of each of those contracts that had been made at that time. There are two applicants, PepsiCo Foods and Pratt & Whitney, which would have been public information at the time. Under the capital rebate program, they're eligible to receive just about $16.5 million over a multi-year period. Their actual spending profile in the 2015-16 fiscal year had not matched earlier estimates. That's the program and the clients in the program as we speak.
MR. LOHR: In terms of Invest Nova Scotia, I guess there would be some who would say it has been taking a long time to get going. I know that that doesn't necessarily mean that it's not doing the right thing, but it has been awhile. I notice they've had 14 applications, have rejected four, and have not accepted any. What is your anticipation of the work of Invest Nova Scotia in this coming year? Do you anticipate that they will approve any applications?
MR. FUREY: I think the first thing that's important to recognize is that Invest Nova Scotia itself, the board of directors is an independent board with independent decision making from government. They have a budgeted amount of money, and they will administer the application and decision-making process within their board. They've received to date 18 applications. Six applications have been declined. There's five that are in the application process - what I would say is applications in process. There are four applications to be reviewed, and there are three applications presently on hold. Invest Nova Scotia has a web page, so there is information available to the public through their web page.
The creation of Invest Nova Scotia - to the time frame my colleague has referenced - certainly has taken time. They are a new entity. They're independent of government. They had to come through the bylaw process and ensuring that the governance model is in place. That takes time.
What I think is most relevant with Invest Nova Scotia is the independence and the scrutiny that they are giving applications. Invest Nova Scotia doesn't support direct-to- business, as the old Jobs Fund did. There's no blank cheques coming from Invest Nova Scotia to individuals where there's no business plan or there has been no business analysis to determine the potential success or potential failure of a business, as was the case in the old Jobs Fund. We closed the Jobs Fund because it was not serving the intended purpose.
We know the economy of Nova Scotia has struggled for the last 25 years, up to 2013, for the previous 25 years, Nova Scotia had the worst-performing economy in the country. Hundreds of millions of dollars were spent without any true analysis supported by established business plans.
The Invest Nova Scotia fund has significant scrutiny. It's removed from Cabinet decision making. It is, as I mentioned earlier, an independent board that applies what I would consider a high level of due diligence. The decisions they're making, I think, as they become public, will give Nova Scotians confidence that taxpayers' dollars are not being abused, that the Invest Nova Scotia fund has started and will continue to serve its purpose of an independent funding model that supports sectors and not individual businesses.
This aligns with our government's priorities and our ability to drive high-potential sectors - oceans, seafood and agri-food, and our ICT sector - where we're seeing significant growth. What's reassuring in the growth that we're seeing in the wine industry, in the seafood industry, and in our ICT sector is job growth.
Private sector investment is really a new concept to many, but I can tell you, Mr. Chairman, the private sector are stepping up to contribute. The Invest Nova Scotia fund is intended for government to contribute as well but to support sectors, to drive our overall objective of expanding and growing the economy of Nova Scotia. I think it's a great example of what is an appropriate process, a transparent process, a process of integrity with an independent board of private-sector leaders making those decisions on behalf of Nova Scotians. That is a significant departure from the previous model, and I think it's a model that Nova Scotians will come to respect and admire as we move forward in driving the economy of Nova Scotia.
MR. LOHR: I don't want to belabour that, but all I can say is that as I hear the minister speak, I can only imagine that every other business development program in the last 25 years also started with high and lofty ideals. I hope that the minister proves to be correct, truthfully, in everything he says about Invest Nova Scotia.
My question is about the Regulatory Affairs and Service Effectiveness Office. I know it has been transferred to the Public Service. Can the minister explain why that has been transferred and why he thinks the Public Service is more able to manage that office than his department?
MR. FUREY: I can't help but respond to the sarcasm of my colleague around the transparency and independence and integrity of a new funding model. My colleague knows the past. He knows that was an unacceptable model. He knows the status quo is not sustainable. My colleague has used the Ivany report in this Legislature, referenced it many times.
This is about change. This is about programs that Nova Scotians will recognize are in their best interests. I want the House and my colleagues to recognize this is about a new way of doing governance. This is a new way of providing funding to sectors, not to individual businesses.
You cannot compare the previous governance model to the independence of this funding model, the independence and integrity of the members of the board who have stepped forward in the best interests of Nova Scotia to advance what they believe is a funding model of high integrity that will restore the confidence of Nova Scotians in the government, regardless of what political stripe they wear. This is about restoring the confidence of Nova Scotians in their government, and Invest Nova Scotia is the best example of any funding program that any previous government has ever administered.
I will also mention for the benefit of my colleague that the minutes of monthly board meetings that Invest Nova Scotia has are online. I encourage all Nova Scotians to visit the website and see the diligence and the transparency of that particular fund.
I have to ask my colleague to repeat the question because I've misplaced that frame again.
MR. LOHR: I will apologize. Maybe I was being sarcastic about the lofty vision; however, I am sincere in saying I hope it works, seriously. I do recognize that the minister's description of Invest Nova Scotia is accurate. I've read the minutes online too.
I was switching gears to another department, just working my way down that line, Mr. Minister. I'm asking you to tell me . . .
MR. CHAIRMAN: Order, please. Please direct your questions through the Chair.
The honourable member for Kings North has the floor.
MR. LOHR: Mr. Chairman, I was just working my way down the page. I want to know why the Minister of Business felt that the Office of Regulatory Affairs and Service Effectiveness was better situated in the Public Service than in his department.
MR. FUREY: To speak to the point of my colleague's question, this is my assessment of why the Office of Regulatory Affairs and Service Effectiveness has actually been carved out of the Department of Business - so originally it was in the Department of Business. We felt it was appropriate for it to be removed from the Department of Business for a couple of reasons. We wanted it to be independent so that it could provide guidance and direction to all departments. The intent and the work to date has seen a tremendous amount of work and analysis by the Office of Regulatory Affairs and Service Effectiveness on individual departments and the legislation that has come forward since the creation of the department. So it was important that they were able to do that analysis of the Department of Business without reporting to the Minister of the Department of Business.
The model that we implemented really was a part of the alignment that the Premier is leading throughout Atlantic Canada with the Province of New Brunswick and a similar role in New Brunswick. We believe that office is best positioned to report directly to the Premier's Office.
My colleague has pointed out, appropriately, that on the bottom of Page 4.5, it says "Transferred to Public Service," when in fact on Page 20.28, it identifies that the Office of Regulatory Affairs and Service Effectiveness falls under the Premier's Office. My colleague has identified a mistake in the document on Page 4.5. The Office of Regulatory Affairs and Service Effectiveness actually reports to the Premier's Office.
MR. LOHR: Possibly, the confusion there lies for me in the title of this department. But when I read Office of Regulatory Affairs and Service Effectiveness in the Department of Business, in my mind, I think this is trying to help businesses streamline somehow in the province, that this is a service to the businesses in the province. What I think I heard the minister say was that this is acting in this way, and its primary focus is government departments. Maybe the minister can clarify. Did I misinterpret what this office does?
MR. FUREY: I thank my colleague for the question because it is an important question. It actually does both. It is about putting the regulatory legislative lens on government departments to ensure that we're reducing red tape, not creating red tape. But through the extensive work they've done engaging the private sector and engaging businesses and seeking their input on present legislation and the engagement of the Office of Regulatory Affairs and Service Effectiveness with the business community - and I'll say the broad business community - and the value that they have drawn from the dialogue with the business community.
I've met with Mr. Fred Crooks, who leads the office on behalf of the Premier. He has briefed me on the engagement that he has had with the business community and the value that the business community brings to his office really as an impartial lens and a collective objective to reduce red tape. We've seen some significant work across government.
I'm proud to say that I'm the Minister of Service Nova Scotia, and I can tell you the work that my colleagues and the employees in Service Nova Scotia are doing towards red tape reduction is very much aligned with the broad business community and very much aligned with the Office of Regulatory Affairs and Service Effectiveness. I think there's two great examples where Service Nova Scotia reached out - and this is the lens of the Office of Regulatory Affairs and Service Effectiveness kind of looking over their shoulder - to the business community, engaged them right away in both the restaurant and accommodations bundle that we announced last year, as well as the corner store bundle that the business community contributed to and that the business community helped design.
The business community is pleased to say they were part of that solution in addressing red tape in those two sectors. I know the employees in Service Nova Scotia continue to engage the business community, and they're working on a third bundle that I know they're excited about and looking forward to announcing sometime this calendar year.
The point I wanted to make in response to my colleague's questions was the Office of Regulatory Affairs and Service Effectiveness is really working with both government departments and the broad business community to ensure that the balance of necessary regulation remains in the best interest of government and business, but we're also able to identify and eliminate that unnecessary regulation that is really tying the hands of business. We continue to hear from the business community.
We have great opportunities to drive small business in Nova Scotia. We want to ensure through the efforts of Service Nova Scotia, the work that they're doing with the Office of Regulatory Affairs and Service Effectiveness, and the strong working relationship between the Office of Regulatory Affairs and Service Effectiveness - I can't get an acronym in my head for that office, so that's why I continue to repeat it - the work relationship that they have with individual departments and supporting the work of the Office of Regulatory Affairs and Service Effectiveness.
It's not restricted to government and the business community. As we speak, the Office of Regulatory Affairs and Service Effectiveness has seconded one of their staff members to Tourism Nova Scotia, a Crown Corporation, and he's doing an analysis of the shared economy. It's creating tremendous discussions, and we're seeing every day new components of the shared economy. We as government want to be part of that discussion. We want to ensure that there's a regulatory lens placed on that discussion. We want to ensure that the business community is included in that discussion. That is really what the Office of Regulatory Affairs and Service Effectiveness has been facilitating since their implementation.
I want to take this opportunity to recognize the work that they're doing, not only Mr. Crooks himself, but the individuals who make up that office. They are making a significant difference in the legislative regulatory world of government, and it's a direct benefit to our broad business community.
MR. LOHR: Going down to the next line, Crown Corporations is a very, very large line, a huge part of your department, Mr. Minister. I do appreciate the fact that you tabled the guidelines for NSBI for the payroll rebate fact sheet. I just glanced at that quickly when that was tabled. I had a question that wasn't answered in that fact sheet, actually. What qualifies as a job that would attract the payroll rebate? That's the question.
MR. FUREY: The strategy of our government has been to focus on those sectors with high potential growth. I mentioned them earlier: the ocean sector, the seafood and agri-food sector, and the ICT sector. That doesn't exclude the payroll rebate being available to manufacturing or to the financial sector, as we discussed earlier. My colleague from the NDP had spoken about three financial facilities. I referenced Oxford Frozen Foods as an example. That investment attraction and the use of the payroll rebate program primarily in those three sectors for high potential growth - when I talk about oceans, just as an example, sometimes people get confused, but oceans is broad. It's shipping, it's marine tourism, it's oil and gas - it's a very, very broad sector, not limited just to what someone might interpret "oceans" to be. That's the intent of the payroll rebate program, but it's certainly not restricted to those three sectors.
MR. LOHR: You mentioned Oxford Frozen Foods. I have the press release here, but it doesn't actually say what the 110 new jobs were for. Mr. Chairman, can the minister tell me what those 110 jobs were, more or less, in broad categories?
MR. FUREY: I don't have the document in front of me that my colleague is referring to. I think it's probably framed in such a way that it's up to 110 positions. My colleague may be able to clarify that in his next question. The application of the payroll rebate for Oxford Frozen Foods is both a transition and, I believe, an addition to the facility to process another product. They've found a market for a particular product. They believe there's a strong business case, and they utilized the payroll rebate for the purpose of securing financial support for the positions that they will create.
MR. LOHR: I just want to say that I have a very high regard for Oxford Frozen Foods. My father did business with Oxford Frozen Foods, and in my farm life - I'm in the process of selling the farm - I'm doing business with Oxford Frozen Foods right now, trading land. That's what I'm doing. I have 30 acres of our land that they're using, and I'm using 30 acres of their land.
However, in November 2015, the Hillaton plant was closed down in Kings County, with a loss of almost 100 part-time jobs, which was the equivalent of 52. In February, this payroll rebate was given to Oxford Frozen Foods for the creation of new jobs in Oxford. There were many in Kings County who scratched their heads at that. There was a feeling that some of this was simply taking jobs from Kings County and putting them in Cumberland County, and that attracted a payroll rebate. We were scratching our heads.
As I said, I have very high regard for that company, and I wish we had 10 more just like it in the province. But I'm not sure about the decision making of NSBI in providing a payroll rebate for what looked, from Kings County's point of view, like a transfer of processing from one area to another.
MR. FUREY: I just wanted to confirm that I had the circumstances right. I'm aware of the facility in Kings County that my colleague has referenced. That's certainly difficult for any community. In those circumstances, I think the product that was specific to that facility was actually carrots, and a business decision was made on the part of Oxford Frozen Foods around waste water issues at that particular location and the cost to remedy those challenges. The payroll rebate in the Oxford facility itself was a different product altogether. I don't see any correlation between the business decision that Oxford Frozen Foods made in Oxford by way of the payroll rebate and the unfortunate circumstances that the community experienced with that facility that my colleague has referenced.
MR. CHAIRMAN: Order, please. The one-hour allotment for the Progressive Conservative caucus has expired. We will now move back to the New Democratic Party caucus.
The honourable member for Truro-Bible Hill-Millbrook-Salmon River.
MS. LENORE ZANN: I'm going to ask a few questions about tourism. I was concerned when the tourism department was deleted, Economic and Rural Development and Tourism, because I think it is so important to the province.
My first question is, what is the plan at this point in time to basically try to bring more tourists to Nova Scotia? Do you have radio, TV, print, online ads? What is the major plan to try to get people here as soon as possible?
While you're looking up some of those figures, I was going to say, in separation from Mr. Trump winning the election in the United States, what do we have up our sleeves?
MR. FUREY: I appreciate the question. It does give us an opportunity to speak about the work and the objectives of Tourism Nova Scotia. In the first part of my colleague's question, she expressed some concerns around the closure of the former Department of Economic and Rural Development and Tourism and the creation of the Department of Business, but I think her comments were more specific to tourism itself.
They were an agency of government at the time. The feeling was that the industry and those from the industry are best positioned to drive the industry. As a result, a Crown Corporation was created reflective of those individuals from the industry, the board and highly competent staff. The restructuring of Tourism Nova Scotia really speaks to a focus on priorities recognizing that their objective of doubling tourism revenues over the next 10 years is going to be a significant challenge; $2 billion to $4 billion is a tremendous amount of money through a tourism strategy.
For the benefit of my colleague I'll explain the areas. I did have the privilege of sharing these with her colleague, the member for Dartmouth South, yesterday. We had a similar discussion.
My colleague has mentioned the videos, the marketing piece. That is a significant part of our tourism strategy. I know there's a lot of attention being given to the $6 million contract going out of province. I take every opportunity I can to explain that initiative. I spoke to it to some degree yesterday. The reality is, the largest percentage - $5.8 million of that $6 million - will be out-of-province spend. Some people have tried to position that as money out of the province, money that's going out of the province. If we want to market our province to others across the country, across the continent, and around the world, it takes money. Those expenditures are going to be experienced regardless and are a critical part of the marketing strategy.
The videos that you've seen - and we recognize that there has been some criticism of those videos, but here's the reality: research has shown that the videos are having a positive effect on the interest that those from outside Nova Scotia have. We've seen a 20 per cent increase in visits to our website over the same period last year, and we anticipate that some of that will correlate into actual visitors.
Last year, Tourism Nova Scotia partnered with Destination Canada on a pilot project around marketing into the northeastern U.S. For a very small investment, I believe in the area of $150,000, we saw a 14 per cent increase in vehicle traffic from the northeastern U.S. to Nova Scotia. That was a significant difference. What we realized this year is that every other province is competing now for the same money, for the same tourists. They want those visitors in their provinces as well. We're not competing internally with anyone else in the province; we're actually competing with the world for visitors.
The marketing strategy, for me, is really about safe travel - as the world has come to realize, unfortunately. Those around the world have recognized Canada for an extended period of time as a safe country to visit. Our visitors from the south have seen the same culture and hospitality and safety of the country and particularly Nova Scotia. The research that our staff and employees of Tourism Nova Scotia have done identifies specific areas that we want to target: Ontario, Quebec, and the northeastern U.S. That's where the marketing strategy is focused, that's where we're seeing the results, and we anticipate another very successful tourism season.
We believe that the investment that we have made in marketing, the investment that the board and employees of Tourism Nova Scotia have made in marketing, will be one of the most significant contributing factors in our ability to draw first-time visitors, to extend their stay while they're here, and to spend more money while they're here.
I want to tell you a little story, Mr. Chairman. For those on social media, I'll give them a plug and promote their business, the LaHave Bakery. I know many in this Legislature have heard me speak of it before. I was in the bakery in the latter part of March on a Sunday afternoon. I had ordered a coffee, and I was waiting. The guest book was on an adjacent counter. I just took the opportunity to flip through the guest book for a previous day. There were a number of local visitors, but there were 16 visitors who identified their name and their community - this was the end of March - from the Netherlands, from the U.K., from Australia, from the United States, and there were a couple of other international locations. This was the end of March.
I know traditionally we talk about the tourist season about to start. We're seeing that tourism season expand beyond what we have referred to as the traditional tourist season when tourists traditionally travel. I made a comment to the staff member working. She said to me, Mark, you can go back through that book; that's all year round.
The point I'm making is it's those individuals who come here for different reasons, and we believe the marketing component is a significant piece of that, who will speak about their experience, and they become ambassadors for Nova Scotia. I can give you a number of examples where I visited the Town of Mahone Bay or the Town of Lunenburg and have bumped into people from out of province. They're speaking about their experience; they're sharing that with me. In some cases, they're seeking a real estate agent because they are making decisions to buy property based on a first-time visit. We know when they go back to their community they're going to speak about that experience, and they're going to share their experience, and they're going to share their decision to look at Nova Scotia as a place to travel, as a place to experience quality activities, and as a place, in these circumstances, to purchase second properties.
I had the good fortune in the late 1990s - 1999 to 2001 - to work in the RCMP in charge of the Lunenburg detachment. I used to go for a walk on the waterfront every morning at about seven o'clock. I had the opportunity throughout the day at that time and took it upon myself to count the out-of-province licence plates for both the country and U.S. states. I was able to identify literally every provincial licence plate across the country and counted 47 different U.S. states' plates in the Town of Lunenburg.
This was pre-9/11. When we experienced 9/11, we saw a significant decline in our U.S. travel for obvious reasons. That lasted for quite an extended period of time, where we saw U.S. residents selling their properties because of the difficulties of travelling to Canada and the challenges that they faced as a nation. But now we're seeing our U.S. residents purchasing properties again. We're seeing those volumes of licence plates from the U.S. and the country. I was over in Lunenburg two weeks ago, and I counted seven U.S. plates in the Town of Lunenburg. That's a significant difference from where we were. I believe the marketing that Tourism Nova Scotia has undertaken and the method and medium that they're using to market are providing us that value and providing us those outcomes.
The second piece of our marketing strategy is around the Atlantic Canada Tourism Partnership. It's a partnership that includes ACOA, the provincial departments and Crown Corporations responsible for tourism in each of the four Atlantic Provinces, and the four provincial tourism industry associations. This promotes Atlantic Canada in the United States as well as key overseas markets through these consumer advertising campaigns, the travel trade programs, and the media relations activities that we've undertaken and will undertake within the strategy.
I mentioned Destinations Canada earlier, a pilot project that we've partnered with Destinations Canada on last year. They're a national marketing organization that's responsible for marketing the country around the world. Part of their mandate is to develop national and global marketing programs that destination marketing organizations can buy into. This partnership network allows organizations like Tourism Nova Scotia to leverage the strength of the national brand that leverages dollars, so a percentage of people who visit Canada we know will visit Nova Scotia. Currently, Tourism Nova Scotia is partnering with Destinations Canada in the millennial agreement, the millennial segment, U.S. through the Connecting Canadians program, as well as Germany, the United Kingdom, and China.
The literature programs comprise the trail maps, the visitor guides, and our annual Doers & Dreamers guide. These are produced annually in both French and English. We've reduced the number of copies of the Doers & Dreamers guide, and we've done that because of the significant transition to online use and online access to our website. People are travelling, and they're using their mobile devices to do their travel plans.
I had the good fortune, when I was still in the RCMP, to be seconded to the European Union. I spent a year in Europe, from July 2010 to July 2011, and quite literally travelled during that 12 months to 26 countries in Europe. I planned every single trip on my mobile device. I would literally sit down on a Tuesday evening and plan my travel for the following weekend. I did it wherever I was - if I was at a restaurant or back in my apartment or in my office - I was able to make those plans from my device. So when I hear about the transition and people using electronics and web-based platforms and mobile devices for purposes of planning travel, I understand it.
There's great value in the electronic planning of travel. It has become an important part for those who choose to travel. It's inherent to the marketing strategy and people's ability to make those plans in a very expeditious and, in their view, a very cost-effective way. That's the reason we've reduced the production of the Doers & Dreamers guide. It's still available because we recognize that there's still a percentage of the population that likes the hard copies.
I don't know if anyone else in the Legislature has experienced it, but I use the travel component of my dashboard. I set my map and go where I'm going, if I'm not sure of the address. Often I end up on a dirt road, and it's not where I'm supposed to be. I do keep a provincial map in the door of my car for that reason, so that I can revert to the hard copy, but as technology improves and the mapping system improves, I hope I reach 100 per cent confidence in that.
My point is there's still individuals who use hard copy and electronics. We acknowledge that; we recognize that. We'll continue with that in mind, recognizing that as we go forward, there will be a continued transition to the digital platform.
Trade and sales is comprised on all the business-to-business support and contacts. It includes in-market representations in the United Kingdom and Germany; support for gateway partnerships for air access and other programs; and travel trade partnerships, which represent all the joint marketing arrangements with tour operators in the United Kingdom, Germany, and the United States.
The last one is around media relations and its dedicated focus of forging relationships with travel media writers, bloggers, and influencers to pitch editorial stories about Nova Scotia that will translate into travel stories featuring Nova Scotia in travel media, whether it be magazine, newspaper, blog, social media, or other mediums of communication. In 2015, the media relations activity yielded $16.585 million in media value and $754 million in reader circulation.
I'm going to take this opportunity to encourage each and every one of us in this Legislature and each and every one of us as citizens of the province - we see it often that Nova Scotia is hitting the mark on the top destinations in the country, on the continent, and around the world. We see that through social media and various media platforms and how important it is that we recirculate those mediums to maximize the exposure of Nova Scotia. There was one just yesterday that identified Halifax and Cape Breton Island as two of the top 20 destinations in Canada. Those are the types of things that we can do to help support the tourism industry in Nova Scotia. Those types of mediums are seen around the world.
The economic growth of those opportunities - and I'll use Cabot Links in Inverness, built on an old mining property. The economic growth that community on Cape Breton Island is experiencing because of that investment and the recognition that those golf courses, including Cabot Cliffs, are getting is international and is global. When they come to Nova Scotia, they're having an experience that they haven't had in visiting your traditional golf course to the point that world business leaders are buying properties in Inverness, and they're building homes in Inverness. They're creating jobs in Inverness. That's one particular business initiative that's tied to the tourism industry that is captured and has been captured and will be captured in the future through these mediums that I have referenced in our tourism strategy.
I know I took a little longer than my colleague would have liked to explain that strategy. But I think it's incumbent upon all of us to be familiar with the strategy, to be willing to communicate the strategy and when we see those mediums - whatever they may be - that we ourselves are recirculating and I believe inherently drawing attention and visitors to Nova Scotia.
MS. ZANN: I'm sorry, but in that long description, which was very interesting, and I'm glad to hear, how many tourists did you say had actually come to Nova Scotia as a result of the marketing by Tourism Nova Scotia?
MR. FUREY: I'm just not able to find the actual numbers, but we can get those numbers for my colleague. I think the other piece that drives the numbers, and the objective that's laid out in the Ivany report is not about numbers of people; it's about revenues. There's a distinct difference, although there certainly would be a correlation of the numbers versus the money they spend. But there's three areas of responsibility that really will drive that. The tourism industry has a responsibility; we know individual communities have a responsibility, and they're each stepping up; and government has a responsibility.
But the numbers I'm hearing from a revenue perspective, the objective to double from $2 million to $4 million, the most recent numbers I've seen and heard for last year is $2.5 billion. I think the Crown Corporation has been tracking; I just don't have it readily available to me here, but we'll get the numbers for my colleague.
MS. ZANN: I would also add that there are other things that draw people to Nova Scotia or to anywhere for tourism - clean air, clean water, and good environment. I know I'm hearing from a lot of people from China that it's becoming more and more difficult to even see a blue sky in Beijing because it's so clouded with smog every day. When they come to Nova Scotia, they're thrilled that places are so pristine, and they're not used to that, so it's like a paradise. I would suggest that we really pay attention to that and push to keep our environment nice and clean and healthy here in Nova Scotia in order to not only keep our health on par for own people but also to attract others from around the world.
Another great opportunity for tourism is heritage. There are a lot of people who go to see heritage buildings in places like Nova Scotia who, statistics show, spend more money than they do for instance when coming for a convention. They stay longer. They spend more money. They see more parts of the province. So I also think we should look at our heritage buildings as something of value to protect and preserve here in order to attract tourists. They don't really come to Nova Scotia to see skyscrapers. I think that's something else that perhaps the minister could take a look at and keep in mind going forward and perhaps influence his colleagues that this is also something that's very important.
Another one that I believe is so important for tourism for Nova Scotia is of course the film and television industry. There are so many examples. For instance the Book of Negroes when it was done - it first came out as a book and then it was done as a mini-series. When we were in government, we also put $750,000 into the Black Loyalist Heritage Centre in Birchtown, to improve it and make it a state-of-the-art place that tourists would want to come and see. Our strategy was to tie in the creative economy, arts of all sorts - being able to read the book, and being able to see the beautiful vistas in the TV series.
A friend of mine helped to produce that TV series, and they put $13 million into the economy down there in the Birchtown and Shelburne area, and then we watched as they won awards, and the TV series was sold around the world, and many people came to see where that story took place, and our tourism improved in that area last summer. I think that that is a really good example of why we should be investing in film and television as well.
Another example would be in Truro; right now we have the Trailer Park Boys in Bible Hill, in a trailer park there. Tons of people come there when it's shooting to see the Trailer Park Boys in action. They get hotels and motels and spend a lot of money in the town. Not only does the production do it but also these tourists who are fascinated with the show.
Another example is in Tatamagouche, when they shot a live-action real TV show called The Week The Women Went. It was very popular. The following summer, the tourism in Tatamagouche just went skyrocketing because everybody wanted to come and see what happened in this little town where they'd seen the lives of all of these people. It's just a great example.
One thing I think we need to keep in mind here in this House is not everything is said to be political; it's said because we believe in it, because we actually have value for the things that we talk about. Having been in the industry of film, television, animation, and live theatre for 33 years and having lived in North America, right across the continent, in the States, right across the United States, right across Canada, in Europe, and in Australia, I've seen how that industry really kick-starts economies and puts money time and time again into the economy and attracts tourism.
For instance, when I lived in British Columbia, the reason I moved to British Columbia in the first place was because that was where the film and television tax credits were really good and business was booming. So I went out there. First of all, I got a little apartment, and then I bought a condo - I bought a condo. I ended up living there for 12 years. I went to visit Molly's Reach and did a tour of all the Beachcombers places because that was part of my childhood. You couldn't believe how many bus tours would go to see the locations where a show that had played 20 years ago was shot.
So again, I feel it's my duty as somebody who believes in this industry so much to just remind the minister that in his portfolio, tourism is tied in with that industry. It's almost like free advertising. When we do a show that's shot here, and people see it around the world, they want to come and see that place. It's like Ireland. There's so many great Irish movies and TV series that you see and you go, oh my goodness, I want to go there. Newfoundland, the Republic of Doyle - same thing. I think this is something that we really need to take a look at.
One more thing that I believe in as well, which has taken off, is ecotourism. I know that there is a museum in Mi'kmawey, up in Debert, where they have found artifacts that are 11,000 years old, First Nations artifacts. Don Julien has been trying to get a big museum going there for some time now - he put some money in it, but it's going to need more - in order to attract people to come to see the beautiful forest that they want to put back, to show people the way First Nations used to live, and also to house these artifacts. There's even a flute that's made out of the bone of an elk or something like this that's 11,000 years old. They're saying that they think it might be one of the oldest instruments that we have in the world. Things like this are very important.
Up on the North Shore where I have my little summer place, of course, it's fossils. That's also something that kids love. Up in Tatamagouche in the Creamery Square, there is the state-of-the-art museum. You can go in and push one button and see where one level of dinosaurs crossed these tracks at a certain particular point in time. Press another button, and then a million years later, you see the type of dinosaur and the little tracks almost on the same path because the water was in the same area. Then when there was a dry spell, the tracks from another creature another million years later go somewhere else. Kids love this sort of stuff, and so do their parents. Then you can go around the corner and press another button, and out comes a hologram, an actor dressed in a workman's outfit with a hat and a tin pail. He comes out and tells you the story about the creamery and about life back in the old days when he was around. These sort of things are thinking outside of the box, and I'm telling you, they really do attract lots of people.
I would like to ask one more thing about tourism, regarding gambling revenue. Apparently gambling revenue did spike this year, and the Minister of Health and Wellness attributed this to tourism. But the Nova Scotia lottery corporation does not track that as a factor of revenue generators. I'm just wondering, does Tourism Nova Scotia follow this?
MR. FUREY: No, Tourism Nova Scotia wouldn't track it. I don't know if you actually could isolate those tourists, those travellers, and the gambling experience they would have in the province. But to your question, Tourism Nova Scotia wouldn't track those numbers.
MS. ZANN: So how much emphasis does Tourism Nova Scotia place on gambling in Nova Scotia?
MR. FUREY: In all of the discussions I've had with my colleagues in Tourism Nova Scotia and discussions I've had with the chair of the board and members of the board individually and collectively, in all of the correspondence that I've read and reviewed relative to our tourism strategy and the objectives of Tourism Nova Scotia, I have not seen anywhere an inclusion or reference to gambling or to the contributions that gambling would make to tourism revenues.
MS. ZANN: So there are no ads that are run, then, about the casino or advertising the casino anywhere?
MR. FUREY: No, I haven't seen anything of that nature or heard anything of that nature.
MS. ZANN: I'd like to ask the minister, many of the other provinces where the film industry is doing very well - obviously a lot of it is attributed to film tax credits.
Some of it is also attributed to having sound stages. In Alberta and Ontario, for instance, and Vancouver in British Columbia, they have sound stages. I have been talking to the industry for some time about their need for a sound stage here in Nova Scotia, hopefully one closer to Halifax than the last one, which was way out. They've said that a sound stage would in fact really be helpful to attracting businesses or more shows here because you can shoot all year round, and you can basically turn it into anything you want. You can turn it into a German village from the 1800s if you wanted to. Has the minister had any conversations at all with industry yet about a sound stage?
MR. FUREY: Yes, actually, I have been part of discussions, but not with the industry, actually with the private-sector community. Because it is a topic that continues to come up, there have been multiple discussions. Some of my colleagues have engaged me about opportunities that they see in metro. I've had discussions with my MP on opportunities that she sees in South Shore-St. Margaret's - but not specifically with the industry.
What I'm looking forward to in the discussions and dialogue that I've had with the industry - we had some discussions late in the summer and early Fall, and in November we announced $475,000 to support Screen Nova Scotia, and inclusive, the broad industry. That was broken down into four components. There was funding for an executive director, and I know they've just recently hired and staffed that position. Inherent to the responsibilities of that individual and the objective of the industry is to lay out a strategic plan for the industry. The third component of those discussions and agreement was an appropriate web portal and location services which the industry identified as the most important component that they required. The fourth component of that was promotions and marketing. There was an opportunity for them to travel and further promote Nova Scotia.
I'm looking forward to the outcomes of all of those components but particularly the strategic plan because this is really where we are as a government if we want to get beyond the present fiscal challenges that we face. It is about driving all sectors.
But the most important part of driving any one sector is the private investment, the private-sector investment in those initiatives or those commitments. I'm anticipating that there will be private-sector involvement with the industry in the strategic plan because I think that's an important part of any one sector: to see the private sector leading. I mentioned it earlier: government cannot continue to write blank cheques. That model of economic development has not worked. We have an opportunity across multiple sectors. We're seeing some sectors advance very quickly. Some sectors will achieve the objectives of the Ivany report within three or four years. It's because of the private-sector investment and the private-sector contribution. I'm anticipating that we will see the same thing in the film industry and inherently contribute to the success that the industry has experienced in the past.
MS. ZANN: Well, if we want to get the private sector more involved with the film industry, I would suggest that even though the government doesn't like to hear the words "tax credits," the reason why the film industry did so well during the 1980s in Canada, particularly in Ontario and Montreal - and I know because I was working all the time - was because they gave an opportunity to private investors to invest their money in films, and they got a tax credit for that. We did a lot of movies at that time in both provinces. It was at a time when the industry was in its - not infancy but it was certainly a young child compared to the United States where they'd been doing it for years.
That did really help. It helped us do a lot of movies because a lot of people would put money into it, people who had made a lot of money who wanted to get some tax credits for that money. It enabled us to grow our industry and give a lot of people opportunities to work and learn the industry, even myself as a young actress. I was just learning, and I managed to do several movies that first year and then several the next year. It kept me going.
One of the things that I noticed was the minister mentioned earlier about the film industry and the fact that yes there's uncertainty because you do one project, and then it comes to an end, and then you have to hope for another. But when you've got a good burgeoning industry, that's the whole point. A lot of the crew people go from one to another to another. Instead of being like someone who goes to a nine-to-five job every day for five years, they would do a job for three months. There is pre-budget planning, there's locations, and there's directing - there's all of these different jobs that come into play before the movie even starts shooting. Then there's all the jobs that come into play while you're shooting. Then there's a lot of jobs after you finish shooting. Some of these jobs continue all the way through. Then they move on to the next show. When you have a successful industry, that's what happens.
It would be very nice to see a community in Nova Scotia - which we had, and it would be really nice to get it back - that is a creative community where people come to Nova Scotia because of its beauty, because they know we appreciate the arts and the artists, because they know we want to tell our stories. There's so many incredible stories we can tell. All you have to do is open up a history book in that library in there. I could tell you, I could write a million TV series or movies just based on the stories that have happened here in Nova Scotia that many people aren't aware of and would love to see.
It's about intellectual property. This is, I have to say, the way forward for most economies these days. That's why they call it the creative economy or the knowledge-based economy of the 21st Century: because it's based on knowledge and thoughts and creativity and imagination. That's where a lot of the work and the jobs and the entrepreneurship are coming from these days, not only from mineral resources or agri-innovation or fishing or forestry. In fact, before the numbers came out from this industry, I already had numbers from the whole country that show that the creative industries actually create more wealth for the governments of their provinces. They create more GDP investment than the agriculture, forestry, and fishing industries put together.
One of the things we have to admit, I think, is that there's just so much talent here in Nova Scotia. You don't even have to go down the street; you can fall over tons of talented people who are just dying to be in this industry - young people. I went to see a show last night in Truro, and there on the stage were 30 or 40 young kids. I went to see them before the show. I'm telling you, several of those kids have it. They have what it takes. I'm definitely going to be using them for some of my shows that I produce and direct in the summertime in my spare time.
I was also reminded that four years before I had been to see a show there and some of the kids that I had noticed in that show had gone forward and been in some of my shows and other shows. A number of them have gone on to Toronto, to Montreal, to the National Theatre School of Canada, to Ryerson, to York University and points further west and in the States, who are really, really talented and will definitely have a career in the arts.
These are the types of people that we want. We want these young bright people to be here to contribute to the economy, to have jobs. If they go off to school to learn their craft, they come back, and they have jobs to go to. Unfortunately for me, when I was 16 years old and I wanted to be an actor, I went off to Toronto to York University, and I had to stay because there was nothing. There was nothing here. There were a few theatres, but no film or television industry worth speaking of. In order to make any money, you really have to get into film and television. That's how you make the money, and that gives you money to put into your own shows, to create your own shows. You write your own shows. You produce your own shows. You hire other people. Or you can wait and do a really good play with a theatre company because you don't really tend to make that much money in theatre.
That's why this industry is so tied into the arts period and in general. That's why I think it's really important that we focus on that going forward and that we tell people not only is Nova Scotia open for business, but we value artists. We value these people who are creative and imaginative with talent.
Really, where does anything start? It starts as a seed in the mind. It starts as a seed in the mind, a picture that we see in our minds, and then we create that. Everything in our lives is based on that. Everything you do - cellphones are the same thing.
I remember doing an animation series in New York for PBS . . .
MR. CHAIRMAN: Order, please. You're not permitted to be using props in the Legislative Assembly.
MS. ZANN: Sometimes I wonder if the Chairs interrupt us because we're on a big flow and we want to get our passions going, and then they stop us. It's like, what? Where was I? Anyway, thank you.
I was going to say that a few years ago, before I went into politics, I was doing a series for PBS in New York. We had been doing it for about two years, and then it was time to renegotiate our contract. I was the negotiator for the team. They came to us and said, okay, we want you to sign a contract, and this time it's for universal rights to use your voices for eternity throughout the universe. I was like, what are they talking about? The next thing they wanted us to do was say that they could use our voices for this show on any device - not just television, but any device. I said, well, what kind of devices are you talking about? They said, watches and phones, things like that. I said, are you going to watch a cartoon series on a watch or a phone? What are we doing, going into Get Smart or something - Maxwell Smart? You're going to be watching it on their shoes next. Well, here we are several years later, and there they are on these smart phones and on watches. I saw a watch that you can watch shows on.
It's amazing what they'll think of. Again, who created that? Who came up with those ideas? Creative people. How much is it worth? Billions of dollars - billions. That's why in Hollywood, for instance, it's called show business because it's a business. That town would not be what it is without show business. New York wouldn't be the same without show business. Chicago wouldn't be the same without show business. Stratford, Ontario, wouldn't be the same without show business.
Charlottetown, P.E.I., wouldn't be the same without Anne of Green Gables. How did it start? A book. How did the characters start? As a seed in the author's imagination. She wrote one book never suspecting how successful it would be. It took the world by storm. Next thing she knows, they want more books. So in the end, she wrote about seven or eight books. I know; I read them all when I was 12, 13, 14, and 15. So did my mother; it goes through generations. Then the next thing you know, several years later, what do we have? A TV series - actually there was a movie first about Anne of Green Gables. Then it was a TV series seen all around the world. People wanted to come and see where Cavendish is and the Lake of Shining Waters and the White Way of Delight and all of these incredible places that the author talks about and that they then see on television.
Also they created a musical. Anne of Green Gables the Musical is the longest-running musical in Canadian history. I know; one of my first gigs was to understudy Anne in Anne of Green Gables when I was 17 years old. That was one of my first professional jobs, and it was fantastic. All these young people descend upon P.E.I. for about five or six months, and they create shows that make joy. People come from Japan - as you know, Anne of Green Gables is huge in Japan, so it's full of Japanese tourists. We can do the same here. We have all kinds of stories that could take off and could create a fire in somebody's imagination.
I personally think that is the way forward for Nova Scotia. I really think that it's good that the minister has been talking to people in the industry. I have heard that they really like the minister, that he treats them with respect, and that they've had some very, very good conversations. I would hope that that will continue, and I would really hope that the minister will try to champion this industry because it will make his job a whole lot easier.
There's also development funding, something that is so important. The film and creative industries in Nova Scotia had development funding, and that's something that we really need to keep putting money into for our young people here.
The other thing I'm curious about, too, is if the minister has an idea of helping Screen Nova Scotia to grow. Is this going to take the place of, for instance, Film Ontario or the agency that we did have in place which is now no longer there? To be honest, $475,000 doesn't go very far. That will pay the executive director's salary for a couple of years, but really to promote and market - as the minister knows himself, in a budget, a large portion of that budget goes to marketing and advertising. To get people to actually come and shoot things here in Nova Scotia, we do need to get out to Los Angeles, New York, and all these places to try to get them to come here.
Also I think that any of the films that we are doing here, we need to praise them and hold them up to the world as a shining example of great filmmaking and great work. I know that Bruce McDonald was the director for Nineteenseventysomething. I had done a movie with him myself, and he's one of Canada's most well-known directors. That film will be going to TIFF, the Toronto International Film Festival. It will be coming to the Atlantic Film Festival, and they're hoping to get it to Berlin as well. That was all shot in and around here and in Halifax.
I think with that, I'm going to leave it, and I believe that there are other questions from the Progressive Conservative Party.
MR. CHAIRMAN: We will now move to the Progressive Conservative caucus for up to one hour of questions.
First, we will recess for five minutes.
[6:13 p.m. The committee recessed.]
[6:19 p.m. The committee reconvened.]
MR. CHAIRMAN: Order, please. I call the committee back to order.
The honourable member for Kings North.
MR. JOHN LOHR: I know we left off talking about Oxford Frozen Foods and the payroll rebate. My one question to finish that subject is, can the minister furnish me with the details of what the payroll rebate was specifically?
MR. FUREY: I do want to share that as we committed with the accountability Act, all of those payroll rebates now issued are posted on the NSBI website. So it is about being open and transparent so Nova Scotians can see. But I do want to go into some of the details for the benefit of my colleague.
Oxford Frozen Foods is obviously a well-known Nova Scotia food producer and processor, and I know my colleague is very familiar with them. I think one of the most important components over and above their manufacturing role is the fact that they're an exporter. Two of the objectives in the Ivany report and in the playbook really speak about export growth and the economic opportunities that provides.
The details of Oxford Frozen Foods, as I indicated earlier, they have the potential to create up to a maximum of 110 new jobs under the payroll rebate agreement. That's based on the maximum growth forecast of the five-year payroll rebate agreement, so it's a five-year period. NSBI estimates Oxford Frozen Foods could spend about $18.7 million in salaries. In addition to the economic benefits to that community and the broader community and that geography of the province, associated with the $18.7 million in wages, the new employees are expected to pay provincial personal sales tax of about $1.887 million. That will result in Oxford Frozen Foods earning up to $1.486 million in rebate. So that's a net to the province of about $400,000. I explained earlier that the payroll rebates generate that tax revenue that is always more than the value of the rebate.
A couple of pieces I do want to add: I mentioned Oxford Frozen Foods because we know they are an exporter, and a manufacturer's ability to access the payroll rebate program is important because we do want to drive exports first. In this case, Oxford Frozen Foods is doing that. The business development incentive will encourage that company's growth into a broader global market to happen right here in Nova Scotia. Companies of all sizes that are looking to increase and develop their export capacity can work with NSBI to explore and evaluate these opportunities.
I know this is a discussion that for the most part, unfortunately, remains within this House, although I know there are mediums where people are able to view it. But I think it is important that we really focus on export and the export opportunities that are available through the payroll rebate program and that it is a mechanism that has low risk and quite potentially exponential yield with the growth of these businesses. I think Oxford Frozen Foods is probably one of the best examples that we have where we see that manufacturing component, export focus and really driving the economy of that community and other areas of Nova Scotia.
MR. LOHR: I want to really just spend one more question - or maybe that leads to a series of questions - on that sort of front page, the cover page. If this was insurance it would be the deck page of your statement here. Can you just explain to me . . .
MR. CHAIRMAN: Order, please. Please direct your questions through the Chair.
MR. LOHR: Ordinary Recoveries went from $238,000 to an actual of $1,000, jumping up to $3 million. I wonder if the minister could explain to me what's going on with ordinary recoveries.
MR. FUREY: I'm just wondering if my colleague is able to identify the page he is referring to and he'll save us some time.
MR. LOHR: It shows up in the main book on Page 4.2 and it also shows up in the main book on Page 1.3. Maybe if you jump to - but it's three-quarters of the way down the page, Ordinary Recoveries.
MR. FUREY: The recoveries that my colleague is speaking to are specific, for the most part, to the Halifax Convention Centre, so $1.5 million recovery from HRM for the small wares agreement, $1.03 million specifically for HCC from HRM, $643,000 in recovery for the capital lease from HRM - that's the amortization, the land lease, and special purpose - primarily amortization and land lease. Then there's a small amount, in the amount of $237,000, for tourism recoveries when the agency was transferred out of the department and the stand-alone Crown Corporation.
MR. LOHR: I would ask again, if you go to Page 1.2, there's General Revenue Fund, Ordinary Revenue - Summary, and it shows for the Department of Business, the estimate for last year of $1.128 million, the actual; a forecast of $483,000; and the estimate for 2016-17 of $59.558 million. I would just ask, where did that number come from?
MR. FUREY: That money, the $59 million, is actually the money coming from HRM for the Halifax Convention Centre.
MR. LOHR: I understood that that number was recoveries for or contributions to the Halifax Convention Centre and the Nova Centre was $110 million, I believe. Where is the other $50 million, if that's the case?
MR. FUREY: The balance of that amount is the federal contribution and that's found in the budget for Transportation and Infrastructure Renewal.
MR. LOHR: That is what we thought. I guess I want to switch gears and ask a couple of questions about Service Nova Scotia. I'm not sure if the minister wants to bring in someone from Service Nova Scotia or not, I'm not sure if it's necessary or not but the minister may wish to.
MR. FUREY: It would be much more convenient and timely if we were able to finish the discussions around the Department of Business and then bring Service Nova Scotia in. They're certainly available but I think to save moving from department to department, because I do have opening comments for Service Nova Scotia and I would certainly value the opportunity to bring those prior to discussions about the Service Nova Scotia budget.
MR. CHAIRMAN: Thank you. That seems reasonable and consistent with practice.
The honourable member for Kings North has the floor.
MR. LOHR: That's fine. What I would like to ask is about tourism. I would like to ask a few questions about tourism. My question is, where does the minister see the destinations program funding going?
MR. FUREY: I'm just wondering, is my colleague referring to Destination Canada? He used the word "destinations." I'm drawing the conclusion it's Destination Canada, but I want to be sure.
MR. LOHR: I'm referring to Destination Eastern and Northumberland Shores, Destination Southwest Nova.
MR. FUREY: The funding available to each of the destination groups that my colleague has referenced remains in place. They will redistribute that money to support the municipal VICs that are located within their area of responsibility.
MR. LOHR: I would like to ask, how much is that funding, and where does that show up in this budget?
MR. FUREY: The amount identified for each of the destinations is found under the Sector Development and Entrepreneurship line.
MR. LOHR: How much money is there for each of the destinations?
MR. FUREY: The amounts are really unchanged from last year so each of Destination Cape Breton, Destination Eastern and Northumberland Shores, and Truro and Colchester area are in the area of $50,000. Southwest Nova, administered through the Tourism Industry Association of Nova Scotia is in the amount of $87,500.
MR. LOHR: My next question is about the VICs, the visitor information centres, which were almost cut this year but kept. Where is the funding for them in this budget? What line is that on?
MR. FUREY: The funding for VICs is found under the Corporate Services line.
MR. LOHR: I understand that there are two kinds of VICs. There's VICs that are I think funded primarily by the provincial government and there's VICs that are more local. I'm just wondering if the minister can tell me how much - if the funding for the VICs has remained the same as it was last year, for the one the government is responsible for.
MR. FUREY: Yes, the monies budgeted for the VICs this year is the same amount budgeted in the previous year.
MR. LOHR: Can the minister tell me what the long-term plan is for the VICs?
MR. FUREY: We made a decision to leave the six provincial VICs open. There's no intention to return to that discussion. We believe that - and I'm saying here to my colleague that the six provincial VICs will remain open.
MR. LOHR: The management of these six VICs, is that managed by the Department of Business or by Tourism Nova Scotia, the Crown Corporation?
MR. FUREY: The VICs, the money is in the Tourism Nova Scotia budget and the VICs will be managed by Tourism Nova Scotia.
MR. LOHR: I know that some of the regions of the province have levies on hotel stays and some do not. I wonder if the minister can update me on the areas that do not have levies, if any of them are progressing towards levies, where they are in that and what the department's role is in that process.
MR. FUREY: It's probably best to identify those communities that have the levies, and some work that has taken place without success and then other work that continues on. Those areas of the province that presently have tourism levies: Halifax Regional Municipality, Cape Breton, and the Town and Municipality of Yarmouth currently have a levy. Those areas that had advanced and didn't secure agreement were Destination Eastern and Northumberland Shores and Central Nova Tourism Association - they tried to achieve that required support for municipalities and operators under the former ERDT Department, without success.
There are unofficial stakeholder groups in areas around the province; Bridgewater, Lunenburg, the Annapolis Valley Chamber of Commerce, Eastern and Northumberland Shores, and Central Nova Scotia are now looking at levies.
MR. LOHR: In regard to the destinations, I know there's a drive in the Valley to have a destination Annapolis Valley. My question for the minister is, does he ever see the opportunity - Southwest Nova, for example, is a very large area and there's a lot of diversity and the Annapolis Valley is really significantly different than a lot of the remainder of the area. Does the minister ever see the time when there would be a destination in the Annapolis Valley that for the marketing and tourism promotion we could break this down into smaller regions?
MR. FUREY: I'll be quite honest, it's not a role that I would take on or a role that I would comment on, other than to say I would envision a discussion between the industry itself and municipalities that is led by industry and municipalities.
MR. LOHR: I can imagine one of the issues with regions that do not have a levy and possibly one of the issues with the regions that do have a levy is what could be called the new economy. That would be AirBnB and Uber and things like that. Can the minister tell us what his view is going forward on this new economy in relation to the existing bricks and mortar tourist infrastructure and what's perceived in some areas as a lack of a level playing field for the operation of the new economy versus the bricks-and-mortar economy?
MR. FUREY: The new economy is a new discussion, no question. It's an emerging piece of business, I guess. It's a discussion that I've had at the federal level, at the provincial level, and at the municipal level. I attended a federal-provincial-territorial ministers' meeting in Winterpeg - I mean Winnipeg - in January. Don't ask me why we were in Winnipeg in January discussing tourism. I offered the federal minister the opportunity to come to Nova Scotia in July and August, and we hope to host that in the very near future. It was the number one item on the agenda at those discussions.
I came back from that environment shortly thereafter and met with two of my three provincial colleagues in Atlantic Canada - the Ministers of Tourism for New Brunswick and P.E.I. Unfortunately, our Newfoundland and Labrador colleague wasn't able to join us. We continued that discussion not isolating it from a provincial level but really to look at it from a regional lens and what opportunities it presents. I've talked to those in the industry.
There are mixed feelings, obviously, around what's called the shared economy. Here's the reality: it's here to stay. How do we manage it in the best interests of all? I took from that discussion with my provincial colleagues the opportunity to engage Mr. Fred Crooks, with the Office of Regulatory Affairs and Service Effectiveness, in the discussion. We talked about a number of examples. The ones that are most prominent are AirBnB and Uber. There are other components of the shared economy emerging. Last night, I watched CBC National's coverage of a story about a young couple in Toronto who were renting their kitchen and competing with the restaurant industry in downtown Toronto - a very interesting piece of that shared economy discussion.
What we've done is, Mr. Crooks has seconded Fred Morley, an employee within the Office of Regulatory Affairs and Service Effectiveness, to Tourism Nova Scotia to do a deeper dive on the discussion, the challenges, and the opportunities. I'm looking forward to the outcomes of those discussions because it is here to stay. How do we manage it in the best interests of the Nova Scotia economy?
MR. LOHR: I know that in talking about the tourism file, we would be remiss if we didn't discuss outsourcing outside the province, the contract to have the advertising go - the advertising contract, the bulk of that sent to Toronto. I know the minister has talked at length already, or briefly, about exports and the importance of exports to the Province of Nova Scotia. I know that in the farm world, any time that we can displace an import, if we can keep something inside that was going out, we thought that was a gain too.
There have been several cases of money going out of the province in ways that some people just really wonder about. One was the hospital contract with Paladin from Vancouver for security for all our hospitals. Another one which has caused a lot of angst in the province is this tourism contract. I know it has been well discussed and the minister probably has comments on that. Does the minister see that this type of activity of sending these types of important pieces of the economy of Nova Scotia out to Toronto, does he see that as fundamentally benefiting the province?
MR. FUREY: Absolutely. This is about competitiveness, Mr. Chairman. If we restrict these opportunities in the procurement process there are certainly legal issues.
Let's put a business lens on this; if we restrict that competitiveness within our provincial boundaries then we, in turn, can expect each and every other province, the U.S. and our international trading partners and business community, to impose the same restrictions. They won't impose them on themselves, they will simply exclude Nova Scotia.
This is about competitiveness, this is about a fair and transparent procurement process that recognizes the strengths of Nova Scotia business but we can't limit those parameters. There were transparent processes in the procurement process, fairness monitors. We were diligent in getting what we believe are the best partners to promote the province and what we have to offer.
This has been a discussion we've had in a number of forms and generally people understand that. They don't want to be restricted as Nova Scotia business people, they want to have opportunities outside the province as well and that's an important piece of this. That competitiveness that we talk about is critical to the growth of our province. I think if we're to sustain that methodology, if we're to sustain those opportunities these are the types of outcomes that we will see, as a province, and other provinces will see.
We're seeing it on a regular basis, Mr. Chairman, other businesses that are competing on the world stage and they are Nova Scotia entrepreneurs, they are business people who are doing amazing things for the province. I'm hoping I've got an example here I can share with my colleague, for his benefit.
MR. LOHR: I'm sure the minister can find an example, if necessary.
I would like to ask the minister, Mr. Chairman, if the focus and direction of the ad campaign, will that be primarily to support the Yarmouth ferry?
MR. FUREY: I want to go back to my colleague's previous question and just to give you an example of a Nova Scotia business that is relevant to the discussion and how important it is that we recognize those external opportunities, the export component and how we can drive that, Mr. Chairman.
I want to speak very briefly about a company called Novatec Braids out of Yarmouth and they are exporting rope all over the world. It started in Yarmouth with a high-quality rope that is now in demand literally around the globe. They started making fishing lines, Mr. Chairman, and now they make equestrian rope, rescue and safety rope, and physical therapy rope. They serve businesses in Pakistan, Finland, and throughout Europe; 60 per cent of their product is now sold outside Nova Scotia, as an export. Those are the types of examples.
I'll table an article from The Chronicle Herald published January 9th, which really speaks to the strength of that business but, more importantly, the competitive opportunity that's extended to them on the global scale. I use that as an example of how we have to leave our doors and borders open for the benefit of Nova Scotia companies and our ability to draw on the expertise of others that will serve an inherent value to the province.
To my colleague's last question around the ad campaign and specific focus on the Yarmouth ferry; no, that's not the case. I went through some of those components earlier in discussion. Our ad campaign is about first-time visitors, their experience in their travels, to stay longer and spend money while they're here in Nova Scotia, and then to take that away and quite literally be ambassadors for the province.
It's about the experience, and the marketing is focused on that. The video and ads that we've seen really highlight what Nova Scotia has to offer. The research has shown that's where we have to focus, that's where we have to target, to demonstrate in quick flips what opportunities exist in Nova Scotia, whether it's canoeing or kayaking or, as one of my colleagues mentioned earlier, our historic sites or our wineries or our beaches or our lighthouses. There's multiple components to that marketing strategy, but I want to assure my colleague across the floor that it's not about marketing the Yarmouth ferry; it's about promoting Nova Scotia.
MR. LOHR: At this time I'm wondering if we can just take a short break to have Service Nova Scotia come in. I'd like to thank the minister's assistants for having been here for the Business part of the program.
MR. CHAIRMAN: So my understanding is that all Parties are satisfied with the questioning for the Department of Business.
Shall Resolution E2 stand?
Resolution E2 stands.
We will now recess for a short break so that the minister may bring in his staff for Service Nova Scotia.
[6:57 p.m. The committee recessed.]
[7:04 p.m. The committee reconvened.]
MR. CHAIRMAN: Order, please. I call the committee back to order.
We will now call for the estimates of the Department of Service Nova Scotia.
Resolution E37 - Resolved, that a sum not exceeding $79,952,000 be granted to the Lieutenant Governor to defray expenses in respect of the Service Nova Scotia, pursuant to the Estimate.
MR. CHAIRMAN: We will now ask the Minister of Service Nova Scotia for some opening remarks and to introduce his staff.
The honourable Minister of Service Nova Scotia.
HON. MARK FUREY: Mr. Chairman, I appreciate the opportunity to speak on behalf of Service Nova Scotia, specific to our Budget Estimates for the 2016-17 fiscal year.
I just want to take a quick moment to acknowledge and recognize the staff. Some tremendous work has been done over the past year that consumed a tremendous amount of their time and energy. I can tell you, Mr. Chairman, I wouldn't be here if it wasn't for the support of the staff around me and I can't say enough about how much they've contributed to the objectives of Service Nova Scotia.
I'm joined today by Joanne Munro, the CEO for Service Nova Scotia, and Darlene O'Neill, who is our Director of Financial Services. I'm honoured to speak on how Service Nova Scotia will fulfill its mandate, which is to deliver and administer high-quality accessible services to citizens and businesses through a diverse range of programs for the public good. I will also touch on how the office will further the government's priorities of people, innovation, and education in support of better positioning the province for growth. This in turn will contribute to the economic and social well-being of Nova Scotia.
We are committed to working together for a stronger Nova Scotia, and we're on the right track. Our office will contribute to a stronger Nova Scotia by continuing to identify areas where we can cut red tape, continuing to modernize all aspects of our operations including legislation to enhance the delivery of service, and by creating a culture of innovation to make Nova Scotia a leader in the public sector.
Last year, we undertook numerous initiatives to cut red tape and make it easier for people and businesses to interact with government. Perhaps most notably, we developed and implemented sector-specific bundles for convenience stores and restaurant and accommodation businesses, and we are continuing with the development of more bundles. These new online tools will help businesses spend less time researching how they need to interact with government so they can spend more time focusing on making their businesses successful.
The Atlantic Convenience Stores Association, the Nova Scotia Tourism Industry Association, and the Restaurant Association of Nova Scotia participated with government in the bundle process from start to finish. We worked very closely with the automobile dealership sector to cut red tape by looking for ways to improve customer service and business processes. In the coming year, we will continue our work with auto dealers to develop a new online service to help make their operations more effective and speed up turnaround times.
Last year we also took a good look at our legislation and eliminated the outdated Place of Amusement Licence for places like community bingo halls, arenas, Royal Canadian Legion branches, Kinsmen Clubs, and bowling facilities. We invested in our Access Nova Scotia centres with the addition of free Wi-Fi for our clients. We helped Nova Scotians who needed it most by issuing more than 41,000 heating assistance rebates.
I'm particularly proud of changes to the Vital Statistics Act to remove requirements for Nova Scotians to have sex reassignment surgery to change the sex designation on their birth certificate. We know this is working. Prior to the change, Vital Statistics received about five applications per year. In the first seven months we've received more than 100 applications. This is a huge step forward for people in Nova Scotia to obtain identity documents that reflect their lived gender identity.
I'm proud of all our success stories this past year. We're on the right track, and we have every intention of keeping the momentum going strong. It is the very heart of our business to serve the people of Nova Scotia from birth to death.
Our vision for this coming year is clear. We see Service Nova Scotia moving closer to becoming a leader in service and program modernization. Every day, Service Nova Scotia front-line teams are serving Nova Scotians including those access centres by phone and online, delivering the highest-quality services possible.
In order to realize our vision of service excellence, we need to raise the bar and modernize all aspects of our operations. We will continue with our focus on cutting red tape and modernizing legislation, programs, and services to help create the right climate for private sector and social enterprise growth. We will take innovative approaches to expanding and enhancing the digital services that Nova Scotians want and need.
One of our key priorities for this coming year and beyond is to continue building and enhancing services that can be accessed online and on mobile devices. The digital world is changing every day, and we need to keep pace in order to keep up. It goes without saying that people are relying more and more on mobile devices in their everyday lives, and that includes how they interact with government. I envision a province where digital government services are easily accessible without red tape so individuals and businesses can focus their valuable time on being successful.
It was announced in our government's budget of 2016-17 that $6 million would be invested to bring high-speed Internet to more rural homes and businesses. This will in turn support our work to develop more digital services that can be accessed conveniently and easily online and on mobile devices. Our work is based on the needs of the user, quite simply. It's important for us to truly understand our clients, to understand their needs so they can interact with government in the fastest and most efficient way possible.
A couple examples of digital initiatives under way in this coming year include the continued development of online licensing for hunting and fishing as well as a digital option for people to apply for the heating assistance rebates. These are areas that are currently 100 per cent paper-based. That's simply unacceptable in today's governance model. We know Nova Scotians need and expect more online options, and we must therefore respond accordingly. In today's digital world, not having a digital option for these transactions is unacceptable. Nova Scotians don't want to have to send applications through the mail, so we need to respond by delivering services in a way that reflects how they actually live their lives.
The same holds true in business. Time is extremely valuable and we understand that business people need to focus their limited time on making their business successful. We had success with the first two sectors' specific online bundles and in the coming year we will continue to explore our options for the development of more bundles. The next one, which will be released in the coming year, will be an express business bundle for start-up companies.
I've said it many times: we are an analog government in a digital world. We still have much work to do to bring our government services in line with what Nova Scotians expect in today's digital world, but I believe we are on the right track and the path we're on will contribute to a stronger Nova Scotia.
Having the right digital services in place is absolutely essential to creating the right environment for growth. If we, as a government, don't keep pace with our technology and digital platforms, we will fail economically by missing out on opportunities and being outpaced by other jurisdictions. That's why we need to keep our momentum going strong because failure is not an option if we want to create the right climate for public and private sector organizations to thrive.
As we expand and enhance our digital services, it is very important that no one is left behind. We understand there are those who prefer to interact with government in more traditional ways or that have limited access to digital services. Service Nova Scotia will continue to explore how we can help individuals and businesses transition to digital services.
This coming year is also an opportunity to continue cutting red tape by modernizing legislation. A recent example of this is the elimination of the requirement for alcohol manufacturers to maintain a separate retail outlet for the sale of their product. This change was made to cut red tape for an important and growing Nova Scotia industry. This change will help make this industry more competitive.
In the coming year as our government invests $3.5 million to boost export growth for our vineyards and wineries, Service Nova Scotia will play a supporting role to ensure we continue to modernize our Liquor Control Act to support Nova Scotia businesses, while ensuring that the sale and consumption of alcohol is conducted in a safe and responsible manner. We will continue to work together with industry partners and engage stakeholders as we aim to strike a balance between reducing red tape for Nova Scotia businesses while ensuring the appropriate protections remain in place.
Service Nova Scotia has its sights set on more legislative changes to cut red tape and make it easier for Nova Scotians to interact with government. We will modernize the Residential Tenancies program so that both property owners and tenants have more convenient access to hearings.
The implementation of amendments to the Cemetery and Funeral Services Act and the Embalmers and Funeral Directors Act will enable the sale of pre-need insurance at funeral homes.
The proclamation of the Community Interest Companies Act will give social entrepreneurs the options to register as a community interest company, which will give them enhanced credibility and profile as businesses which also have a social benefit mandate.
Our office will also look at ways to further optimize public sector debt collection. As the members of this House are aware, government recently announced a direction to modernize Motor Vehicles, Joint Stock Companies and Land Registry. This will, in turn, lay the foundation to enhance service and client satisfaction. Service Nova Scotia serves citizens literally from birth to death and all points in between. Nova Scotians depend on these registries each and every day and we need to ensure that these registries are meeting their needs now and into the future.
Government will develop and implement a plan to modernize the registries which will, in turn, enable us to fulfill our commitment to becoming a leader in public sector service excellence. We owe it to Nova Scotians to ensure that the registries are sustainable, efficient and effective. Nova Scotians have told us that Service Nova Scotia is doing a good job but we know we have to do better.
We know we are not meeting the recommended national benchmark developed by the Institute for Citizen-Centred Service. Our goal is to make services more convenient and efficient and achieve the objective of 80 per cent of the people being served in 20 minutes.
I have tremendous confidence in our Service Nova Scotia team and our ability to modernize these registries. It will be a challenge, but at the end of the day the status quo is not an option. We recognize client service across government is important to Nova Scotians and we have the right team in place at Service Nova Scotia to deliver the enhanced level of service that citizens and businesses want and need.
There can be no question that this is an exciting time in Service Nova Scotia. Creating a more business-like culture of innovation will be both challenging and rewarding. We will be working very close with our team members to get them more involved in improving the client experience, modernizing legislation, and reducing red tape. I know the strength of our team and I see it every day. We understand that Nova Scotians' time is valuable and they don't want to have to wait to receive services they need, especially when it takes their focus away from being successful in business and their busy everyday lives. We need to involve staff and look for their ideas as to how we achieve our vision to raise the bar in service and program modernization. By working together with our staff we have the opportunity to realize our vision of being a leader in the public sector.
The key is to enhance the service culture by being client-centred in all that we do. Building the right service culture is seeing everything from the client's point of view, everything from how our Access Centres look to how they feel and everything from how we answer phones to how we conduct inspections. Even in the design of policy we must balance the public interests with the practical needs of our clients.
This year we are piloting a seasonal workforce to help manage our peak season at Access Centres, which is almost upon us now, from May to September. I'm looking forward to examining the effectiveness of the seasonal workers' initiative as the season progresses.
We will continue to raise the bar, Mr. Chairman, with regard to our service. In the coming year we will build out a client satisfaction model and process which will help us formally assess and measure client satisfaction levels, as well as evolve our work around service standards. Basic client satisfaction research for the in-person channel conducted over the past eight months indicated that Nova Scotians are generally satisfied with their service experience in the Access Centres.
The one area, however, where they have told us we must do better is around wait times. We must facilitate a culture of innovation if we are to succeed. We've already begun to introduce innovative approaches and new ways of doing things and we expect this work to ramp up in the coming year.
Thank you, Mr. Chairman, for the opportunity and I look forward to questions from my colleagues.
MR. CHAIRMAN: The honourable member for Inverness.
MR. ALLAN MACMASTER: Thank you. The first question I would like to ask through you, Mr. Chairman, to the minister is, services that are offered through Service Nova Scotia, there's in-person service and there's also electronic service. I know there is sort of an average cost for both. I've heard that online transactions, I think they cost about - it might be something like 13 cents or 24 cents I seem to recall.
There may be other costs added into that but I'm curious if the minister would have a cost for services budgeted for this coming year that would show the cost of services, on average, delivered in person versus services delivered through the Internet.
MR. FUREY: A very relevant question and right to the point. The in-person transaction costs $28.80, while the same online transaction costs 13 cents.
MR. MACMASTER: Just looking at the - if we're looking at the funded staff for the coming year, one can't help but wonder about the more people are using online services, lower costs, which is perhaps good for citizens, potentially, if those costs are passed on, also potentially good for saving money in government.
We also do think though, of course, about people who are working in those offices and we don't want to see them hurt by changes. I just wanted to ask the minister how the department is looking at that, at the FTEs for the department, the people providing the services, and if the department is finding ways, perhaps if there's opportunities for people who are retiring, that there is less impact on the workforce - could the minister provide some comment on that? Thank you.
MR. FUREY: The language that we're using in the department quite literally is nobody will be left behind. That's the conscious lens that our team is putting on the transition from in-person service to online service. But it is really about leaving the options available. We recognize that as our population advances and progresses, there will be more online services and less in person. But the objective really is to address that through attrition. That's not going to happen overnight. We're conscious of those FTE positions and our ability to achieve that objective of not leaving anybody behind.
MR. MACMASTER: That sounds like a win-win for everyone involved. I wanted to ask the minister if there's an acknowledgement - if service costs are coming down for some services the government is offering, has the government looked at ways that the prices of those services could come down? If there is a move to more online use, the costs are significantly less. We usually see user fees going up by the cost of inflation each year, but if the costs of these services are actually going down, has the government considered passing those savings on to consumers?
MR. FUREY: As I indicated earlier, this transition is not going to happen overnight. We see a five- to 10-year plan to achieve these objectives. The cost of government is not the responsibility of any one department. We all contribute to the centre to ensure that we're able to continue with government services. But the opportunity to position the province financially so that we're able to invest in our core services and able to realize surpluses over multiple years going forward is the objective and the inherent ability then to pass those savings on to residents.
MR. MACMASTER: Mr. Chairman, could you let me know how much time I have remaining? I don't think it's too much. I think I have approximately five minutes left. That's fine; it's all I need.
My next question: of course one of the hot topics for the minister this past year was the possibility of getting a private company to develop new technology. I know the government and the minister have announced that they are not going to be going in that direction. Can the minister explain a little bit about the modernization of the technology that is going to be used for the services provided into the future for Nova Scotians? Can the minister give us some - I believe this might be under the line of program modernization in the budget. There's a figure just shy of $30 million this year. Is that seen as a one-time amount, or is that something that will cost the government over a number of years? I do seem to recall hearing publicly that the cost to update technology for services would be about $30 million. I'll let the minister comment.
MR. FUREY: The amount that my colleague has recognized is for the ongoing maintenance of Service Nova Scotia and the platforms that we presently have. As I've said earlier, we are an analog government in a digital world. It's hard to believe. The cost of modernizing the Joint Stocks, Land, and Motor Vehicle Registries will be additional costs over and above the $29 million. We are in the process of building that strategy. It will be a long-term strategy. That's not a cost that we're going to be able to absorb in the short term, but we will start with the Joint Stocks Registry. It's the oldest and most outdated. We have the money available within our programs to start that. We will do that first, I anticipate, within the next eight to 10 weeks.
MR. CHAIRMAN: That concludes our time for the Progressive Conservative caucus. We will now move to the NDP caucus.
The honourable member for Queens-Shelburne.
HON. STERLING BELLIVEAU: It certainly is a pleasure to participate in Budget Estimates tonight. First of all, I want to thank the minister for his participation, and I also want to thank his staff for participating in these Budget Estimates. Mr. Chairman, I'll leave it for you to give me some guidance on how much time I have left. I just want to know the length of time I have, and I know that the minister would like to have a couple of minutes for closing remarks. I'll leave that to your guidance so I can adjust my questions in the next few minutes here. I'll start off the first question, and I'll look for that guidance on my next question.
My first question to the minister, Mr. Chairman, through you - our NDP caucus is pleased that the minister has decided to take a government-led approach to upgrading the IT system of the Motor Vehicle, Joint Stocks, and Land Registries. However, $800,000 - and I'll repeat it, $800,000 - spent on consultants is certainly a large and significant amount of money. I'd like to know where in the budget this money is accounted for. The second part of that is, when will this consultants' report be made public?
MR. CHAIRMAN: While the minister is collecting his thoughts on that question, I can advise that we will be concluding the committee's work at 7:48 p.m., so if you questioned until 7:46 p.m., that would leave us the required time.
MR. FUREY: The monies that my colleague refers to were captured in both the 2014-15 and the 2015-16 budget years: approximately $125,000 in the 2014-15 fiscal year; $675,000 in the 2015-16 fiscal year; and no associated costs going forward in the 2016-17 budget year.
MR. BELLIVEAU: I thank the minister for that response. Again, Mr. Chairman, through you, can the minister explain the reason for choosing a government-led approach to upgrading these registries?
MR. FUREY: I value the opportunity to respond to this question because I think it is important from a clarity perspective but also the integrity of the process that Service Nova Scotia had advanced from literally the day we commenced this initiative up to the day that we made the decision to go government-led. There's two components, really: there's the quantitative, and there's the qualitative. When we look at the quantitative or the financial lens on this, although there was financial benefit to government, it was marginal. It was actually a single digit percentage increase.
When you put the qualitative lens on that, when we talk about the impact on employees, when you talk about legal, when you talk about the issues that other jurisdictions deal with and continue to deal with, lack of confidence, lack of clarity, ongoing challenges - for the financial gain we believed that it was not in the best interests of Nova Scotians, it was not in the best interests of our employees. We felt that the work that was done supports and recognizes opportunities to take a government-led approach. Quite frankly, that work over the period of some 16 to 18 months was informed, it was evidence-based, and we believe the decision in the best interest of Nova Scotians.
MR. BELLIVEAU: Again to the minister through the Chair, our caucus met with a number of stakeholders in the Fall who were frustrated that the government had not consulted them.
My question through you, Mr. Chairman, is why did the minister wait until it was so late in the process to engage with these stakeholders?
MR. FUREY: The reality of where we found ourselves in the work that we did, the position that we felt was best achieved, was coming to a decision as to whether we would or we wouldn't. Then, if we had decided to, then engage the industry, the sectors - and I've spoken with all of them, the legal community, the real estate community, the surveyors, the list goes on and on. Believe it or not, we actually had informal discussions with them, but to formalize those discussions it was deemed the best opportunity and the most appropriate time was when the decision was made. Obviously, that was not necessary.
MR. BELLIVEAU: Now that the government has chosen a government-led approach to upgrading these registries, I guess once and for all can we consider the idea of privatization dead?
MR. FUREY: A couple of responses in my answer to that: I think it's critically important if we are to move beyond the status quo that as a government, regardless of who is in power, has to start doing thorough analyses before making decisions. Each and every one of our Parties has been guilty of making bad decisions in the past.
I believe informed decisions is the best approach. To my colleague's question, that's going to cost some money, but I believe that investment up front is a saving and in the best interests of Nova Scotians. There's no future plan to revisit alternate service delivery with regard to any one of these three registries.
MR. BELLIVEAU: There's 13 land registry offices that have been closed by this government. I'd like to know, what has been done or what is the cost saving associated with the closure of those 13 registries across Nova Scotia?
MR. FUREY: The savings we've realized through this effort and consolidation of our land registry offices has been achieved over two fiscal years. In 2015-16 we realized a saving of $500,000 and in 2016-17 we will realize a saving of $1 million. But I want to remind my colleague of Bill No. 30 that the then Minister of Service Nova Scotia advanced in 2011 around changes to the registry and really what it enabled future governments to utilize in their decision-making process.
It was the minister of the day in an NDP Government that first initiated and moved that opportunity for government. In fairness to Minister MacDonell, it's an objective vision of challenges Nova Scotia would face going forward given the numbers of visitors, very small and in traffic, the largest percentage is online, couriers less than 5 per cent foot traffic into those facilities. Minister MacDonell initiated that approach to our land registry offices, and I'll table that for the benefit and information of my colleagues.
The member for Inverness himself spoke in response to that and the objective approach that that would enable government to take if necessary. We've reached that point in our government where it was necessary. We acted on the good work of the previous government relative to this subject matter. We were conscious of the position that my colleague, the member for Inverness had advanced on behalf of his Party. We felt this decision is the most fiscally responsible model of service delivery that we're able to provide Nova Scotians within the land registry.
MR. BELLIVEAU: In March, we learned that the government will continue to pay $124,000 in rent for the now-closed Pictou County land registration office until 2019. I guess what we're asking is, what was the reasoning behind the closing of this office given that the government will still have to pay over $350,000 in lease payments? Was there any consideration of keeping this office open until 2019?
MR. FUREY: In our original plans around the closure of land registry and the consolidation of that service into our existing sites, we had actually identified the Pictou site to remain open until the expiration of the lease in 2019. What changed that was government's responsibility to accommodate the employees through the collective bargaining agreement that exists. Employees themselves started to take advantage of the collective bargaining conditions. They sought out other positions in government. Some actually retired, and others relocated for opportunities that were available to them through the collective bargaining process.
In fact, it was our respect for our employees and respect for the collective bargaining process that led to the early closure of the Pictou office. It was originally intended to retain that office for the duration of the lease. As I've said many times through many discussions, we've always put our employees first, and in these circumstances, it was that very respect for our employees that led to the decision and the early closure of the Pictou site.
MR. BELLIVEAU: To me, that's a considerable amount of money to be paid out until 2019. I'm going to approach the question from another angle. I mentioned several times in this Chamber that I had another life, and that was at the municipal level. I know when we talk about courthouses some of these buildings were made available through municipal units free of charge. I can only speak of the time when I was at the Barrington Municipality. I know the courthouse there was free of charge for the services that the people expected to be in that facility. We learned that there is an ongoing lease agreement until 2019 with the Pictou land registry. So my question is, these closures across Nova Scotia, were there arrangements out there free of charge to the government?
MR. FUREY: I am certainly not aware of any free rent that was extended to government from municipalities or business owners. I do want to go back to the earlier question to which my colleague commented on in the opening of this question. He made reference to the ongoing costs of the Pictou lease and facility. We continue to try to find a tenant for that facility. Hopefully, that will materialize.
As I explained earlier in response to a previous question, as we continue with that incurred expense of the Pictou site we're still realizing the savings that I referenced earlier, the total of $1.5 million, which cannot be lost, that's important. We believe that efforts to respect employees' rights through the collective bargaining process was the right decision, respectful of our employees, and in the best interests of Nova Scotians.
MR. BELLIVEAU: We'll get to the short snappers now. There was a question in your earlier remarks, minister, you talked about online and doing a lot of services and you made reference to - I hope I get it close here - but the public didn't like mailing out applications and going through that process. It quickly reminds me of my passport which is due to be renewed this late August. To me nothing much has changed in my life, I think, other than my hair colour, but that needs to be renewed every 10 years, up to 10 years now.
To me there is a good question, if this work can be done and we have the technology to take a picture of yourself almost instantly here now and that process to me is a cumbersome process because you have to literally drive to the right post office, collect all this information now and make sure you get it all in the right package and send it off and it's a long period of time.
My question is, is there any possibility of looking at that and looking for upgrades or improvements of basically doing that online, if the public is available to that particular service?
MR. FUREY: I'll engage one of 32 federal Liberal MPs in Atlantic Canada to make sure that federal program is looking at all technology in advancing into the future.
MR. BELLIVEAU: I like the responses when we get into the short snappers here so I'll continue on. Minister, through the Chair, can you explain where in the budget the Heating Assistance Rebate Program - HARP - is and has the budget for HARP gone up or down in this particular budget?
MR. FUREY: The Heating Assistance Rebate Program is found under the Program Modernization line and the budgeted amount this year remains the same as last year, in the amount of $10 million.
MR. BELLIVEAU: This may be my last question so quickly, Mr. Chairman, through you to the minister, there is $11 million budgeted for Grants and Contributions. Can the minister explain who receives these particular grants and the contributions?
MR. FUREY: The breakdown, as I indicated earlier for Heating Assistance Rebate Program, $25,000 for small business operating grants, and $945,000 for the 211 phone line system.
MR. BELLIVEAU: To the minister, like I said earlier, I enjoy this part, the process of Budget Estimates, and I enjoyed the minister's response. Again, I want to thank the staff, and I look forward to his closing remarks.
MR. CHAIRMAN: The honourable Minister of Service Nova Scotia to make some final remarks in our last couple of minutes.
MR. FUREY: I want to take this opportunity to again thank my colleagues and employees in the Department of Business and the five Crown Corporations for which I'm responsible, as well as the staff and employees at Service Nova Scotia. It's a pleasure to go to work every day. To have the support of the people around you really makes you feel good; you want to get up in the morning and go to work. So I appreciate the ongoing and continued support.
MR. CHAIRMAN: Minister, I'd like to thank you and your staff from both departments for the hard work and response to the questions. I'd like to thank all members of all Parties for their decorum throughout these eight hours of questioning the minister.
Shall Resolution E37 stand?
Resolution E37 stands.
Resolution E45 - Resolved, that the business plans of Tourism Nova Scotia, the Nova Scotia Innovation Corporation (Innovacorp), Nova Scotia Business Incorporated, the Trade Centre Limited and the Waterfront Development Corporation Limited be approved.
MR. CHAIRMAN: Shall Resolution E45 carry?
Resolution E45 is carried.
The honourable Government House Leader.
HON. MICHEL SAMSON: I move that the committee do now rise and report progress to the House.
MR. CHAIRMAN: The motion is carried.
The committee will now rise and report its business to the House.
[The committee adjourned at 7:48 p.m.]